Canada: The One-Year Grace Period For Patent Filing In Canada: An Overview For U.S. Practitioners

Canada is one of a handful of countries that has a one-year grace period for public disclosures made by inventors. The one-year grace period available under Canadian law is summarized in this article, and similarities and differences between the Canadian and U.S. one-year grace periods are discussed. The Canadian grace period is discussed in relation to both current U.S. law and the amended sections 35 U.S.C. §102 and §103 soon to be coming into force under the Leahy-Smith America Invents Act ("AIA").

The one-year grace period in Canada. Paragraph 28.2(1)(a) of the Canadian Patent Act, governing relative novelty in Canada, states that the claimed invention in the Canadian patent application must not have been disclosed:

more than one year before the filing date by the applicant, or by a person who obtained knowledge, directly or indirectly, from the applicant, in such a manner that the subject-matter became available to the public in Canada or elsewhere.

Section 28.3 of the Canadian Patent Act, governing obviousness, has a similar provision. Thus, the statute provides a one-year grace period for disclosures made by the applicant. This one-year grace period runs from the filing date in Canada, not the priority date. In the case of a PCT national phase entry, the Canadian filing date is deemed to be the PCT international filing date.

Issues that arise from these provisions include: (i) what constitutes a disclosure that will trigger the start of the one-year grace period in Canada; (ii) who is the applicant; and (iii) whether there are derivation proceedings in Canada. These issues are addressed in turn below.

Disclosures that trigger the start of the one-year grace period. Any disclosure in which "the subject-matter became available to the public in Canada or elsewhere" will trigger the start of the one-year grace period in Canada. Thus, the disclosure must be a public disclosure. This means, for example, a disclosure of the invention under a non-disclosure agreement will not trigger the start of the one-year grace period.

There are no geographic restrictions under Canadian law in respect of the grace period. The public disclosure can happen anywhere in the world. Also, the public disclosure can be in any form (written, oral, etc.).

Enabling disclosure. The question of whether a public use or public sale of the invention is a public disclosure was considered in Canwell Enviro-Industries Ltd. et al. v. Baker Petrolite Corp. et al. 2002 FCA 158. In short, a prior public use or public sale of the invention may or may not be a public disclosure that will trigger the start of the one-year grace period. To qualify as a public disclosure, the public use or public sale of the invention must be an "enabling" disclosure.

What constitutes an "enabling" disclosure is subject to debate and usually turns on the facts of the case. The basic principle is that, if a person skilled in the art would be enabled to arrive at the invention from the disclosure without exercising inventive skill or undue burden, then the disclosure is enabling. For example, if the invention formed part of a product sold prior to the filing of a patent application in Canada, and if a person skilled in the art had the ability to discover the invention through non-inventive routine reverse engineering, then a public sale of the product would likely be considered an enabling disclosure of the invention.

Offer for sale. The same principle applies to an offer for sale. An offer for sale will only trigger the start of the one-year grace period in Canada if the offer for sale constitutes an enabling public disclosure.

Although there is room for argument as to whether a particular use, sale, or offer for sale of the invention constitutes an enabling public disclosure, the safest approach is to assume that any prior non-confidential use, sale, or offer for sale of the invention is potentially an enabling public disclosure, and to file a patent application in Canada within one year of the earliest such use, sale, or offer for sale.

The applicant under Canadian practice. The one-year grace period in Canada applies to public disclosures made by the applicant, or by another who obtained knowledge, directly or indirectly, from the applicant. Under Canadian law, the applicant includes the inventors and the legal representative of the inventors (typically the assignee).

Practically speaking, this means that in Canada, any disclosures originating from either the inventors or the assignee within the one-year period prior to the filing of the Canadian patent application are not citable against the application when assessing novelty or obviousness. This is the case even if the assignee's disclosure did not originate from the inventor.

Derivation proceedings in Canada. The one-year grace period in Canada applies to public disclosures made by the applicant, or by another "who obtained knowledge, directly or indirectly, from the applicant." Therefore, the grace period in Canada arguably protects inventor-derived disclosures, but what about inventor-derived applications?

Canada does not have derivation proceedings and there is little jurisprudence on the topic. There is, however, one recent Canadian case addressing this topic, which was decided in favour of the party that had relied upon the one-year grace period. In Ultraviolet Systems Inc. v. Brasscorp Ltd., 2009 FC 58, Party A disclosed the invention to the public and filed a patent application in Canada approximately 10 months after the public disclosure. However, in the interim, Party B viewed Party A's disclosed invention and filed a patent application that included a description of Party A's disclosed invention. A reading of paragraphs 28.2(1)(c) and (d) of the Canadian Patent Act suggests that this description of Party A's invention in Party B's application may be citable against Party A's application. However, the Court held that the disclosure in Party B's application was not citable as prior art since "it would not make any sense to allow the subject matter of a claim to be disclosed in the period of one year prior to the filing date and still be patentable if someone else could use the disclosed subject matter as prior art to defeat the applicant's application for a patent."

