Supreme Court Judgments

Supreme Court of Canada

Dairy Foods v. Co-op. Agricole De Granby, [1976] 2 S.C.R. 651

Date: 1975-12-19

Dairy Foods, Incorporated Appellant;

and

Co-opérative Agricole de Granby Respondent.

1974: November 19, 20; 1975: December 19.

Present: Laskin C.J., Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Patents—Validity—Substance “prepared or produced by chemical processes and intended for food”—Preparation of instant skim milk powder—Process of hydration, crystallization and hydrogen bonding in production of soluble agglomerate—Chemical nature of the process—Patent Act, R.S.C. 1970, c. P-4, s. 41(1).

Appellant, owner of a Canadian Patent for an invention entitled “Dried Milk Product and Method of Making Same”, brought an action claiming infringement of its patent against the respondent. Respondent pleaded in defence that the alleged invention of the patent related to “substances prepared or produced by chemical processes and intended for food” within the meaning of s. 41(1) of the Patent Act, and that claims 14, 15 and 16 of the alleged patent were invalid as claiming the substance of the alleged invention and not the process for producing it. Noël A.C.J. concluded, on the basis of findings of scientific fact not challenged on subsequent appeal, that the processes described in the patent in suit were chemical processes within the purview of the Act and this was confirmed in the reasons of the Court of Appeal.

Held (Ritchie, Pigeon, Beetz and de Grandpré JJ. dissenting): The appeal should be dismissed.

Per Laskin C.J. and Martland, Judson, Spence and Dickson JJ.: While it is settled that the phrase “chemical process” is to be taken in its popular and not its scientific sense the test presents difficulty when related to facts of a technical and complex nature. Difficulty by no means diminished by the advances in science which have, since the enactment of s. 41(1), blurred the distinction between physics and chemistry. The existence of a chemical reaction is not conclusive of whether there is a chemical process nor must one find a “chemical process” merely because the trappings of a chemistry laboratory are employed in a simple non‑technical

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undertaking; but one must be wary of failing to find a chemical process because the process employs only commonplace items such as water or heat. Whether a particular invention relates to substances produced by chemical processes is essentially a question of fact. Appellant’s process involved three chemical operations, namely, hydration, crystallization and hydrogen bonding, forming integral and essential parts of a process requiring careful timing and scientific knowledge. The steps were required to be followed in precise sequence. Special machinery was necessary. These facts justified the finding at trial and on appeal that the process was a “chemical process” in terms of s. 41 (1).

Per Ritchie J., dissenting: The claim at issue did not relate to a substance prepared or produced by chemical processes and intended for food.

Per Pigeon, Beetz and de Grandpré JJ., dissenting: The purpose of the invention is to make skim milk powder more soluble in water by aggregation into larger porous grains by treating the powder with steam under controlled conditions. The situation is governed by the principles in Continental Soya Co. Ltd. v. J.R. Short Milling Co. (Canada) Ltd., [1942] S.C.R. 187. The hydration of the milk powder is nothing more than the addition of a small quantity of water in order to enhance the solubility of the final product. The distinction made in s. 41(1) is in common language not scientific language. In common language the mere addition of water and the application of heat are not regarded as chemical processes. This was explicitly decided in the Soya case. That a chemist can detect minute chemical changes or can describe the process in technical terms is irrelevant and does not alter the character of the process.

[Continental Soya Co. Ltd. v. J.R. Short Milling Co. (Canada) Ltd., [1942] S.C.R. 187; Laboratoire Pentagone Ltée v. Parke, Davis & Company, [1968] S.C.R. 307; In the Matter of an Application for a Patent by N.V.I. (1925), 42 R.P.C. 503; S. Company’s Application (1921), 38 R.P.C. 399; Levy and West’s Application (1945), 62 R.P.C. 97 referred to.]

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APPEAL from a judgment of the Federal Court of Appeal[1] dismissing an appeal from a judgment of Noël A.C.J.[2] Appeal dismissed, Ritchie, Pigeon, Beetz and de Grandpré JJ. dissenting.

Russel S. Smart, Q.C., and Nicholas H. Fyfe, for the appellant.

David Watson, Q.C., and Kent H.E. Plumley, for the respondent.

The judgment of Laskin C.J. and Martland, Judson, Spence and Dickson JJ. was delivered by

DICKSON J.:—The basal question in this appeal is whether the “instant” dry skim milk powder, the subject-matter of the alleged invention of the patent in suit, is “prepared or produced by chemical processes”, within the meaning of s. 41(1) of the Patent Act, R.S.C. 1970, c. P-4. The appeal arises from a reference or motion preliminary to the main trial of an action for patent infringement.

