First Green Park Pty. Ltd. v. Canada (Attorney General), docket T-1352-97

Date: 19981014

Docket: T-1352-97

BETWEEN:

     FIRST GREEN PARK PTY. LTD.,

     Applicant,

     - and -

     THE ATTORNEY GENERAL OF CANADA,

     Respondent.

     REASONS FOR ORDER

MULDOON, J.

[1]      This is an application for judicial review pursuant to s.18.1 of the Federal Court Act of a decision of the Commissioner of Patents, dated May 22, 1997, in which the applicant's request for an extension of the period of reinstatement in respect of patent application number PCT/AU91/00350 was denied. This patent application was filed pursuant to the Patent Cooperation Treaty (PCT) June 19, 1970, [1990] Can. T.S. No. 22. This was the second refusal of the applicant's request, a prior refusal having been made by the Acting Commissioner of Patents on January 19, 1995.

[2]      The first decision was the subject of a successful judicial review application, in which the decision was set aside and referred back to the Commissioner.

[3]      In order to understand the nature of this application, it is necessary to describe the various steps identified in the PCT for obtaining international protection for patents. The PCT facilitates the obtaining of protection for inventions where such protection is sought in any one of the PCT member states. The application must proceed through two phases before a patent is granted: the international phase and the national phase. The international phase consists of four steps of which the first three occur automatically and the last is optional to the applicant.

[4]      The first step in the international phase is that the applicant files a single application in a recognized receiving office and designates a number of member countries where protection is sought. An applicant may claim priority from an earlier filed application, but if no earlier filed application exists, then the date of filing becomes the date from which time begins to run for the national phase. Thereafter, an international search is conducted in order to determine whether there is a prior art which may cast doubt on the validity of the invention. The third step is the publication of the international application and the communication by the World Intellectual Property Organization (WIPO) to the national patent office in each country designated in the application. Thus, in this case of an application in which Canada is designated, the Canadian Patent Office receives from WIPO a complete international application and search report. The fourth step is the preparation of and international preliminary examination report by one of the international examining authorities. This last step is also referred to as "chapter II".

[5]      Following completion of the international phase, an international application enters the national phase, that is, the examination and issuance of national patents. In order to start the national process within each of the designated states, there are certain steps which the applicant or his agent must take. If these steps are not taken, the international application will eventually lose its effect in the individual designated states.¹

[6]      If an applicant elects to proceed under Chapter II, the international applicant does not need to enter the national phase until 30 months from the priority date, or if there is none, from the date of filing the international application. If the application satisfied the laws of the designated country, a patent is granted in the designated country with the priority date being the international filing date. These time limits were prescribed in subsection 15(1) of the Patent Cooperation Treaty Regulations, as they then read², which provided that:

(1)      An applicant shall comply with the requirements of section 13 and, where applicable, section 14 not later than on the expiration of

(a)      where Canada is designated in an international application, other than in the cases referred to in paragraph (b), 20 months after the priority date; or

(b)      where the election of Canada has been made before the expiration of the 19th month after the priority date, 30 months after the priority date.

[7]      The applicant is an Australian company which filed an international patent application on August 8, 1991 for a meat packaging system. The priority date was August 9, 1990 because of an earlier domestic application in Australia. The applicant designated Canada in this application. On March 3, 1992, the applicant elected Canada under Chapter II of the PCT for examination and issuance of a national patent. So, the deadline which the applicant had to meet to enter the national phase of the process in Canada was February 9, 1993, which is 30 months from the priority date of August 9, 1990. Otherwise, the application would be deemed to have been abandoned pursuant to subsection 15(2) of the PCT Regulations.

[8]      In accordance with PCT Regulations as they then read, the deadline within which the applicant could seek reinstatement of its application was April 9, 1993, which was 2 months from the date of deemed abandonment. The power of the Commissioner to reinstate an application deemed to be abandoned is found in subsection 15(3) [as am. by SOR/94-284, s.4] of the PCT Regulations. This subsection as it then read, provided that:

(3)      The Commissioner may, at the request of the applicant reinstate an international application which has been deemed to be abandoned pursuant to subsection (2) if, within two months after the date on which it was deemed to have been abandoned, the applicant

(a)      complies with the requirements of section 13 and, where applicable, section 14;

(b)      pays the reinstatement fee set out in the schedule; and

(c)      satisfies the Commissioner by affidavit that the failure to comply with the requirements of section 13, and where applicable, section 14 was not reasonably avoidable.