Despite this favourable decision, and in view of the lack of formal derivation procedures in Canada, the safest approach is to take steps to protect confidential information and minimize reliance on the one-year grace period in Canada.

Three key differences between the U.S. grace period (pre-AIA) and the Canadian grace period. The Canadian grace period is summarized above. From the discussion above, a U.S. practitioner will recognize that there are differences between the grace period in Canada and the grace period in the U.S. A few key differences are summarized below.

(1) The grace period in Canada runs from the filing date in Canada, not the filing date of the priority application.

A typical hypothetical scenario frequently encountered by a Canadian patent practitioner is that an invention was disclosed by the applicant on June 1, 2010, and a U.S. application claiming that invention was filed on May 1, 2011, within one year of the disclosure. The question often posed is, can an application be filed in Canada on May 1, 2012, which claims priority from the U.S. application? Unfortunately, the answer is no. The fact that the U.S. priority application was filed within one year of the disclosure is irrelevant. The filing of the priority application does not extend the Canadian grace period. The Canadian filing date must be no more than one year after the disclosure.

To preserve Canadian rights, U.S. practitioners should consider docketing to file in Canada within one year of the first non-confidential disclosure of the invention, as soon as it is known or suspected that there has been or will be such a disclosure. Otherwise, simply docketing to file in Canada within one year of the earliest priority date will not preserve Canadian rights if there has been an enabling public disclosure of the invention before the priority application is filed.

(2) There is no absolute on-sale bar in Canada.

Under current U.S. law (35 U.S.C. §102(b)), a sale or offer for sale of the invention within the U.S., even if confidential, may trigger the start of the one-year grace period in the U.S. However, under Canadian law, there is no absolute on-sale bar. Rather, there needs to be an enabling public disclosure of the invention in order to trigger the start of the one-year grace period in Canada. As discussed above, a sale or offer for sale of the invention may or may not be an enabling public disclosure. For example, if a person skilled in the art would not be able to derive or reverse engineer the invention from the sold product (without exercising inventive skill or undue burden), then the sale is likely not an enabling public disclosure.

Even though the U.S. on-sale bar may operate to prohibit a U.S. patent from being obtained, it may still be possible to obtain a patent in Canada depending upon whether or not the sale or offer for sale constituted an enabling public disclosure. Notably, a confidential sale or offer for sale (e.g. under a non-disclosure agreement) in the U.S. may trigger the U.S. on-sale bar, but it will not trigger the start of the grace period in Canada, as it is not a public disclosure.

(3) There are no geographical restrictions in Canada

Under Canadian law, it does not matter in which country the public disclosure was made, or the form of the public disclosure (written, oral, use, etc.). Any enabling public disclosure will trigger the start of the one-year grace period in Canada.

This is in contrast to current 35 U.S.C. §102(b) in which, for example, public uses and public sales of the invention outside the U.S. will not trigger the start of the one-year grace period in the U.S.

The effect of the AIA on Canadian and U.S. filing strategies. Any U.S. patent application containing one or more claims having a first effective filing date after March 16, 2013, will be subject to the new sections 35 U.S.C. §102 and 35 U.S.C. §103 amended by the AIA.

The AIA introduces sweeping changes to 35 U.S.C. §102, including substantial changes to the one-year grace period available under U.S. law. Like in Canada, the new grace period introduced by the AIA has no geographical restrictions, and is not limited to certain forms of disclosure (written, oral, uses, etc). However, in contrast to Canada, the U.S. grace period will be calculated back from the priority date of the U.S. application, not the U.S. filing date. Of course, the AIA has no impact on the Canadian grace period. That is, it will still be necessary to file a patent application in Canada within one year of the public disclosure.

This difference gives rise to new filing strategies. For example, one approach is to file a patent application in Canada within one year of the public disclosure (as is necessary), and then file the corresponding U.S. application a year later claiming priority back to the Canadian application. This will delay the start of the patent term in the U.S., which may be desirable if the invention is slow to come to market. Additionally, accelerated examination could be requested in Canada, and if the Canadian examination leads to a favourable allowance, examination could then be requested under the Patent Prosecution Highway in the corresponding U.S. application.

Conclusion. While Canada and the U.S. both provide a one-year grace period for disclosures made by inventors, there are differences between the Canadian provisions and both the current U.S. provisions and the U.S. provisions under the AIA. These differences can affect filing strategies in Canada and the U.S.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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