Commentary – Amendments to Canadian Patent Act – Bill C-34Craig Wilson
On December 16, 2014, Bill C-34 received Royal Assent. This bill includes amendments to the Canadian Patent Act. The purpose of many of the amendments to the Patent Act is to align Canadian patent law with the Patent Law Treaty (PLT) done at Geneva on June 1, 2000.
Currently, new Regulations are being drafted to support the amendments to the Patent Act. Once these Regulations are in place, the Act will come into force. One might expect to the see the new Patent Act in force in the fall of 2017, if not sooner.
The following commentary reflects the authors view and does not constitute legal advice.
Provisions are made for new rules or regulations relating to carrying into effect the PLT, representation of applicants by a patent agent or other person, the correction of request for priority, unity of invention, unacceptable reasons (guidelines) for reinstatement, and to permit the Commissioner to extend deadlines during or after the time period if the Commissioner considers the circumstances to be justified.
At filing, the filing fee no longer has to be paid to secure a filing date. A late fee is payable in addition to the filing fee at a date to be determined in the rules. Also the application may be filed in an language other than English or French to receive a filing date. The translation into English or French will be a completion requirement and your rights associated with publication may extend only from when the translation is filed if the translation is after the publication date. These provisions to not extend to PCT patent applications.
INCORPORATION BY REFERENCE STATEMENT
The Act contains a new provision for a patent application to contain a statement of incorporation by reference of the priority document. The Office may require that the applicant file the priority documents and prior to publication, the applicant may have to remove the incorporation by reference statement and add any subject matter from the priority application into the Canadian patent application.
MAINTENANCE FEES OF PENDING PATENT APPLICATIONS
Maintenance fees on pending applications are due as there were in the past (annually). The real change comes in Section 27.1 from procedures that come into effect if the maintenance fee is not paid by the due date.
Currently if a maintenance fee is not paid by the due date the application goes abandoned. Abandoned applications can be reinstated no later than one year from the date of abandonment by simply requesting to reinstatement, paying the maintenance fee and paying a reinstatement fee. If the one year period expires and the application is not reinstated, the application becomes irrevocably abandoned.
The amendments introduce potential grace periods that if met, prevent the application from going abandoned. The amendments set out that if the maintenance fee is not paid on time, then an additional late fee becomes due. If the maintenance fee is not paid, the Commissioner shall send a notice that the application will be deemed to be abandoned if the maintenance fee and late fee are not paid within 6 months of the original maintenance fee due date or 2 months after the date of the notice (presumably the later of these two dates). If the maintenance fee and late fee are paid before the notice is sent or after the notice is sent and before later due dates noted previously, the maintenance fee shall be deemed to have been paid on the first due date. Therefore, the application is not deemed to be abandoned. If the application goes abandoned, then the new reinstatement procedures come into play (discussed below ) as well as potential intervening rights (a new provision).
MAINTENANCE FEES ON ISSUED PATENTS
Section 46 This section on payment of maintenance fees for issued patents follows the same reasoning as that for payment of maintenance fees for pending application for subsections 46(1), (2) and (3).
The term of the patent expires if the renewal fee is not paid on time or if this fee and a late fee are not paid at the end of 6 months after the due date or 2 months after a notice from the Commissioner.
This expiration can be reversed if within a prescribed time (to be determined by the regulations), a request is made for the patent to never have been expired, a statement in the request of the reasons for failure to pay the fee and late fee, and make provisions for the payment of the maintenance fee and all of the late fees.
In view of the reasons given, the Commissioner is to determine that the failure occurred in spite of the due care required by the circumstances having been taken and informs the patentee of this determination. In view of the notice letter sent to the applicant from the Commissioner, the bar may be set higher for the Commissioner to reach a determination that the failure occurred in spite of the due care required by the circumstances. The due care provisions may be comparable to unavoidable and not unintentional. The regulations should provide some indication or guideline of what constitutes due care.
Also, there is a provision for the Federal Court to be able to overturn a Commissioner’s decision to remove a patent expiry if 1) the statement of reasons contains an untrue material allegation, or 2) the failure did not occur in spite of the due care required by the circumstances having been taken.
Currently, Canadian patent law recognizes the Paris Convention and permits an applicant to claim the benefit of an earlier filed priority application if the Canadian patent application is filed no later than one year after the filing of the priority application.
