Not so Flexible: Prior art disclosing “a flexible set of options” renders mechanical patent invalid

In Steelhead Lng (Aslng) Ltd v Arc Resources Ltd, 2023 FC 1684, the Federal Court considered the validity of Canadian Patent no. 3,027,085 (the “085 Patent”). At a high level, the subject matter of the 085 Patent relates to floating liquefied natural gas (“FLNG”) facilities which produce liquefied natural gas (“LNG”) on vessels nearshore.

In particular, the 085 Patent claims water-based apparatuses that liquify natural gas using air-cooled, electrically-driven refrigeration modules, as well as methods and systems using these water-based apparatuses.

The Federal Court held 79 out of 84 claims invalid due to anticipation and obviousness.

Of interest are the Court’s comments about “optionality” in relation to its anticipation analysis [¶¶92-102] as well as its comments on “safety” in relation to its obviousness analysis [¶¶261-271].

On the topic of “optionality” the Court noted that “[s]electing one combination from a variety of known options is not novel unless that combination offers a unique benefit that was previously unknown” [¶98]. This is consistent with the requirements for a selection patent as articulated by the Supreme Court of Canada [Apotex Inc v Sanofi-Synthelabo Canada Inc, 2008 SCC 61 at ¶10].

The Court considered prior art references that disclosed “a flexible set of options” for an FLNG facility, including a refrigeration compressor:

• driven by a gas turbine or an electric motor; and
• cooled by water or air.

The Court held these options constituted disclosure of an FLNG facility configured specifically to use an air-cooled, electrically-driven refrigeration module, which resulted in the invalidity of most of the 085 Patent’s claims.

On the topic of “safety”, expert evidence provided to the Court asserted that features in claims 24, 25, and 27 to 29 were unsafe and, therefore, uninventive. The Court held that the obviousness analysis was not concerned with safety. Moreover, the alleged fact that these features were unsafe also led the expert to conclude that no one would use the features in an FLNG facility, which supported the patentee’s argument that the features were not obvious [¶¶265 and 270]. Overall, the Court upheld the validity of the purportedly unsafe features covered by claims 24, 25, and 27 to 29.

Read the full decision here: https://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/524762/index.do