I

An American corporation, Dairy Foods, Incorporated, the owner of Canadian Patent No. 566,‑787 dated December 2, 1958 for an invention entitled “Dried Milk Product and Method of Making Same” brought an action for damages against Co-operative Agricole de Granby claiming infringement of its patent. The Co-operative Agricole de Granby, in defence, pleaded that the alleged invention of the patent relates to “substances prepared or produced by chemical processes and intended for food” within the meaning of s. 41(1) of the Patent Act which reads:

41. (1) In the case of inventions relating to substances prepared or produced by chemical processes and intended for food or medicine, the specification shall not include claims for the substance itself, except when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents.

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and that claims 14, 15 and 16 of the alleged patent are in consequence invalid and void because they claim the substance of the alleged invention and not the process for producing it. The claims which have been called into question read:

14. A dry food product comprising porous aggregates, the aggregates consisting of smaller particles of milk powder firmly adhered together in random fashion to form a free-flowing, divided material, the milk solids present forming a stable milk when dispersed in water, the product being further characterized by high wettability and by its ability to quickly disperse in water by simple stirring to form a stable, reconstituted milk product, the major portion of the aggregates having a size greater than about 74 microns.

15. A dry food product as in Claim 14 having a specific gravity ranging from 0.27 to 0.39.

16. A dry milk product comprising porous aggregates, the aggregates consisting of smaller particles of dry milk powder firmly adhered together in random fashion to form a free-flowing, divided material, the major portion of the aggregates having a size greater than about 74 microns, the milk solids present having a solubility index substantially of the order of about 0.1, the product having a specific gravity ranging from 0.27 to 0.39, a substantial portion of the lactose content of the product being in crystalline form, the product being free-flowing and non-hygroscopic and characterized by high wettability and its ability to quickly disperse in water by simple stirring to form a stable, reconstituted milk product.

The invention, the subject of the appellant’s patent, relates generally to methods for the manufacture of dry powdered products, such as skim milk, from liquid lacteal material. Commercial skim milk powder is produced by the spray drying of skim milk. Apparently, when one attempts to reconstitute ordinary skim milk powder in water, the powder resists wetting and tends to form sticky masses or lumps difficult to break up without long and vigorous agitation. The advantage of the patented product is that it will rapidly and completely disperse in water, simply by stirring with a spoon, to form a stable reconstituted milk. The patented product is produced by treating ordinary dry milk powder in a hydrator with precisely controlled and

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timed amounts of water vapour, water droplets and heat. The crystallized substance resulting is characterized by high permeability and wettability, which facilitates dispersal in water.

II

The appellant mounted an elaborate argument on the question whether the patent alleged an invention relating to a “substance” within the meaning of s. 41(1). A distinction must be drawn, it was said, between a claim for the substance itself and a claim for a product made out of a substance and one must distinguish between substances, as found in nature, and things which are not substances but artifacts, the result of man-made changes in shape, matter and functions. Where claimed physical limitations are impressed upon a known substance for a functional purpose, the result, it was contended, is a product or manufacture which should no longer be regarded merely as a substance, improved or otherwise. The philosphic potential of this argument, with its Aristotelian and Kantian overtones, about matter, form and substance, was not explored in depth because the point was foreclosed, in the opinion of the Court, by the fact that it had not been raised in the Court of first instance. Evidence bearing upon the question had not been produced at the trial and indeed it was there conceded that this question was not in issue.

III

There is no doubt that the substance, the subject-matter of the alleged patent, is intended for food. This leaves only one question remaining for determination, videlicet, whether the substance is produced by a chemical process within the meaning of s. 41(1). The position of Dairy Foods, Incorporated is that the process described in its patent is a physical process, although some chemical changes may take place, and that it should be regarded as being of the same genre as bread-making or furniture gluing. The Co-opera-

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tive Agricole de Granby maintains that the process is a chemical process and the four judges of the lower courts who have, to date, heard the case, agree.

Extensive expert evidence was adduced at the trial. Dr. Lipsett, a practising consulting chemist, testified on behalf of Dairy Foods, Incorporated. Dr. Marion, a highly qualified chemist and retired dean of the Faculty of Science at the University of Ottawa, and Dr. Riel, head of the Department of Food Science at Laval University, testified on behalf of the Co‑operative Agricole de Granby.

After a lengthy hearing, Noël A.C.J. delivered an exhaustive and penetrating judgment which, but for its length, I would repeat in extenso. The judgment, in my view, reflects a mastery of the evidence and full appreciation of the legal principles to be applied. The findings of scientific fact made by the trial judge were not challenged in the Court of Appeal nor in this Court. The conclusion reached by Mr. Justice Noël, that the processes described in the patent in suit were chemical processes within the purview of the Patent Act, was confirmed in the Court of Appeal for reasons delivered by Mr. Justice Thurlow and concurred in by the Chief Justice and by Mr. Justice Cameron.

