Consultation period: March 31, 2022 to April 29, 2022
This consultation is seeking input from stakeholders on the Canadian Intellectual Property Office (CIPO)’s proposed changes in fees. CIPO recognizes the importance of the needs and views of its clients and the public. CIPO would appreciate receiving your views on proposed areas of consideration for change and adjustment in the proposed fees.
Adjusting CIPO’s fees for services
CIPO has a mandate to deliver high quality and timely intellectual property (IP) products and services to customers and to increase awareness, knowledge and effective use of IP by Canadians. CIPO administers Canada’s IP system and provides access to these rights in Canada to foreign or Canadian applicants.
In Canada, CIPO provides services that administer the examination, granting and registration of IP rights, which covers the life span of an IP right, from the initial filing to the expiration of the right. This covers a range of IP rights, including patents, trademarks, industrial designs, copyright, official marks and geographical indications.
CIPO supports innovation in Canada by:
- providing quality IP rights to increase market certainty
- providing timely IP rights to permit innovators to more quickly develop, monetize and commercialize ideas
- aligning internationally to support businesses operating globally
- raising awareness of IP to help clients make informed decisions about acquiring and using their IP
- sharing data and information to support follow-on innovation
- administering over 1 million interactions with clients and over 120,000 new IP applications annually
Canada’s IP ecosystem relies on, and benefits from, services provided by CIPO. This includes for example, the grant and issuance of rights, authorizations and certificates. These services have not had their fees substantively updated since 2004, thereby not accounting for the impact of inflation. This has resulted in a structural deficit where revenues from fees no longer cover the costs required to deliver services.
Since the last fee review in 2004, several factors have contributed to the operational and financial pressures on the organization:
- Inflation: Covers all non-labour costs that have not been accounted for through corresponding fee increases. Rising costs of approximately 30% since 2004, covering rent, access to data, professional services, etc.
- Labour costs: Given fees have not been substantively increased in almost 2 decades, they have fallen well behind wage settlements. On average, labour costs have increased by 28% since 2004.
- Application volumes: There have been surges in certain areas (e.g. trademark applications were up 8% in 2019).
There have also been a number of policy initiatives since 2004 that have required CIPO to adjust processes and assign resources:
- Implementation of the Canada–United States–Mexico Agreement (CUSMA), including measures on patent term adjustment
- Implementation of 5 international IP treaties, with new IT and stringent timeliness requirements
- Implementation of the Comprehensive Economic Trade Agreement with the European Union, including a new geographical indications regime
Further, implementation of the national IP Strategy has resulted in a loss of agent registration and exam fees due to the creation of the new College of Patent Agents and Trademark Agents (approx. $500,000 loss annually). Moreover, to ensure that CIPO meets client needs, it must provide internationally comparable services and meet international standards to be able to support businesses operating in Canada and globally. The fee adjustment will help address productivity challenges to help businesses get to market in a timely manner.
CIPO is not funded through appropriations but is entirely funded by its fee revenue. CIPO funds its operations on a cost-recovery basis from the revenues it generates from fees paid by clients for IP services. Therefore, fees must be sufficient to recover the costs of the associated activities in order to adequately fund and support CIPO’s operations. CIPO has not revised its fees since 2004. Without such a revision, it faces a significant, long-term structural deficit and the prospect of service disruptions.
Overall, CIPO’s modernization efforts have not kept pace with those of comparable IP offices in other jurisdictions, and Canada’s fees are much lower than those of major international partners. CIPO is also operating on legacy and diverse technologies, which hinder and complicate the implementation of required legislative and regulatory changes. Maintenance costs for these technologies are increasing, while CIPO also confronts risks and obsolescence issues due to technological rust-out.
In response to this situation, CIPO’s general approach is to catch up with close to 30% inflation since 2004 by adjusting most of its fees by 25%. This will address its structural deficit situation and return the organization to a position of financial stability. CIPO is sensitive to the possible impact of changing fees on small business and, as part of its proposal, is suggesting measures to provide substantial relief to a broader range of small businesses.
The proposed fee adjustment is central to supporting Canada’s IP Strategy, meeting growing demand, fulfilling trade and treaty obligations, providing internationally comparable services and addressing critical capacity and technological issues to provide improved services to CIPO clients. A modernized CIPO would enable better and faster service for Canadian businesses and innovators and will strengthen CIPO’s ability to support the IP economy.
As we begin the process of increasing our fees, we are asking for your feedback. To learn more and to share your ideas, visit the current fee consultations.