[emphasis not in original]

[9]      Both the application deadline and the deadline within which the application could be reinstated were missed and the application was deemed abandoned on February 9, 1993 and deemed dead on April 9, 1993. A "practice" existed in the Patent Office at the time, which allowed the applicant to seek a reinstatement of its application following the deemed abandonment by an additional 10 months, thus amounting to a 12 month period within which applications could be reinstated. There is no statutory authority for the extension of the deadline beyond the two month period, but the Commissioner of Patents assumed, erroneously, that this power derived from Article 48(2) of the PCT. If one would consider the additional 10 months as being time within which an application could be reinstated, then the last date the application could have been reinstated was February 9, 1994.³

[10]      On June 30, 1994, the oversight came to the applicant's attention. On October 12, 1994, the Canadian patent agents for the applicant sent a letter to the Commissioner of Patents requesting an extension of time under Rule 139, of the Canadian Patent Act, to reinstate the abandoned application.⁴ This request came 16 months after the application was deemed dead and 18 months after the application could be reinstated, as the final date it could have been reinstated was April 9, 1993.

[11]      An official at the PCT section of the Patent Office denied the request on the basis that more than 12 months had passed after the application had been deemed abandoned. The applicant's patent agent requested that a decision be rendered by the Commissioner of Patents. By letter dated January 19, 1995, the Acting Commissioner denied the applicant's request.

[12]      That decision was the subject of a judicial review application to this Court. On March 5, 1997, Mr. Justice Richard allowed the judicial review, [1997] 2 F.C. 845 (T.D.). In that decision, he held that there was no obligation on the Commissioner to provide the applicant with written notice that the application would be deemed dead unless an application for an extension was submitted. He also assumed that the Commissioner, operating under Article 48(2) of the PCT could excuse any delay for filing an application late. This Article provides that:

(a)      Any Contracting State shall, as far as that State is concerned, excuse, for any reasons admitted under its national law, any delay in meeting any time limit.

(b)      Any Contracting State may, as far as that State is concerned, excuse, for reasons other than those referred to in subparagraph (a), any delay in meeting any time limit.

[13]      In rendering his decision, Mr. Justice Richard made the following statement:

Sub-rule 2(b) of Article 48, clearly confers a broad discretion on the Commissioner to excuse a delay.

[14]      On the basis of this statement, he held that the Acting Commissioner improperly fettered his discretion under sub-rule (2)(b) of Article 48 of the PCT by refusing to exercise his discretion in circumstances where the request for reinstatement was made beyond the self-imposed deadline of 12 months. In addition, he held that the Commissioner would not fetter his discretion by treating the 12 month time frame as binding upon him and excluding other valid or relevant reasons for the exercise of his discretion. Accordingly, he ordered the Commissioner to exercise her discretion found in Article 48(2)(b) of the PCT according to law.

[15]      The Commissioner of Patents exercised her discretion in a decision dated May 22, 1997 and decided not to reinstate the applicant's international patent application. The relevant portion of her decision reads as follows:

I therefore turn to consider the actions of the applicant. I have the affidavit of Peter Johnstone, one of the inventors and Managing Director of the applicant and an affidavit from Laurence John Dyson the Australian patent attorney who has carriage of the application. In the months leading up to February 1993 Johnstone and Dyson started discussions regarding the selection of States for national entry. I cannot find on the evidence an explicit instruction from the client to the attorney that the applicant wanted to proceed in Canada by entering the national phase. Instruction [sic] were given by telephone; Exhibit F to the Dyson affidavit are copies of notes taken during one such conversation. There is shown an annotated copy of Form PCT/IB/332, and a handwritten sheet. Canada is conspicuous in having neither a check mark on the PCT/IB/332 nor an indication on the handwritten sheet. I am not persuaded by the argument that since Brazil, Finland, Hungary and Norway, countries which involve translation costs, were designated there was an implication to proceed in Canada, a country which involved no translation costs. The second argument mentions other countries which lack a check mark (see paragraph 9 of the Dyson affidavit), however this argument is negated by the explicit listing of those same countries on the same page in paragraph 7 of the affidavit. Both affiants indicate that the North American market was important to the applicant such that a national application was filed in Mexico to complement the US application via the PCT and imply that there was an intention to proceed in Canada. If this market was of such a high priority, I find it difficult to accept that both client and attorney did not explicit mention Canada.

