Canada: Innovation To Commercialization: A Guide To Protecting Your Intellectual Property

WHAT IS INTELLECTUAL PROPERTY?

Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images and designs used in commerce.

Intellectual property is divided into two categories: Industrial property, which includes inventions (patents), trademarks, industrial designs and geographic indications of source; and copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings and those of broadcasters in their radio and television programs.

Source: World Intellectual Property Organization

INTRODUCTION

At Borden Ladner Gervais LLP (BLG), we are excited by new ideas. We also understand that nurturing an idea and developing it into a viable business opportunity can be a daunting task. How do you translate your discovery into dollars?

A strong foundation for your company is absolutely crucial. In many cases, that foundation is your company's Intellectual Property (IP). Your IP must be effectively protected from the outset to adequately support a clear path to commercialization.

We have developed this reference guide to provide a basic introduction to patents and commercialization. Whether it serves as an introduction to the subjects or simply reinforces your current knowledge, we hope that it will assist innovators on the path from innovation to commercialization in bringing products and services to market for the benefit of Canada.

PATENTS

What is a patent and what does it do?

A patent is an IP right granted by a country to the patent holder for a specific period of time. It gives the patent holder the exclusive right to prevent others from making, using, offering for sale, selling or importing articles covered by the invention without the patent holder's permission. In exchange for this exclusive right granted by a country, the patent holder must disclose the invention to the public.

What a patent does not do is grant the right to make, use, offer for sale, sell or import the patented article. The patent holder must comply with laws that affect the manufacture, advertising, use and sale of the patented article (for example, the Food and Drugs Act and its regulations may apply to a biotechnology invention).

A patent only offers protection in the country in which it is obtained. Therefore, an Applicant should obtain a patent in every country where a substantial market exists for the patented article (including articles developed from a patented process).

What criteria must my invention meet to be patentable?

Invention

Each country has its own laws governing what is patentable. In Canada, an invention is defined as "any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter." In the United States, whoever "invents or discovers any new and useful process, machine, manufacture or composition of matter" or any improvement thereof is entitled to a patent. In Europe "any invention which [is] susceptible of industrial application" is patentable unless a specific exclusion is noted. Each country continues to clarify the limits of the law regarding what is, and is not, patentable.For example, the Canadian courts and the Canadian Patent Act have established the following criteria:

• the subject matter must relate to a useful art as distinct from a fine art;
• the inventor must adequately describe the subject matter so it is operable, controllable and reproducible;
• the subject matter must have practical application in industry, trade or commerce; and
• the subject matter must be more than a mere scientific principle or abstract theorem.

The terms "art," "process," "machine," "manufacture" and "composition of matter" are not defined in the Patent Act and are used as generally understood. Although this seems to include anything and everything, the Canadian courts and sections of the Patent Act exclude specific subject matter from being patentable. For example, a patent cannot be granted for software. Business methods may be patentable according to a ruling of the Federal Court in the Amazon¹ decision. The court held that there are three important elements in the test for whether subject matter falls within the definition of an "art": i) it must have a practical application, ii) it must be a new and inventive method of applying skill or knowledge, iii) it must have a commercially useful result. Methods of medical treatment are also not patentable. Canadian courts do not allow patents for higher life forms, including plants and animals. The Supreme Court of Canada ruled accordingly in the Harvard Mouse decision.² However, a subsequent decision allowed claims to a plant cell to be enforceable against an infringer possessing an entire plant.³ This decision gives inventors of new higher life forms some protection.

The law continues to evolve. In particular, caution needs to be taken when attempting to patent diagnostic methods, methods of medical treatment, higher life forms, business methods and computer programs. The laws on these subjects vary depending upon the country, and the specific limitations can be subtle. Often commercially valuable patents can be designed with use of the appropriate wording. Therefore it is very helpful to consult a patent agent on these matters.

