In managing patent portfolios, whether small or large, an overarching and important question is where to pursue patent protection.
Canada’s patent system can be used strategically to create business value and to help companies achieve their objectives, including managing IP costs, tailoring scope of protection, and influencing their competitors’ activities.
Patent protection in Canada can be a valuable asset, particularly given the extensive commerce between Canada and the United States. A Canadian patent not only protects an invention in Canada, but also protects its exploitation in other ways, such as preventing exportation of infringing products to foreign markets or preventing importation of products made elsewhere by an infringing process.
As part of an overall patent strategy, Canada’s patent system provides (1) an opportunity to obtain commercially-effective patents and (2) a favourable environment for patent enforcement.
Bang for your buck
Canada offers a sophisticated and cost-effective patent regime, and the current depreciation of the Canadian dollar weighs in favour of pursuing patent protection in Canada.
Cost-effective filing and prosecution: Low government fees, including no excess claim fees and the ability to include multiply-dependent claims, allow products to be protected in many different ways, making it harder for competitors to “design around” a company’s patents. Also, patent applications drafted to meet the standards of other major patent offices, typically will meet Canadian standards, thereby reducing filing costs.
Stream-lined examination: As a strategy for cost reduction, the Canadian Patent Office has implemented a Patent Prosecution Highway (“PPH”) program with many other patent offices around the world (US, EP, JP, CN, etc.), including a PPH program based on PCT applications. No fee is required and it is possible to expedite examination by relying on allowable claims in other jurisdictions. In turn, with a prompt allowance in Canada, the applicant may leverage the favourable Canadian examination results to streamline prosecution elsewhere, which may contribute to reducing examination costs globally.
No inter partes review: Unlike some patent systems, the only option for a third party to challenge a Canadian patent in the Canadian Patent Office is to request re‑examination. But re‑examination is entirely ex parte after the initial request is filed. This is advantageous to patentees for several reasons, including managing patent prosecution costs.
Flexible patent regime
Patent prosecution in Canada is flexible, providing applicants with opportunities to adopt advantageous strategies, including delaying the filing of applications, modifying claim scope voluntarily at any time and controlling the speed of examination. There are also no official limits on the number of Office Actions, and Final Actions are often only encountered when a real impasse is reached with the examiner.
Disclosure grace period: Unlike many other countries, Canadian law provides a one-year grace period for applicant-derived disclosures. Thus, there is no “absolute novelty” requirement and patent protection can still be obtained in Canada so long as a national Canadian application or a PCT application is filed within one year of the earliest disclosure by the inventor or applicant.
Delayed national entry: Whereas in most countries the national phase counterpart of a PCT application must be filed within 30 or 31 months from the earliest priority date, national phase entry in Canada can be extended to 42 months on payment of a nominal fee.
Accelerate or delay prosecution: Examination may be deferred in Canada for up to five years from the filing date, allowing applicants the opportunity to assess prosecution in other jurisdictions and further evaluate the commercial importance of the technology, before making decisions regarding the Canadian application. Once examination is requested, accelerated examination is available, for a minimal fee (or no fee for “green technology” applications), which can facilitate obtaining Canadian patent rights quickly, thereby providing enforcement options faster.
Freedom to adapt patent rights to commercial realities: There is virtually no constraint on modifying the scope of patent coverage being sought (i.e., the claims), as long as what is sought to be protected is disclosed in or reasonably inferable from the patent application as filed (i.e., strict verbatim support is not required). This allows patents to be “tailored” or “adjusted” to cover a company’s products and/or competing products that are commercialized as the technology and market evolve.
With respect to pharmaceutical inventions, Canada has a comprehensive legislative scheme - the Patented Medicines (Notice of Compliance) Regulations - linking drug regulatory approval of a second entry manufacturer to an innovator’s patent status. If the regulations are engaged and relevant patents are listed on the Patent Register, it is possible for a pharmaceutical patentee to delay market approval for a subsequent party, such as a generic, for as long as the life of its patent(s).
Together with the Patent Act, the regulations provide a balance between the timely entry of generic medicines and the rights of patent holders. On the one hand, the Patent Act provides a statutory exemption from infringement by allowing a subsequent manufacturer to use a patented invention for the purpose of seeking regulatory approval. On the other hand, the regulations provide an enforcement mechanism to ensure that the early working exception is not abused and generic forms of patented medicines are not sold before patent expiry.
Upcoming changes to Canadian patent law
As a signatory to the multilateral Patent Law Treaty, Canada is in the process of implementing changes to the Canadian Patent Act, of which many will be favourable to applicants.
Restoration of priority: Currently, priority can only be claimed if an application is filed within 12 months of the priority application. Under the amendments, an extension of 2 months is available so long as the failure to file the application within 12 months was unintentional. Importantly, the issue of whether the failure to file within 12 months was unintentional can be challenged in the Federal Court.
Filing of missing parts: Currently, it is difficult to amend a patent specification or drawings to include parts that were missing at filing. Under the amendments, so long as the missing parts were completely contained in the priority application and the request to add the missing parts is submitted within six months of the filing date, it is possible to amend the application to include the missing parts and maintain the filing date.
Introduction of a notice regime for fees not timely paid: Under the amendments, the Commissioner will be required to send a notice informing the applicant of non-payment of certain fees, including the application filing fee, maintenance fees and the fee for requesting examination. There will be a two month deadline to respond to such a notice before the application is deemed abandoned.
Favourable environment for patent enforcement
Patent enforcement in Canada can bring about significant benefits, both domestic and global, for companies that make strategic use of the patent framework.
Costs: Patent litigation is typically less expensive in Canada than in other jurisdictions, such as the United States. Also, under our Federal Courts Rules, a successful litigant is entitled to seek an order for payment of its legal costs. In patent infringement actions, the Federal Court has recently shown that these awards can be significant in the appropriate circumstances, awarding costs of up to $6.5 million (2016 FC 91).
Speed & climate: Patent litigation in Canada is typically conducted in the Federal Court. This means litigants deal with one court irrespective of geographic location of the parties or the impugned acts. Actions in the Federal Court are case managed and proceed quickly and efficiently, with a decision often being rendered within two years even in complex matters.
Remedy: There are alternate remedies which may be sought upon a finding of infringement. A successful plaintiff may be entitled to elect either their “damages” or an “accounting of profits” of the defendant. In some instances, the availability to claim an accounting of profits may significantly increase the remedy that is obtainable.
The advantages described in this article highlight aspects of Canada’s patent system that can be used in coordination with a global IP strategy to create business value by pursuing patent protection in Canada, but they are by no means exhaustive.