New section 28.4 (6) sets out that the filing date of a pending application for certain provisions in the Patent Act shall be deemed to be within 12 month after the filing date of the regularly filed applications (priority application) if the filing date is more than 12 months and less than 14 months after that priority application. The applicant must make a request for this subsection to apply, must states in the request that the failure to file the pending application within 12 months was unintentional, and must comply with the priority request requirements. It appears from the Act that an applicant need only state that the failure to file the application within 12 months was unintentional without reasons. The new regulations may introduce a requirement for reasons.
New section 28.4(7) allows the Federal Court to set aside the priority date permitted by section 28.4(6) noted above if the court determines the failure was intentional. So you better have your reasons documented in the event you should have to enforce a patent in the Federal Court that claims this priority benefit.
Canada has what I refer to as a 1 year grace period on public disclosures made by the applicant or by a person who obtained knowledge directly or indirectly from the applicant. This means that such a public disclosure by the applicant cannot invalidate a Canadian patent for anticipation or obviousness. The 1 year grace period runs from the filing date of the Canadian application (or PCT international filing date). Unlike the AIA, there is no provision in the Canadian patent Act Amendments to change this 1 year grace period to be calculated from either the filing date in Canada or from the priority filing date.
What the amendments introduce is the circumstance where the claim date (priority date) is before the 1 year grace period, then the grace extends from the claim date (priority date). This claim date provision has been added for patent applications being filed up to 14 months after the priority claim date and still being able to claim convention filing under the Paris Convention (see comments below).
Currently, the prescribed time for requesting Examination is 5 years after the filing date of the application. If the request for examination is not made and paid within the 5 years, the application goes abandoned and can be reinstated in one year of the notice abandonment. If the application is not reinstated in one year, the application goes irrevocably abandoned.
The amended Act requires the Commissioner to send a notice that the Examination has not been made or the fee not paid. The applicant can, within two months of this notice, make the exam request, pay the exam fee and pay a late fee. If the Applicant takes this action within 2 months of the notice, or after the exam due date and before the notice is sent, then the request and payments will be deemed to have been made on time and the application will not go abandoned. If the Applicant does not take action within 2 months of this notice, the application goes abandoned. The Abandoned application is subject to the new reinstatement provisions of the amended act (see below).
Sections 49 to 51 of the act are replaced by new section 49 which relates to transfers (formerly known as assignments).
The Commissioner will record transfer subject to evidence to be established by Commissioner and on request made by transferee. The transfers will be subject to new regulations which can be different for a patent vs. applications. Note: currently the transfer of an application requires the signature of the assignee whereas the transfer of a patent requires the signature of the assignee and all other parties to the transfer (assignor). There is no longer a provision in the Act for the other parties to sign the patent transfer.
Section 49(4) relates to the transfer of a patent that has not been recorded being void against a subsequent transferee, if the transfer to the subsequent transferee has been recorded. This wording is limited to a patent. Previously, this clause effected every transfer and hence both applications and patents. So the new wording does not appear to cover inventor transfers for applications transferred to applicants.
Section 49(5) This is new and relates to both application and patent transfers and gives the Commissioner the authority to remove a prior application or patent transfer upon receipt of evidence the transfer should never have been recorded.
Section 49(6) For a patent, the Commissioner cannot remove the recording because the patent had been previously transferred by the transferor to another person. By it silence, this could be a valid reason for removing a previously recorded transfer by an inventor for a patent application. Need to wait to see if the regulations effect this interpretation.
Take away. It may be less imperative to register transfers on applications by inventors and just as important to record patent transfers.
Section 55.11 is directed to intervening rights as the result of an abandoned application that is reinstated or an expired patent that is revived. The intervening rights are directed to otherwise acts of infringement. The regulations are to prescribe a period during which the intervening rights may come into effect. It should be noted that the term “intervening rights” is not specifically mentioned in the Act.
55.11(1) sets out the conditions under which subsections (2), (3) and (4) may apply. To summarize subsection (1) it appears that abandoned applications and expired patents will give rise to intervening rights. Note: Currently properly reinstated patent applications do not suffer a loss of any rights of enforcement for infringement.
Subsections (2), (3) and (4) set out the types of intervening rights.
Subsection (2) sets out that no action for infringement of a patent lies against a person in respect of an act that would otherwise constitute an infringement of the patent if that act is committed in good faith by the person during a period to be established by the regulations. The regulations should be helpful in clarifying when this period starts and ends. Presumably, this period, established by the regulations, will be sometime between the time the application goes abandoned, or the patent expires, and the time the application is reinstated or the patent is no longer expired.