Novelty/Disclosure

In many countries an invention must not have been disclosed anywhere in the world before the initial patent application is filed (not necessarily in Canada) or the invention will not be patentable. Disclosure means any form of public disclosure including journal articles, published patent applications, abstracts, conference proceedings, trade pamphlets, magazine articles, theses, PowerPoint presentations, oral disclosures and trade-show viewings.

In Canada, an exception exists where the novelty of the invention will not be destroyed if the inventor, or someone acquiring knowledge directly or indirectly from the inventor, makes the information public within one year before the patent application is filed. Inventors should pay particular attention to journals or conference materials that post material on the Internet before the print versions are published. The earliest public disclosure date will prevail. The USA, Mexico and Australia offer a similar grace period.

As noted, many countries do not allow grace periods, meaning that, if the invention is disclosed anywhere in the world before the initial application is filed (not necessarily in any one of those countries), it will not qualify for protection in all of those countries. For this reason, inventors are strongly advised not to disclose their invention before filing appropriate patent applications.

For Canadian patent applications, the grace period for the public disclosure covers one year back from the filing date in Canada. Therefore, when an inventor makes a public disclosure anywhere in the world, the inventor must file a patent application in the Canadian Patent Office within one year of that disclosure so that the invention may still be considered novel. If the inventor files the patent application after the grace period has expired, the disclosure counts as prior art.⁴

If the inventor must disclose all or some elements of an invention during business negotiations, he or she must protect the confidentiality of that information by having the recipient sign a confidentiality agreement (also called a non-disclosure agreement) beforehand. A confidential disclosure (preferably supported by a signed agreement) does not destroy the novelty of an invention. However, there is always a possibility that the recipient will disclose the confidential information, accidentally or otherwise.

In Canada, selling a product that incorporates an invention does not constitute public disclosure if the product cannot be "reverse-engineered" to reveal the invention. If the sale of the product does not reveal or disclose the invention to the public, then a subsequent patent directed to that invention could still be granted to the inventor.⁵

Inventive Ingenuity/Obviousness

For subject matter to be inventive, it must not be obvious. A determination of what is obvious is undertaken by each national patent office. In most cases, it must be more than a mere workshop improvement. If someone with general knowledge in the subject matter can "discover" the invention, the invention is considered obvious and therefore non-patentable. In addition, the combination of known elements may make the subject matter obvious.⁶ Keep in mind, however, that everything appears obvious in hindsight. It is therefore helpful to consult a patent agent to determine whether the subject matter would be considered obvious.

As with novelty, many countries do not allow for a one year grace period, but in Canada if the inventor makes a public disclosure anywhere in the world, and so long as the Canadian patent application is filed within one year of that disclosure, the disclosure will not apply against the Canadian patent application and make the invention obvious.

Like novelty, the one-year grace period only applies if the inventor, or someone acquiring knowledge directly or indirectly from the inventor, discloses the information. A disclosure by any other person will count as prior art.⁷

Utility

To qualify as an invention, the subject matter must have utility. Utility is generally assessed on a claim-by-claim basis. In Canada, if an invention does not do what the claim says it will do, the application is rejected. The inventor must carefully consider the claims stated in an application to avoid claiming any subject matter that does not work as described. Any such claim would be considered invalid. In some cases, the subject matter does not have the sufficient or substantial utility required for patentability. Expressed sequence tags (ESTs), for example are not considered to meet the utility requirement under many laws.⁸

What do I need to understand about Patent Laws?

Each country has a set of laws relating to the protection of patents in that country. For example the current patent law in the USA is set out in Title 35 of the United States Code. The current Canadian patent law is set out in the Patent Act.⁹ On October 1, 1989, amendments were made that changed the system from first-to-invent to a first-to-file. The Act was amended again, effective January 1, 1994, to comply with the North American Free Trade Agreement. As a result of these amendments, and in response to the use of the first-to-file system, more amendments were made, effective October 1, 1996. Because of the changes over the years, it is important to refer to the relevant version of the Act and to the appropriate transitional rules.

