This will update previous notes on this subject, published in the June and October 2003 issues of IP Perspectives.
In Barton No-Till v. Dutch Industries, the Federal Court of Appeal held that, if a small entity maintenance fee is incorrectly paid where a large entity maintenance fee was required, and the time for reinstatement has passed, the patent has irrevocably lapsed, and the payment of a “make-up” fee is not possible. On December 11, 2003, the Supreme Court of Canada denied Dutch Industries’ leave to appeal this decision.
In a separate decision released on November 25, 2003, F. Hoffman-La Roche AG v. The Commissioner of Patents, 2003 FC 1381, the Federal Court, Trial Division, confirmed that the provisions of the Patent Act governing the payment of maintenance fees require strict compliance. In that case, a maintenance fee due on a reissued patent was not paid, and no action was taken during the reinstatement year to correct the non-payment. Notwithstanding evidence of the patentee’s intention to pay the fee, and evidence of incorrect notices by the Patent Office, the Court found that the Patent Act provides no legal basis on which a patentee might avoid the consequence of non-payment of fees, namely, the irrevocable lapse of the patent. The Court stated that “patent holders . . . must shoulder certain burdens and obligations.Among them is the duty to pay maintenance fees to keep a patent in good standing.”
The Roche and Dutch Industries decisions highlight the importance of strictly adhering to the maintenance fee provisions of the Patent Act and Rules. We are continuing our practice of paying large entity fees in all cases to avoid even the risk of improper payment.
The Canadian government may take action to alleviate at least some of the concerns arising from the rigidity of Canada’s laws in this regard. We reported in IP Perspectives for October 2003, that the government of Canada had announced its intention to amend the Patent Act and Regulations in order to address the issue raised by the Dutch Industries decisions. On December 22, 2003, the government published its proposed legislation, and invited comment from the public. The proposed legislation would specifically address the small entity fee issue by providing a six month period wherein any improperly paid small entity fee may be “topped up” with retroactive effect. This would be a one time opportunity to revive otherwise invalid patents. The legislation also contains a provision that would empower the government to pass regulations dealing more generally with the problem of incorrectly paid or unpaid fees. The form that the regulations might take has not been announced. They could, for example, permit the payment of make-up fees in situations where the patentee can show a bona fide intention to pay the correct fee at the appropriate time. However, this is speculative at present. The public has until the end of March, 2004, in which to submit comments, and it is not known how soon the legislation might become law. The introduction of this legislation could be affected by a Canadian general election, which might be called in the spring of 2004.
A. David Morrow, Ottawa