Entity Status (Small or Large Entity) of a Patentee/Applicant in Canada
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ENTITYSTATUS(SMALLORLARGEENTITY)OFAPATENTEE/APPLICANTIN
CANADA
GarabedNahabedianandLaurentCarrière*
LEGERROBICRICHARD
,L.L.P.
Lawyers,PatentandTrademarkAgents
CentreCDPCapital
1001Square-Victoria–BlocE–8thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.(514)9876242–Fax(514)8457874
www.robic.ca–info@robic.com
OnAugust13,2001,inDutchIndustriesLtd.v.Canada(Commissionerof
Patents),theTrialDivisionoftheFederalCourtofCanada,bytheHonorable
MadamJusticeEleanorR.Dawson,renderedadecision(2001FCT879)related
totheentitystatus(SmallorLargeEntity)ofapatenteeinanissuedpatent
andofanapplicantinanapplicationstillpendingattheCanadianPatent
Office.
Section2oftheCanadianPatentRules(1996)providesthat”smallentity”in
respectofaninventionmeans:
Anentitythatemploys50orfeweremployeesorthatisauniversity,butdoes
notincludeanentitythat:
(a)hastransferredorlicensed,orisunderacontractualorotherlegal
obligationtotransferorlicense,anyrightintheinventiontoanentity,
otherthanauniversity,thatemploysmorethan50employees,or
(b)hastransferredorlicensed,orisunderacontractualorotherlegal
obligationtotransferorlicense,anyrightintheinventiontoanentitythat
employs50orfeweremployeesorthatisauniversity,andhasknowledge
ofanysubsequenttransferorlicenseof,orofanysubsistingcontractualor
otherlegalobligationtotransferorlicense,anyrightintheinventiontoan
entity,otherthanauniversity,thatemploysmorethan50employees.
Thegovernmentalfeetobepaidfori)thefilingofanapplication,arequest
forexaminationorthedeliveryofapatent,ii)aninternationalapplication,iii)
arequestforre-examinationofapatentandiv)themaintenanceofapatent
©CIPS,2001.*OfLEGERROBICRICHARD,L.L.P.,amultidisciplinaryfirmoflawyers,andpatentand
trademarkagents.PublishedintheFall2001issue(Vol.5,No.4)issueofourNewsletter.
Publication068.041E.
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willvarydependingonwhethertheapplicant/patenteeisaSmallorLarge
Entity.
TheFederalCourtconsideredthatfailuretopaythe“properamount”of
maintenancefeesinapatentandapatentapplicationcreatedasituation
wherebythepatentandthepatentapplicationbecameirrevocably
abandoned.
ThefactsbroughtbeforetheFederalCourtofCanadawerethefollowing:
Themaintenancefees(annuities)forthepatentandpatentapplicationat
issuewerepaiduptoa“certainperiodoftime”basedonthepremisethat
thepatenteeorapplicantwasaSmallEntity,andthis,despitethefactthat
thepatentee/applicanthadbecomeaLargeEntityduetoalicense
agreement.Thepatentee/applicantlaterdecidedtocorrectthesituation
retroactivelybypayingthenecessaryadditionalfeestotheCanadianPatent
OfficeinordertobringitsstatustoLargeEntity.TheCanadianPatentOffice
hadacceptedtheadditionalfees.
Inthecontextoflitigation,thepatentandthepatentapplicationwere
broughtbeforetheCourt,whichconsideredthattheCommissionerhadno
authoritytoaccepttheadditionalfees,since:
-theadditionalfeeswerenotpaidwithinthetimelimitssetbythe
CanadianPatentActandtheRulesandtheywerenotpaidalongwith
thenecessarylatepaymentandreinstatementfees;and
-theadditionalfeeswerepaidbeyondtheone(1)yeargraceperiod
grantedbytheCanadianPatentActandtheRulesinordertoavoid
thelapsingofthepatentandtheirrevocableabandonmentofthe
application.
Thisdecisiondemonstratestheimportanceofdeterminingthecorrectstatus
(SmallorLargeEntity)oranychangeofstatusofanapplicant/patenteeas
soonaspossiblesothatthesituationmaybeexaminedandthe
Commissionerinformed,ifnecessary.
Thefollowingpointsshouldbetakenintoconsiderationwhenassessingthe
EntityStatus(SmallorLargeEntity)ofapatenteeorapplicant:
-an“insufficient”maintenancefeepaymentisconsideredbythe
CanadianPatentOfficetobeanon-payment;
-abandonmentofthefile(patentorpatentapplication)willfollowasa
resultofsuchan“insufficient”payment;
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-theentitystatus(SmallorLargeEntity)ofapatentee/applicantcannot
becorrected,inamaintenancefeepaymentsituation,bythe
paymentofanadditionalfeeaftertheexpiryoftheone(1)yeargrace
period.
-theCommissionerhasnoauthorityordiscretiontoaccept,ina
maintenancefeepaymentsituation,a“correctivepayment”ofan
officialfeebeyondthetimelimitssetbytheCanadianPatentActand
theRules;
-failuretopaytheprescribedmaintenancefeeontimecanonlybe
correctedwithintheone(1)yeargraceperiodprovidedbyRule152of
theCanadianPatentRules;
-timelimitsforthepaymentofmaintenancefeesarenot“extendable”
(Section27.1(1)ofthePatentActandRules154(1)and157forpatent
applicationsandSection46(1)andRules100(1)and102forpatents).
Thismeansthatifamaintenancefeeisnotpaidontime,apatentoran
applicationwillnotbesavedfrom“lapsing”or“irrevocable
abandonment”,unlessthenecessarystepsaretakenwithintheone(1)
yeargraceperiod,bypaying,inthecaseofapatent,therequired
maintenancefeealongwiththelatepaymentfee,andbypaying,in
thecaseofanapplication,thereinstatementfeealongwiththe
requiredmaintenancefee.
Theabove-mentionedCourtcasespecificallydealtwiththenon-paymentof
prescribedmaintenancefeesinafile(patentorapplication).Thereareother
situationsinwhichprescribedfeesareduewhenfilinganapplicationorwhile
sameispending.Pursuanttotheabove-mentionedCourtdecision,itisclear
thattheutmostattentionshouldbegiventothestatus(SmallorLargeEntity)
ofanapplicantorpatenteeandtothesituationsinwhichofficialfeesare
dueaswellastothetimelimitsprescribedintheCanadianPatentActand
theRules.
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