As noted earlier, a patent application must be filed in each country for which patent protection is desired. Each country applies its own laws to determine whether the invention is patentable, and will ultimately issue a patent, if appropriate. Filing in each desired country is clearly a costly endeavor, and it is often desirable to delay many of these costs for as long as possible.

The Patent Co-operation Treaty (PCT) is a multi-lateral treaty that provides an administrative procedure to allow for the filing of a single international patent application, for all countries which are a party to the treaty.¹⁰ The filing of a PCT application allows the Applicant (inventor(s)/owner(s)) to express the intention to have national patent applications filed in the indicated countries, but permits the deferral of the cost of translations and national filing fees for at least 20 months from the first date on which a patent application on the subject matter has been filed.

Review of the merits of the application can often be delayed even further. Most jurisdictions permit national filing to be deferred for at least 30 months.¹¹

First-to-invent

In Canada, before October 1989, the rights to an invention were determined by the date of the invention. If two inventors filed applications containing the same subject matter, a patent for the overlapping subject matter would be granted to the inventor proving the earlier date of invention. The USA is one of the few jurisdictions still operating under this first-to-invent system.

Patents issued in Canada before October 1989 were granted a term of 17 years from their date of issue. Amendments that came into effect on July 12, 2001 extended this term to the longer of 17 years from the date of issue or 20 years from the date the application was filed. This extension applies only to patents that were filed before October 1, 1989 and in good standing as of July 12, 2001. A patent that expired before July 12, 2001 cannot be revived to benefit from the extension.

First-to-file

Almost all countries (except the USA as noted) operate on a first-to-file basis. This means that the exclusive rights granted in each country are given to the first person to file a patent application on the subject matter. Luckily, it is not necessary to race to each patent office in the world to demonstrate first filing. Rather, in accordance with the Paris Convention, the filing of a "priority" patent application in any Paris Convention member country¹² will be considered as the first filing date (or "priority date") in each Paris Convention member country, if certain criteria are met. In particular, a patent application can "claim priority" to an earlier-filed application that described the same invention, so long as the later application is filed no more than 12 months after the earlier-filed application and the subject matter in the earlier-filed application fully supports the claims in the later application. When properly and timely filed, the later application enjoys the benefit of an earlier "priority date" or "claim date" that corresponds to the filing date of the earlier application. Where two or more inventors claim the same subject matter in separate applications, the inventor having the earliest claim date is entitled to a patent for the overlapping subject matter.

For example, since October 1, 1989, when Canada converted to a first-to-file system, the filing date serves as the "claim date" to determine priority among competing claims to an invention.

As a member of the Paris Convention, as well as NAFTA and WTO agreements, Canada will grant an earlier claim date if:

• an application was filed in a country that is a member of one of these agreements¹³,
• an application was filed in Canada within one year after the earliest filed application, and
• the Applicant claimed priority from the filing date of the earlier filed application. Such an earlier filing date is referred to as the priority date or "claim date."

It is important to note that each claim in a Canadian patent application has a claim date. Therefore, several priority applications may be relied on to support different claims of an application, provided that the Canadian application is filed within one year from the earliest application. A claim may derive its claim date from any of these priority applications, not necessarily the earliest one. Where several priority applications are relied on, claims in the Canadian application may have different claim dates from each other. This may be significant when determining novelty and obviousness of the claimed subject matter, particularly when relevant prior art is published between the earliest filing of the priority application and the Canadian application.

Publication of Patent Applications

Patent applications are published or "laid open" to the public 18 months after the earlier of the filing date or priority date. There is a limited exception in the United States. An Applicant can request that the application not be published if the invention disclosed has not, and will not, be the subject of an application filed in any other country or under any multilateral agreement.

Term of Patent Protection

The term for patents filed under the first-to-file system is 20 years from the date of filing. There is currently no mechanism for obtaining an extension of the patent term in Canada although the United States does have some patent term extension provisions (for example for pre-market regulatory review).

