Filing Away into USA

An article in the Globe & Mail on January 17, 2011 highlights the record number of patents issued to Canadians in 2010, and included the interesting statistic that “U.S. patent authorities issued a record 5,223 patents to Canadian firms and individual inventors last year, up 20 per cent from 2009.”[1]

The article goes on to discuss this as a sign of Canadian inventiveness, relative to other countries which do not receive as many US patents, “Still, at No. 6, Canada ranks ahead of many other large European countries, including France, Britain and the Netherlands, as well as China.”

One of the problems with this approach is that the number of patents filed in the US is not a great proxy for patents filed worldwide, as for a variety of historic and economic reasons companies and individuals from some countries are more likely to file in the US than others.

For example, Canadians are significantly more likely to file in the US than in Canada. In 2010 there were 5,223 US patent grants to Canadians, but Canadians received only 2,061 Canadian Patents.[2]

This is likely not a surprise to most Canadian patent agents, as for a variety of reasons, making the first filing into the US often makes sense for Canadian based patent applicants.

The US is a large market in which many Canadian companies want to protect their innovations. The US market provides many potential benefits to a Canadian applicant, such as the ability to file a simple and low-cost US provisional which can, if later desired, be converted into a US patent, and international applications through the Patent Co-operation Treaty (PCT), and a patent prosecution highway to allow quick grant in Canada if a US patent has been granted.

Just as many Canadian companies seek to file in the US, many foreign companies seek to benefit from Canada’s strong patent protection. Only 11% of the patents issued by CIPO in 2010 were granted to Canadian applicants (2,061 of 19,120)[3] , while more than 46% of the patents were issued to Americans (8,804 of 19,120)[4].

These numbers highlight the importance for Canadian IP Practitioners to have a strong network of relationships with IP firms in other jurisdictions, and the careful decision that patent applicants must make in choosing which country or countries to file their applications in.

By James Wagner

[1] http://www.theglobeandmail.com/report-on-business/your-business/grow/new-product-development/canada-picks-up-pace-in-patents/article1873617/
[2] CIPO Database search for: (CA INVTCOUNTRY) (ISD>=2010-01-01) (ISD<=2011-01-01)
[3] CIPO Database search for: [(ISD>=2010-01-01) (ISD<=2011-01-01)]
[4] CIPO Database search for: (CA INVTCOUNTRY) (ISD>=2010-01-01) (ISD<=2011-01-01) (US INVTCOUNTRY) (ISD>=2010-01-01) (ISD<=2011-01-01)

Clarifying the Commissioner’s Discretion under S. 8 of the Patent Act

Congratulations to MBM on a successful Judicial Review of the Commissioner of Patent’s refusal to grant a S. 8 Clerical Error remedy on behalf of Repligen Corporation.

The impact of the Repligen decision is such that when the Commissioner of Patents decides to exercise her discretion, the Commissioner will now have to consider the impact of the decision on the applicant and may only consider the evidence and not speculate about the impact the decision may have on others.

Repligen’s patent was issued under Patent Number 1, 341, 486 on July 19, 2005; it is titled “Modified Protein A”. The application for patent was filed on March 4, 1988 and is subject, pursuant to Section 10 of the Act, to the Patent Act as it read before October 1, 1989. It was open for public inspection as of July 19, 2005. When CPA transmitted the required maintenance fees for the second and third anniversary dates of the issued patent, it did so, as instructed by Repligen’s patent attorney in the US, who had received the wrong patent reference number from its former Canadian patent agents; these agents identified Repligen’s patent not as the 1, 341, 486 patent but the 1, 314, 486 by inverting the 314 for the 341.[1]

MBM filed a request for correction of the error and reinstatement of the patent pursuant to Section 8 of the Patent Act, which reads:

Clerical errors in any instrument of record in the Patent Office do not invalidate the instrument, but they may be corrected under the authority of the Commissioner.

The Commissioner of Patents acknowledged that “identifying the patent as the 1, 314, 486 patent rather than of the 1, 341, 486 patent in the “Payment of Maintenance Fees Form” sent by CPA to the CIPO was a clerical error according to the relevant jurisprudence.” [2]

The Commissioner concluded:

Nevertheless, the delay in addressing the errors has resulted in an extensive period of time where third parties may have relied upon publicly available documents and the information contained therein. The Office record reflected that as of July 21, 2008, the exclusive right to make, use, or sell the invention ceased in reference to Canadian patent no. 1,341,486. Therefore, effecting said correction has the potential to negatively affect the rights of others.[3]

Justice Lemieux held that it was an error to rely on speculation of third party harm when there was no evidence on the record to suggest such harm.

