T-868-95
BETWEEN:
FIRST GREEN PARK PTY. LTD.
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR ORDER
RICHARD J.:
The applicant seeks an order quashing or setting aside the decision of the Acting Commissioner of Patents (the "Commissioner"), dated January 19, 1995 confirming an earlier decision of Ms. C.R. Demers of the Patent Cooperation Treaty (PCT) section of the Canadian Patent Office denying the applicant's request to extend the period of reinstatement in respect of PCT Patent Application No. PCT/AU91/00350.
BACKGROUND
It is useful, at the outset, to establish a chronology of the relevant events leading to this application for judicial review.
August 8, 1991: The applicant First Green Park Pty. Ltd., filed an international patent application in Australia for an invention entitled "Packaging System"(a meat packing system) pursuant to the PCT. The priority date was August 9, 1990 because of an earlier domestic application in Australia. The applicant designated Canada in this application. A copy of the "Notification to the Designated Office" was sent to the Canadian Intellectual Property Office (the "CIPO") from the International Bureau of the World Intellectual Property Organization (the "WIPO") on or about September 3, 1991.
October 2, 1991: The applicant proceeded with the optional search which was completed on October 2, 1991. A copy of the "International Search Report" was sent to the CIPO from the International Bureau of the WIPO.
March 3, 1992: Canada became an elected state pursuant to a filed election.1 A copy of the "Notification of Election" was sent to the CIPO from the International Bureau of the WIPO on or about March 16, 1992.
September 10, 1992: The "International Preliminary Examination Report" was completed and sent to the CIPO by the WIPO on October 6, 1992.
February 9, 1993: The deadline that the applicant had to meet to enter into the national phase of the process in Canada was February 9, 1993, that is, 30 months from the priority date of August 9th, 1990. Otherwise, the application would be deemed to have been abandoned.
February 9, 1994: The deadline within which the applicant had to seek reinstatement of its application following any deemed abandonment was February 9, 1994, that is, within twelve months from the date of deemed abandonment.2
June 30, 1994: Discovery by the applicant and its patent agent that no steps had been taken to enter the PCT application into the national phase in Canada.
July 1994: Mr. Warren Hall, a registered patent agent with Dennison & Associates was advised by an officer of the PCT section that it was not possible to proceed under the Patent Rule 139 (Rule 139) and that the international application was abandoned and could not be reinstated.
October 12, 1994: Dennison & Associates, as 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 Regulations, to enter into the national phase. This letter was supported by a request and two affidavits, one from the inventor3 and one from the Australian patent attorney4 of the applicant.
November 21, 1994: Ms. C.R. Demers, Head of the PCT section at the CIPO, denied the request on the ground that more than twelve months had elapsed since the application had been abandoned. The CIPO asserted that the applicant was 8 months beyond the 12 month reinstatement period for a total of 20 months since the national entry date.
November 28, 1994: Dennison & Associates reiterated its request for reinstatement and requested a decision by the Commissioner himself. The Commissioner responded on January 19, 1995, refusing to reverse the decision of Ms. Demers denying the applicant's request to extend the period of reinstatement.
January 20, 1995: A letter by the Acting Commissioner, A. McDonough, informs Dennison & Associates of the Acting Commissioner's decision denying, "after reviewing the evidence submitted",5 the request,
April 27, 1995: The applicant sought judicial review of this decision by Originating Notice of Motion in this Honourable Court.
These facts are not in dispute.
THE PCT SYSTEM
The PCT was done at Washington on June 19, 1970. It was amended on September 28, 1979 and again on February 3, 1984. Canada ratified the PCT on October 2, 1989 and it came into force for Canada on January 2, 1990. Prior to its coming into force, s. 12 of the Patent Act was amended and s. 12(1)(i) authorizes the Governor-in-Council to make rules or regulations for carrying it into effect.
The PCT established a system whereby an applicant can initiate the process of seeking patent protection in 83 states around the world by filing a single international application in a single language and paying a single fee to a single national or regional office.6
The PCT facilitates the obtaining of protection for inventions where such protection is sought in any one of the PCT member states. In essence, the application will proceed through two phases before a patent is granted; hence, the use of the terms "international phase" and "national phase".
The framework for the international phase is set by the PCT itself, administered by the International Bureau of the WIPO in Geneva, Switzerland. The framework for the national phase is set by the Canadian Patent Act, and is administered by the Canadian Patent Office. It follows that one of the crucial purposes of the PCT Regulations under the Patent Act is to draw a clear dividing line between these two frameworks.
WIPO provides a detailed explanation of this process in a publication known as the PCT Applicant's Guide. Volume I (one binder) covers the international phase. Volume II (three binders) covers the national phase in general, but it also contains a chapter devoted to each designated office, setting out in detail what has to be done and by when. Each of these chapters is prepared in cooperation with the office concerned, and the office concerned has approved the instructions set out in that chapter.
The Guide informs the Applicant that "(i)t is up to the applicant to decide whether and when to enter the national phase before each designated office." In the Applicant's Guide, volume 1, p. 3, paragraph 15 , it reads:
| It is up to the applicant to decide whether and when to enter the national phase before each designated Office. The international phase continues, for any particular designation, until entry into the national phase before the designated Office concerned or until the expiration of the applicable time limit for entering the national phase before that Office. |
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In Volume II, at pp. 2-3, paragraph 12, it reads:
| How does the national phase start? The national phase starts only if the applicant performs certain acts, either before the expiration of a certain time limit or together with an express request that it start earlier. The applicant should not expect any notification inviting him to perform those acts. He has sole responsibility for performing them in due time. The consequences of failure to do so are fatal to the application in most designation States. |
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later, at p. 4, paragraph 18:
| What are the consequences of failure to perform the acts required for entry into the national phase? The consequences where, on expiration of the applicable time limit for entering the national phase, the required acts have not (all) been performed, are that the international application loses the effect of a national application and the procedure comes to an end in respect of each Office before which they have not (all) been performed. |
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Both the international and the national phases are described in the affidavit of Pierre Trépanier,7 Deputy Director of the Patent Branch of the CIPO.
