Limitations for Patent Infringement Claims: Alberta Law Clarified by Rare Five-Member Appellate Panel

On January 28, 2025, a rare five-member panel of the Alberta Court of Appeal (ABCA) issued its unanimous and much-anticipated decision in JL Energy Transportation Inc. v. Alliance Pipeline Limited Partnership (Decision). The key issue was whether a patent infringement action commenced in Alberta falls under the two-year limitation period in the provincial Limitations Act or the six-year period in the federal Patent Act. The ABCA ultimately found that the six-year limitation period applies, expressly overturning its earlier decision in Canadian Energy Services Inc. v. Secure Energy Services Inc. (Canadian Energy Services), which came to the opposite conclusion.

Background

In May 2016, JL Energy commenced an action seeking C$638-million in damages, which included a claim for infringement of a Canadian patent brought against a series of defendants and former licensees. It alleged that since 2010, the defendants had been flowing fluids through their respective pipelines using JL Energy’s patented method. In response to an application for summary dismissal, the lower court noted that the claim had been brought within six years but not within two years of JL Energy’s knowledge of the defendants’ activities.

The lower court found that the two-year limitation period in the Alberta Limitations Act applied and summarily dismissed the claim. In doing so, the lower court followed the 2022 decision of the ABCA in Canadian Energy Services, which held that the applicable limitation period for breach of licensing agreements and patent infringement is two years in Alberta, rather than six years under the Patent Act.

In 2024, a unanimous ABCA granted JL Energy leave to seek reconsideration of the earlier decision in Canadian Energy Services. On the appeal, the ABCA had to confront one key issue: the applicable limitation period for a breach of patent claim commenced in Alberta.

The Decision

In the Decision, the ABCA identified several “shortcomings” in its earlier decision in Canadian Energy Services. In particular, the court found that the panel in Canadian Energy Services had relied on a “literal interpretation” of section 12 of the Limitations Act, finding that since the litigation was “a proceeding commenced in Alberta,” the Alberta Limitations Act applied without exception. In the Decision, the ABCA held that the better analysis is to ask whether the Alberta Limitations Act excludes claims for which Parliament has provided a specific limitation period (such as in the Patent Act).

Overall, the ABCA found that, properly interpreted, the provincial Limitations Act does not purport to override federal statutes. Importantly, the court found that the provincial Limitations Act was not intended to apply to claims created under federal legislation that are subject to specific federal limitation periods, because they are not claims “to which [that] Act can apply.” Therefore, the ABCA did not need to resort to the doctrine of paramountcy, wherein federal legislation prevails over conflicting provincial legislation, to resolve the conflict between the two statutes.

As a result, the ABCA allowed the appeal on the limitations issue. JL Energy’s claim for patent infringement falls under the limitation period in section 55.01 of the Patent Act and was commenced in time. The court held that the reasoning on the limitations issue in Canadian Energy Services should no longer be followed. 

Conclusion 

In the Decision, the ABCA has clarified that claims for patent infringement that are commenced in Alberta fall under the six-year limitation period in the federal Patent Act and not the two-year limitation period under the Alberta Limitations Act. Unless and until the Supreme Court of Canada weighs in on the issue, the Decision provides clarity to patentees for commencing breach of patent claims in Alberta.

For further information, please contact the authors of this bulletin or any other member of our Litigation & Dispute Resolution group.