How and where do I file my patent applications?

Patent agents are fully trained to draw up the complex legal documents that make up a patent application. Inventors are strongly advised not to do it themselves. Patent agents are also better placed to handle the many deadlines and steps in the process from application to issuance. In particular, Canadian patent agents are often qualified to file Canadian, U.S. and PCT patent applications and, in conjunction with the Applicant, can assist in designing a strategy which helps preserve rights in each of the countries where the Applicant wishes to have the protection, while minimizing costs.

How do I get the ball rolling for a Canadian Patent Application?

Under the Canadian Patent Act, the Applicant has two options for filing a Canadian Patent Application. The Applicant can either file directly in Canada, or can file a Canadian national phase patent after the filing of a PCT application designating Canada as one of the countries in which patent protection is sought.

For purposes of filing an application directly in Canada, the Applicant need only file the minimally required documents to obtain a filing date. For all applications filed after October 1, 1996, the minimum requirements are:

• a written statement that a patent is being sought;
• a document in English or French that describes the invention;
• the name of the Applicant (which may be the inventor, or his or her university or research institution depending on the arrangements between the inventor and his or her institution);
• the address of the Applicant or his, her or its patent agent; and
• the application fee.

A Canadian national phase application of a PCT application must be filed in Canada within the later of (i) 30-months from the priority date or (ii) 42 months from the priority date with the payment of an additional late fee. For filing a Canadian national phase application, the minimum requirements are:

• a copy of the international application, if it has not been published
• a translation of the international application, if the published application is not in English or French
• the basic national phase application fee.

For the purposes of the national phase application, the filing date of the application in Canada, once filed, is deemed to be the same as the filing date of the PCT application.

On receiving the document through either route, the Canadian Patent Office reviews the form of the document rather than its substance or merit. When only the minimum requirements are met, the application is considered "incomplete." No new subject matter may be added to a Canadian incomplete application that is not already fully described or supported by the incomplete application at the time of its Canadian filing.

The Canadian incomplete application is not a parallel process to the United States provisional patent application. For example, unlike the United States provisional patent application, the 20-year patent term in Canada begins on the date the incomplete application is filed (or is deemed to be filed), not when it is completed.

Some useful terminology to remember:

How many inventions may I claim in one patent?

A patent is granted for one invention only, although a patent that includes more than one invention is not invalidated for that reason alone.¹⁴ Under the Patent Rules, an application may include more than one invention if the subject matter forms, by design or operation, a "single general inventive concept." The Canadian Patent Office considers the following combinations to be acceptable in the same application:

• a product and a process for making a product;
• a product and a use of the product;
• a product, a process for making the product and a use of the product;
• a process and an apparatus designed to carry out the process;
• a product, a process for making the product and an apparatus designed to carry out the process; and
• a product, a process for making the product, an apparatus designed to carry out the process and a use of the product.

An application may include claims to a final product and to an intermediate product used to directly manufacture the final product – but only if the two are similar enough that one was clearly designed to prepare the other. The intermediate product may have the same use as the final product, but it must not have other uses.

On the other hand, a "single general inventive concept" may not be present if an application includes (1) a claim to compound A, (2) a claim to compound B and (3) a claim to the combination of A and B. Claims (1) and (3) may be in the same application, or (2) and (3). However, claims (1) and (2) are directed to different substances and, therefore, lack unity. Such claims may be divided into one or more divisional applications.¹⁵

What if I have too many inventions in one patent?

Divisional Applications

In Canada, Applicants may file a divisional application based on its "parent" application at any time before the parent application issues to patent. The parent application can, itself, be a divisional application. Much like a family tree, if an application is divided more than once, the first divisional application may be a parent to a later one. Therefore, Applicants may still file divisional applications even though the original application has issued to patent, as long as at least one divisional application is pending that describes all the inventions.