I now turn to consider the time frames involved. I accept that the PCT is a system which allows an applicant to buy time in which to make a decision whether of [sic] not to proceed in any designated State. Where Chapter II is elected the applicant has 30 months from the priority date to act. In Canada there was [sic] a further 12 months in which it was possible to reinstate. This [sic] 12 months [period (?)] was chosen to allow internal monitoring systems employed by the patent profession to pick up missed deadline etc. The applicant's problem came to light over 16 months late on June 30, 1994 when the applicant contacted its patent attorney seeking the status of the Canadian application. Presumably therefore the applicant's patent attorney was not using an adequate record-keeping system, if, in fact, the applicant did have an intention at the time to enter the national phase in Canada. Moreover, even after detecting the error on June 30, 1994 it took over three months until October 14, 1994 before any representation was made before the Canadian Patent Office. I find that the length of these delays is very significant bearing in mind the interests of third parties who may have assumed that the subject application would not be entering the national phase in Canada. I am also mindful of the fact that little satisfactory explanation has been provided for these delays having regard to the importance of dates to the patent system and the patent profession.

Considering all of these specific circumstances, I have decided to refuse to grant an extension of time under PCT Article 48(2)(b).

[16]      Again, the Commissioner assumed that she had the jurisdiction to entertain a request beyond the two-month period specified in the PCT Regulations.

[17]      Based on this decision, the applicant makes the following arguments:

1.      That the Commissioner made erroneous findings of fact in a perverse or capricious manner without regard to the totality of the material before her and without regard to the findings of this Court in the first judicial review application;

2.      That the Commissioner based her decision on irrelevant considerations; and

3.      That the Commissioner fettered her discretion, contrary to law and to the directions of Mr. Justice Richard.

[18]      In oral argument, counsel were asked to provide argument on the authority of the Commissioner to excuse a delay, beyond the period specified in subsection 15(3). If the Commissioner were indeed vested with discretion to extend the applicant's time, this judge holds that on May 22, 1997, she exercised her discretion quite lawfully in refusing to grant an extension of time. As will be outlined below, this discretion does not, in fact, rest with the Commissioner and thus, the applicant's arguments mentioned above are irrelevant and do not need to be addressed by this Court.

[19]      While Mr. Justice Richard was of the view that sub-rule 2(b) of Article 48, "clearly confers a broad discretion on the Commissioner to excuse a delay", it is not so clear to this Court. Article 48(2)(b) grants a broad discretion on a Contracting State not the Commissioner to excuse any delays for meeting a time limit. It should be remembered that the Commissioner cannot be equated with a Contracting State as defined in the Treaty, but rather derives her authority to act by virtue of section 4 of the Patent Act.

[20]      The constitutional authority to conclude international agreements is exercised in the name of Canada by the Governor-in-Council but treaty implementation is done by Parliament through the enactment of legislation incorporating the terms of the treaty. Once done, Canada is bound to the international agreement. There is no authority for the Commissioner of Patents to conclude an international agreement on behalf of Canada nor is the Commissioner a party to any international agreement. In this case, in order to incorporate the terms of the PCT into domestic law, the Patent Act was amended in 1987 (R.S. 1985, Chap. 33 (3rd Supp.), s.3 assented to on November 19, 1987) to provide that:

(1)      The Governor-in-Council may make rules or regulations

. . .

(h)      for carrying into effect the terms of any treaty, convention, arrangement or engagement that subsists between Canada and any other country;

(i)      notwithstanding anything in this Act, for carrying into effect the terms of the Patent Cooperation Treaty done at Washington on June 19, 1970;

. . .

[emphasis not in original]

[21]      Since the Commissioner of Patents is not a party to the treaty, nor is she a Contracting State, the only way that she may exercise authority to reinstate applications deemed dead is through a regulation passed by the Governor-in-Council. The Regulations incorporating the PCT into Canadian law enacted pursuant to subparagraph 12(1)(I) of the Patent Act speak to the authority of the Commissioner to excuse delays. The Regulations, as stated above, provided the Commissioner with the authority to excuse a delay within 2 months after the application was deemed abandoned. This time period was later extended to 12 months. There is absolutely no provision in the PCT Regulations nor in the treaty itself which allows the Commissioner unilaterally to extend the time beyond the period specified in subsection 15(3) of the PCT Regulations.

[22]      Since there is no explicit authority for the Commissioner to excuse time delays beyond the period specified in subsection 15(3), the applicant argues that implicit authority vests with the Commissioner. This argument is premised on the operation of section 6 of the PCT Regulations, the intent of Article 48(2) and the definition of "time limit" as provided by Regulations made under the PCT.

