Draft Regulations for the College Act: A Review and a Warning

Draft Regulations for the College Act: A Review and a Warning

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On March 13, 2021 the College of Patent Agents and Trademark Agents Regulations [1] (“the proposed Regulations”) for the implementation of the College of Patent Agents and Trademark Agents Act [2] (“College Act”) were published in the Canada Gazette. The legislation creates a new regulatory body for patent and trademark agents, requiring such persons to meet appropriate standards of professional conduct and competence, as well as imposing penalties for unauthorized practice by persons licenced by the college.

The proposed Regulations will remain in Part I of the Canada Gazette for a 30-day consultation to give stakeholders the opportunity to provide comments. They will move to Part II once enacted. Of particular concern is the residency requirement introduced in the proposed Regulations, which will make the securing of US patents by Canadians more difficult. Please refer to the discussion in the commentary of this post to take immediate action to address the concerns related to the enactment of the proposed Regulations as they currently read.

Background

On October 29, 2018 the House of Commons introduced Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures [3]. The omnibus bill proposed a number of changes to Canada’s intellectual property (“IP”) laws and established a distinct regulatory body to govern the practice of patent and trademark agent professions in the public interest.

The proposal of this new college came about through a desire to implement a modern regulatory framework to enhance the integrity of the profession. Previously, patent and trademark agents were regulated by the Canadian Intellectual Property Office (“CIPO”), with the Commissioner of Patents having limited authority to discipline patent agents. There was no equivalent authority to discipline trademark agents.

The new college will require that individuals obtain a licence in order to act as patent or trademark agents and that licensees comply with a code of professional conduct. In this way, the College Act adopts a self-regulatory model, whereby governance of the profession is turned over to the profession itself, much in the way that Canadian lawyers are regulated by provincial law societies. The college has yet to become fully operational, but a transitional Board of Directors was appointed in August 2019 for the interim. CIPO has and will continue to maintain the register of patent agents and list of trademark agents up to the day before the coming-into-force date.

Some of the notable highlights of the College Act include:

  • Licences: Section 26(3) of the College Act provides that an individual that obtains a patent agent licence must comply with the conditions within the statute including, among other conditions, being subject to standards of professional conduct and competence [4], a code of professional conduct [5] and professional liability insurance [6]
    • If a licensee fails to comply with the by-laws in the College Act, they may be suspended [7] until they comply with the requirements set out to address their failure [8]
    • In the event a licensee does not comply with these remedial requirements, their suspended licence may be revoked [9]
  • Investigations and Disciplinary Proceedings: The College Act provides a mechanism by which investigations and disciplinary proceedings may be brought
    • The Investigations Committee will receive complaints and conduct investigations into whether a licensee has committed professional misconduct or was incompetent [10]
    • Following that, the Discipline Committee will impose disciplinary measures if it is decided that a licensee has committed professional misconduct or was incompetent [11]
    • The College Act confers upon an individual the right to appeal a decision of the Discipline Committee under section 57 to the Federal Court [12]
  • Prohibitions and Offences: The College Act also provides new offences, including of falsely claiming to be a patent agent [13] and of unauthorized representation before the Patent Office [14]

Highlights of the Proposed Regulations

The proposed Regulations are meant to facilitate the transfer of responsibility for IP agent oversight from CIPO to the new college. Additionally, they will put in place a framework which aims to ensure that the college is operating within the public interest.

Part of the proposed Regulations would allow the college to establish its own process for the appointment of members to the Investigations Committee and the Discipline Committee, with the requirement that the committees be composed of a public interest majority. [15] Certain periods of time and procedures related to provisions in the College Act regarding protection of privileged and confidential information obtained during the course of an investigation of professional misconduct or incompetence are also prescribed.

To compliment provisions of the College Act, the proposed Regulations would provide exemptions to the prohibition that a person cannot represent another person in presentation and prosecution of applications for patents or for the registration of trademarks or in other business before the Office of the Registrar of Trademarks or the Patent Office. [16] These exemptions include situations where other legislation authorizes a non-agent to represent another person.

Also included in the proposed Regulations are amendments to the Patent Rules [17] and Trademark Regulations [18], which mainly pertain to the appointment of agents for patent and trademark applications. For example, under the College Act only individuals will be recognized as a patent or trademark agent. The proposed Regulations would allow parties to appoint a single patent or trademark agent, or all the patent and trademark agents that are members of the same firm to represent them before CIPO.

The Residency Requirement for Patent Agents

Sections 4 to 11 of the proposed Regulations pertain to patent and trademark agent licencing. Provisions authorizing the enactment of by-laws to govern how individuals must apply for and maintain a patent or trademark agent licence [19] or for the new class of agent in training licence [20] are included. Of concern are the provisions that impose as a licencing requirement and a condition for maintaining a licence, that patent agents reside in Canada. [21]

Currently, non-residents may be listed on the Register of patent agents or list of trademark agents maintained by CIPO. Equivalent legislation has existed in the US for decades and allows Canadian patent agents to act directly on behalf of Canadians before the United States Patent and Trademark Office (“USPTO”). However, this reciprocal legislation says that Canadian residents can only be US patent agents if Canada allows US residents to be Canadian patent agents. As such, the proposed Regulations will remove the reciprocal recognition of US patent agents in Canada, which by operation of US law, will strip hundreds of Canadian patent agents of their status as US patent agents.

