You have invested a significant amount of time and money to
develop a new product or service. Apart from the essential
requirements for patentability (patentable subject matter, novelty,
non-obviousness, and utility), the primary determinant of whether
to file a patent application is whether you believe your new
product or service is likely to be commercially viable.
If your product or service is commercially viable, patents can
generate substantial income which will allow you to recoup your
investment in research and development as well as profit
financially from your invention. You can profit from patents by
employing monopoly pricing on your products and services which
embody the patent by virtue of the right to exclude others from the
market, or, alternatively, patents can be sold or licensed to
others to use for a profit.1 Patents may also be used as
assets to secure funding.
On the other hand, if a patent does not cover a product or
service that is commercially viable, monopoly pricing will be of
little benefit and others are unlikely to be interested in
purchasing or licensing the patent. Since obtaining a patent in
itself is not an assurance of commercial viability, a proper
assessment of commercial viability prior to deciding to apply for a
patent is needed to ensure that patent and other business
expenditures on a new venture are sensibly made.
Corresponding Canadian Patent Filings Are Good Value
If you believe your new product or service is likely to be
commercially viable and you intend to seek patent protection, in
most cases applying for a patent in the United States is a logical
choice. According to a July 2012 report of the World Intellectual
Property Organization,2 the United States Patent Office
was the top patent office in 2010, receiving 490,226 patent
application filings in 2010. This is not surprising due to the size
of the U.S. market (over 15 trillion dollars and more than 21
percent of world GDP) and the excellent value provided by the U.S.
patent system when patenting costs are examined in view of market
Although Canada is an affluent, high-tech society having a near
2 trillion dollar economy and close to 3 percent of world GDP, only
35,449 patent applications were filed in Canada in 2010. Assuming
every patent application filed in Canada was also filed in the
United States, this would mean that only 7.2 percent of patent
applications filed in the U.S. are also filed in Canada. While the
differential in the number of patent filings is likely due to
Canada's smaller market size, it represents a missed
opportunity for many patent applicants who have filed in the
Once a patent application has been filed in the United States,
the value proposition for filing an application in Canada becomes
compelling. The same patent application that was filed in the U.S.
can be filed in Canada without incurring much additional cost.
Translation is not needed and the requirements for the form of
patent applications in Canada are similar. Furthermore, the outcome
of examination of patent applications in Canada is typically
consistent with U.S. examination. As a result, while an originating
U.S. patent has been estimated to cost about $30,000 on average to
obtain, a Canadian patent corresponding to the U.S. patent can be
obtained in some cases for as little as $3000-$50003.
Given the low additional cost, filing a Canadian patent application
corresponding to a U.S. patent application is nearly always
worthwhile since it provides an additional opportunity for income
generation at similar value for money to a U.S. patent.
1 The Canadian Patent Office itself allows a sale/licence
notice to be put in the Canadian Patent Office Record and the
online Canadian Patents Database free of charge.
3 This excludes annual maintenance fees to maintain the
application or patent payable from the second anniversary to the
nineteenth anniversary of the filing date as well as any costs
incurred from using a U.S. or other foreign patent agent to
instruct the Canadian patent agent, if applicable.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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