The trial judge described the process by which the invented product is made as follows:

A conventional dry skim milk powder (the composition of the starting powder would be as follows—water 3.2%, fat 0.8, milk sugar (lactose) 51.7, protein 36.9, ash (mineral residue after ignition) 7.4) having a small amount of insoluble materials and made by a method of spray-drying milk is introduced in a large agglomerating chamber where the powder is caused to co-mingle with continuously introduced warm water vapour and droplets of moisture. The amount of dry skim milk powder, warm water vapour and steam introduced into the chamber where a temperature from 80° F. to 120° F. is maintained are controlled by adding an amount of moisture content of from 10% to 20%. As the particles of powder are co-mingled with the vapour and atomized water, moisture distributes itself on the surfaces of the powder particles, thus producing a surface stickiness. The sticky skim milk particles adhere to each other to form larger porous aggregates or agglomerates. As the

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porous aggregates are formed, they are soft and will not stand mechanical handling. These aggregates must then be permitted to rest for a period that may last from a second to several minutes in order to become firmer and to allow the surface to become less sticky. Part of the excess of moisture is then removed from the skim milk aggregates in a drying operation with hot air from 200° F to 300° F. The temperature levels and time period of drying must be controlled to avoid the creation of undesirable amounts of insoluble material such as coagulated protein and the creation of foreign flavours due to overheating. A small amount of fine powder is separated from the aggregated material and re-introduced into the material entering the agglomerating chamber. Crystallized lactose powder may be added to the feed in the treatment zone.

The trial judge then described the apparatus employed in these words:

The first step is to cause to be delivered to the top of the processing chamber, dry skim milk powder, together if desired with crystallized lactose powder or fines, by means of a conveyor. In the chamber, the powder comes into contact with finely atomized water and air saturated with steam. The product then goes into a flow of cool air and then onto a conveyor belt. The moistened milk powder is next conveyed by a belt to a shaker type of drier where the moisture is lowered to the desired level of 3.5-4.00% by forcing heated air through a moving bed of the product. In the shaker drier, the powder is continuously agitated while excess moisture is being removed.

The judge’s conclusions with respect to the practical importance of the operations utilized in obtaining a product having the desired qualities were summarized in these words:

I am, however, particularly impressed by the hydration, crystallization and hydrogen bonding of the particles to form the agglomerates as I believe that without them, it is not possible to obtain the advantageous characteristics of the patented product. These products, indeed, must, according to the patentee, have good wettability, good pouring characteristics, must be noncaking, must not be denatured, must have a good flavour and good shelf life and be readily and conveniently reconstitutable. The emerging product must be a well hydrated spongy mass with good capillary characteristics. I am also of the view

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that great care and pain must be taken in ensuring that the process itself is properly and carefully implemented. Controlled moistening and redrying of commercial spray dried milk is most important in the main processing chamber. The air flow must be controlled as well as the air and water temperatures and the atomization of the water. Time, temperatures are important. Adequate hydration is also essential because, if excessive temperatures or periods of time are employed, the milk proteins will become too denatured and be rendered insoluble. An improper quantity of moisture may result in undesired lumps with a tendency to cake, which must be avoided. During redrying, the moisture must be removed without excessive heat otherwise there may be a loss of solubility and changes in flavour. The spongy character developed in the main processing chamber must not be broken up otherwise good dispersability may not be obtained. This is accomplished with the shaker dryer by control of drying air temperatures and gentle vibration on the conveyor.

With reference to the dissolving of the soluble compounds of lactose and of some of the protein in the hydrator to make the particles sticky and adhere together, the trial judge concluded that the formation of the hydrogen bonds between the particles in the process were chemical bonds and a necessary part of the process for the production of the finished product. He said:

We indeed have here three operations all of which are chemical. The formation of the agglomeration involves the chemical step of (1) dissolving the lactose and the further chemical step of (2) forming bonds to link particles and (3) some minor denaturing of the protein takes place which, according to Dr. Riel, creates sites for bonding, which is a beneficial and necessary step in the process and which is chemical.

In the concluding paragraphs of his judgment, the trial judge held:

The instrumentalities of chemistry are not only used in the present process but they also happen to be the very method by which the desired product is produced. There are indeed, as we have seen, controls in the moisture level to achieve agglomeration and prevent an unaccept-

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able product. The temperature has to be right, the times are essential. One indeed must feed the powder into a chamber in which hydration takes place at a temperature in the range of 80° to 120°F. If the temperature is too high, then the proteins will become denatured. The temperatures must therefore be adjusted with jets of vapour in order to get proper hydration without denaturing unduly the protein to the point of getting an insoluble product. The particles then have to be brought together while they are falling through the air. From the patent it appears that there is an instantaneous moment at which there is sticking and at which they have to be brought together in a container in which they will be dropping together in a random fashion. If, on the other hand, the powder is merely moistened, a caked unsatisfactory powder will be obtained. It must indeed be conditioned so that agglomeration will occur.

