This document is intended to share general observations made by the Patent Office in assessing requests for reinstatement and requests for the reversal of deemed expiry that require a due care determination under sections 73(3)(b) and 46(5)(b) of the Patent Act. Applicants, patentees, agents and their representatives may use these observations as guidance in responding to a notice under 27.1(2)(b), 35(3)(b) or 46(2)(b) of the Patent Act, and in determining what information they may wish to include in their request for reinstatement or reversal of deemed expiry.
These are general observations only of the Canadian Intellectual Property Office (CIPO)'s interpretations of the "Due Care" provisions. In all cases the relevant provisions of the Patent Act and Patent Rules are legally binding and must be followed.
Introduction
Applicants and patentees must pay annual maintenance fees to maintain an application for a patent in effect or to maintain the rights accorded by a patent. In addition, in order to start prosecution of their application, applicants must submit a request for examination, along with the payment of the fee for requesting examination. When an applicant or patentee fails to take one of these actions by the prescribed deadline, the Patent Office will send a Commissioner's Notice ("Notice") under sections 27.1(2)(b), 35(3)(b) or 46(2)(b) of the Patent Act as applicableFootnote 1. An applicant or patentee and their representatives must then take the required action before the prescribed due date ("Notice due date") to avoid deemed abandonment of the application or deemed expiry of the patentFootnote 2.
An application that is deemed abandoned for failing to pay a maintenance fee and late fee may be reinstated, or the deemed expiry of a patent may be reversed if, among other things, the Commissioner makes a determination that the failure occurred in spite of the due care required by the circumstances having been taken.
It is also possible that an application that is deemed expired for failing to request examination may be reinstated. If the request for reinstatement is received more than 6 months after the original deadline to request examination, the Commissioner must make a determination that the failure occurred in spite of the due care required by the circumstances having been taken in order for the reinstatement to be successful.
The Patent Office's interpretation of the due care standard is contained in sections 9.04.03 and 27.03.03 of the Manual of Patent Office Procedure ("MOPOP"). These sections state that the Commissioner will assess whether the applicant or patentee took all measures that a reasonably prudent applicant or patent holder would have taken – given the set of circumstances related to the failure – to avoid the failure, and that the failure occurred despite having taken those measures.
As the due care standard may be considered a high standard to meet, the Patent Office strongly recommends that applicants and patentees take caution to avoid deemed abandonment and deemed expiry.
Common issues in statement of reasons
After having reviewed many requests for reinstatement or reversal of deemed expiry, the Patent Office notes the following common issues in the statements of reasons provided in the request.
Relevant point in time
Sections 46(5)(a)(ii) and 73(3)(a)(ii) of the Patent Act require applicants and patentees to state, in their request for reinstatement or reversal of deemed expiry, the reasons for the failure to take the action that should have been taken to avoid the abandonment or deemed expiry. The action that should have been taken to avoid the abandonment or deemed expiry is taking the required action set out in the Notice (i.e. paying the maintenance fee and late fee, or requesting examination and paying the late fee) before the Notice due date. The Patent Office focuses on the actions that were taken after the Notice was received. In the majority of cases, the Patent Office disregards explanations as to why the maintenance fee or request for examination was not paid by the original deadline since missing the original deadline to pay the maintenance fee or request examination does not result in abandonment or deemed expiry.
Many requests for reinstatement or reversal of expiry do not provide an explanation of what was done after the Notice was received. If the request for reinstatement or reversal of deemed expiry focuses on the reasons why the original due date was missed, the Commissioner will not be able to make a determination that the failure occurred in spite of the due care required by the circumstances having been taken.
Unintentionality
In certain circumstances (and in other jurisdictions), applicants must show that a failure to take action was "unintentional" in order for rights to be reinstated (see for example, section 154(3)(a)(i) of the Patent Rules). It should be noted that this is a lower standard than that of "Due Care". Many requests for reinstatement include claims that the failure was unintentional. While the Patent Office may agree with these claims, the Patent Office does not take this into account when making an determination as to whether due care was taken.
All authorized persons must show due care
Under the Patent Act and Rules, any person may pay a maintenance fee, request examination, and pay the late fee. The applicant and patentee, as well as all persons authorized by the applicant or patentee to pay the maintenance fee or request examination, must show that due care was taken. In other words, all persons that were authorized by the applicant or patentee must take due care to ensure that the relevant action and payment of the late fee are completed before the Notice due date. For example, if a patentee has appointed an agent but hires an annuity firm to pay the maintenance fees, the patentee, patent agent (foreign and Canadian), and annuity firm must all demonstrate that due care required by the circumstances was taken.
Lack of Information
Sections 9.04.06 and 27.03.05 of the MOPOP explains that the Patent Office recommends that certain information be provided in the request for reinstatement or reversal of deemed expiry. It is not enough to include a reason for failure without fully describing what actions were taken to avoid the failure.
