Hopkinson v. Commissioner of Patents, docket T-2153-91

     T-2153-91

BETWEEN :

     RON HOPKINSON, EDWARD R. RING and THOMAS VIRANY,

     Plaintiffs

     - and -

     THE COMMISSIONER OF PATENTS, and

     HER MAJESTY THE QUEEN,

     Defendants.

     REASONS FOR JUDGMENT

RICHARD J.:

Background

     This action for declaratory relief was commenced by a statement of claim filed on August 20, 1991 and amended on October 20, 1994. The defendants filed a statement of defence on November 7, 1991 and did not file an amended statement of defence. A statement of agreed facts and issues for the purposes of the trial of the action was signed by counsel for the parties in February 1996. The plaintiffs conducted oral discovery of the defendants on March 5, 1996. The plaintiffs applied for a date and place for trial pursuant to Rule 483(6) of the Federal Court Rules on December 3, 1996. An order fixing the date and place for trial of this action was made by the Associate Chief Justice on January 20, 1997. The hearing was held in Ottawa on June 9, 1997.

Issues

     The parties have identified the following issues to be determined at trial in their statement of agreed facts and issues.

1.      In order for patent examiners lawfully to act to determine whether patent applications are suitable to be issued as patents, do they require a formal delegation of power from the Commissioner of Patents?

2.      Who has the authority to hire patent examiners to examine patent applications under the Patent Act?

3.      Are patent examiners members of the federal "Public Service"?

4.      Are employees of the Patent Office members of the "Public Service"?

5.      Does the Patent Office as described herein meet the requirements of section 3 of the Patent Act?

Agreed Facts

     The Department of Consumer and Corporate Affairs was merged into the Department of Industry, Science and Technology as of June 1993, and no longer exists. The Department of Industry Act, creating the Department of Industry, came into force March 29, 1995.

     The Patent Office has de facto been merged, as a result of a reorganization within the Department of Consumer and Corporate Affairs in the 1980's, into a Directorate of Intellectual Property. On December 21, 1992, by direction of the Deputy Minister of Consumer and Corporate Affairs, this Directorate was re-named "Canadian Intellectual Property Office". This name is usually abbreviated as "CIPO".

     CIPO is now run as a Special Operating Agency within the Department of Industry. This means that it is considered by the Government of Canada to be part of the Department of Industry, but one with more control over its finances and long-term budgeting than is normal for a Directorate within such Department.

     The Patent Act¹ sets up a mechanism whereby patent applications can be filed by purported inventors or their legal representatives wishing to obtain patent protection in Canada. By the scheme of the Patent Act, such applications are filed with the requisite fees. They are examined to see whether they comply with the requirements of the Patent Act. Applications which comply are allowed and become patents.

     Patent applications are examined as to whether they meet the requirements of the Patent Act. A search is conducted of prior patents and other materials to ascertain whether the purported invention disclosed in the application is new and examine for compliance with the other requirements of the Act such that a patent can be issued. To conduct such an examination requires both the knowledge of the Patent Act and knowledge of the particular technical field to which the invention relates. The persons who conduct this examination are called patent examiners.

     Following examination, the patent application is either rejected or a patent based on it is granted.

     Over 25,000 patent applications are filed in Canada each year. These applications are examined by patent examiners.

     The plaintiffs, Ring, and Virany, carry out the duties of a patent examiner. The plaintiff Hopkinson, who is no longer employed with the Government of Canada, previously carried out such duties.

     The Treasury Board has classified eight types of position for persons who are employed in examining patent applications. The positions are classified with the Patent Examining Branch of the Canadian Intellectual Property Office. These positions are entitled SG-PAT-01 to SG-PAT-08 inclusive. Formerly these positions were entitled SG-PEM-01 to SG-PEM-08. There are no positions entitled Principal Examiner, Examiner, Associate Examiner or Assistant Examiner.

     Each of the plaintiffs herein has been through the hiring procedure of the Public Service Commission and has been placed in a position classified by the Treasury Board as SG-PAT-04 or SG-PAT-05. The duties of the plaintiffs are the examining of patent applications. Mr. Ring has been placed in a position classified as SG-PAT-05. Mr. Virany has been placed in a position classified as SG-PAT-04. Prior to July 14, 1995, Mr. Hopkinson had been placed in a position classified as SG-PAT-05. However, Mr. Hopkinson is no longer with the Government of Canada.