The technology of chemistry is here clearly being used to achieve the desired product. The equipment to produce the instant powder is indeed of a technical nature and the chemical operations taking place therein are not merely incidental changes but are used and relied upon in order to make the end product.

Overwhelming evidence supports the finding of the trial judge that the chemical operations taking place are not merely incidental changes but are used and relied upon in order to give the end product the desired properties. It is also manifest that the end product is chemically different from the starting product. The judge finally held that “the processes described in the patents in suit are chemical processes within the purview of subsection (1) of Section 41 of the Patent Act”. I would have wished to avoid burdening these reasons with the lengthy quotes from the judgment at trial, but it has seemed to me that, in fairness to the learned trial judge and in aid of a better understanding of the complex and difficult issue before us, such prolixity was warranted.

IV

Noël A.C.J. held that the phrase “chemical process” in s. 41(1) must be interpreted in the ordinary and popular sense rather than the scientific sense. He also held that the process must be examined to see if what is really involved is merely a mechanical or physical process, even though some chemical changes or reactions occur. These legal tests come from two earlier cases in this

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Court, Continental Soya Company Limited v. J.R. Short Milling Company (Canada) Limited[3], and Laboratoire Pentagone Limitée v. Parke, Davis & Company[4]. The judge looked carefully at the whole process, particularly the processes of hydration, crystallization and hydrogen bonding and decided that an ordinary reasonable man would look upon the process as chemical. It is contended that the Continental Soya case is controlling and calls for a conclusion in the present case different from that reached by the learned trial judge. I do not share that view. In my opinion, the process in the Continental Soya case and the process in the present case are antipodal. The invention in Continental Soya related to a substance of vegetable origin for bleaching flour, added while mixing dough preparatory to the making of bakery products. The bleaching agent was derived particularly and preferably from the soy‑bean by methods disclosed in the Specifications of the patents. The method referred to as the “wet process” was described as follows:

Soak the beans for twelve to forty-eight hours in water of approximately room temperature, using enough water to cover the beans at all times. At the end of the steep period, the water is drained off and the beans are well washed with two or three changes of fresh water. At this point the beans have swelled to about three times their original size. After draining off the wash water, the beans are ground in a mill which reduces them to a paste or sludge. This paste or sludge is thoroughly mixed with a cornstarch or corn flour or other cereal flour which has preferably been gelatinized to increase its water absorbing capacity.

The resulting mixture is a rather dry, friable mass. This mass is dried in vacuo at a temperature not exceeding 60°C. in order not to injure the enzyme, and it is then ground to a fine powder.

In the Exchequer Court, Maclean J. said (sub. nom., J.R. Short Milling Company (Canada) Ltd.

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v. George Weston Bread & Cakes Ltd.[5], at p. 100):

It is a vegetable material containing a bleaching enzyme, prepared mechanically and without the intervention or aid of any substance of a chemical nature intended to effect any particular reaction, and is not, I think, a material prepared by a method which might fairly be said to involve a chemical process set in motion by human agency, which, I think, the statute must have contemplated when it speaks of “inventions relating to substances prepared or produced by chemical processes.” It is a substance entirely of vegetable origin and such it remained when completed for the market. The application of water or heat caused no chemical change in the soy-beans before being ground into a flour. The swelling of the beans in the water-soaking process did not cause any chemical change in the beans nor was that intended; that was a biological change, a process of growth, caused by water which changed something that was inert into something that was alive, a living plant, and this I do not think means the preparation or production of a substance by a chemical process, within the meaning of the statute.

It was with reference to the process so described, which I would have thought to be clearly biological and not chemical, that Duff C.J. observed, when the case reached this Court (p. 191):

The substance in question is not, I am satisfied, one “prepared or produced by chemical processes”, within the meaning of this enactment. Everything done by Haas and Bohn is in the nature of a physical, as distinguished from a chemical, process. I do not think the application of heat for the purpose of drying the substance, and for that purpose alone, can bring either the process or the product within the ambit of the section. The same may be said with regard to the application of water for the purpose of stimulating germination. The vital processes may, it may be assumed, involve chemical processes, but that, in my opinion, is immaterial. If that were sufficient to make section 40 applicable, it would be enough to say that, the soya bean being a natural vegetable growth, everything contained or derived from it is produced by chemical processes.

