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Changes to patent law

How formal procedures and substantive rights will be affected
|Written By Jean-Charles Grégoire
Changes to patent law

Canada is preparing to implement the Patent Law Treaty, which aims to harmonize formal procedures in respect of patent applications. Statutory amendments which implement and go beyond the treaty were recently passed into law, and regulatory amendments are expected to be released in draft for public consultation late 2016. The statutory and regulatory amendments will come into force after that.

Although Canada has been a party to the treaty since 2001, it had not taken steps to implement it. Then, in December 2013, the United States became the latest country in which the treaty has come into force. The Government of Canada tabled it before Parliament within two months, explaining in a memorandum that harmonization would, in addition to reducing regulatory and procedural burdens, improve alignment with Canada’s major trading partners.

After the government introduced implementing amendments to the Patent Act in omnibus budget Bill C-43, the statutory amendments passed into law a mere 54 days later in December 2014. An overview of the amendments is below.

Filing requirements are simplified. Obtaining a filing date plays an important role in establishing a right to an invention. Currently, an applicant obtains a filing date by filing an application with a filing fee. No fee, no filing date. Under the amendments, a filing fee is no longer required to obtain a filing date. If the filing fee is missed or otherwise not fully paid at filing, the Commissioner of Patents sends a notice informing the applicant of non-payment and requesting payment with a late fee.

Priority can be restored. An application may claim priority to a previously filed application (the priority application) to benefit from the filing date of the priority application (the priority date). Currently, if the application is not filed within 12 months of the priority date, then the priority right is lost. Under the amendments, the applicant will have an additional two months to file the application if the failure to file within 12 months was unintentional.

Missing parts can be submitted after filing. The filing of an application is accorded a filing date. Currently, if parts of the application’s specification or drawings are missing at filing, submitting them afterwards can be problematic. Under the amendments, an applicant can submit a part of the specification or drawing that was missing at filing, while maintaining the filing date accorded. The addition must be completely contained in the priority application, and must be added within a prescribed period not more than six months after the filing date.

The grace period is adjusted. While disclosing an invention to the public before filing has the effect of barring the invention from being patented in most jurisdictions, Canada provides a one-year grace period. Currently, the grace period runs to one year before the filing date in Canada, such that the invention can still be patented if an application is filed in Canada within one year of the disclosure. Under the amendments, the grace period will be allowed to run to one year before the priority date, such that the invention can still be patented if its priority application was filed within one year of the disclosure.

The change brings Canada’s grace period into harmony with a number of other countries including the U.S. (under its new first-to-file system). To preserve the ability to obtain patent protection outside of Canada, and avoid relying on an exception to what is otherwise a ground of invalidity, it remains preferable to file an application before disclosing an invention.

Abandonment requires notice (sometimes). During the pendency of an application, failure to perform certain steps will result in the application becoming abandoned. The amendments provide relief against abandonment in respect of certain fee payments, by introducing notices before abandonment and by extending time limits.

An application will not become abandoned for failure to pay a maintenance fee by a prescribed date without the applicant first being notified by the commissioner and being provided additional time to pay the maintenance fee, with a late fee, namely before the later of six months after the prescribed date and two months after the notice.

Where the applicant fails to request examination with the requisite fee, the commissioner will similarly be required to provide a notice before abandonment, but the extension provided is two months after the notice. Failure to respond to an Office Action, however, continues to result in abandonment without a notice.

Reinstatement becomes more complicated. An application that has become abandoned can be reinstated within a certain period of time.

Currently, the application can be reinstated as of right within a year by taking the action that should have been taken to avoid abandonment, requesting reinstatement, and paying a reinstatement fee. To curb attempts to unduly prolong uncertainty associated with abandonment, according to the Canadian Intellectual Property Office, additional requirements will apply to reinstatement in certain circumstances.

Under the amendments, in order for an application to be reinstated, an applicant will additionally be required to state the reasons for failing to take the action that should have been taken to avoid abandonment, and that the commissioner determines that the failure occurred in spite of due care. The Governor in Council will be provided the power to regulate in respect of the circumstances in which reasons and due care will not be required. It remains to be seen how this will affect the current ability to abandon an application after allowance to reopen prosecution, for example to add claims upon reinstatement.

However, the CIPO has indicated, in an example of how the regulations might be implemented, that applicants requesting reinstatement past a period defined in the Patent Rules would need to meet the requirements of reasons and due care. Accordingly, perhaps it will be possible to reopen prosecution while avoiding the requirements of reasons and due care, by abandoning the application as described above but then reinstating the application before the prescribed period ends.

Administrative defects are contained. The amendments confirm that a patent is not to be invalidated due to an administrative defect during the application stage. A patent cannot be declared invalid only because, before the patent was granted, the application was abandoned and not reinstated. The amendments carve out an exception, however, namely where an untrue material allegation was made in the statement of reasons or where due care was not exercised.

Third-party rights are introduced. To mitigate the impact of potentially longer periods of market uncertainty and discourage uncompetitive behaviour, according to the CIPO, a good faith defence to infringement is provided under the amendments. No action for infringement will lie against the act of a third party that would otherwise have constituted infringement, where the act was made in good faith during a prescribed period. The introduction of these third party rights goes beyond Canada’s treaty obligations.

The amendments to abandonment and reinstatement practice, which introduce a patchwork of extension periods and create more onerous requirements, underline the need to exercise caution and limit their use. The amendments do, however, provide welcome relief in terms of missing parts and priority restoration.

Jean-Charles Grégoire is an associate at Marks & Clerk, with a focus on securing patent and industrial design protection. He can be reached at jcgregoire@marks-clerk.ca.


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