On September 9, 2008, Canada's Federal Court of Appeal rendered a decision in a closely watched case concerning the inadvertent lapse of patent rights: DBC Marine Safety Systems Ltd. v. Canada (Commissioner of Patents).1
In that case, a patent examiner had reviewed the appellant's patent application and had issued a typical letter called an "office action". The office action indicated several respects in which the examiner felt the application was deficient and required either (i) that the application be amended to make it comply with the applicable requirements, or (ii) that arguments be provided as to why the application was already compliant. The office action also included a requisition under Rule 29 of the Patent Rules that the applicant provide information concerning prior art cited in the prosecution of corresponding patent applications in the US and the UK.
Three days before the expiration of the six-month period to respond to the office action, the applicant's patent agent filed a response. While the response dealt with the issues the examiner saw as deficient, it was silent concerning the Rule 29 requisition. This seems to have been a simple oversight on the part of the patent agent.
Section 73(1)(a) of Canada's Patent Act provides that "[a]n application for a patent in Canada shall be deemed to be abandoned if the applicant does not ... reply in good faith to any requisition made by an examiner in connection with an examination, within six months after the requisition is made or within any shorter period established by the Commissioner." Because the response failed to reply to one of the requisitions in the office action, the application was deemed abandoned. A notice of abandonment may have been sent to the applicant's patent agent concerning the missing response to the Rule 29 requisition, but it was not received. Such a notice is merely a courtesy as there is no requirement to send one.
The Patent Rules provide that abandonment of a patent application begins a 12-month period during which the applicant may reinstate the application by (i) requesting reinstatement, (ii) paying a reinstatement fee, and (iii) taking the action that should have been taken to avoid the abandonment in the first place. After the expiration of the 12-month period, the application becomes irretrievably lost.
In DBC Marine, during the 12-month reinstatement period, the applicant paid an annual maintenance fee. For some reason, the Patent Office accepted the fee and made no mention of the abandonment. The applicant learned of the problem only upon attempting to pay the maintenance fee for the following year (after the expiration of the reinstatement period). In response to the applicant's request to reinstate the application, the Patent Office indicated that the application was abandoned, that it was now too late to request reinstatement, and that it had no discretion in the matter.
Subsequently, in an application for judicial review, the Federal Court agreed with the decision of the Patent Office that it had no discretion to exercise and could not correct the situation. The recent decision of the Federal Court of Appeal dismissed the applicant's appeal and upheld the ruling of the lower court. In its reasons, the Court of Appeal said:
The regime for patent applications is firmly established by the Patent Act and the Patent Rules. Together, the various legislative provisions set out a complete code governing the duties of an applicant for a patent, the consequences of a failure to comply with those duties, and the steps that may be taken to avoid those consequences.
The implications of this decision are far-reaching, particularly in light of the 2003 Federal Court of Appeal decision in Dutch Industries Ltd. v. Canada (Commissioner of Patents).2 In that case, filing and maintenance fees for a patent application had been paid incorrectly at the lower rate applicable to a small entity. The Court ruled that the application was deemed abandoned even though the Patent Office had accepted the fees and had considered the application to be in good standing.
The recent decision in the DBC Marine case could have implications beyond the inadvertent abandonment of rights in a patent application. This ruling could result in a conclusion, years after the issuance of a patent, that some omission by the patent agent during prosecution of the application (even one made in good faith that went unnoticed by the Examiner) caused a deemed abandonment of the application under section 73(1)(a) of the Patent Act, meaning that the patent that later issued from the abandoned application would be invalid.
DBC Marine has until November 8 to decide whether to seek leave to appeal this decision to the Supreme Court of Canada. Another initiative that may meet with greater success in addressing this type of situation is a recommendation made in May by the Intellectual Property Institute of Canada to amend Canada's Patent Rules to provide that the period for reinstatement of a patent application cannot expire until at least three months after a notice of abandonment detailing the deficiency has been received by the applicant or its agent, or at least that such a notice has been sent by the Patent Office. A similar notice would be required before an issued patent could lapse for non-payment of maintenance fees.
1 2008 FCA 256. To view the decision of the Federal Court from which the appeal arose, click here.
2. 2003 FCA 121.
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