Consultation document – Third party rights and due care

Amendments to the Patent Act and Rules required for compliance with the Patent Law Treaty (PLT) will introduce a series of new safety nets for applicants and patentees. These safety nets include increased time limits to remedy certain deficiencies such as, for example, a missed maintenance fee payment. Increases in these time limits are likely to cause increased uncertainty for third parties; therefore, new balancing provisions are being introduced to mitigate the impact of potentially longer periods of market uncertainty. These balancing provisions will both encourage timely actions and responses by applicants and patentees and will incentivize an early reversal of an abandonment of an application or deemed expiry of a patent. These balancing measures are third party rights and the due care requirement for reversing abandonment or deemed expiry.

Third party rights

Rights are afforded to third parties who, while the patent rights are uncertain, take actions in good faith which would otherwise constitute an infringement. In specific circumstances, third parties will be protected against infringement proceedings when they start using or make serious and effective preparations to use a patented invention after a prescribed period of time has elapsed after IP rights appear uncertain. IP rights may appear uncertain when an applicant or patentee did not take an action that should have been taken during the course of prosecuting an application or maintaining a patent.

The availability of third party rights is a significant departure from the current Canadian patent system in which there are no third party rights. While the framework for third party rights is established in the Patent Act the precise parameters surrounding their application are primarily provided in the Patent Rules.

Failure to pay a maintenance fee on a patent application or a granted patent, failure to request examination of a patent application and provide the prescribed fee, and failure to take any action that results in an abandonment of an application could give rise to third party rights as described and illustrated in the Appendix. Third party rights may also be applicable in cases where such a failure has occurred, but the application was not deemed abandoned, or the patent was not deemed expired.

Due care

The due care requirement is one that will need to be met in certain circumstances in order to reinstate an application or to reverse the deemed expiry of a patent. Whether or not due care will be required is proposed to be dependent on both the type of failure that led to the abandonment or deemed expiry and the point in time when the failure was rectified. Under the proposed Patent Rules, due care will be required to be shown in order to successful request reinstatement following abandonment for failure to pay a maintenance fee, or for failure to request examination when the request for reinstatement is received after 6 months from the deadline to request examination. Due care will also be required to be shown in order to successfully request the reversal of the expiry of a patent following a failure to pay a maintenance fee. Due care will not be required to reinstate applications that have been abandoned for failure to take any other action. Only when due care is required to be shown, a request to reinstate an application or reverse the deemed expiry of a patent must include the reasons for the failure to take an action and should describe the circumstances that the applicant/patentee was faced with which led to the failure that resulted in abandonment or deemed expiry.

When due care is required the Commissioner will make a determination, based on the facts of the case, as to if the applicant or patentee failed to take an action that should have been taken in order to avoid abandonment or deemed expiry despite all due care required by the circumstance. The Commissioner may ask the client for additional documentation or information if deemed necessary to make a determination. Additional documentation could include supplementary details, medical notes or other evidence of the facts (e.g. affidavit).

For a complete understanding of this topic please consult the Bill C-43 and Bill C-59 legislative amendments not in force in the Patent Act and the public consultation draft of proposed amendments to the Patent Rules available on our website.

References:

Bill C-43:

  • Abandonment and Reinstatement - Section 73 of the Patent Act (not yet in force)
  • Third Party Rights - Section 55.11 of the Patent Act (not yet in force)
  • Maintenance Fees for Patents - Section 46 of the Patent Act (not yet in force)
  • Maintenance Fees for Patents - Section 27.1 of the Patent Act (not yet in force)

Bill C-59:

  • Abandonment and Reinstatement - Section 73 of the Patent Act (not yet in force)

Proposed Patent Rules:

  • Due Care - Section 117
  • Third Party Rights – Section 129
  • Due Care – Section 136

Appendix: Proposed application of due care and third party rights

The information below demonstrates the interaction between third party rights and the due care requirement in cases where there was a failure to pay a maintenance fee on a patent application or a granted patent, failure to request examination of a patent application and provide the prescribed fee

Applications for a patent:

A. Maintenance fee

Current state

In the current regime an application will go abandoned immediately after a maintenance fee is not paid by the due date. Applicants have 12 months from this date to pay the fee that should have been paid and to request reinstatement before the application is dead.

