Canada: Five Important Changes To The Canadian Patent Act Now In Effect

Last Updated: December 20 2018
Article by David Schwartz

The Budget Implementation Act, 2018, No. 2, Statutes of Canada 2018, c.27, received Royal Assent on December 13, 2018. As discussed in our earlier article, this is wide-ranging legislation implementing various provisions of the federal budget introduced in Parliament in February of this year.

Effective immediately the following important changes to the Patent Act have been made, affecting the scope of protection available under Canadian patents:

  • Licensing commitments on standard-essential patents now bind subsequent patent owners
  • Prosecution histories are now admissible in evidence to construe patent claims
  • An experimental use exception to infringement has been codified
  • The scope of prior user rights has been expanded
  • Regulation-making authority concerning the requirements for cease and desist letters has been established

The amendments to the Patent Act are particularly notable as they appear to have been taken at Parliament's own initiative, and are not mandated for compliance with an intellectual property treaty such as the Patent Law Treaty or a trade agreement such as the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), both of which have been the basis for other recent changes to Canadian patent law.

1) Standard-essential patents

New section 52.1 of the Patent Act provides that a licensing commitment in respect of a standard-essential patent that binds the patentee, also binds any subsequent patentee (e.g. an assignee of the patent).

This provision extends to certificates of supplementary protection (CSPs) that have been issued in respect of patents to account for delays in the pharmaceutical regulatory approval process. It seems unlikely that a pharmaceutical patent eligible for a CSP would be a "standard-essential patent," as standards setting activity usually occurs in the computer and telecommunications fields. 

Nevertheless, the scope of what constitutes a "licensing commitment" or a "standard-essential patent" remains to be set by regulation.

This provision applies in respect of any action or proceeding that had not been finally disposed of as of December 13, 2018.

2) Prosecution history may be relevant to claim construction

The Patent Act has been amended to establish that the prosecution history of a Canadian patent may be relevant to claim construction.  New section 53.1 of the Act provides in part, that:

In any action or proceeding respecting a patent, a written communication, or any part of such a communication, may be admitted into evidence to rebut any representation made by the patentee in the action or proceeding as to the construction of a claim in the patent if

(a) it is prepared in respect of:

(i) the prosecution of the application for the patent,

(ii) a disclaimer made in respect of the patent, or

(iii) a request for re-examination, or a re-examination proceeding, in respect of the patent; and

(b) it is between

(i) the applicant for the patent or the patentee; and

(ii) the Commissioner, an officer or employee of the Patent Office or a member of a re-examination board.

These provisions also apply to divisional applications filed after the relevant written communication was made in the parent application, to reissued patents and applications to reissue patents and to CSPs.

Notably, section 53.1 refers to written communications between the applicant and the Patent Office, rather than only to written communications from the applicant to the Patent Office.  Thus, it appears that this provision might permit a written communications from the Patent Office to the applicant (e.g. an Examiner's Report) to be admitted into evidence to rebut a representation made by the patentee with respect to claim construction.

These provisions apply in respect of any action or proceeding that had not been finally disposed of as of December 13, 2018.

3) Experimental use

The Canadian courts have historically recognized a limited exception from infringement for non-commercial, experimental use of a patented invention.  New section 55.3(1) of the Act provides that "[a]n act committed for the purpose of experimentation relating to the subject-matter of a patent is not an infringement of the patent."  This provision extends also to infringement of a CSP.

The drafters recognized that determining what constitutes experimental use is an involved matter, as authority is established under the Act to make regulations respecting:

  1. factors a court may consider, must consider, or is not permitted to consider in determining whether an act is committed for the purpose of experimentation relating to the subject-matter of a patent; and
  2. circumstances in which an act is, or is not, committed for the purpose of experimentation relating to the subject-matter of a patent.

The new experimental use provisions apply in respect of any action or proceeding that had not been finally disposed of as of December 13, 2018.

4) Prior user rights

Section 56 of the Patent Act, concerning prior use rights, has been amended.  Previously, this section provided that a person who purchased, constructed, or acquired the subject matter defined by a claim of a patent before the priority date, had the right to "use and sell to others the specific article, machine, manufacture or composition of matter patented and so purchased, constructed or acquired" without liability to the patentee.

The scope of prior user rights has been expanded.  Broadly, under amended section 56, if, before the priority date, a person, in good faith, committed an act that would otherwise constitute an infringement of the patent, or made serious and effective preparations to commit such an act, it is not an infringement of the patent or a CSP on the patent if the person commits the same act on or after the priority date.  

Specific provisions are established to deal with business transfers, use or sale of articles obtained directly or indirectly from a person benefiting from an exception from infringement, and articles and services that are "substantially the same" as exempted articles and services.

Generally, the exemptions from infringement under these provisions do not apply in circumstances where a person used the invention or made preparations to do so before the priority date and this was only possible because that person obtained knowledge of the claimed invention, directly or indirectly, from the applicant, and they knew that the applicant was the source of the knowledge.

The revised prior user provisions apply only in respect of an action or proceeding commenced on or after October 29, 2018.

5) Written demands

Newly added to the Patent Act is section 76.2, providing a regulation-making authority for the establishment of requirements for written demands relating to patents (i.e. cease and desist letters). 

Written demands received by a person in Canada, relating to an invention patented in Canada or elsewhere, or protected by a CSP or its equivalent, must comply with the prescribed requirements.

Notably, these provisions appear to apply to any cease and desist letter, provided the recipient is in Canada.  It does not matter that the patent is a foreign patent, that the alleged infringement occurs elsewhere or that the complainant is in another country. 

For example, a German patentee, writing to a Canadian company, complaining of infringement of a German patent on German soil, could fall within the scope of these provisions, unless such an interpretation will be excluded by regulations yet to be made.

A person receiving a written demand that does not comply with the prescribed requirements, or a person "aggrieved" as a result of the receipt by another person of such a written demand, may seek relief in the Federal Court.  Such relief may include recovery of damages, an injunction, a declaration, or an award of costs.

Regulations setting out the prescribed requirements will be needed before these provisions can be operative.  The regulation-making authority under these new provisions extends to regulations respecting:

  1. what constitutes a "written demand" or "aggrievement"
  2. the requirements with which a written demand must comply
  3. the factors that the Federal Court may consider, must consider, or is not permitted to consider  in granting a remedy
  4. the circumstances in which someone who issues a non-compliant written demand is not be found liable in the Federal Court

Conclusion

The full impact of these changes likely will not be known for years.  Many important details remain to be set by regulation, or are subject to further clarification or refinement by regulation.  Moreover, some of the issues are inherently complex, including the role of prosecution history in claim construction, the scope of prior user rights and the experimental use exception from infringement, and will requirement interpretation by the Canadian courts.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
David Schwartz
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions