David Schwartz November 14 2022 Safe and cost-effective divisional application filing strategies under Canada's newest patent rules Smart & Biggar | Intellectual Property - Canada David Schwartz Intellectual Property IntroductionDivisional application requirements in CanadaDivisional applications and double patentingExcess claim fees and continued examination feesCost implications for divisional applicationsStrategies for cost-effective patent prosecutionOutlook: voluntary divisional applications and double patenting considerations IntroductionCanada recently introduced patent rules related to excess claim fees and continued examination fees that have the potential to complicate conventional approaches to filing divisional patent applications (for further details, see "Canada's new patent claim fee rules: alternative embodiments within a single claim – part one" and "Canada's new patent claim fee rules: alternative embodiments within single claim – part two"). This article reviews the requirements for filing a divisional patent application in Canada, the impact of the new claim fee and continued examination fee rules on divisional practice and provides strategies for safely filing divisional applications while minimising patent prosecution costs.Divisional application requirements in CanadaCanadian patent law provides for the filing of divisional applications, consistent with Canada's obligations under article 4.G of the Paris Convention, as follows:(1) If the examination reveals that an application for a patent contains more than one invention, the applicant may divide the application into a certain number of divisional applications and preserve as the date of each the date of the initial application and the benefit of the right of priority, if any.(2) The applicant may also, on his own initiative, divide a patent application and preserve as the date of each divisional application the date of the initial application and the benefit of the right of priority, if any. Each country of the Union shall have the right to determine the conditions under which such division shall be authorized.Paragraph (2) of article 4.G does not limit the conditions under which an applicant may "voluntarily" divide their patent application. Any such restrictions are matters of national law.Divisional application filing formalities are much more flexible in Canada than in many countries. A divisional application may be filed at the applicant's initiative at any time, the sole limitation being that the divisional application must be filed no later than the day before grant of the parent application. There are no formal limitations as to what may be claimed in a divisional application, and the historical requirement that the subject-matter claimed in the divisional application must have been claimed at some point in the parent application was removed from the Patent Act by amendments in force 1 October 1996.(1) Furthermore, the Patent Office permits divisional applications to be filed in a serial or "cascading" manner, such that if a first application (the "grandparent" application) leads to a first divisional application (the "parent" application), a further divisional application (the "child" application) may be filed on the basis of either the parent or the grandparent application.(2)With respect to substantive matters, subsections 36(2) and (2.1) of the Canadian Patent Act set forth the conditions under which a divisional application may be filed:Limitation of claims by applicant(2) Where an application (the "original application") describes more than one invention, the applicant may limit the claims to one invention only, and any other invention disclosed may be made the subject of a divisional application if the divisional application is filed before the issue of a patent on the original application.Limitation of claims on direction of Commissioner(2.1) Where an application (the "original application") describes and claims more than one invention, the applicant shall, on the direction of the Commissioner, limit the claims to one invention only, and any other invention disclosed may be made the subject of a divisional application if the divisional application is filed before the issue of a patent on the original application.It means that the Patent Act permits the Patent Office to require division only when an application "claims more than one invention". Reciprocally, the applicant may voluntarily file a divisional application that claims an invention "other" than the invention claimed in the parent application.Divisional applications and double patentingAlthough the Patent Act and Patent Rules contain no unambiguous reference to the concept, the Canadian courts have recognised a prohibition against "double patenting" – that is, the patentee obtaining a second patent claiming subject matter that is "conterminous" with or obvious over the claims granted in the first patent. This issue does not arise in respect of divisional applications filed in response to an objection for lack of unity of invention. While there is no statutory safe harbour for a divisional application filed at the direction of the Patent Office,(3) the Supreme Court of Canada has held that "[i]f patents are granted on divisional applications directed by the Patent Office, none of them should be deemed invalid, or open to attack, by reason only of the grant of the original patent".(4)But this judicially developed protection against double patenting does not apply to a "voluntary" divisional application filed at the initiative of the applicant. Accordingly, it is generally preferable to file a divisional application only after the Patent Office has objected for lack of unity of invention. Consequently, proposed divisional claims are routinely added to applications, often late in prosecution, for an assessment by the Patent Office as to whether such claims properly should be filed in a divisional application or retained in the original application.Excess claim fees and continued examination feesAmendments to the Canadian Patent Rules came into force recently and apply to any application in which examination was not requested before 3 October 2022 (for further details, see "New rules: request examination of Canadian patent applications before 3 October 2022"). The rules introduce a fee of C$100(5) for each claim over 20. Claim fees are first calculated and payable when examination is requested. They are calculated again when the final fee (ie, the issue fee) is paid. The excess claim fee calculation is based on the