On September 5, 2025, the Federal Court of Appeal ruled in Canada (Attorney General) v. Matco Tools Corporation, 2025 FCA 156, reaffirming a strict “due care” standard for reinstating abandoned Canadian patents. This decision overturns a more flexible test from the Federal Court and highlights the high level of care required from applicants and their agents.

What is “Due Care”?

Under the Patent Act, missing deadlines like annual maintenance fees causes abandonment when the maintenance fee and late fee are not paid. Reinstatement is only possible if the failure occurred despite due care—meaning all reasonable precautions were taken.

Since the standard was introduced in 2019, reinstatement has been very difficult. Only about 12% of requests succeed.

The Matco Tools Case

Matco relied on a third-party annuity service to manage and pay maintenance fees. When switching annuity service providers, a data migration error caused one application to be dropped from the payment system of the annuity service provider. The fee went unpaid, and CIPO sent a Notice of Non-Payment. The Canadian patent agent forwarded the notice to U.S. counsel.  The U.S. counsel did not forward the notice to Matco apparently because of Matco’s standing instructions that the U.S. counsel was to “take no further action” with respect to the payment of maintenance fees. With no payment made, the application was abandoned.

The Federal Court had supported a broader two-stage test, considering both the initial data migration error and later actions. But the Court of Appeal disagreed, restoring CIPO’s stricter approach.

Court of Appeal’s Key Findings

• All parties must act with due care. Agents, counsel, and service providers share responsibility.
• Focus is on actions taken post non-payment notice of fees. Pre-notice mistakes (like the data error) do not excuse failure to act after CIPO’s notice.
• Strict standard applies. Any breakdown in communication to the applicant can block reinstatement.

Why It Matters

This ruling confirms that reinstatement will remain rare. Patent owners must:

• Treat every CIPO notice as urgent.
• Maintain strong, redundant reminder systems.
• Ensure clear responsibility among all agents and service providers.

The message is clear: vigilance is the only safeguard against losing patent rights.

For more information on this case please visit Canada (Attorney General) v. Matco Tools Corporation, 2025 FCA 156 (CanLII)

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Updated September 2025