Commentary

The College Act that received royal assent in 2018 set the foundation for a new regulatory body to govern patent and trademark agents, however, until earlier this month there were no regulations bringing it to life.

Although the implementation of the new college has been long-awaited, the new draft regulations pose an alarming concern for patent agents dual qualified before the USPTO. In the event that US registrations are taken away from Canadian patent agents, this could mean higher costs and greater delays for Canadians seeking protection for their inventions in the US.

Urgent action is required to put a halt to this very significant change that is being proposed to the Canadian patent system. Please consider using the information below to contact your local government representations to ensure that the Canadian patent agent regulatory regime has reciprocal recognition of patent agents in foreign countries and allows Canadian patent agents to reside abroad.

Please adopt the form letter below, adjust it to your wording and email it to your MP (you can find the email address at https://www.ourcommons.ca/) copying Mary.Ng@parl.gc.ca; Francois-Philippe.Champagne@parl.gc.caMaryam.Monsef@parl.gc.ca; and Melanie.Joly@parl.gc.ca.

The timing of this is urgent and to be meaningful, emails should be sent immediately and before March 30, 2021.

Draft Email Concerning the College of Patent Agents and Trademark Agents Regulations

To:

<<My Local Member of Parliament>> (you can find the email address at https://www.ourcommons.ca/)

The Honourable François-Philippe Champagne; Francois-Philippe.Champagne@parl.gc.ca

The Honourable Mélanie Joly; Melanie.Joly@parl.gc.ca

The Honourable Mary Ng, MP; Mary.Ng@parl.gc.ca

The Honourable Maryam Monsef; Maryam.Monsef@parl.gc.ca

My Dear Friends:

Background

My name is << Name>>> and I am << Title >> of <<Company>>  (<<Link to Company Website>>).

Our company is in the business of <<Brief Description>>.  We are an employer of Canadians and are an innovator.  We make frequent use of the US patent system to protect our inventions and consider intellectual property protection to be a critical part of our business.

I am writing to you, <<My MP>>, in your capacity as my Member of Parliament since I live in your riding.

I am writing to you, The Honourable François-Philippe Champagne, The Honourable Mélanie Joly, The Honourable Mary Ng, MP, The Honourable Maryam Monsef as the leadership team of Innovation, Science and Economic Development Canada.

Due to proposed regulatory changes to the way Canadian Patent Agents are regulated, there is an unintended but drastically urgent problem that is brewing that will permanently and drastically harm the entire Canadian innovation eco-system.

Executive Summary

Under current, and reciprocal legislation, found in the Canadian Patent Act and in the United States Patent Act, Canadian Patent Registered Agents have the privilege of being qualified as a United States Patent Agent.  This means that my local Canadian Patent Agent can represent my company directly before the United States Patent and Trademark Office (USPTO), which means that I do not need to hire an American patent agent to represent me in the USA.  In the spirit of economic integration between Canada and the United States, I also support the reciprocal nature of the legislation because it ensures that American patent agents can be recognized as Canadian patent agents with standing before the Canadian Intellectual Property Office (CIPO).

I understand there are approximately 800 Canadian patent agents who have this status. These numbers mean that Canadian innovators are supported by a network of local Canadian expertise on matters of acquiring US patents.

The current proposed regulatory change will remove the reciprocal recognition of US Patent Agents in Canada, which, by operation of US law, will immediately and automatically strip 800 Canadian Patent Agents of their status as United States Patent Agents.

The result will be that companies like ours, and other Canadian innovators will no longer have the benefit of a Canadian professional to help them with their needs before the USPTO.

By a 3:1 margin, the USPTO is the patent office of choice for most Canadians due to the large US market.  Canadian innovators will either have to forego patent protection in the US, or locate patent firms in the USA, leading to higher costs and greater geographical and cultural disparity for Canadians seeking to protect their inventions in the USA.  Put simply, it is going to be harder for Canadians to protect their ideas in the USA.

I implore you to please take immediate action to ensure that the Canadian Patent Agent regulatory regime has reciprocal recognition of Patent Agents in foreign countries, notably the USA, and allow Canadian Patent Agents to reside abroad.

Detailed Discussion

The proposed Regulations at issue are the College of Patent Agents and Trademark Agents Regulations proposed in the Canada Gazette (Part I, Vol. 155, No. 11, pgs. 1141 to 1167) on March 13, 2021 (“Proposed Regulations”).

The Regulations propose drastic changes to the way in which Patent Agents are regulated in Canada.  Some of these changes are positive and well intentioned, but in their current form the overall effect to the Canadian innovation eco-system will be disastrous for Canada, Canadian innovators and the Canadian Patent Agents that advocate on behalf of Canadian innovators in the USPTO.