     The Minister of Supply and Services, at the request of the Minister of Consumer and Corporate Affairs, in about September 1990, entered into a Standing Offer for temporary help services (Contract 66OTT-O-9946/01) with a company called Personnel Plus Ottawa Inc. for the supply of temporary personnel.

     The Minister of Supply and Services, at the request of the Minister of Consumer and Corporate Affairs, issued a Request for Proposal in December, 1990 to an individual (Request 508ZF.54474-0-8877).

     The agreed facts were supplemented by the oral evidence of one of the plaintiffs, Edward R. Ring, and by reading into evidence portions of the examination for discovery of Peter James Davies, produced on behalf of the defendants.

Patent Office

     At the hearing, counsel for the plaintiffs questioned the existence of a Patent Office since no entity with such a name was shown on recent government organization charts. Counsel relied on section 3 of the Patent Act which reads as follows:

Section 3. Patent Office

There shall be attached to the Department of Industry, or to such other department of the Government of Canada as may be determined by the Governor in Council, an office called the Patent Office.

     The Patent Office has been established by legislation; no one is called upon to establish it. It exists by virtue of the statute and is not a physical location. What matters is that the functions mandated by legislation to be performed by the Patent Office be carried out. I am satisfied that these functions are being carried out under the direction of the Commissioner regardless of whether the agency is described as the Patent Office, the Bureau of Intellectual Property, the Intellectual Property Directorate, the Patent Branch or the Canadian Intellectual Property Office (CIPO). Section 2 of the Patent Rules states that "Patent Office" means the Patent Office established by section 3 of the Act.

Delegation

     Counsel for the plaintiffs claims that the patent examiners de facto grant patents of invention and in order to carry out their function properly and legally, they require a delegation of authority from the Commissioner pursuant to subsection 4(4) of the Patent Act which reads as follows:

         Section 4. Commissioner of Patents

         ...

(4) Delegation. - The Commissioner may, after consultation with the Minister, delegate to any person he deems qualified any of his powers, duties and functions under this Act, except the power to delegate under this subsection.

     This argument ignores the reality under law that the patent examiner does not confer any right. It is the Commissioner who grants a patent of invention not the patent examiner. Subsection 27(1) of the Patent Act states:

Section 27. Commissioner May Grant Patents

(1) The Commissioner shall grant a patent for an invention to the inventor or the inventor's legal representative if an application for the patent in Canada is filed in accordance with this Act and all other requirements for the issuance of a patent under this Act are met.

     Further, fees to maintain an application in effect are paid to the Commissioner. Section 27.1 of the Patent Act reads as follows:

         Section 27.1. Maintenance Fees

An applicant for a patent shall, to maintain the application in effect, pay to the Commissioner such fees, in respect of such periods, as may be prescribed.

     It is the Commissioner who may refuse an application. Section 40 of the Patent Act reads as follows:

Section 40. Refusal By Commissioner

Whenever the Commissioner is satisfied that an applicant is not by law entitled to be granted a patent, he shall refuse the application and, by registered letter addressed to the applicant or his registered agent, notify the applicant of the refusal and of the ground or reason therefor.

     It is also the Commissioner who may issue a new or amended patent. Subsection 47(1) of the Patent Act reads as follows:

Section 47. Issue of New or Amended Patents

(1) Whenever any patent is deemed defective or inoperative by reason of insufficient description and specification, or by reason of the patentee's claiming more or less than he had a right to claim as new, but at the same time it appears that the error arose from inadvertence, accident or mistake, without any fraudulent or deceptive intention, the Commissioner may, on the surrender of the patent without four years from its date and the payment of a further prescribed fee, cause a new patent, in accordance with an amended description and specification made by the patentee, to be issued to him for the same invention for the then unexpired term for which the original patent was granted.

     The application for a patent is addressed to the Commissioner. The patent examiners are called upon to examine the patent application. If the examiner judges that the subject matter of a claim has been previously disclosed or the invention is obvious, the examiner's objections are set out in a report known as a "Patent Office Action". The applicant has an opportunity to respond or can ask the Commissioner to amend the application. On receiving the response, the examiner will assess it and prepare a second Office Action. It may call for further amendments or may be a "Notice of Allowance" advising that a patent will be granted. If the examiner makes a final objection to the application, the applicant has a right to appeal to the Commissioner and request a review of the examiner's objection. This review is conducted by the Patent Appeal Board. If the Commissioner denies the appeal and refuses to grant a patent, the applicant may appeal to the Federal Court of Canada.

