Wednesday, March 14, 2012

International patent strategies? Choose Canada

Wednesday, March 14, 2012

Recent global economic events have forced intellectual property (IP) owners to tighten their belts. IP reform has put more pressure on IP owners too, as they now have to consider and act on reforms such as the Leahy-Smith America Invents Act (AIA), which was signed into law by US President Barack Obama on September 16, 2011. When these events are combined, they represent a good opportunity for Canada to become a top-tier priority for patent filings.

For example, applicants in the US now have to request prioritised examinations of patent applications that have a limited number of claims, for a fee (large applicant) of $4800. In comparison, the cost for requesting an expedited examination in Canada is $500, or free if the application is for green technology. Given that there is a Patent Prosecution Highway (PPH) in place between Canada and the US, the significantly reduced costs of expedited examination make filing and expediting prosecution in Canada a more attractive economic option in comparison to the US .

Canada also has PPH agreements in place with other countries, including Japan, Germany and Korea.

Patent claims

Regarding patent claims, there is another economic consideration to keep in mind. In Canada, there is no limit to the total number of claims or the number of independent claims that can be included in an application. Moreover, there are no restrictions or surcharges on the use of multiple dependent claims. This means that any claim that may have been deleted in an original US or European application for cost-saving purposes may be reintroduced during Canadian prosecution.

Another change brought by the AIA in the US, which comes into force in March 2013, affects foreign priority claims. The change will put foreign priority claims on an equal footing with US patent filing dates. This means that patent applicants will no longer have to file in the US before seeking protection elsewhere, as they do now, because a US filing date and a foreign priority date will carry the same weight during examination.

This may effect a change in filing strategy. Inventors who currently seek protection in the US first and then claim priority for the US application when filing into Canada will be able to do the reverse.

Filing first into Canada and then the US, for applicants who are legally able to do so, can be more cost-effective and a faster means of securing a filing date. In Canada, a patent applicant has 12 months from the date of filing to complete an application and secure the original filing date. There are no requirements in Canada for an inventor’s oath, formalised drawings or the other formalities that are required in the US.

Protection from cross-border activity

Manufacturers would be unwise to patent a product in the US only. Without patent protection elsewhere, their competitors could set up businesses in jurisdictions such as Canada and sell their products to customers around the world, as well as cross-border shoppers from the US. At the very least, manufacturers should consider applying for patent protection in Canada as part of a defensive filing strategy if Canada is not an attractive market in itself.

Making, using, selling or offering for sale a claimed invention in Canada constitutes patent infringement, and inducing others to infringe also constitutes infringement. Infringement may also occur if a non-patented product that was made outside Canada, using a process or product that is covered by a Canadian patent, is sold there. There is a six-year limitation period for infringement.

When filing in Canada

There are aspects of Canadian patent law that make the country a more attractive jurisdiction to patent in than the US.

The grace period that can be enjoyed by inventors when preparing a patent application is different in Canada and the US. Under the AIA, prior art that is disclosed within one year of an application’s effective date will not be citable against an invention in the US. A patent’s effective date can either be the application’s filing date or the priority date. In Canada, however, the grace period requires a Canadian patent application to have a filing date within one year of an inventor’s disclosure.

Canada does not allow the submission of post-filing data to support predictions about a claim’s utility or soundness. By contrast, the AIA allows the submission of post-filing data. Applicants must therefore include sufficient data at the time of filing, within one year of an initial priority filing, or within one year of an initial public disclosure, when filing for patent protection in Canada.

There are no terminal disclaimers to manoeuvre around double patenting in Canada. If a double-patenting objection cannot be overcome by argument, the claims will need to be amended to eliminate the overlap cited by the Examiner. Accordingly, we advise that the full breadth of the invention be claimed in a single application, particularly in view of no associated fees for excess claims. Alternatively, if the Applicant believes they have claims which should be filed as a divisional application we would recommend adding the new claims to the parent application and triggering a unity of invention objection from the Examiner thus avoiding a double-patenting objection down the road.

Unlike in the US, there is no absolute ‘on-sale bar’ in Canada. It is possible for an invention to be sold, but due to the nature of the invention (if the product that is sold cannot be reverse-engineered to reveal the subject matter of the invention), the sale is not considered to be a disclosure. Therefore, patent applications that would be prohibited in the US may still be able to grant to patent in Canada.

Preventing counterfeiting with IP

Industrial design, trademark and copyright protection are not mutually exclusive, which could be used to an IP owner’s advantage when doing business in Canada.

In Canada, it is not an infringement of copyright to reproduce (copy) a design that is applied to a useful article (a shape) for which more than 50 articles have been produced. However, this rule does not apply when the shape is used as, or for, a trademark.

The copyright holder must ask an important question: Is the shape/design of the article a trademark? The question poses a significant problem, because under the Canadian Trademarks Act, a trademark that is a shape, defined as a distinguishing guise, is only protectable if the distinguishing guise is distinctive on the date of filing for registration. Moreover, in common law, trademark rights exist only if a trademark is distinctive of a single source.

The inquiry must then turn to how to ensure that the design applied to a useful article (a shape) can be sufficiently distinctive to attract trademark protection and, therefore, take advantage of the copyright exception, which would preclude the reproduction of the copyright holder’s shape of a product.

The answer lies in the Canadian Industrial Design Act. An industrial design is a feature of shape, configuration, pattern or ornament and any combination of those features that, in a finished article, appeal to and are judged solely by the eye. A shape is capable of being both an industrial design and a distinguishing guise trademark if the distinguishing guise is distinctive of a single source. The basis of the right to an industrial design is founded in originality. There is no requirement for previous use to register an industrial design.

An industrial design lasts for 10 years from the date of registration. The right holder, relying on the monopoly provided by the ID registration can wait until there is sufficient distinctiveness in the shape/design to assert trademark rights. A significant precaution that must be strictly observed for this strategy to work is that the industrial design must be filed within one year of publication anywhere in the world. Otherwise, it would become ineligible for registration in Canada.

If this strategy is followed, the result is a multi-pronged approach to IP protection in Canada that will allow a right holder to assert copyright infringement should a product be reverse-engineered.

Copyright enforcement is typically the cheapest and easiest form of IP enforcement. Copyright should and can be used as an effective tool against anti-counterfeiting.

If Canada is not a traditional consideration for an IP strategy, it should become one. It would be a strategic mistake not to count Canada as a top-tier country when developing international IP strategies. Canada is a cost-effective jurisdiction in which strong IP protection can be obtained quickly.


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