The careful manner in which Duff C.J. chose his words makes it plain that his remarks were not intended to be of general application. I take it

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from the case that neither the application of heat “for the purpose of drying the substance, and for that purpose alone,” nor “the application of water for the purpose of stimulating germination” will bring the resultant process or product within the ambit of s. 41(1). In the case at bar heat is not used only for the purpose of drying nor is water used for the purpose of germination. One of the essential features of the process is regulated heating. Heat is used to remove part of the excess moisture, it is true, but prior to that, in the hydrator, a temperature of from 80°F to 120°F is maintained in order to reduce the production of protein insolubles and to facilitate crystallization. Water is used as a chemical reagent to accomplish a chemical reaction, according to the findings of the trial judge, who said, “somewhere between the dry anhydrous lactose to the hydrated crystalline lactose, there is a chemical reaction of water with the lactose to form the hydrate”. The water molecule itself undergoes a fundamental change. I do not think that Duff. C.J. intended to lay down any general proposition respecting processes in which heat is used and water applied. Whether heat or water form part of a chemical or physical process will depend on an informed appreciation of the character of the entire process. In my opinion Continental Soya, which was fully considered by the trial judge, does not conclude the case against the respondent.

V

One must, I think, consider what seems to be the underlying public policy behind s. 41(1), namely, to free invented food substances or invented substances intended for medicine which are prepared or produced by chemical processes from the control that the inventor of the substance would, but for s. 41(1), have had by reason of an unlimited patent on the substance itself. The policy of the legislature to limit the protection only where a chemical and not a physical process is involved has an historical origin related to the concern evinced many years ago by British industry over German dyestuff patents which were framed so broadly as

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to cover items for which no process of manufacture had yet been devised. The British statutory provision, with one important change, was imported to Canada in 1923. Whatever its origin, the meaning and effect of the section is clear. It is aimed at limiting monopolies in food and medicine. Protection may be obtained for a new process, but competitive forces remain as to the substance. In In the Matter of an Application for a Patent by N.V.I.[6] 504, it is said that the English counterpart of s. 41(1)

…was designed to prevent the appropriation by a patentee of certain substances in such a way as to preclude other explorers in the same field from devising improvements in the preparation or the quality of the substance in question.

In the present case Mr. Justice Noël expressed the matter well:

The object of section 41(1) is to prevent a patentee from monopolizing a food or a medicine. He indeed must be content with a monopoly for his way of making it. If someone else develops a different process which will result in a similar product, then he is free to use it.

It is, I think, for the benefit of the public in general to maintain the freedom of competition which the common law recognized and respected. While patent law is generally designed to confer a monopoly on inventors, it is best to give s. 41(1) that liberal interpretation and application which will restrict the scope of patents relating to substances prepared or produced by chemical processes and intended for food or medicine.

VI

There has been, in the past, a difference of judicial opinion on whether the term “chemical processes” should be interpreted according to the view of the scientist or that of the man in the street. In S. Company’s Application[7], Pollock

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S.-G., in the course of his judgment, expressed his own opinion, obiter, that the term might well not be limited to those reactions and processes which would be regarded as chemical by scientific men but might well extend to processes which would be so described in a popular or “vulgar” sense. Ever-shed J., as he then was, held a different view which he expressed in pungent terms in Levy and West’s Application[8] at p. 103:

The truth is that any attempt to apply popular or vulgar standards to such a subject matter must result in conclusions so vague and capricious as to be liable to render futile or ridiculous the object of the legislature.

It is settled law in Canada since the decision of this Court in Laboratoire Pentagone Limitée v. Parke, Davis & Co., supra that the phrase “chemical process” is to be taken in its so-called “popular” sense and not in a scientific sense (p. 311):

[TRADUCTION] AS this matter now before us is not one of scientific vocabulary, it cannot be decided by considering solely the opinions of experts on this vocabulary and the concepts attaching thereto.

This approach appears to have been adopted by this Court in the Continental Soya case without express endorsement, and it is the approach of Maclean J. in the judgment at trial ([1941] Exch. C.R. 69). The test, however, presents difficulties when one comes to relate it to facts which are technical and exceedingly complex. The judge is expected to apply a popular conception to the expert testimony of scholars who are highly versed in the art in question. The difficulty is by no means diminished when one recognizes the revolutionary advances in science since s. 41(1) was first enacted, which have blurred the distinction between the disciplines of physics and chemistry. One can discern no clear boundary between them. Thus, while the standard to be applied in deciding if a substance is produced by a chemical process is a popular one, it must, I think, be that of an informed layman with a reasonable understanding of the character of the operation. Otherwise the criterion to be applied will be so vague and uncertain as to be meaningless. The appellant would have us view the process described in the patent in

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suit in simplistic terms, merely as wetting skim milk powder and then drying the moistened powder. However, the teachings of the patent and the four large volumes of evidence lead one to conclude that the judgment in the lower courts was soundly based and that there is indeed a chemical process in the alleged invention of Dairy Foods.