greatest number of claims pending in the application at any time starting from the date examination is requested and ending on the date the final fee is paid. The new rules also introduced a continued examination scheme requiring a request for continued examination (RCE) and payment of a C$816(6) fee to continue examination and respond to the third examiner's report and every second examiner's report thereafter.Cost implications for divisional applicationsPrior to the 3 October 2022, rule change, it was common to prosecute large claim sets with a view to obtaining an assessment of unity of invention and to avoid filing voluntary divisional applications. For instance, the claims from a series of foreign counterpart continuation or divisional applications might be consolidated in a single claim set. If the Patent Office were then to object for lack of unity of invention, divisional applications safely could be filed. No government fees were payable.Similarly, it was common to reopen prosecution after allowance to add claims for an assessment of unity of invention rather than to file a voluntary divisional application upon allowance. If the examiner objected for lack of unity, the added claims could then safely be cancelled and filed in a divisional application. Alternatively, if the examiner did not object for lack of unity, the application might immediately again proceed immediately to allowance or another examiner's report might be issued.(7) The only government fee associated with this practice was the C$407.18 fee for withdrawing the application from allowance.The introduction of the new excess claim fee and RCE rules have the potential to add to the costs involved in ensuring that divisional applications are safely filed without the risk of double patenting.Prosecuting large claim sets will incur excess claim fees, even for claims that are ultimately cancelled for filing in a divisional application. Adding claims later in prosecution may result in issuance of a further examiner's report, potentially requiring an RCE and C$816 fee. Reopening prosecution after an application is allowed to add further claims for an assessment of unity of invention will also require an RCE and C$816 fee and will similarly ultimately require payment of excess claim fees.By way of example, under the previous rules, if an application was allowed with 20 claims, and 16 claims added after allowance for an assessment of unity of invention, the only government fee payable was the C$407.18 fee to withdraw the application from allowance. Under the new rules (ie, if examination was requested on or after 3 October 2022), the government fees would instead be C$2416 (the excess claim fees of C$1600 and the RCE fee of C$816). Even if the 16 additional claims were added prior to allowance, it would still be necessary to pay the excess claim fees of C$1600, whether or not those claims were later cancelled in response to an objection for lack of unity of invention.Strategies for cost-effective patent prosecutionCompact prosecutionThese new requirements and fees for excess claims and requests for continued examination will motivate applicants to prosecute compact claim sets that do not require multiple rounds of examination. This may involve limiting the scope of claims early in prosecution to that of claims granted in other jurisdictions or focusing on subject-matter of greatest importance. But at the same time, claims to all subject-matter of interest ideally are presented for an initial examination so that unity of invention can be assessed early, and voluntary divisional applications avoided.Prior to or at the time of requesting examination, it may be advantageous to reduce the number of claims (eg, by cancelling dependent claims) and at the same time to ensure that independent claims to all important embodiments of the invention are presented so that unity of invention can be properly assessed. There are no additional fees for independent claims (provided the total number of claims does not exceed 20) and unity of invention is more readily assessed in the context of independent claims.Claiming alternatives in single claim for assessment of unityA claim reciting subject-matter in the alternative counts as a single claim for fee calculation purposes (for further details, see "Canada's new patent claim fee rules: alternative embodiments within a single claim – part one" and "Canada's new patent claim fee rules: alternative embodiments within single claim – part two"). Such claims have disadvantages – if one of the alternatives is unpatentable, the entire claim is likely invalid. But they might be used effectively to permit assessment of unity of invention in an application covering numerous embodiments. For example, a claim reciting the following could take the place of five separate independent claims yet be similarly useful for obtaining an assessment of unity of invention in the first examiner's report:A compound selected from the group consisting of: (a) a compound of Formula I; (b) a compound of Formula II; (c) a compound of Formula III; (d) a compound of Formula IV; and (e) a compound of Formula V.Outlook: voluntary divisional applications and double patenting considerationsPractice with respect to voluntary divisional applications at the time of allowance may also evolve in view of increased costs under the new claim fee and RCE rules. Although voluntary divisional applications have historically been avoided in view of potential double patenting concerns, the application of double patenting principles finds limited support in the case law. The Supreme Court of Canada has explained that the prohibition against double patenting addresses an "evergreen" problem – that is, an improper extension of patent term.(8) The prohibition against double patenting would therefore seem to have no application to divisional applications filed under the post-1 October 1989 Patent Act, when the patent term changed from 17 years from grant to 20 years from the filing date. A parent and divisional patent now both expire no later than 20 years from the original filing date, such that there is no extension of the term of protection.While there is one instance in which the Federal Court concluded that a voluntary divisional application under the current Patent Act could be invalid for obviousness double patenting, the "sin" of double patenting going beyond an evergreening problem,(9) the Federal Court has more recently described parent/divisional double patenting under the current Patent Act, where there is no extension of term, as "somewhat academic".