Subsection (3) Introduces more intervening rights that may extend after the prescribed period.
Subsection (4) intervening rights established under (2) and (3) are transferred to a person who acquires the patented invention directly or indirectly from a person having intervening rights under (2) and (3).
ABANDONMENT AND REINSTATEMENT OF APPLICATIONS
For the most part 73(1) and (2) define the instances of when an abandonment occurs, which correspond to the present circumstances, and introduces by the amendments the notice provisions and late fee payments noted above.
Section 73(3) relates to reinstatement of abandoned applications. Interestingly, it introduces that the reinstatement is now subject to the regulations. So we need to see have how the regulations may further impact the interpretation of the Act.
Within the prescribed time (used to be 1 year but may be different in view of the 6 month periods and 2 month periods from an office notice grace period) the applicant must make a request for reinstatement, state the reasons for the failure to take action that should have been taken to avoid abandonment and take the action that should have been taken . The reasons are new.
The Commissioner must then determine that the failure occurred in spite of due care required by the circumstances having been taken and the Commissioner informs the applicant of this determination.
The Federal Court may declare an application to never have been reinstated if the statement of reasons contains an untrue material allegation or the failure did not occur in spite of the due care required by the circumstances having been taken.
These changes place a heavy burden on the applicant when it comes to reinstating. Let us hope the regulations shed some light on what the Commissioner will or will not accept. In view of this and in view of intervening rights, abandonment and reinstatement procedures in Canada appear to be fraught with danger and should be avoided.
Subsections 73(4) and (5) remain, however, the practice under (4) of not paying an allowance fee to allow the application to become abandoned and inserting continuation or divisional claims to re-open the prosecution introduces the risk of intervening rights and having to provide a reason for the failure to take action that should have been taken to avoid abandonment and that allows the Commissioner to determine that the failure occurred in spite of due care required by the circumstances. If the regulations do not provide a mechanism for this section, the process of adding new claims after allowance may be very challenging.
There regulations are able to waive the due care requirement. So there may be a period in the abandonment of an application where the application can be reinstated without having to demonstrate due care was taken. This would be very important for abandonments that occur as a result of not timely paying a final fee or responding to an office action.
General Comment – The patent office typically sends as a courtesy voluntary notices that a case is abandoned due to not filing a response to an Examiner’s requisition (aka office action) or paying a final fee. There is no mandatory provision for the office sending a letter on these two matters like there is for maintenance fees and exam requests. However, one would think that the office will continue to send courtesy letters for Examiner’s requisitions and final fees. The practice of diarying all incoming mail from the patent office should continue so that the patent agent can swear an affidavit that correspondence was never received. In this case the abandonment should be removed and the application should proceed as if the abandonment never occurred. This is a current office practice. Let’s hope that the rules will codify this practice. Again this raises the importance of practitioners having to follow up on all files. Intervening rights and the reasons to reinstate appear to now be an avenue of last resort.
The role of the Patent Agent appears to be changing. The amended act sets out that in prescribed circumstances, an applicant, patentee or other person shall be represented by a patent agent in all business before the Patent Office. It is not so much as what this section says as what it no longer says. Previously, the Act spoke to patent agents being “entitled to represent applicants in the presentation and prosecution of applications or in other business before the Patent Office”. It is likely that this change together with changes to be made in the regulations for representation before the patent office by a patent agent or other person, will open the door for other persons to pay fees on pending applications. There is a published page on CIPO’s website ( http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03533.html ) that sets out how Patent Rule 6 should be changed to allow any interested party to pay a maintenance fee on a pending patent application to bring the rules into compliance with the PLT. It now appears that it is the intention of the Government to have the rules premit for maintenance fees to be paid by third parties. When this change comes into effect with the new regulations, it will have significant consequences for applicants in Canada. There is also consideration being given to who can represent the patentee for the filing of disclaimers, reissues and re-examination requests.
Note: Section 29 has been repealed. This section had required that a non-resident applicant was required to appoint a representative who has an address in Canada.
New section 73.1 sets out that if there is a failure to comply with an administrative requirement and the patent is granted thereafter, the patent will not be held invalid. This provision is expected to prevent a patent from being held invalid if a maintenance fee or wrong fee is paid, for example, and the case is not abandoned before the patent office.