Practice Notice: Payment of Fees Relating to Patents and Entity Size

This notice is intended to provide guidance on current CIPO practice and interpretation of relevant legislation and jurisprudence, including in particular the recent decision of the Federal Court of Appeal (FCA) in Barton No-Till Disk Inc. v. Dutch Industries Ltd (2003 FCA 121). However, in the event of any inconsistency between this notice and the applicable legislation and jurisprudence, the legislation and jurisprudence must be followed.

Background

In August 2001, the Federal Court of Canada, in Dutch Industries Ltd. v. The Commissioner of Patents, Barton No-Till Disk Inc, and Flexi-Coil Ltd. (2001 FCT 879) addressed the consequences of the failure to correctly pay the prescribed fees within the prescribed time limits. This specifically applied to corrective payments, whether or not they were submitted in order to compensate for incorrectly having paid a small entity fee. As a result of the aforementioned decision, CIPO no longer accepts any corrective payments which are submitted after a due date, unless the appropriate actions are taken as required by legislation within the prescribed time limits, e.g. a request for reinstatement and reinstatement fee or late fee, together with the action that should have been taken in order to avoid the abandonment or about to lapse state.

In March 2003, the FCA provided, in Barton No-Till Disk Inc. v. Dutch Industries Ltd (2003 FCA 121) an interpretation of the legislative provisions relative to small and large entity fee payments. The FCA found that the entity status is determined only once, when the patent regime is first engaged , and that subsequent fees must be paid based on this initial determination, notwithstanding the fact that it may change after the filing of an application or during the life of the patent.

Practice

The status of an entity is determined once; CIPO considers that the regime is first engaged at the filing date. CIPO will apply the principles of the FCA decision to both small and large entities, regardless of any status change that may occur after the filing of an application or during the life of the patent, through assignments or other corporate reorganizations.

An applicant or patentee must be a small entity as of the filing date in order to benefit from the advantages conferred onto small entities. A small entity declaration should be presented in the petition (Schedule I of the Rules respecting the Patent Act, Form 3) when an application is filed, or separately when, for example, an international application enters the national phase in Canada or, in certain circumstances, when the applicant later determines that it was at the time of filing a small entity. The declaration should be in the following form: "The applicant [or patentee] believes that the applicant [or patentee] is entitled to claim status as a "small entity" as defined under section 2 of the Patent Rules."

The onus is on applicants and patentees to decide for themselves whether they can declare themselves to be a small entity. CIPO generally does not question an assertion by an applicant or patentee that it is a small entity. Applicants and patentees have the responsibility to ensure that the information submitted and the fees paid are sufficient.

CIPO's refund practice has not changed and Section 4 of the Patent Rules will be applied. Specifically, pursuant to Subsection 4(6) of the Patent Rules, the Office is under no obligation to issue a refund solely because a fee is paid at the large entity level and the entity is later determined to have been a small entity as of the filing date.

When an incorrect payment is made and the time limit has elapsed according to the Patent Act and Rules, CIPO's practice is, as a courtesy, to notify the applicant or patentee of the status of his/her application or patent. It is however the responsibility of applicants and patentees to keep track of relevant time limits and they should not rely on a notice necessarily being sent in every case

Information

It is important to note that any status information generated by the Techsource system is based on the records of the Patent Office that are maintained for administrative purposes only. The current status information generated by the Techsource system may not fully take into account the FCA Dutch decision since it is based on information from the last maintenance fee paid, and any entity declaration that may have been submitted on or after the filing date of an application. For legal purposes, it is recommended that the relevant documents in the Patent Office be consulted. Copies or the file history can be obtained from the Reproduction and Sales Unit at (819) 997-2985 or by fax at (819) 953-9969.

CIPO is currently in the process of reviewing the FCA Dutch decision and determining whether the decision will require any regulatory or statutory changes.

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