Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m M A R C H 2 0 1 6 45 at the Federal Court level. "But com- panies are more knowledgeable about patents; hence, when they come to me, they generally have done some legwork and are at a stage where they need rec- ommendations on how and when to go forward," he says. Sander Gelsing, an IP lawyer and registered patent and trademark agent with Warren Sinclair LLP in Red Deer, Alta., has also met with clients looking to start infringement actions. "When there is a downturn, clients are look- ing at patents to maintain market share and maintain work to keep their busi- nesses operating and employees hired," he says. "People have these patents and when there's a downturn you rely on it to keep infringers at bay." However, while Packers has taken a strategic and bullish approach, with oil prices lower, that also affects the amount of money many companies have to spend on IP and enforcement, says Mark Sajewycz, a partner with Norton Rose Fulbright Canada LLP. During tough times, it can be difficult for companies to say they are going to spend money on the patent to keep it maintained and hopefully it will pay off. "The payoff is really hard to quantify," says Gelsing. "But it's good to have that option of threatening a competitor." Sajewycz says service companies like Packers Plus are the ones waging the battles for the most part. Service companies help producers set up the infrastructure to produce the oil or gas. Intellectual property and the pat- ents for technologies are generally of more importance to service providers because their businesses are tied to technologies that enable them to help producers extract oil. Producers, on the other hand, make their money by selling oil, but their revenues are dependent on the resource rather than the technolo- gies. "Traditionally, service companies have always been more patent litigious than producers and that will probably continue to be the case," says Sajewycz. "Producers do continue to secure patent protection for new technologies, but, historically, they have not been as active in enforcing their patents." He sees service companies becoming more litigious because, with oil prices falling, the market is going to get more competitive, and in order to maintain a competitive edge, they are going to have to enforce their patents to block competitors or force them into licensing arrangements. "If they let competitors free ride on their technologies, they are going to lose their competitive posi- tion," he says. And although budgets are being cut, oil service companies are continuing to file for patent protection because demand is there for the technologies they are developing. "Innovation is still occurring and that's because the customers of the service companies are even more willing in the current economic environment to adopt new technologies," says Sajewycz. "When oil prices were high, there was less of an urgency for producers to accept new technologies being offered by service companies that enable lower-cost pro- duction." In this environment, the service companies can expand their markets by licensing their technologies. Beaudoin says 2014 had a record year for patent filings of technologies for oil service companies. Then there was a significant dip when the U.S. introduced its Inter Partes Review process. "We have more U.S. patents than we have Canadian patents, that's for sure, and strategically we file in different places according to the technology. When the U.S. intro- duced their IPR process, the kill rate for patents going through the process was 80 per cent. I think it made everybody stop a little and ask: 'Do I want to file a litigation because I'm going to get dragged into the IPR process and my patent may not survive it?'" When Beaudoin started the patent lawsuits, the market looked very differ- ent than it does now, but she says the company is "fully committed" at this point. "We're confident in the technol- ogy and the patents we've got. If you run in and think you're just going to be able to slap down a bunch of lawsuits and have people pay you nuisance value — I don't think that's a good strategy. It's one the non-practising entities are taking, but they are being shut down in the U.S. to a large extent if they don't have proper claims. It's becoming more difficult to do. You haven't really seen that in the energy space yet like it has the software space." All she will say is that it's about a five-year time horizon — a little bit lon- ger perhaps. "You have to have a crystal ball and a little bit of intestinal fortitude to withstand this," she says. "The board has to be on board with the strategy or it wouldn't fly, that's for sure." IF THEY LET COMPETITORS FREE RIDE ON THEIR TECHNOLOGIES, THEY ARE GOING TO LOSE THEIR COMPETITIVE POSITION. MARK SAJEWYCZ, Norton Rose Fulbright Canada LLP

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