[23]      The applicant argues that section 6 of the PCT Regulations allows the Commissioner to extend the time period for reinstating an application deemed dead beyond that provided in subsection 15(3). This section, in its entirety provides that:

The provisions of the Treaty and Regulations under the Treaty shall apply in respect of:

(a)      an international application that is filed with the receiving Office in Canada;

(b)      an international application in which Canada is designated; and

(c)      an international application in which Canada is designated and elected.

[24]      The applicant argues that this forms the basis for the statement that all of the provisions of the PCT and the Treaty Regulations⁵ are expressly incorporated into Canadian law in respect of international applications. If this is so, Article 48(2)(b) is also incorporated into domestic law and regard does not need to be had to subsection 15(3) of the PCT Regulations in order to determine whether the Commissioner has the power to reinstate applications beyond the time period specified in the Regulations.

[25]      This argument is untenable. Section 6 merely codifies the types of patent applications covered under the Treaty and its Regulations and does not speak to the authority of the Commissioner to extend the time for accepting applications, even implicitly. The PCT is incorporated into Canadian law by virtue of section 12 of the Patent Act and the Commissioner's limited authority to reinstate an abandoned application vests specifically in subsection 15(3) of the PCT Regulations. The authority is explicit as are the defining boundaries within which that authority must operate, or not.

[26]      The Australian case of Sanyo Electric Co. Ltd. v. Commissioner of Patents [1996] AIPC 91-283 (Administrative Appeals Tribunal) upon which the applicant relies is, of course, not binding in Canada, but moreover, it is not strictly relevant. The A.A.T. in its own paragraph 17, records that subsection 223(2) of the pertinent Act provides exceptions to the general rule of time limitations, but also records that "the exercise of the [Commissioner's] discretion contained in that section is unconfined". Such is not the case here, as noted above.

[27]      Neither party's counsel could point to any lawful delegation of authorization to the Commissioner or to CIPO, here, as permissibly provided by article 2(xii) of the Treaty.

[28]      Thus, there is no basis for authority for the Commissioner to extend the time for accepting applications beyond the period specified in subsection 15(3). Therefore, there is no ground to conclude that the respondent Commissioner erred in law in refusing to extend the time for reinstating the applicant's application which was deemed abandoned, simply because the Commissioner lacked the jurisdiction to make this decision.

[29]      Thus, the application for judicial review sought by the applicant, must be dismissed, but in light of the apparently general misperception of the Commissioner's arrogation of an authority with which she has not been vested, no costs are awarded.

                                

                                 Judge

Ottawa, Ontario

October 14, 1998

__________________

     ¹      These steps include providing the Canadian Office with a translation of the international application into either English or French, and paying the basic national fee: section 13 of the PCT Regulations .

     ²      The PCT Regulations have been repealed and are now combined in the new Patent Rules SOR/96-423 in force August 28, 1996.

     ³      It is also necessary to note that section 15(3) of the PCT Regulations was amended effective April 14, 1994. The amendment codified the "practice" and provided that:          (3)      The Commissioner may, at the request of the applicant, reinstate an international application that was deemed to be abandoned pursuant to (2) if, within twelve months after the date on which it was so deemed, the applicant . . .
     This amendment does not affect the applicant's application, as the application was already deemed dead before April 14, 1994.
     In 1996, the PCT Regulations were repealed but were substantively incorporated into Part II of the new Patent Rules SOR96-423. Subsection 58(3) is now the substantive equivalent of subsections 15(3) of the PCT Regulations. This subsection also provides for a 12 month period within which an application deemed abandoned can be reinstated.

     ⁴      This Rule provides that:          Subject to these Rules, where the Commissioner is satisfied by an affidavit setting forth the relevant facts that, having regard to all the circumstances, any time prescribed by these Rules or fixed by the Commissioner may, either before or after the expiration thereof, extend such time.
     It is important to note that this Rule can be invoked only when an application falls within the national phase of the PCT system and not in the international phase. Since the applicant in this case never entered the national phase, due to the deemed abandonment, this Rule does not apply.

     ⁵      Specifically, Rule 82^bis .1 which provides that:          82^bis.1      Meaning of "Time Limit" in Article 48(2)              The reference to "any time limit" in Article 48(2) shall be construed as comprising a reference:              (i)      to any time limit fixed in the Treaty or these Regulations;              (ii)      to any time limit fixed by the receiving Office, the International Searching Authority, the International Preliminary Examining Authority or the International Bureau or applicable by the receiving Office under its national law;              (iii)      to any time limit fixed by, or in the national law applicable by, the designated or elected Office, for the performance of any act by the applicant before that Office.
     [emphasis not in original]