The Laboratoire Pentagone case, it is true, shows that neither the existence of a chemical reaction nor lack thereof is conclusive of the issue of whether there is a chemical process. That case involved the isolation of an antibiotic, chloramphenicol, by use of solvents or by adsorption. Even though the chemical structure of the product was unchanged and no chemical reactions affected it, it was held that there was a chemical process involved in the production. The principle so enunciated is obviously sound, for to find a “chemical process” wherever a chemical reaction occurs would be to throw a wide barrier in the way of assertion of patent claims. Thus, in the instant case, the fact that the chemical structure of the dried milk changed cannot be conclusive of “chemical processes”.

There are, however, other elements of the appellant’s process which do seem to bring it within s. 41(1). Noël A.C.J. noted three chemical operations, hydration, crystallization and hydrogen bonding. When water is added to the dry skim milk powder, crystallization of lactose occurs. Lactose has both an alpha and a beta form. The former, being less soluble, crystallizes more readily than the beta form. A definite amount of water combines with the amorphous alpha lactose to create the alpha lactose monohydrate, and the Chemical reaction can be written—C₁₂H₂₂O₁₁ + H₂O  C₁₂H₂₂O₁₁ . H₂O. The result is not the same as “wetting” with water. Here, the water molecule acts as a reagent and becomes part of the lattice structure of the alpha lactose monohydrate. Furthermore, since the alpha form of lactose is much less soluble than the beta form and crystallizes out as a hydrate, the need for an equilibrium between the alpha and beta forms will result in a

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transformation of the beta forms into alpha lactose. Temperature is controlled at 80°-120°F. in the agglomerating chamber because higher temperatures promote the reaching of equilibrium. Too high temperatures must be avoided to prevent undue denaturing of protein and unfavourable flavours.

Hydrogen bonding occurs between the hydrogen of the water molecules and the nitrogen and oxygen of the protein molecules in the hydrator. Hydrogen bonds develop between the protein and lactose to join the particles into the aggragates necessary for easy dispersal.

While hydrogen bonding and crystallization can occur in ordinary phenomena, that does not take this process out of the realm of a chemical process. The different procedures form integral and essential parts of a process requiring careful timing and scientific knowledge of how substances react with water. The steps must be followed in precise sequence. Special machinery is necessary for the process. The agglomerating chamber allows continuous injection of water vapour and precise control of temperature.

VII

The appellant argues that while the chemical phenomena mentioned may occur during the production process, the process looked at as a whole is a physical, not a chemical, process. Although the existence of a chemical reaction at some stage in a process is not conclusive of whether there is a chemical process, neither is it required that all steps in the process be chemical. It is enough if the chemical operations play a significant part in the production of the food or medicine in s. 41(1). Here, the chemical phenomena are essential to the production of the skim milk powder.

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One must not find a “chemical process” merely because the trappings of a chemistry laboratory are employed in a simple, non-technical undertaking, but, conversely, one must be wary of failing to find a chemical process because the process employs commonplace items such as water or heat. The question whether a particular invention relates to substances produced by chemical processes is essentially one of fact. In Levy and West’s Application, supra, Evershed J. said, p. 102:

As I read the subsection the question to be answered in each case to which it may apply is one of fact—is the process involved in fact a chemical process or is it not?

See also 17 Can. P.R. 48, p. 50. We have concurrent findings in the Courts below. I do not think it is our task to retry the case and for myself, I can find no error on the part of the learned trial judge.

I would accordingly dismiss the appeal with costs.

RITCHIE J. (dissenting)—I agree with Mr. Justice Pigeon that the claims here at issue do not relate to a substance “prepared or produced by chemical processes and intended for food”, within the meaning of s. 41(1) of the Patent Act. In my view the circumstances here disclosed are governed by the reasons set forth in the judgment of Chief Justice Duff in Continental Soya Company Limited v. J.R. Short Milling Company (Canada) Limited[9], at p. 191, and I would therefore dispose of this appeal in the manner proposed by my brother Pigeon.

The judgment of Pigeon, Beetz and de Grandpré J.J. was delivered by

PIGEON J. (dissenting)—This appeal is from a judgment of the Federal Court of Appeal affirming the judgment of the Trial Division holding invalid three product claims for the making of

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“instant skim milk powder”. The only question is whether the Courts below erred in holding that those claims, which are numbered 14, 15 and 16, are invalid because they would relate to a substance “prepared or produced by chemical processes and intended for food” within the meaning of s. 41(1) of the Patent Act. Counsel for the appellant sought to raise other points but counsel for the respondent was advised by the Court that they would not be considered.

