Two Certainties in Canada: Death and the Obligation to Correctly Pay your Patent Maintenance Fees
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TWOCERTAINTIESINCANADA:DEATHANDTHEOBLIGATIONTOCORRECTLY
PAYYOURPATENTMAINTENANCEFEES
AdamMizera*
LEGERROBICRICHARD
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TheFederalCourtofCanadahasrecentlyrejectedarequestforjudicial
reviewinappealofadecisionbytheCommissionerofPatentsthathad
declaredapatentownedbythepharmaceuticalcompanyF.Hoffman-La
RocheAG(hereafter“Hoffman-LaRoche”)lapsedforcauseofnon-payment
oftheregulatorymaintenancefeeswithinthetimelimits.F.Hoffman-La
RocheAGv.Canada(CommissionerofPatents)[2003C.F.1381(November
25,2003,JusticeO’Reilly)]illustrateshowstrictlyCanadiancourtshave
appliedthelawwhichunfortunatelyleaveslittleopeningforapartyto
correctanerrororadefaultinthepaymentofapatentmaintenancefee.
ThistendencyoftheCourtscanbehighlightedwhenputincontrastwith
Americancaselawwhichismorefavorabletowardsafaultypartyinasimilar
situation.However,thisclemencyisonlypossiblebecausetheU.S.statuteon
patentsismoreflexibleandisdraftedsoastoallowthecorrectionoffaulty
paymentsinmanyspecificcaseswhereapartyactsingoodfaith.
Hoffman-LaRochewastheownerofCanadianpatentnumber1,291,429
issuedinitiallyin1991.In1995,Hoffman-LaRochesubmittedtothe
CommissionerofPatentsarequestforre-issuanceofthispatent.Accordingly,
in1998,thisrequestwasacceptedandthepatentwasreissuedwithanew
number(1,340,121).
However,Hoffman-LaRocheincorrectlyconsideredthatitsreissuedpatent
hadastatussimilartothatofanewpatent.Section46ofthePatentAct
createsanobligationforthepatentownertopayperiodicalfees.Inthecase
ofanewpatentissuedwithregardstoanapplicationfiledbeforeOctober1,
1989,nofeesarepayableonthefirstanniversaryofissuanceofthepatent.
Consequently,thefirstfeebecomesdueonthesecondanniversaryandhas
©CIPS,2004.*OfLEGERROBICRICHARD,L.L.P.,amultidisciplinaryfirmoflawyers,andpatentand
trademarkagents.PublishedintheWinter2001issue(Vol.8,No.1)issueofourNewsletter.
Publication068.059E.
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tobepaideachfollowingyear.TheRulesprovidefeeincreasesonthefifth,
tenthandfifteenthanniversariesoftheissuanceofthepatent.Inthecaseof
areissuedpatent,thepaymentofthefeesiscomputedfromthedateof
issuanceoftheoriginalpatentandnotfromthedateofthere-issuanceofthe
patent,suchasclaimedbyHoffman-LaRoche.Ifafeeisnotpaidwithinthe
prescribedtimelimit,theownerofapatentbenefitsfromaoneyeargrace
periodtohonouritslatepayment,towhichtheOfficewilladdasurtax.
Furthermore,insuchasituation,thePatentOfficeusuallyinformsthepatent
ownerofthenon-paymentofthefeesandsendsanoticetothiseffect.
Unfortunately,inHoffman-LaRoche’scase,thenoticewasnotsentwithinthe
timelimitwhichwouldhaveallowedittocorrectitsmissedpayment.More
precisely,theCommissionerofPatentswaitedtwoyearsafterthedateon
whichthefirstpaymentwasduetoinformHoffman-LaRochethatitspatent
hadlapsedforcauseofnon-paymentoftheannualfees.Thus,Hoffman-La
RocheandtheCommissionerofPatentshadbotherredinthiscase.
TheCourtdidnotfindanyambiguityinthePatentActwhichwouldhave
madeitpossibletointerpretitsprovisionsinfavourofHoffman-LaRoche,
allowingittocorrectitsmissedpayment.Intheabsenceofanyflexibilityin
theinterpretationoftheAct,Hoffman-LaRochetriedtoovercomethisstrict
interpretationoftheCourtbyproposingtheapplicationofcertaincommon
lawprinciples.Thus,Hoffman-LaRochesubmittedasargumentstheprinciples
ofnaturaljustice,equity,legitimateconfidenceandestoppel,buttheywere
allrejectedbytheCourt.TheCourtheldthattheCommissionerofPatents
doesnothaveanyobligationtosendnoticesinformingpatentownersoftheir
non-paymentofannualmaintenancefees.Thelawisclearonthisissue,and
theCourtcannotcircumventitsapplication.
ThesituationisdifferentunderU.S.law:Apartycanrestoreitspatentwithin
thetwoyearsfollowingthesixmonthgraceperiodifitcanprovethatthe
delaywasinvoluntary
,oratanytimefollowingthegraceperiodifitcanshow
thatthedelaywasinevitable
(see35U.S.C.§41(c)(1)).Theburdenofproof
torestorethepatentincreaseswithtime,inaccordancewiththepresumed
dateofabandonmentofthepatent.Aftertwoyears,itisnotsufficientforthe
partywhohasnotabandoneditspatentintentionallytoproveitsgoodfaith.
Itmustprovethatappropriatemeasuresweretakenbyittoensurethe
paymentofthefeesbeforetheexpirationofthetimelimit.
ThefollowingexampleissimilartotheHoffman-LaRochecaseand
demonstrateshowaU.S.Courtcametoadifferentconclusionundersimilar
circumstancesbecauseU.S.lawismoreflexibletowardsapartywhohas
omittedtopayitspatentmaintenancefees.TheCourt’sdecisioninLaerdal
MedicalCorp.v.AmbuInc.4USPC(2d)1140(February14,1995,U.S.D.C.
Maryland]dealtwithlitigationbetweentwocompaniesrelatedtothe
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infringementofamedicalinstrument.Inthiscase,thepatentowner’s
representativesmadeanadministrativeerrorwhichcausedthefirstpayment
ofthere-issuedpatenttobeincorrectlyindexedfor1990.Thisincorrectdue
datehadbeencalculatedfromthedateofthere-issuanceofthepatent
andnotfromdateofissuanceoftheoriginalpatent.Followingthereception
ofthelatepayment,thePatentOfficeoftheUnitedStatesrefusedtocash
thepayment,statingthatthepatenthadlapsed.Aftersubmittingtwo
petitions,thePatentOfficeeventuallyreinstatedthepatent.TheCourtthen
refusedAmbuInc.’srequesttorevisethePatentOffice’sdecision.
Therefore,eventhoughthepatentownerhadlessfavourableargumentsin
theLaerdalcasethanintheHoffman-LaRochecasetojustifyitsnon-
payment,thepatentintheU.S.casewasreinstated.Suchaninterpretationof
involuntaryandinevitabledelaysdoesnotexistinCanadianLaw.
Consequently,CanadianCourtsareobligedtointerpretthePatentAct
strictly.Unfortunately,eventhoughwesympathizewithHoffman-LaRoche’s
situation,webelievethatitwillhavegreatdifficultyinconvincingCanadian
Courtstodecideinitsfavourwithoutalegislativeamendment.Nevertheless,
Hoffman-LaRochehasdecidedtoappealtheFederalCourtofCanada’s
decision.Furtherdevelopmentsinthiscasewillbecloselyfollowed…
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