If the Canadian Patent Office insists that the application be divided on the basis of unity of invention¹⁶, any attack for "double patenting" will fail because the Patent Examiner requested the division (referred to as filing a divisional application "involuntarily"). However, a divisional application filed "voluntarily" by the Applicant may be open to a double-patenting attack. Applicants are strongly advised not to "voluntarily" file divisional applications.

What else do I need to do to complete the application?

The Applicant must file the following additional documents with the Canadian Patent Office within 15 months from the earlier of the earliest claimed priority date and the Canadian filing date:

• the petition;
• an abstract of the invention;
• claim(s) to the invention;
• any drawing mentioned in the description;
• a biological deposit (e.g. microorganism) number, if applicable; and
• a sequence listing (i.e. novel nucleotide or peptide sequence(s)), if applicable.

The patent specification must describe the invention and its operation in such full and exact terms that anybody experienced in the subject matter (referred to as a "person skilled in the art") can make, construct or use the invention. The entire patent specification must state the novel and inventive features of the invention, and it must end with a claim defining the subject matter. If the patent specification is not detailed enough, one or more claims may be found invalid.

Prior to allowance, the Applicant must file a statement explaining how the Applicant is entitled to the invention. The Applicant cannot add new subject matter to the application once it has been filed. This includes new features in the invention, more data, recent developments or a more precise description.

What is the Canadian Intellectual Property Office (CIPO)?

CIPO is responsible for administering and processing the IP in Canada. Its areas of activity include:

• Patents: new inventions (process, machine, manufacture, composition of matter) or any new and useful improvement of an existing invention;
• Trade-marks: words, symbols and/or designs used to distinguish goods or services;
• Copyright: protection for artistic, dramatic, musical or literary works (including computer programs), and performance, sound recording and communication signal;
• Industrial design: the visual features of shape, configuration, pattern or ornament applied to a finished article of manufacture;
• Integrated circuit topographies: the three-dimensional configurations of electronic circuits in integrated circuit products or layout designs.

What is the Canadian Patent Office?

The Patent branch within CIPO is commonly referred to as the Canadian Patent Office.

When will the Patent Office examine my application?

The Canadian Patent Office does not automatically examine applications. The Applicant has to file a request for examination and pay a fee within five years after the Canadian filing date. For divisional applications, the deadline is the same as for the parent application or, if that has passed, within six months after the divisional application has been filed. Once a request for examination and the appropriate fee have been submitted, an Examiner will review the application on its merits. If the Examiner finds one or more defects arising from non-compliance with the Patent Act or Patent Rules, the Examiner will issue an "Examiner's Report" (also referred to as an Office Action) to the Applicant, requesting argument and/or amendments to the application. However, if no defects are found on the patent application, the Examiner will issue a Notice of Allowance, which initiates the patent granting process.

Expedited examination (Special Order) may be requested at any time upon payment of the required government fee. This typically results in issuance of an Office Action within about four months.

The Patent Prosecution Highway (PPH) also allows Applicants to request expedited examination at no additional cost in certain cases in which the claims of a corresponding foreign application have been deemed allowable during examination. Currently, the Canadian Patent Office has PPH pilot programs in place with the U.S., Denmark, Germany, Japan, Korea, Finland, and Spain.¹⁷ To request entry into the PPH, examination of the Canadian application must be requested, but must not yet have commenced.

What fees do I pay and when?

An Applicant must pay the patent filing fee, the patent maintenance fees and, if the patent issues, the patent issuance fee to the Canadian Patent Office.

Maintenance Fees

For all applications filed after October 1, 1989, the Applicant must pay annual maintenance fees to maintain the application in good standing. The first maintenance fee is due on the second anniversary of the filing date and is payable every year until the patent expires. An Applicant may pay the maintenance fees up to one year after the due date as long as an additional late payment fee is also paid. If the Canadian Patent Office does not receive such fees within the one-year grace period, the patent will lapse. A lapsed patent cannot be revived.

What happens if I forget deadlines and payments?