The US legislation that recognizes Canadian Patent Agents can be found here: https://mpep.uspto.gov/RDMS/MPEP/current#/current/d0e350181.html

For context, Patent Agents are a highly specialized profession unique from lawyers, accountants, dentists and doctors.  Patent Agents typically possess advanced degrees in Science, Technology, Engineering and Mathematics (“STEM”).  Canadian Patent Agents are deeply integral to the Canadian innovation eco-system.  Patent Agents work directly with Canadian small inventors, small businesses and large companies to prepare and file patent applications that protect “Made In Canada” innovations.  Without patents and patent agents, Canadian innovations can be taken and used, for free, by anyone, anywhere in the world.  Speak with any Canadian small business or inventor and they will tell you that securing a US patent is complex, expensive and uncertain.

The Proposed Regulations will only make it harder for Canadians to secure US patents.

Canadians file nearly 3 times as many patent applications in the US as they file in Canada.  This means that Canadians, by a margin of 3:1, prefer to file in the US over Canada, bypassing the Canadian patent system altogether.  (According to the USPTO, in 2015, there were 13201 patent applications filed in the USPTO by Canadians.  (https://www.uspto.gov/web/offices/ac/ido/oeip/taf/appl_yr.htm)  According to CIPO, in 2018, Canadians filed 13045 applications in the US.  In contrast, according to CIPO, in 2018 Canadians only filed 4238 applications in Canada (https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr04873.html). The ability for Canadians to file directly in the USPTO through their Canadian agents is a major contributor to this remarkable statistic.

The Proposed Regulations, if implemented, will do serious and irreparable harm to the public interests they are intended to protect. The Regulations appear to be based on a fundamental misunderstanding of the international IP ecosystem, and on Canada’s position within that ecosystem. The Regulations will strip Canadian patent agents of reciprocal US practice rights, requiring US filings to be routed through US patent agents located in the USA. Canadian innovators will end up paying higher fees to protect their inventions in the US, and many Canadian agents will suffer a significant drop in business, thereby disincentivizing future generations to pursue this profession and further weakening Canadian innovation.

At a time when Canada must strategically reposition itself for success in the economy of intangibles, the Regulations will severely limit Canadians’ ability to access the US market and to attract investment in Canadian companies.

 The US reciprocal recognition of Canadians is a major incentive for Canadians to pursue careers in Patent Agency.  Removing the ability for Canadian Patent Agents to be recognized as US Patent Agents will seriously harm the attractiveness of going through the very difficult and long training process to become a Patent Agent.  Indeed, the Proposed Regulations also come at a time when the Canadian innovation sector as a whole, and the Canadian Patent Agency profession itself, need to attract more women, persons of colour and other diverse groups to the STEM field and the patent agency profession. Achieving this diversity will be serious harmed by the Proposed Regulations by reducing the scope of practice available to Canadian Patent Agents.

Recommendations

 Please amend the Proposed Regulations so as to:

  1. Ensure that foreign registered patent agents are reciprocally recognized as Canadian Patent agents, provided that the foreign legislation provides reciprocal recognition of Canadian Patent Agents. This will ensure that Canadian Patent Agents will maintain their capacity to be US Patent Agents.
  2. Remove the residency requirement that Canadian Patent Agents must reside in Canada.

If there is too little time to make these changes in the current regulatory cycle, I strongly urge that the Proposed Regulations simply be deferred until such time as they can be properly amended.  The status quo is far better than proceeding with the Proposed Regulations.

Conclusion

 The Proposed Regulations are a non-partisan matter of national importance affecting all Canadian equally. Canada is a country of innovators, but on a global scale we are small and already struggle to ensure our innovations are adequately protected for export.  The Proposed Regulations are harmful to our ecosystem.

Again, I implore you to ensure that the Proposed Regulations are revisited immediately to correct this oversight.

Thank you for sharing your valuable time on this matter and I would be pleased to speak with any of you directly to answer any questions you may have as to how this change is going to negatively impact our ability to protect innovation in Canada.

Yours very truly,

<<Your Name>>

 

Footnotes

[1] Canada Gazette, Vol. 155, No. 11 [“Proposed Regulations”].

[2] S.C., 2018, c. 27, s. 247 [“the College Act”].

[3] 1st Sess, 42nd Parl, 2018 (as passed by the House of Commons 13 December 2018).

[4] College Act, supra note 2 at s. 32.

[5] Ibid at s. 33.

[6] Ibid at s. 34.

[7] Ibid at s. 35(1).

[8] Ibid at s. 35(3).

[9] Ibid at s. 35(4).

[10] Ibid at ss. 37-41.

[11] Ibid at s. 57(3).

[12] Ibid at s. 59.

[13] Ibid at s. 67.

[14] Ibid at s. 70(1).

[15] Ibid at ss. 2-3.

[16] Ibid at ss. 16-17.

[17] SOR/2019-251.

[18] SOR/2018-227.

[19] College Act, supra note 2 at paras. 4(b), 5(b), 8(b) and 9(b).

[20] Ibid at paras. 6(b), 7(b), 10(b) and 11(b).

[21] Ibid at paras. 4(a) 5(a) 8(a) and 9(a).


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The contents of this article are provided for general information purposes only and do not constitute legal or other professional advice of any kind.

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