In review: key recent IP developments and trends in Canada

All questions

Recent developments

i Legislation and treaties

On 1 July 2020, the Canada–United States–Mexico Agreement (CUSMA)¹² officially came into force. The Canada–United States–Mexico Agreement Implementation Act¹³ (Implementation Act) was introduced earlier in 2020, making a number of changes to Canada's IP statutes to align them with the CUSMA provisions. Notably, the CUSMA required Canada to amend the Copyright Act to extend the copyright term to life of the author plus 70 years. The amendment came into force on 30 December 2022. The extension of the copyright term was not retroactive. Copyright for works that had expired before 31 December 2022 remain in the public domain. The Implementation Act was silent on patent-term adjustment (PTA), intended to allow patent holders to recover time lost owing to unreasonable delays in patent issuance. Canada has until January 2025 to implement the PTA. However, in anticipation of CIPO's obligation to implement the PTA, the Patent Rules¹⁴ have been amended with provisions to help CIPO streamline the patent examination process, including a new continued examination scheme, excess claim fees and a conditional notice of allowance mechanism.

In June 2022, Quebec brought some amendments to its Charter of the French Language.¹⁵ The amendments will bring some changes into effect in June 2025 requiring brands and trademark owners to adhere to additional restrictions on the use of English and other non-French languages as a trademark, on product packaging and labelling and on public signage and commercial advertising. The draft regulations are expected to be published soon for comments.

On 1 July 2022, amendments to the Patented Medicines Regulations governing the PMPRB came into force. These amendments implemented a new list of comparator countries, which removed the US and Switzerland and added other countries, for the purpose of international price referencing of patented medicines.¹⁶ The government repealed, and did not proceed with, other PMPRB amendments on pharmacoeconomic value and third-party rebates. This occurred after a series of court decisions struck down these other amendments for falling outside of the PMPRB's jurisdiction, which is limited to regulating the excessive price of patented medicines.¹⁷

ii Jurisprudence

In 2022, the Supreme Court clarified the law on accounting of profits, a remedy for patent infringement. The Supreme Court further confirmed that 'springboard profits', namely, profits that arise after the expiry of the patent but are causally attributable to infringement during the period of the patent protection, can be included in an accounting of profits. In so doing, the Court upheld an award of C$644 million plus costs, the largest monetary award ever made for patent infringement.

The Supreme Court considered the 'making available' provision in the Copyright Act, and confirmed there is no separate compensable right for making available a work online. The Supreme Court held there are only three compensable rights, namely reproduction, performance or publication, and that a single act of making available is engaged only once, and only one royalty is owed.¹⁸

There has also been a first decision in 2021 interpreting the solicitor–client privilege provision set out in the Patent Act. The Federal Court provided some commentary and analysis on the application and limitations of patent agent privilege.¹⁹

In 2424508 Ontario Ltd v. Rallysport Direct LLC,²⁰ the Federal Court of Appeal considered whether general damages principles should be applied when considering statutory damages under the Copyright Act. The Federal Court of Appeal confirmed that statutory damages can be awarded even if there are no monetary damages and in the absence of lost business.

The Federal Court of Appeal also confirmed the two-part analysis to assess originality in a work in Pyrrha Design Inc v. Plum and Posey Inc.²¹ The Court's decision reinforced the principle that the degree of originality of a simple work may be lower, and that the simpler the work, the more exact the copying must be to infringe on the copyright.

Trends and outlook

i Legislative amendments

The year 2022 was a busy one on the legislative front.

In August 2022, the offices of the Innovation Minister and Heritage Minister announced a collaborated effort in drafting proposed amendments to the Copyright Act to include artists' resale rights, allowing artists to get paid when their artwork is resold and benefit from the collectors' profits. The proposed amendments are expected to be introduced in 2023.

Many bills were introduced in 2022 affecting copyright law in Canada. In February 2022, Bill C-11, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts, was introduced, proposing amendments to the definitions of programming undertaking, broadcasting undertaking, new media retransmitter and retransmitter in the Copyright Act. Bill C-244, An Act to amend the Copyright Act (diagnosis, maintenance and repair), also introduced in February 2022, proposes amendments to the Copyright Act to create exceptions to technological protection measures (TPMs), namely creating exceptions for the circumvention of a TPM in a computer program if the circumvention is for the purpose of diagnosing, maintaining or repairing a product in which the program is embedded. Bill C-294, An Act to amend the Copyright Act (Interoperability) introduced in June 2022, proposes amendments to the Copyright Act to allow a person to circumvent a TPM where the circumvention is done for the purpose of making computer programs interoperable with other devices or products they manufacture.

Under the Budget Implementation Act, 2018, No. 2,²⁸ proposed changes to the Trademarks Act included two new ways to invalidate official marks. The new provisions allow for a person to pay a fee and provide evidence to the Registrar demonstrating the entity holding the official mark is not a public authority. In 2022, the CIPO issued a draft Practice Notice on the proposed implementation of the amendments, which are expected to come into force in 2023.

The CIPO and the Trademarks Office Opposition Board have also made electronic correspondence available for online access as of March 2023.

ii Jurisprudence

In 2022, the Federal Court defined a new test for the Commissioner of Patents to assess the patentability of computer-implemented inventions in Benjamin Moore & Co v. Attorney General of Canada.²⁹ The Court adopted the three-part test proposed by the intervener Intellectual Property Institute of Canada, which is expected to clarify and simplify the assessment of the patentability of computer inventions and ensure they are not unfairly denied patentability status. The government has appealed this decision.

The Ontario Court of Appeal confirmed that the Statute of Monopolies cannot be used to obtain compensation for any harm suffered because of the adjudication of rights under the PM(NOC) Regulations. In dismissing these claims, the Court confirmed that the Patent Act and PM(NOC) Regulations operate as a complete code that precludes other causes of action.³⁰

On the trademark front, the Federal Court delivered a first case providing guidance of what constitutes bad faith in trademark registration. In Beijing Judian Restaurant Co Ltd v. Wei Meng,³¹ the Federal Court found that the trademark in issue should be expunged because it was registered without a legitimate purpose, and in bad faith.