     Counsel for the plaintiffs argued that the Supreme Court of Canada in the Pioneer case² had described the patent examiner as rejecting the application in issue. According to counsel, the Supreme Court had recognized that the decision to grant or reject a patent was that of the patent examiner. However, the judgment of the Supreme Court makes it abundantly clear that after the examiner rejected the application, the applicant applied to the Commissioner for a review of the examiner's decision. The Commissioner referred the matter to a Patent Appeal Board constituted by the Commissioner. In its report, the Board affirmed the examiner's decision and found that the invention was not patentable. The Supreme Court went on to state:³

In deciding the review application, the Commissioner of Patents accepted the recommendations and findings of the Patent Appeal Board.

     Clearly, the decision to refuse the grant of a patent was that of the Commissioner regardless of the role played by the examiner. Accordingly, I would declare that there is no requirement, in these circumstances, for a delegation of authority from the Commissioner to the patent examiner pursuant to subsection 4(4) of the Patent Act.

Employment Status

     I will now turn to the main issues in this proceeding:

1.          Who has the authority to engage patent examiners; and

2.          Are they members of the Public Service?

     The Public Service Employment Act,⁴ provides, inter alia, as follows:

2. ...

"employee" means a person employed in that part of the Public Service to which the Commission has the exclusive right and authority to appoint persons;

...

"Public Service" has the same meaning as in the Public Service Staff Relations Act.

...

6.(1) The Commission may authorize a deputy head to exercise and perform, in such manner and subject to such terms and conditions as the Commission directs, any of the powers, functions and duties of the Commission under this Act, other than the powers, functions and duties of the Commission in relation to appeals under section 7.1, 21, 34, 34.4 and 34.5.

...

     The Public Service Staff Relations Act⁵ provides, in section 2, as follows:

"Public Service" means the several positions in or under any department or other portion of the public service of Canada specified in Schedule I;

     The French version reads as follows:

"fonction publique" Ensemble des postes qui sont compris dans les ministères ou autres secteurs de l'administration publique fédérale spécifiés à l'annexe I, ou qui en relèvent.

         Schedule I, Part I⁶ of the Public Service Staff Relations Act refers to "Departments named in Schedule I to the Financial Administration Act". Schedule I of the Financial Administration Act⁷ list, inter alia, the Department of Industry.

     Section 3 of the Patent Act reads, in part, that there shall be attached to the Deparment of Industry an office called the Patent Office.

     Simply put, the issue is whether the Patent office is "in or under" the Department of Industry as contemplated by the definition of the "Public Service" found in section 2 of the Public Service Staff Relations Act.

     The term "in or under" is descriptive. Attached means to form part of. The Patent Office is part of the Department of Industry. Accordingly, it is in or under the Department of Industry. I find that the patent examiners are members of the Public Service and that their employer is the Treasury Board.

Classification

     The plaintiffs claim that since Treasury Board has established eight different classifications ranging from SG-PAT-01 to SG-PAT-08 for persons who do patent examination and does not classify such positions into the four positions enumerated in section 6 of the Patent Act, there is no appointment of persons as required by that provision.

     The plaintiffs rely on their reading of section 6 of the Patent Act which provides:

Section 6. Staff

There may be appointed in the manner authorized by law such principal examiners, examiners, associate examiners and assistant examiners, clerks, stenographers and other assistants as are necessary for the administration of this Act.

     It is agreed that the duties of the plaintiffs are the examining of patent applications. They are patent examiners. Section 6 of the Patent Act imposes a duty on the Commissioner to ensure that applications for a patent are examined by qualified and competent patent examiners. It recognizes that there may be different levels of examiners. There is no allegation that any of the patent examiners, and a fortiori, the plaintiffs themselves, are not qualified or competent to perform the function of a patent examiner. Section 6 also provides for the appointment of clerks, stenographers and other assistants as are necessary for the administration of the Act.