Patent Office Standards
As noted in sections 9.04.07 and 27.03.06 of the MOPOP, the Patent Office will have regard to considerations that are taken into account by the International Bureau and Receiving Offices as described in paragraph 166M of the PCT Receiving Office Guidelines. Although the due care standard in the PCT Receiving Office Guidelines may be considered by the Patent Office in some circumstances, the Patent Office must create standards which reflect the unique elements of the patent system in Canada. The following standards have been adopted by the Patent Office in it's interpretation of the assessment of due care.
Responsibility of appointed patent agent
It is understood that many applicants and patentees decide to pay maintenance fees directly, or through a third party such as an annuity firm. Applicants and patentees should understand that, unless an agent is revoked under the Patent Rules, their agent remains on record with the Patent Office and is considered to be the representative of the applicant or patentee. As such, all correspondence, including Commissioner's Notices for non-payment of maintenance fees or failure to request examination, will be sent to the appointed patent agent if one is on record at the time the notification is sent.
If an agent was appointed and not revoked, the Patent Office takes the position that the agent is expected to demonstrate due care in dealing with any correspondence, including Commissioner's Notices, that are received. At a minimum, an appointed patent agent is expected to forward a Commissioner's Notice to the applicant or patentee for their action. In some cases, depending on the circumstances, it might be necessary to confirm receipt of the Notice by the applicant or patentee, as well as to confirm who will be responsible for paying the fees. Forwarding the Commissioner's Notice with a note indicating a non-response from the client and no action on the part of the patent agent will, in most circumstances, not be considered as having taken due care.
Docketing system, process and procedures
Irrespective of the reason for failure to take the action that should have been taken to avoid abandonment of an application or deemed expiry of a patent, any person authorized to take the action should demonstrate that they use a well-functioning, reliable docketing system with fail-safes. The docketing system should include due dates relating to Commissioner's Notices (i.e. the "late period"), especially when a Notice setting out the due date is received. If deadlines are previously removed from an agent's docketing system because the applicant or patentee agreed to take responsibility for paying the fees, unless action is taken immediately upon receiving instructions from the applicant or patentee, it is reasonable to assume that due dates would be added back to the docketing system if the responsibility for paying the fees is transferred back to the patent agent.
COVID-19 pandemic
Lack of financing due to business disruptions caused by the COVID-19 pandemic does not excuse a failure to pay the maintenance fee and late fee, or failure to request examination and pay the late fee. Applicants and patentees are expected to find the means necessary to pay the annual maintenance fee (and late fee, if applicable). In the context of the COVID‑19 pandemic, any due dates to take action that fell between and were officially extended to pursuant to the Commissioner's power to designate days under section 78(2) Patent Act. As such, applicants and patentees were provided with additional time to pay maintenance fees (and late fees, if applicable), and to request examination (and pay the late fee, if applicable).
Affidavits
The applicant/patentee or authorized person making the request for reinstatement or reversal of deemed expiry may choose to provide evidence through an affidavit in support of the reasons for failure and the description of the circumstances provided. Although an affidavit is not required by the Commissioner in order to make a determination, evidence provided through an affidavit might be helpful if there is doubt surrounding some of the facts presented.
Responses to Intention to Refuse Letters
As described in sections 9.04.08 and 27.03.07 of the MOPOP, if, after reviewing the original request for reinstatement or reversal of deemed expiry, the Commissioner is not satisfied that the failure occurred in spite of the due care required by the circumstances having been taken, the Patent Office will send a letter to the requestor of the reinstatement or reversal of deemed expiry, indicating the Commissioner's intention to refuse to make the determination that the failure occurred in spite of the due care required by the circumstances having been taken ("Intention to Refuse Letter"). Applicants and patentees then have one month from the date of the letter to provide observations on the Commissioner's intention, or alternatively, provide a new request for reinstatement or reversal of deemed expiry, if the deadline to make such a request has not yet passed.
To date the Patent Office has received several responses to Intention to Refuse Letters. In some responses, new reasons for the failure to take action were included. It should be noted that if reasons unrelated to the original request are provided in a response to the Intention to Refuse letter, these new reasons may be disregarded. If an applicant or patentee wishes to submit new reasons for the failure to take action, a new request for reinstatement or reversal of deemed expiry should be submitted, along with a new fee for the request for reinstatement or reversal of deemed expiry, provided the deadline to do so has not expired.
Conclusion
The Patent Office has posted on the CIPO website a list of patent applications and patents that have been subjected to a determination related to due care. It should be noted that each request is determined on the factual circumstances of each individual case.
The list can be accessed here: Determinations related to due care (canada.ca).