F.C.J. No. 1647
2010 FC 1288
December 15, 2010
Repligen held a patent for "Modified Protein A". The application for patent was filed correctly, under the Patent Act R.S.C. 1985, c. P-4 ("the Act"). However, when a company called Computer Patent Annuities Ltd. ("CPA") paid maintenance fees on the patent, it did so on instructions from Repligen's US patent attorney, using the wrong patent reference number which had been received from its former Canadian patent agents. Thus, maintenance fees were paid on patent number 1,314,486 instead of on the correct patent number, 1,341,486.
Maintenance fees due on the second and third anniversaries of the patent were paid in a timely manner, but the patent serial number was incorrect. Despite efforts to correct the administrative error by correspondence, the patent ultimately lapsed when the commissioner decided, on February 4, 2010, that it would deny Repligen's request to correct the error. The request to correct the error was made pursuant to s. 8 of the Act, which reads, "clerical errors in any instrument of record in the patent office do not invalidate the instrument, but they may be corrected under the authority of the Commissioner."
The Commissioner's February 4 decision found that the maintenance fees sent to the Canadian Intellectual Property office contained a clerical error according to the relevant jurisprudence. However, she ruled that she had a discretion of not being obliged to allow a correction in every circumstance. The Commissioner exercised her discretion to decline the application for correction, saying that the correction had the potential to negatively affect the rights of others, aside from Repligen.
The Court relied on the decision of Scannex Technologies LLC v. Canada (Attorney General), 2009 FC 1068, which held that an interpretation of s. 8 of the Act was a legal question reviewable on a correctness standard, while its application to the facts of the case was a mixed question of fact and law reviewable on a reasonableness standard.
It is a clearly established rule that the courts ought not interfere with an exercise of discretion by a statutory authority simply because they might have exercised that discretion differently.
"Where the statutory discretion had been exercised in good faith and, where required, in accordance with the principles of natural justice, and where reliance has not been placed upon considerations irrelevant or extraneous to the statutory purpose, the courts should not interfere."
Maple Lodge Farms Ltd. v. The Government of Canada et al,  2 S.C.R. 2 at pages 7 and 8
The exercise of discretionary power should be compatible with and promote the object and purpose of a statute. The object and purpose of the Act is to advance research and development and encourage broader economic activity. Previous jurisprudence had found the maintenance fee regime under the Act to be "surprisingly complex".
The application for judicial review was allowed. The Court rejected Repligen's argument that the proper patent remained in good standing even though the fees were paid to the wrong patent. The Court rejected the submission that the finding of inverting the patent number was a clerical error meaning that fees tendered and accepted for the incorrect patent were, without more, paid to the correct patent. Rather, s. 8 was triggered because of the error itself. S. 8 of the Act is a remedial section enabling the Commissioner to correct clerical errors in any instrument of record taking into account "all relevant considerations which, as the jurisprudence established, includes delay and seeking correction and the impact third parties."
The Commissioner failed to properly exercise her discretion in this case, because she only took into account two relevant factors (delay seeking correction, and possible third party prejudice). The refusal to correct the clerical error here had the catastrophic effect of Repligen losing its patent rights to "Modified Protein A". The case contained a list of relevant factors which ought to have been considered in the Commissioner's decision, including an obligation to weigh and balance all relevant factors prior to exercising discretion.
The Commissioner's decision was set aside and Repligen's request was sent back for reconsideration by a different official in the patent office on the basis of these reasons.