If the Applicant does not reply to requests from the Canadian Patent Office, the application will be considered abandoned – for example, if the Applicant does not request an examination by the deadline.

If the Applicant has corrected all deficiencies, including paying all outstanding amounts, within one year after the date of abandonment, the application will be reinstated. If an application has been abandoned for more than one reason, dates of abandonment run from each failure, not simply from the earliest. This is why Applicants must pay multiple reinstatement fees to restore an application to good standing. For example, if an Applicant does not request examination within the time limit, the application becomes abandoned. If the Applicant does not also pay the maintenance fee, the application is abandoned for that reason also. To fully reinstate the application, the Applicant must request examination, pay the examination fee, request reinstatement from failure to pay the examination fee, pay a first reinstatement fee, pay the outstanding maintenance fee, request reinstatement from the failure to pay the maintenance fee and pay a second reinstatement fee.

There's a mistake in my application. Am I in trouble?

If the Applicant has been diligent and not willfully misled the Canadian Patent Office, the patent will be assumed valid. However, this only applies to omissions or additions. The courts have been inconsistent in applying this provision. For example, leaving out the names of some inventors was not enough to void a patent¹⁸ because the failure was not false or misleading. The courts also did not void the patent in a case¹⁹ where none of the correct inventors was named. Although the omission was false and misleading, it was not done willfully in order to mislead.

On the other hand, a patent may be void if the application contains untrue allegations, regardless of whether or not the allegation was made willfully.

New data isn't in the application. How do I deal with that?

The Applicant may include new subject matter in a new Canadian application that may claim priority from the earlier Canadian application if it is filed within one year after the earlier application. The Applicant may file an incomplete application as early as possible after an invention has been made to obtain the earliest possible filing date for the disclosed subject matter. The Applicant may include improvements, alterations or additional data in a later application, which then requests priority over the earlier one.

This practice allows the Applicant to retain an early claim date for the subject matter disclosed in the first application while receiving a later claim date for the new subject matter. The Applicant has the option of proceeding with both applications or only with the second one. Applicants may make an unlimited number of priority claims. Claiming internal priority (i.e. priority to a previously filed Canadian application) is similar to making a priority claim on the basis of an application filed abroad. Once the one-year period after the earlier application has expired, internal priority may no longer be claimed. The patent term for the later application is calculated as 20 years from its filing date.

To read this article and footnotes in full please click here.

Footnotes

1 Amazon.com, Inc. v. The Attorney General of Canada, and The Commissioner of Patents (2010), 2010 FC 1011.

2 Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45, 2002 SCC 76.

3 Percy Scmeiser.

4 See section on Prior Art in this document.

5 Baker Petrolite Corp. v. Canwell-Enviro Industries Limited (2001), 13 C.P.R. (4th) 193 (F.C.T.D.).

6 KSR International v. Teleflex Inc. 550 U.S.(2007)

7 See section on Prior Art in this document.

8 In re Fisher, 421 F.3d at 1374, 76 USPQ2d at 12; Trilateral Project B3b "Comparative study on biotechnology patent practices Theme: Patentability of DNA fragments".

9 R.S.C. 1985, c. P-4 as amended.

10 At last count 142 countries are members of the PCT.

11 Further information on national and regional phase deadline s under the PCT may be found at: http://www.wipo.int/pct/en/texts/time_limits.html

12 At last count 173 countries are members of the Paris Convention.

13 At least one of the Applicants must be a resident or citizen of a country that is a signatory to these agreements.

14 See the section on Divisional Applications in this document.

15 See the section on Divisional Applications in this document.

16 See section above.

17 Futher information on the PPH may be found at: http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr02160.html

18 Apotex Inc. v. Wellcome Foundation Ltd. (1998), 79 C.P.R. (3d) 193, at 264 (F.C.T.D.), aff'd. (2000), 10 C.P.R. (4th) 65 (F.C.A.).

19 671905 Alberta Inc. v. Q'Max Solutions Inc. (2003) 27 C.P.R. (4th) 385.

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