On September 5, 2025, the Federal Court of Appeal (FCA) set aside the decision of the Federal Court (FC) in Matco Tools Corporation v Canada (Attorney General), 2025 FC 118, and restored a decision of the Commissioner of Patents refusing to reverse the deemed abandonment of Canadian Patent Application No. 3,086,194 (the Application): Matco Tools Corporation v Canada (Attorney General), 2025 FCA 156.
We wrote about the FC's decision in our February 6, 2025 article.
Background
The 2022 maintenance fee deadline was missed after a data migration error prevented the Application from being entered into a third-party annuity service's database. The annuity service advised the Applicant of the error, but the error went unnoticed by the Applicant. The Canadian Intellectual Property Office (CIPO) sent a Commissioner's Notice – Maintenance Fee for a Patent Application Not Paid to the Applicant's Canadian patent agents, who forwarded it to the Applicant's US counsel, from whom the Canadian patent agents took instructions for prosecution of the Application. Based on the Applicant's standing instructions to US counsel to take no further action in respect of maintenance fees, US counsel did not send the Commissioner's Notice to the Applicant. The maintenance fee and late fee therefore were not paid, and the Application became abandoned. The Applicant's request to reinstate the application was refused by the Commissioner.
The Applicant filed an application for judicial review of the Commissioner's decision with the FC, which set aside the Commissioner's decision and remitted the matter for redetermination. The FC noted that aspects of the Commissioner's decision pointed to the decision as being unreasonable for lacking "justification, transparency and intelligibility," including the finding that no explanation had been provided as to why the Commissioner's Notice was not forwarded to the Applicant, and the conclusion that the data migration error was not relevant since it could have been cured if the Commissioner's Notice had been forwarded to the Applicant. The Attorney General of Canada appealed the FC's decision.
The Federal Court of Appeal's decision
In restoring the Commissioner's decision, the FCA focused on three points.
First, the FCA confirmed that the obligation to exercise due care extended to the Canadian patent agents, US counsel, and the annuity service. If it did not, applicants may be encouraged to limit the scope of their instructions to reduce or evade the strict requirements of due care by simply citing the limited scope of its instructions to its agents and other representatives.
Second, the FCA found that the Commissioner did not err in treating the data migration error as not relevant and focusing on the period following the issuance of the Commissioner's Notice, noting that the "failure" referred to in subsection 73(3) of the Patent Act is the failure to avoid the abandonment of the application, not the failure to pay the maintenance fee.
Third, the FCA found that it was not unreasonable for the Commissioner to state that no explanation had been provided as to why the Commissioner's Notice was not forwarded to the Applicant. While US counsel had instructions not to pay the maintenance fee and/or late fee, the FCA found that the instructions not to pay any maintenance fees did not amount to instructions not to forward communications sent from CIPO regarding maintenance fees, or otherwise inform the Applicant of missed maintenance fee payments.
Analysis
The FCA's decision is significant in at least two regards:
- It confirms that the period to be considered when assessing whether the due care required by the circumstances was taken is the period between the issuance of a Commissioner's Notice and the deadline set out therein; and
- It confirms that the requirement to exercise due care extends beyond the applicant or patentee, to other authorized individuals such as the Canadian patent agents of record, foreign counsel and annuity services.
Many parties may be involved in ensuring that maintenance fees are paid: the applicant or patentee, an annuity service, foreign counsel and the Canadian patent agent. The FCA's decision highlights the importance of having effective and robust procedures in place to ensure that Patent Office correspondence is put into the hands of the ultimate decision-maker for an application or patent.
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.
