Canada Gazette, Part I, Volume 155, Number 27: Rules Amending the Patent Rules
On July 3, 2021, several amendments to the Patent Rules were published for consultation in the Canada Gazette. The proposed changes to Canada’s patent system include excess claim fees, limits on office actions, and other changes intended to lay the groundwork for patent term adjustments (“PTA”), although PTAs are not being introduced at this time.
The proposed amendments will remain in Part I of the Canada Gazette for a 30-day consultation period before moving into Part II and becoming law. The coming into force date has not yet been set, but is expected before January 1, 2022—the deadline set by Canada’s treaty obligations.
Background
The revisions made to the Canadian patent system in the last three years have been the most substantial changes made since 1989. Some amendments were enacted in December 2018, such as the introduction of file history estoppel, while additional amendments came into force on October 30, 2019, including those required for Canada to ratify the Patent Law Treaty (“PLT”). The PLT was adopted in 2000 with the aim of harmonizing and streamlining formal procedures with respect to patent applications and patents internationally. Since the coming into force of the 2019 amendments, a number of significant changes have been introduced, including shortened deadlines, new correction procedures, a requirement to submit certified copies of priority documents, changed abandonment and reinstatement procedures, and due care obligations.
Though many may have anticipated these amendments to be the beginning of the end, once more, Canada’s patent system has been tasked with adopting additional changes to further streamline patent prosecution.
Patent Term Adjustment
The regulatory impact statement published alongside the proposed amendments explains that the amendments are being introduced in part, to fulfill the PTA obligation as required under the new Canada-United States-Mexico Agreement (“CUSMA”). Entered into force on July 1, 2020, CUSMA replaced the previous North American Free Trade Agreement (“NAFTA”) and now governs the trade relationship between the three parties, including providing minimum legal standards for the protection and enforcement of intellectual property rights.
As found in Article 20.44 of CUSMA, parties are required to provide PTAs to compensate patent applicants for unreasonable delay in the issuance of their patents. The term for patents filed on or after December 1, 2020, may be extended if the patent issues more than five years after the application date, or three years from an examination request, whichever is later. Certain delays are expressly excluded, including those not directly attributable to the granting authority.
The Patent Rules as they currently read were not designed in view of the PTA. There is a lack of encouragement within the legislation to ensure timely and efficient processing of patent applications by applicants. In order to implement the PTA obligation and compensate applicants for delays, reasonable limits must be put in place or else undesirable results could ensue. To list just one of many examples, as mentioned in the Canada Gazette publication, under the current framework applicants could abuse the system and delay examination purposely so as to lead to PTA compensation. The government rationalized the present amendments as a first step towards enacting PTAs.
Amendments to the PCT
The proposed amendments are also necessary in bringing the Patent Rules in line with the Patent Cooperation Treaty (“PCT”) Regulations in respect of sequence listings. The PCT came into force in Canada on January 2, 1990, and Canada’s obligations are codified in Part 2 of the Patent Rules. The PCT provides a mechanism to effectively extend the 12-month priority term provided by the Paris Convention by an additional 18 months in most member countries of the PCT by filing a single international patent application. Recent amendments to the PCT require signatories to amend their national patent laws to ensure national requirements do not conflict with international requirements. Canada has until before January 1, 2022, to make the necessary changes to the Patent Rules and remain compliant with the PCT.
Highlights of the Proposed Amendments
The Government of Canada is proposing these regulatory amendments to the Patent Rules to further restructure the patent examination process so that Canada may to meet its international obligations, and consequently, unreasonable, or unnecessary delays in the granting of patents can be avoided.
1. Limits on Office Actions
Part of the proposed amendments to prosecution practice would put limits on the number of office actions available to an applicant. Applicants would be entitled to receive a maximum of three examination reports or a notice of allowance, whichever comes first. Once these actions are exhausted, examination ends unless an applicant elects to continue by requesting continued examination and paying a prescribed fee.
2. Excess Claim Fee
In addition, part of the proposed amendments would adjust the existing fee for making a request for examination and the final fee required to grant a patent. Specifically, these fees will be increased for each claim in excess of 20 claims in a patent application. The standard fee for each excess claim over 20 is $100 or $50 for small entities. Applications with 20 claims or fewer would not be subject to these new fees and would pay only the current rate for request for examination or the final fee.
3. Conditional Notice of Allowance
The proposed amendments would further create a new office action called a Conditional Notice of Allowance (“CNOA”). This would be issued at the discretion of the Commissioner and would inform the applicant that the application is in condition for allowance, but certain minor defects in the application must be addressed. The CNOA would require that the applicant address the defects and pay the final fee. Once the requirements of the CNOA are satisfied, the application would proceed to grant.
Commentary
In general, these changes promise to align the Canadian system more closely with the US patent system. However, there are still differences between US and Canadian systems that may prevent a smooth transition to the new Patent Rules.
First, the USPTO uses a point system to encourage patent examiners to raise all issues with a patent application in the first office action, which reduces the likelihood that an applicant will be required to file a request for continued examination. Without an equivalent system in Canada, Canadian examiners sometimes only address one or a few issues in each examination report, which draws out prosecution unnecessarily. For this reason, we anticipate that the new request for continued examination will add unnecessary costs to prosecution. CIPO should consider policy changes to avoid increasing the financial burden on applicants.
Second, the USPTO has a continuation regime which allows applicants to refile their patent applications with a new set of claims. While voluntary divisionals are available in Canada, they are not equivalent to continuations since they can be rejected or invalidated under the double patenting doctrine. Consequently, a common strategy to land a Canadian divisional is to include a large number of claims in the original application and hope that the patent examiner will force the applicant to divide some of their claims into a divisional. The new claim fees are bound to put a damper on this strategy. We hope that Canada will add a continuation regime in the future, but to avoid heightened fees in the meantime, applicants are strongly encouraged to file in Canada before the new Rules come into force.
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