(10) Nevertheless, the Patent Office takes the position that double patenting can apply in the modern parent/divisional context and may object to alleged double patenting in a voluntary divisional application or a divisional application in which the claims do not adhere to a claim grouping identified by the examiner in an objection for lack of unity of invention in the parent application.(11)"Obviousness" double patenting and unity of invention In any event, the principle of "obviousness" double patenting does not rest easily with divisional practice under section 36 of the Patent Act, an issue that the courts do not appear to have addressed to date. The question to be answered for obviousness double patenting is whether there is an "inventive step" from the first patent to the second patent.(12) This is not the test for filing a divisional application under section 36 of the Patent Act. The Patent Rules provide that a patent application claims only "one invention", and thus does not require division, if the inventions are "linked in such a manner that they form a single general inventive concept".(13) The Patent Office considers this to be consistent with rule 13.2 of the Regulations under the Patent Cooperation Treaty, which specifies that unity of invention is present "only when there is a technical relationship among those inventions involving one or more of the same or corresponding special technical features" and that "[t]he expression 'special technical features' shall mean those technical features that define a contribution which each of the claimed inventions, considered as a whole, makes over the prior art".Unity of invention thus requires a comparison of the claimed invention to the prior art, whereas double patenting instead requires a comparison between the claims in question of the earlier and later patent. Consider the following claims:an apparatus comprising elements A and B;the apparatus of claim one, further comprising element C; andthe apparatus of claim one, further comprising element D.If each of elements A, B, C and D is known in the art, but the combination of A and B is nevertheless inventive, then claim one is patentable, and claims two and three possess unity of invention as they share the inventive concept of A+B. The Patent Office could not properly object for lack of unity of invention in such circumstances.But if the combination A+B is not inventive, claim one is unpatentable. Claim two (A+B+C) and claim three (A+B+D) may or may not be patentable (ie, unobvious over the prior art), but they clearly now lack unity of invention as they are not linked by a single general inventive concept. The Patent Office could properly object for lack of unity of invention under subsection 36(2.1) of the Patent Act, obliging the applicant to prosecute claims to an apparatus comprising A+B+C in the original application and claims to an apparatus comprising A+B+D in a divisional application (or vice versa). Likewise, pursuant to subsection 36(2) of the Patent Act, the applicant properly could file a "voluntary" divisional application, separating claims to A+B+C from claims to A+B+D, as these subject matters lack unity of invention.Thus, pursuant to the express provisions of the Patent Act, whether a voluntary divisional application properly claims A+B+D when the parent application claims A+B+C fairly should turn on whether there is a single general inventive concept linking these two inventions (ie, the same test that the Patent Office uses to assess unity of invention) not whether A+B+D reflects an "inventive step" over A+B+C, which is the test for obviousness double patenting but clearly an irrelevant consideration for unity of invention.The Federal Court of Appeal has held that the "improper" filing of a divisional application does not, in the absence of double patenting, give rise to a loss of patent rights. The principle of double patenting provides a sufficient remedy.(14) However, this was decided in a case under the pre-1 October 1989 Patent Act such that a divisional patent could have a different term (running 17 years from grant) than the parent. Moreover, it does not follow that the applicant's entitlement to voluntarily file a divisional application under subsection 36(2) of the Patent Act requires that the claims of the divisional application reflect an "inventive step" over the claims of the parent application – rather, the statutory requirement is that the divisional claim an invention "other" than the invention claimed in the parent application, a matter of unity of invention, not double patenting.Clarification from the courts concerning the relevance of double patenting principles to divisional applications under the current Patent Act would be welcome. In any event, applicants will no doubt be scrutinising their entitlement to file voluntary divisional applications more closely under the new excess claim fees and RCE rules, which will add to the cost of reopening prosecution to add claims.For further information on this topic please contact David Schwartz at Smart & Biggar by telephone (+1 613 232 2486) or email ([email protected]). The Smart & Biggar website can be accessed at www.smartbiggar.ca.Endnotes(1) Intellectual Property Law Improvement Act SC 1993 c 15 s 39.(2) Canadian Intellectual Property Office Manual of Patent Office Practice (MOPOP) section 3.04.01.(3) See 35 US Code section 121.(4) Consolboard Inc v MacMillan Bloedel (Sask) Ltd,  1 SCR 504 at p 537.(5) The C$100 excess claim fee is reduced by 50% to C$50 for small entities. In brief, a "small entity" is an entity that has no more than 50 employees or that is a university, and that has not transferred or licensed any right or interest in a claimed invention to another entity that is not a small entity and has no obligation (other than a contingent obligation) to do so.(6) The C$816 continued examination fee is reduced 50% to C$408 for small entities.(7) Typically, objections would only be raised to newly added claims but as the application is subject to further examination it is possible that new objections would be made to previously allowed claims.(8) Whirlpool Corp v Camco Inc, 2000 SCC 67 at section 37.(9) GlaxoSmithKline Inc v Apotex Inc, 2003 FCT 687.(10) MIPS AB v Bauer Hockey Ltd, 2018 FC 485 at section 302.(11) MOPOP section 18.06.04.(12) See for example Mylan Pharmaceuticals ULC v Eli Lilly Canada Inc 2016 FCA 119 at section 35.(13) Patent Rules SOR/2019-251 s 88.(14) Merck & Co, Inc v Apotex Inc 2006 FCA 323 at section 50.