Figure 1
Figure 1 - Text version

The figure contains a time-line illustrating the current abandonment and reinstatement regime for non-payment of a maintenance fee for a patent application. The time line begins at 0 months and an arrow at 0 months represents a maintenance fee due date. An arrow pointing to 0 months indicates abandonment occurs at this date when the maintenance fee is not paid. An illustration on the time-line after 0 months indicates that a courtesy notice is provided when there is a failure to pay a maintenance fee on-time. An arrow at 12 months indicates the deadline to reinstate the application which is 12 months from the date of abandonment.

Proposed new state

In the new regime when a maintenance fee is not paid on time a notice will be sent to the applicant requiring the payment of the fee and a late fee. If these fees are not paid before the later of 6 months from the maintenance fee due date and 2 months from the date of the notice, the application will be abandoned. It is proposed that if a maintenance fee due for an application is not paid on time:

  • Third party rights will apply starting from 6 months after the maintenance fee due date.
  • Due Care will be required to reinstate the application in the time period beginning immediately after abandonment.
Figure 2
Figure 2 - Text version

The figure contains a time-line illustrating the proposed new state for when third party rights and due care will apply when maintenance fee for a patent application is not paid on or before the due date. The time line begins at 0 months and an arrow at 0 months represents a maintenance fee due date. An illustration on the time-line after 0 months indicates that a notice is provided when there is a failure to pay a maintenance fee on-time. An arrow at 6 months indicates the date when the patent application will typically be deemed abandoned for a failure to pay a maintenance fee on time. Abandonment occurs on the date that is the later of 6 months after the maintenance fee due date and 2 months from the date of the notice. An arrow at 18 months indicates the deadline to reinstate the application. The deadline to reinstate the application is 12 months after the end of 6 months after the maintenance fee due date. While this is illustrated at 18 months on the time-line it may be a different date where deadlines become extended. Under the time-line is a red arrow beginning at 6 months and extending indefinitely to the right. This arrow indicates that third party rights may apply 6 months after maintenance fee due date. In most cases, third party rights will apply until the earlier of reinstatement of the application of the granting of the patent. Also under the time-line is a red arrow beginning at 6 months and extending indefinitely to the right. This arrow indicates that due care will apply to reinstate the patent application.

B. Request for examination

Current state

In the current regime an application will go abandoned if an applicant does not request examination and pay the prescribed fee before the 5 year period after from the filing date of an application. Applicants have 12 months from the date of abandonment to request examination, pay the prescribed fee and request reinstatement before the application is dead.

Figure 3
Figure 3 - Text version

The figure contains a time-line illustrating the current abandonment and reinstatement regime for failure to request examination of an application before the time limit to request examination. The time line begins at 0 months and an arrow at 0 months represents the time limit to request examination. An arrow pointing to 0 months indicates abandonment occurs at this date when an applicant has not successfully requested examination before the time limit to request examination. An illustration on the time-line after 0 months indicates that a courtesy notice is provided when there is a failure to request examination of an application before the time limit to request examination. An arrow at 12 months indicates the deadline to reinstate the application which is 12 months from the date of abandonment.