Claim 14 reads as follows:

14. A dry food product comprising porous aggregates, the aggregates consisting of smaller particles of milk powder firmly adhered together in random fashion to form a free-flowing, divided material, the milk solids present forming a stable milk when dispersed in water, the product being further characterized by high wettability and by its ability to quickly disperse in water by simple stirring to form a stable, reconstituted milk product, the major portion of the aggregates having a size greater than about 74 microns.

Claims 15 and 16 are also claims for the product specifying additional characteristics.

In short, the purpose of the invention is to make skim milk powder readily soluble in water. As produced, it is in very fine grains and does not readily disperse in water. To make it readily soluble, it is aggregated into larger porous grains of suitable size. This is done by treating it with steam under controlled conditions.

The essential part of the reasoning of the trial judge whereby he came to the conclusion that the patented method was a chemical process is quoted in the reasons for judgment of the Court of Appeal, and is as follows:

I am indeed of the view that once the instrumentalities of chemistry are put to work (and this appears to have been the basis of the decision in the Pentagone case) and chemical changes and reactions occur to produce or are helpful in producing the desired product,

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then I believe there should be no question that it is a chemical process.

The instrumentalities of chemistry are not only used in the present process but they also happen to be the very method by which the desired product is produced. There are indeed, as we have seen, controls in the moisture level to achieve agglomeration and prevent an unacceptable product. The temperature has to be right, the times are essential. One indeed must feed the powder into a chamber in which hydration takes place at a temperature in the range of 80° to 120°F. If the temperature is too high, then the proteins will become denatured. The temperatures must therefore be adjusted with jets of vapour in order to get proper hydration without denaturing unduly the protein to the point of getting an insoluble product. The particles then have to be brought together while they are falling through the air. From the patent it appears that there is an instantaneous moment at which there is sticking and at which they have to be brought together in a container in which they will be dropping together so they can collide in a random fashion. If, on the other hand, the powder is merely moistened, a caked unsatisfactory powder will be obtained. It must indeed be conditioned so that agglomeration will occur.

The technology of chemistry is here clearly being used to achieve the desired product. The equipment to produce the instant powder is indeed of a technical nature and the chemical operations taking place therein are not merely incidental changes but are used and relied upon in order to make the end product. I do not think that the fact that an ordinary man might not appreciate all that is taking place in the process can disqualify it from being chemical. I agree the chemical process should be one in the ordinary sense of the word and not in the scientific sense, but I do not think it should be subject to not being so held if it is not appreciated by the ignorant man. I believe that although the person who is called upon to appreciate this should not be a scientific man, he should, I believe, not be one that is uninformed or unreasoned.

After this quotation, Thurlow J. said for the Court of Appeal:

I do not read the first paragraph of this quotation as purporting to be a statement of law of general application and I do not think the learned trial judge erred in considering the features of the process to which he referred in the paragraphs that follow it in reaching his conclusion.

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On the facts as found by him I reach the same conclusion. It is clear from the Continental Soya and Pentagone cases that the matter is not to be resolved simply by reference to the fact that chemical reactions occur in the process. But the fact that chemical reactions do occur in the process and in addition bring about the result must be of some importance in the situation as a whole and cannot be disregarded entirely.

Here is no mere process of nature. Nor is it akin to the purely mechanical process of sawing logs into lumber or grinding grain into flour. Nor yet is it like the baking of bread which, while involving chemical reactions, is not properly regarded as a chemical process. On the other hand it is a process which besides involving chemical reactions to produce the desired result, employs the substances involved in particular proportions and exploits their chemical characteristics in sequential stages under particular conditions at particular temperatures and for particular times. These, to my mind, are things that chemists do in carrying out chemical processes and, as I see it, these things, coupled with the fact that important chemical reactions and little else are involved, give the process its character. To my mind these features of the matter are sufficient to indicate that the process is properly called a chemical process in the ordinary sense and I do not think that conclusion is weakened by the consideration that some of the features of the process as a whole are carried out by mechanical means or that technicians or operators can be trained to carry out the process efficiently without their becoming chemists.

In my view, the Courts below failed to apply properly the principles established by this Court in Continental Soya Co. Ltd. v. J.R. Short Milling Co. (Canada) Ltd.[10], which case they did not however fail to mention. The reason for which it was there held that the patented substance was not prepared or produced by chemical processes was expressed as follows by the Chief Justice speaking for a majority (at p. 191):

The substance in question is not, I am satisfied, one “prepared or produced by chemical processes”, within the meaning of this enactment. Everything done by

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Haas and Bohn is in the nature of a physical, as distinguished from a chemical, process. I do not think the application of heat for the purpose of drying the substance, and for that purpose alone, can bring either the process or the product within the ambit of the section. The same may be said with regard to the application of water for the purpose of stimulating germination. The vital processes may, it may be assumed, involve chemical processes, but that, in my opinion, is immaterial. If that were sufficient to make section 40 applicable, it would be enough to say that, the soya bean being a natural vegetable growth, everything contained or derived from it is produced by chemical processes.