Simply invoking possible third party rights without more would, in my view, fundamentally impair the remedial power Parliament conferred upon the Commissioner to remedy clerical errors. The reason is obvious: in the case of every issued patent the disclosure will have been made; in the case of a patent application, it is open to the public inspection after a certain date. Justice Desjardins in Bristol-Myers did not endorse a speculative determination of third party rights. She had hard facts before her which pointed to the likehood third parties would be affected – the nature of the remedy sought which was the addition of a new priority date had the effect in a document, that had been opened in 1994, of permitting the entry in 1997 of a priority date of July 1992.[4]

                                   

Justice Lemieux held further that other factors in Repligen’s favour needed to be considered, including:

The impact on Repligen– the loss of its patent; [should the commissioner decline to exercise her S. 8 discretion]

[And that] the remedial scope of section 8 would have the effect that the ‘486 patent never lapsed for non-payment under paragraph 46(2) of the Act because those fees were paid in the appropriate amount and on time, a result which was achieved in Dutch Industries, above, without the recourse to section 8.

Consequently, the judicial review application was granted with costs, the Commissioner’s decision was set aside and the Applicant’s correction request was sent to CIPO for reconsideration pursuant to the judgment.

By Scott Miller

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[1] Lemieux J. at para. 3, Repligen Corporation v. Attorney General of Canada 2010 FC 1288

[2] supra at para. 14

[3] supra at para. 16
[4] supra at para. 40

A Step Closer to Claiming your Damages?

Patents, industrial designs, registered trade-mark rights, and copyright are federally granted rights in Canada, and generally enforceable in either the Federal or Provincial Courts.

If however the Federal Government has harmed a right holder or applicant in some manner (refusing to correct a clerical error, etc.) the challenge to the decision has usually been through the Federal Court’s judicial review process. Under this approach the rights holder seeks to overturn the decision of the “Federal Board or Tribunal” (i.e. a decision by the Commissioner of Patents) with the aim of reversing the previous decision. Compensation for harm from the decision would then require a separate action seeking damages, following the successful judicial review.

This result arose from the Federal Court of Appeal’s decision in Grenier[1] , which held that pleading a claim for compensation without first commencing a judicial review amounted to either: a collateral attack on the decision of the board or tribunal, or a ‘sham’ attempt to obtain a judicial review indirectly, and often beyond the expiry of the deadline. “In short, a decision of a federal agency … retains its legal force and authority, and remains juridically operative and legally effective so long as it has not been invalidated.”[2]

This line of case law had several downsides which limited the ability of parties to obtain compensation, such as:

• The short timeline to file a judicial review (30 days, extendable by order in exceptional circumstances)

• A judicial review could prove time consuming and costly, while not directly addressing the issue of whether compensation is owing or providing any relief (as even a successful judicial review does not establish entitlement to compensation).

• Judicial reviews of Federal Government decisions can only be filed in the Federal Court, adding complication to claimants who may have wished to proceed in a provincial court to obtain their damage remedy.

This approach was particularly hard for those parties who did not seek to reverse the tribunal or board’s order, but still sought compensation. This could often arise in cases where the effect or damage caused by the order had already lapsed prior to the claimant seeking relief.

On December 23, 2010, the Supreme Court of Canada released four decisions which clearly overturned this past precedent; as a result, parties may now seek damages directly against the Federal Government, in either Provincial or the Federal Court. The Supreme Court judgments are framed from the point of view of access to justice, attempting to eliminate an often unnecessary hurdle (judicial reviews) before a potentially injured party can receive compensation.

This appeal is fundamentally about access to justice. People who claim to be injured by government action should have whatever redress the legal system permits through procedures that minimize unnecessary cost and complexity. The Court’s approach should be practical and pragmatic with that objective in mind.

If a claimant seeks to set aside the order of a federal decision maker, it will have to proceed by judicial review, as the Grenier court held. However, if the claimant is content to let the order stand and instead seeks compensation for alleged losses (as here), there is no principled reason why it should be forced to detour to the Federal Court for the extra step of a judicial review application (itself sometimes a costly undertaking) when that is not the relief it seeks. Access to justice requires that the claimant be permitted to pursue its chosen remedy directly and, to the greatest extent possible, without procedural detours.[3]

While a party seeking only compensation will now have the option to avoid pursuing a judicial review, such an approach will limit the remedies available (the underlying order can not be overturned).

As well, in the absence of a successful judicial review, the Federal Government may be able to raise the defence of “statutory authority,” and the parties may still need to determine the validity of the underlying order. However, the onus will be reversed from the position of a judicial review. In raising the defence of statutory authority the Federal Government may need to prove the alleged harmful outcome of the order was inevitable or practically impossible to avoid if following the applicable statute. This contrasts sharply with a judicial review, where the party challenging the order has the onus to prove that the order was wrongly decided or that the statute is invalid.

[1] Canada v. Grenier, 2005 FCA 348, [2006]

[2] Létourneau J.A. at para. 19, Grenier supra.

[3] Per Binnie, J. at paras. 18 and 19, Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62

By: James Wagner