     Sections 7 and 11 of the Financial Administration Act provide in part, as follows:

7.(1) The Treasury Board may act for the Queen's Privy Council for Canada on all matters relating to

(e) personnel management in the public service of Canada, including the determination of the terms and conditions of employment of persons employed therein;

(e.1) the terms and conditions of employment of persons appointed by the Governor in Council that have not been established under this or any other Act of Parliament or order in council or by any other means;

         ...

11.(1) In this section and in sections 12 and 13,

'public service' has the meaning given the expression 'Public Service' in the Public Service Staff Relations Act and includes any portion of the public service of Canada designated by the Governor in Council as part of the public service for the purposes of this section and sections 12 and 13;

(2) Subject to the provisions of any enactment respecting the powers and functions of a separate employer but notwithstanding any other provision contained in any enactment, the Treasury Board may, in the exercise of its responsibilities in relation to employer and employee relations in the public service, and without limiting the generality of sections 7 to 10,

(a) determine the requirements of the public service with respect to human resources and provide for the allocation and effective utilization of human resources within the public service;

(b) determine requirements for the training and development of personnel in the public service and fix the terms on which such training and development may be carried out;

(c) provide for the classification of positions and employees in the public service;

     Clearly, paragraph 11(2)(c) of that Act enables the Treasury Board to provide for the classification of positions in the public service, notwithstanding any other provision contained in any enactment. Having determined that patent examiners are employees in the public service as defined in subsection 11(1), it follows that Treasury Board can provide for the classification of their positions.

Temporary Personnel

     During the course of the trial counsel for the plaintiffs introduced evidence concerning the use of temporary personnel as patent examiners. There were two sources of such personnel. One was pursuant to a Regional Master Standing Offer (RMSO) with a firm called Personnel Plus to provide the Federal Government with temporary help services for the period July 1, 1990 to June 30, 1991. It was admitted that some qualified and competent patent examiners were called up during this period to assist in dealing with a backlog in patent applications. It was also established that this route was followed in order to avoid a continuing employer/employee relationship. The other source was a contract for services limited in time. Two former qualified and competent patent examiners were retained. These were also to address a backlog in patent applications and were for the period June 1, 1992 to March 31, 1993.

     The plaintiffs claim that these persons did not meet the requirements of subsection 35(1) of the Patent Act which states that the Commissioner shall cause an application for a patent to be examined by competent examiners to be employed in the Patent Office for that purpose. There is no question that these persons were competent; the plaintiffs claim they were not employed in the Patent Office.

     Although paragraphs 14 and 15 of the amended statement of claim refer to the standing offer for temporary help services, the question of temporary help is not identified as a relevant issue to which argument should be directed at trial. The evidence concerning temporary help was introduced at trial subject to the defendants' objection both as to its relevance to the central issues identified by the parties and its weight. I rule that this evidence is not relevant to the central issues identified by the parties in the statement of agreed facts and issues.

     In any event, the fact situation relied on in the case of Personnel Plus dates back to 1991. There is no evidence as to what is the current situation. There is also no evidence as to whether such conduct is contrary to any collective agreement and whether this Court is the proper forum for disposing of this question. In the circumstances, it would not be appropriate to grant the relief requested.

Conclusion

     It is declared, based on the evidence and submissions of the parties, that:

     1.      The Patent Office meets the requirements of section 3 of the Patent Act;

2.      In order for patent examiners lawfully to act to determine whether patent applications are suitable to be issued as patents, they do not require a formal delegation of power from the Commissioner pursuant to subsection 4(4) of the Patent Act;

3.      Treasury Board has the authority to hire patent examiners to examine patent applications under the Patent Act;

4.      Patent examiners are members of the Public Service;

     5.      Employees of the Patent Office are members of the Public Service;

6.      Treasury Board can provide for the classification of positions and employees in the Patent Office, including patent examiners.

    

     The declaration sought concerning the engagement of temporary personnel is denied. Costs are awarded to the defendants..

    

     ________________________

     Judge

Ottawa, Ontario

June 13, 1997

__________________

¹      R.S.C. 1985, c. P-4 as amended.

²      Pioneer Hi-Bred Ltd. v. Canada (Commissioner of Patents) (1989) 25 C.P.R. (3d) 257.

³      Ibid. at 260.

⁴      R.S.C. 1985, c. P-33.

⁵      R.S.C. 1985, c P-35.

⁶      Part II of Schedule I refers to "Portions of the public service of Canada that are separate employers."

⁷      R.S.C. 1985, c. F-11.