In my opinion, the situation is exactly the same in the present case, the only difference being that expert witnesses went on to describe in scientific terms at extremely great length, the application of heat and the addition of water in the form of steam. One must not be misled by the use of “hydration” to describe the addition of some water. The same must be said of the elaborate description of controlled temperatures. Pasteurization does involve controlled temperatures but no one would consider it a chemical process in the usual sense of this expression. The same is true of malting and of most food preparation processes. It is especially true of such food preparation processes as candy making, maple syrup boiling, maple sugar crystallizing, and so forth. The evidence is clear that a chemist will find subtle chemical changes occurring in the substances subjected to such processes, but this is not the test for deciding whether they are “chemical”.

In fact, this test was rejected by this Court when restoring the judgment at trial in Laboratoire Pentagone Ltée v. Parke, Davis & Co[11]. In that case, it was contended for the patentee that the process of preparing the patented antibiotic chloramphenicol was not chemical because the substance underwent no chemical change. This argument was rejected and the two methods used by the inventor were characterized as chemical processes

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(55 C.P.R. at p. 115; [1968] S.C.R. at p. 311) “because they call upon chemical substances and put their properties to work”. This was essentially based on the definition the trial judge had adopted for deciding the case and is quoted at 46 C.P.R. (at pp. 175-176):

A chemical process is one of a series of acts or procedures involving the use of chemicals, involving their properties. Or it could be better stated by saying, one or a series of actions or operations performed by the use of chemicals involving their properties.

In that case, the substances used in the process were undoubtedly “chemicals” within the meaning of this word in the usual language. They were in the case of one method (see p. 180): cyclohexanone, butanol, ethyl acetate and methyl isobutyl ketone; in the other (see p. 181): benzene, or petroleum ether. In the present case, the substance used is water and, in my view, the contention of counsel for the respondent in argument that water is a “chemical” is completely untenable. It is in direct contradiction of Duff C.J.’s words above quoted. If it was accepted, then every substance would be a “chemical”. Of course, this is so from the point of view of the chemist because he looks upon the chemical properties of every substance. But, in the usual language, the term “chemicals” does not include natural readily available substances such as water.

One must bear in mind that the whole purpose of the patented process is to facilitate the use of the product by the consumer. It is to make it easy to reconstitute the milk by dissolving the powder in water or in some other beverage in which the addition of milk powder will serve the same purpose as the addition of fluid milk. Naturally, the idea is to make as little change as possible in the milk solids so that the reconstituted milk will as closely as possible, approximate fluid milk. In effect, the hydration of the milk powder is nothing else than the addition of a small quantity of water,

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in order to facilitate ultimately the dissolution and dispersion in a large quantity of water by the consumer. In my view, the fact that in these operations, a chemist is able to detect some minute chemical changes is as irrelevant as in the Soya case. The distinction made by Parliament in s. 41(1) of the Patent Act is not expressed in scientific language but in common language, and what is a “chemical process” is to be ascertained by consideration of what is so understood in common language. In common language, the addition of water and the application of heat are not such processes as was explicitly held by this Court in the Soya case.

With respect, I have to express special disagreement with the last paragraph I have quoted from Thurlow J.A.’s reasons. He accepts that the baking of bread is not properly regarded as a chemical process, but, in my view, all he says to show that the patented process is “chemical” is equally true of bread making. There are undoubtedly some chemical reactions in bread making. The substances involved are employed in particular proportions when mixing the dough. Their chemical characteristics are exploited in sequential stages when the dough is allowed to rise and later baked. All this has to be done under particular conditions at particular temperatures and for particular times. In my view, it is abundantly clear that the baking of bread will not become a “chemical process” within the meaning of s. 41(1) because all the steps involved starting with the mixing of the dough are described by a chemist in scientific language or because they are described as performed by elaborate machinery, possibly with the help of a computer operating in real-time, instead of being performed by a country baker who does not even use a thermometer to control the temperature of his oven.

For those reasons, I would allow the appeal with costs throughout, reverse the judgments at trial and on appeal and hold that the alleged invention of Canadian Patent 566,787 does not relate to substances prepared or produced by chemical pro-

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cesses and intended for food within the meaning of s. 41(1) of the Patent Act, and that claims 14, 15 and 16 of the said patent are not invalid as being claims directed to the substance itself contrary to the said s. 41(1).

Appeal dismissed with costs, RITCHIE, PIGEON, BEETZ and DE GRANDPRÉ JJ. dissenting.

Solicitors for the appellant: Smart & Biggar, Ottawa.

Solicitors for the respondent: Gowling & Henderson, Ottawa.