Technical amendments to the Patent Act receive Royal Assent:
Another step toward the Jean Chrétien Pledge to Africa

OTTAWA May 5, 2005 — Important technical amendments to the Patent Act were adopted by Parliament today. These amendments provide relief to patent holders and applicants who are affected by a 2003 Federal Court of Appeal decision and will ensure equal participation of the Senate in assessing and recommending eligible candidates for an expert advisory committee to the government to be established under the Jean Chrétien Pledge to Africa (JCPA).

Other technical amendments will allow for the coming into force of the Jean Chrétien Pledge to Africa. They properly place the Schedules contained in the JCPA inside the Patent Act, an important component of the regime in that they establish which pharmaceutical products are eligible for export and which countries are eligible to receive them.

The amendments to the Patent Act will also provide patent holders and applicants with a one-year time limit for the correction of past fee payments in situations where a fee was incorrectly paid.

"With the adoption of Bill C-29, patent holders and applicants who have been affected by certain Court decisions will have an opportunity to restore their good standing. Bill C-29 will provide them with a one-year time limit to rectify their incorrectly paid patent fees and secure their intellectual property rights. This is an important technical amendment that will not only relieve a great concern in the patent community, but will also maintain the integrity of our intellectual property regime," said the Honourable David L. Emerson, Minister of Industry.

This legislative initiative builds upon the Government of Canada's commitment toward good government and smart regulation that enhances conditions for an innovative economy, while finding improved ways to ensure the establishment of the highest standards.

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For more information, please contact:

Media Relations
Industry Canada
(613) 943-2502

Christiane Fox
Office of the Honourable David L. Emerson
Minister of Industry Canada
(613) 995-9001

BACKGROUNDER

Technical Amendments to the Patent Act

Technical Amendments to the Patent Act
Bill C-29, An Act to amend the Patent Act, seeks to address three technical issues. First, it would provide relief to patent holders and applicants who, having incorrectly paid certain patent fees, see the validity of their patents jeopardized. Second, it would ensure the Senate's participation in the assessment and recommendation of candidates for the expert advisory committee to the government to be established under the Jean Chrétien Pledge to Africa (JCPA). And thirdly, by giving legal standing to the schedules affixed to the JCPA, it allows for the coming into force of this important initiative.

Incorrectly Paid Fees
The Patent Act and Patent Rules require that patent holders/applicants pay fees, including annual maintenance fees, in order for their patents and applications to remain valid for the duration of their 20-year term of protection. The fees paid by patent holders/applicants vary according to the entity size — large or small. Small entity provisions, introduced in 1985, were intended to encourage small businesses (50 or fewer employees) and universities to use the patent system.

In 2003, pursuant to the patent infringement case of Dutch Industries Ltd. v. The Commissioner of Patents, Barton No-Till Disk Inc. and Flexi-Coil Ltd. (commonly known as the Dutch Industries case), the Federal Court of Appeal ruled that entity size is determined once: when the patent application process is first engaged. For example, if a company initially files as a large entity, it is required to pay large entity fees throughout the life of the patent regardless of any subsequent changes in the entity size of the company. The Court's decision did not support the prior common understanding that, as the entity changed size, so would the required fee.

The Court's decision also curtailed the practice of flexibility exercised by the Canadian Intellectual Property Office, which consisted of allowing patent holders/applicants to pay the difference in fees (commonly referred to as "top-up" payments) when their entity size changed from small to large.

As a consequence, some 7000 patent holders/applicants may now find themselves in the situation of having underpaid a fee, and, having no recourse to correct these minor payment errors, the validity of their patents is in jeopardy.

The amendments to the Patent Act will provide patent holders/applicants with a one-year time limit for the correction of past fee payments in situations where a fee was incorrectly paid at the lower small entity fee level instead of the higher large entity fee level.

Amendments Related to the Jean Chrétien Pledge to Africa The JCPA (also known as Bill C-9, adopted under the previous Parliament) calls for the creation of an expert advisory committee to advise the government on what pharmaceutical products should be eligible for export under the patent regime. During examination of the JCPA in 2004, an amendment was made to allow a House of Commons committee responsible for industry-related matters to assess and recommend candidates for the expert advisory committee to the government. However, this amendment did not provide for the equal participation of the Senate. An amendment ensuring the Senate's participation has thus been included in Bill C-29. This bill also makes a technical amendment to the Patent Act by giving legal standing to the schedules affixed to the JCPA. This amendment now allows for the coming into force of the JCPA.

Further details on Bill C-29 can be found on the Library of Parliament Web site.