Proposed new state

In the new regime applicants must request examination before the expiry of the 4 year period after the filing date. This time period is extended in limited circumstances for PCT applications and divisional applications. If the applicant fails to request examination and pay the prescribed fee before the prescribed date a notice will be sent to the applicant requiring this action be taken. If the action is not taken before 2 months from the date of the notice, the application will be abandoned. It is proposed that if an applicant fails to request examination and pay the prescribed fee before the prescribed date:

  • Third party rights will apply starting from 6 months after the prescribed time to request examination.
  • Due Care will be required to reinstate the application in the time period beginning 6 months after the prescribed time to request examination.
Figure 4
Figure 4 - Text version

The figure contains a time-line illustrating the proposed new state for when third party rights and due care will apply when there is a failure to request examination of an application before the time limit to request examination. The time-line begins at 0 months and an arrow at 0 months represents the time limit to request examination. An illustration on the time-line after 0 months indicates that a notice is provided when there is a failure to request examination of an application before the time limit to request examination. An arrow at just after 2 months indicates the date when the patent application will typically be deemed abandoned for a failure to request examination of an application before the time limit to request examination. Abandonment occurs on the date 2 months after the date of the notice. An arrow at just past 14 months indicates the deadline that is 12 months from the date of abandonment. This is the deadline to reinstate the application. Under the time-line is a red arrow beginning at 6 months and extending indefinitely to the right. This arrow indicates that third party rights may apply 6 months after the time limit to request examination. In most cases, third party rights will apply until the earlier of reinstatement of the application of the granting of the patent. Also under the time-line is a red arrow beginning at 6 months and extending indefinitely to the right. This arrow indicates that due care will apply to reinstate the patent application in the period starting 6 months after the time limit to request examination.

Patents:

A. Maintenance fee is unpaid

Current state

In the current regime a patent is deemed to expire if the maintenance fee is not paid within a 12 month period of grace after the fee is due. In the current regime there is no requirement to show due care after having missed payment of a maintenance fee and there are no third party rights.

Figure 5
Figure 5 - Text version

The figure contains a time-line illustrating the current grace period regime for non-payment of a maintenance fee for a patent. The time line begins at 0 months and an arrow at 0 months represents a maintenance fee due date. An dashed horizontal arrow starting at 0 months and extending to 12 months indicates there is a 12  month period of grace in which to pay the maintenance fee after missing payment on or before the maintenance fee due date. An illustration on the time-line after 0 months indicates that a courtesy notice is provided when there is a failure to pay a maintenance fee on-time. An arrow at 12 months indicates the deadline to pay the missed maintenance fee before the term limited for the duration of the patent is deemed expired.

Proposed new state

In the new regime when a maintenance fee is not paid on time a notice will be sent to the applicant requiring the payment of the fee and a late fee. If these fees are not paid before the later of 6 months from the maintenance fee due date and 2 months from the date of the notice, the patent will be deemed to expire retroactively as of the maintenance fee due date. It is proposed that if a maintenance fee on a patent is not paid on time:

  • Third party rights may apply 6 months after the maintenance fee due date; and,
  • Due Care will be required to reverse the deemed expiry in the time period beginning 6 months after the maintenance fee due date.
Figure 6
Figure 6 - Text version

The figure contains a time-line illustrating the proposed new state for when third party rights and due care will apply when maintenance fee for a patent is not paid on or before the due date. The time line begins at 0 months and an arrow at 0 months represents a maintenance fee due date. An illustration on the time-line after 0 months indicates that a notice is provided when there is a failure to pay a maintenance fee on-time. An arrow at 6 months indicates the date when the term of the patent will typically be deemed expired retroactively for a failure to pay a maintenance fee on time. The date the patent is deemed expired retroactively is the later of 6 months after the maintenance fee due date and 2 months from the date of the notice. An arrow pointing from 6 months back to 0 months indicates that the term is deemed expired retroactively as of the maintenance fee due date. An arrow at 18 months indicates the deadline to reverse the deemed expiry of the patent. The deadline to reverse the deemed expiry of the patent is 12 months after the end of 6 months after the maintenance fee due date. While this is illustrated at 18 months on the time-line it may be a different date where deadlines become extended. Under the time-line is a red arrow beginning at 6 months and extending indefinitely to the right. This arrow indicates that third party rights may apply 6 months after maintenance fee due date. In most cases, third party rights will apply until deemed expiry is reversed. Also under the time-line is a red arrow beginning at 6 months and extending indefinitely to the right. This arrow indicates that due care will apply to reverse the deemed expiry of the patent.