Canada’s new patent regime coming into force October 30, 2019 – beware of pitfalls for reinstatement of rights

Patenting can be expensive.  As a company expands their patent portfolio and files in multiple countries, often it becomes necessary to cull certain patents/applications in a portfolio to keep costs in check.  Culling patent rights is quite simple in principle – in practice it merely involves not paying a fee due to a patent office and/or not taking a particular action required and a patent right will lapse.

On the other hand, selecting which patent or patent application in a portfolio to abandon isn’t always a simple decision.  A patent right generally lasts for 20 years (with exceptions) and so identifying which patents/applications to jettison may involve predicting their future value – something that is inherently imprecise.  So what if you made the wrong decision and want to reinstate a patent right after abandonment?  Then what?

Most countries have legal back-stops that allow patent applicants to reinstate patent rights within strict time lines.  However, Canada is currently more permissive than most countries in this respect.  If a patent or application expires or goes abandon, in many instances an applicant can reinstate rights within one year of the expiration/abandonment date, provided an additional fee is paid, among meeting other legal requirements.  No reason for failure to observe the missed deadline needs to be provided.  Relatively speaking, this system is quite user friendly.

However, this is all changing on October 30, 2019.  Many of the changes will significantly complicate mechanisms for restoration of rights after a missed deadline.

Under the new patent regime in Canada, in a nutshell, there will be different reinstatement schemes that vary in complexity and stringency depending on the nature of the missed deadline.  Without going into too much legal detail, one of the schemes invokes a due care standard in which the reasons for the failure to meet a deadline must be submitted to the Commissioner within certain time frames after the missed deadline.  The Commissioner determines whether such failure occurred “in spite of the due care required by the circumstances having been taken”.[1]  For example, this due care standard applies within a certain time period after a maintenance fee payment deadline is missed.  This is a significant departure from the current “as of right” system for reinstatement of patent rights.  In addition, in some instances competitors will have a safe harbour for infringement after certain timelines subsequent to a missed deadline.

So why introduce such complicated changes?  The changes to Canadian patent law were required for alignment with the Patent Law Treaty (PLT), which is an international treaty aiming to harmonize and formalize procedures among different countries.  While the goals of the PLT were meant to simplify formal procedures, Canada’s current laws on revival of rights are now far less stringent than other countries.  Harmonization thus has the opposite effect of streamlining procedures for reinstatement of rights.

So what is the moral of the story?  Since the system is less user-friendly, it will become necessary to work even more closely with your patent agent to make sure the stricter legal requirements are met for revival of rights.  So long as you adhere to the new requirements, it is still possible to successfully revive patent rights in Canada.  In fact, in some instances, the late fee penalties will be less costly than under the current regime.  Currently, the reinstatement fee is $200.00, but under the new regime, provided the new timelines are met, will be only $150.00 for revival of rights for failure to pay a maintenance fee.  So there is a small silver lining.

However, navigating the new laws will definitely require more legal savvy.  It is important to realize that there may be serious consequences for failure to adhere to certain time limits and, as noted above, in many instances, it will not be possible to remedy such failure merely by payment of a reinstatement or late fee.  Given the complexity of the new patent regime, legal advice should always be sought for a particular case at hand with respect to the restoration of rights and the specific deadlines involved.

[1] Section 73(3) of the new Patent Act.