Danny Titolo is a JD candidate at Osgoode Hall Law School.
The Federal Court of Appeal upheld the trial decision of Justice Gauthier in Phostech v. Valence ruling in favour of Valence Technology on a patent infringement lawsuit involving carbothermal reduction technology (CTR).
Valence is a leading manufacturer of advanced energy storage solutions based in the United States. More specifically, Valence develops and manufactures advanced lithium iron phosphate cathode materials as well as programmable battery modules and trays.
In January 31, 2007, Valence filed a lawsuit against Phostech Lithium Inc. for patent infringement. Phostech also develops and manufactures lithium iron phosphate. The company focuses primarily on developing the material used in lithium ion batteries for electric engines in the automotive industry. The infringement in question was related to a process for making lithium mixed metal cathodes for lithium batteries. The process for making a particular cathode (LiFePO4) was not commercially available due to the high cost of production. Valence and Phostech were developing new processes for developing the cathode. Valence’s process involved the use of CTR, which is a reduction reaction that employs carbon at high temperatures. Valence held three process patents on its technology: 2,395,115 and 2,466,366, which was a divisional of ‘115, and the subsequent 2,483,918 patent which was intended to claim an extension of the technology to a wider set of compounds.
Compounds used in the Phostech process support the idea that CTR was being utilized. Although it was difficult to determine whether or not a CTR was occurring inside Phototech’s industrial kilns, it was decided that on a balance of probabilities that CTR was used.
In February 2011, the Trial Court ruled in favour of Valence concluding that Phostech infringed on Valence’s CTR patent. The decision was appealed by Phostech, and heard the week of June 6, 2011. On August 17, 2011, the Federal Court of Appeal upheld the lower court’s decision and ruled in favour of Valence. The Court ruled that Phostech infringed on Valance’s Canadian CTR patent, 2,395,115, and found Valence's patents 2,395,115 and 2,466,366 valid. The appeal was dismissed with costs.
The Federal Court of Appeal reinstated the injunction ordered by the Trial court. The injunction prohibits Phostech from manufacturing and selling cathodes that are produced using Valence’s patented CTR process. Determination of costs will be dealt with by another court since compensation for trial and appeal expenses will be awarded to Valance as well as any potential loss of profits or damages.