As MacKay J. noted in Celltech Ltd v. Commissioner of Patents,8
| [A] description of the Treaty's process is included in the decision of Mr. Justice Aldous in The Queen v. Comptroller General, the Patent Office, Ex parte Celltech Limited (unreported, file no. CO/1003/91, U.K., High Ct. (Q.B.D.), May 21, 1991, as follows: |
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| The basic scheme of the PCT is that an applicant for a patent applies to his local patent office and fills in a form if he wishes to make "an international application" enabling him to claim priority in designated states. That local office is by an agreement with WIPO designated as a receiving office for the purpose of international applications. The receiving office checks the application to see that it complies with the formalities required under the PCT and the PCT rules and, if so, gives to the application an international filing date. Thereafter the receiving office sends one copy of the application to the International Bureau in Geneva and another to the International Searching Authority which searches for prior art which might throw doubt on the validity of the invention. The result of that search is then forwarded to all the patent offices of the states which the applicant has designated in its application as a country in which patent protection is to be sought. The local patent offices thereafter take over the application and, provided the application satisfies the law of the relevant country, a patent is granted in that country with a priority date of the date of the international application. |
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In 1995, the Patent Branch of the CIPO received approximately 26,000 applications for patent protection in Canada and of that number forty percent were filed through the PCT system operating under the Canadian Patent Act. It is expected that this percentage will eventually rise to, and stabilize at, fifty percent.
INTERNATIONAL PHASE
The international phase consists of the following four steps of which the first three occur automatically and the last is optional to the applicant.
| 1) An applicant files a single application in a recognized receiving office and designates a number of member states where protection is sought. The filing of an international application is equivalent to filing a separate application in each of the designated member states. A filing date for each designated state is obtained through the filing of a single international application, in one place, in one language and by paying an initial set of fees in one currency. |
| 2) The second step consists of the establishment of an "International Search Report" by one of the international searching authorities.9 A search report provides an applicant with information with which to decide whether any further prosecution is warranted. |
| 3) The third step is the publication of the international application together with the "International Search Report" as well as their communication by the International Bureau of the WIPO to each national or regional office which the applicant has designated. |
| 4) The fourth and optional step in the international phase is the establishment of a "International Preliminary Examination Report" by one of the international preliminary examining authorities. |
NATIONAL PHASE
Following completion of the international phase, an international application enters the national phase, i.e. the examination and issuance of national patents.
In order to start the national process within each of the designated states, there are certains steps that 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.10
The applicant, or his agent, has to pay a national fee in each of the designated states. As well, a translation of the international application has to be filed where the original was not filed in one of the official languages of the designated state. Apart from these requirements, however, the individual states are not allowed to impose any other requirement that have to be met within the 20 month (or 30 months if Chapter II has been elected) time limit.
Once these steps have been taken, the application has entered into the national phase, and is processed and examined by each of the designated, or elected, states in the same way that any other domestic application would be. For example, the "International Preliminary Examination Report" is not binding on any elected state, but it can have the effect of speeding the domestic process. The eventual outcome of the national phase is that each state grants, or does not grant, the international application its domestic patent protection.
LEGISLATIVE PROVISIONS
The following provisions are relevant to this application for judicial review.11
Patent Cooperation Treaty
(...)
| Article 48. (1) Where any time limit fixed in this Treaty or the Regulations is not met because of interruption in the mail service or unavoidable loss or delay in the mail, the time limit shall be deemed to be met in the cases and subject to the proof and other conditions prescribed in the Regulations. |
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| (2) (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. |
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| (b) Any Contrating State may, as far as the State is concerned, excuse, for reasons other than those refered to in subparagraph (a), any delay in meeting any time limit. |
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Patent Cooperation Treaty Regulations
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| Section 6. The provisions of the Treaty and the Regulations under the Treaty shall apply in respect of |
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| (a) an international application that is filed with the receiving Office in Canada; |
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| (b) an international application in which Canada is designated; and |
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| (c) an international application in which Canada is designated and elected. |
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| Section 7. Subject to these Regulations, the Act and the Rules shall apply in respect of an international application when the applicant has complied with the requirements of section 13 and, where applicable, section 14. |
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(...)
| Section 14. Where an applicant has designated and elected Canada in an international application and complies with the requirements of section 13 after the second anniversary of the international filing date, the applicant shall, in order to maintain that application in effect, pay, pursuant to section 76.1 of the Rules, the fee set out in item 3 of the schedule to these Regulations. |
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Section 15.
| (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 |
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| (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. |
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| (2) Where the applicant fails to comply with the requirements of section 13 and, where applicable, section 14 within the applicable period set out in subsection (1), the international application shall be deemed to be abandoned. |
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| (3) The Commissioner may, at the request of the applicant, reinstate an international application that was deemed to be abandoned pursuant to subsection (2) if, within twelve months after the date on which it was so deemed, the applicant |
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| (a) complies with the requirements of section 13 and, where applicable, section 14; |
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| (b) pay the reinstatement fee set out in the schedule; and |
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| (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. |
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Regulations under the Patent Cooperation Treaty
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| 82bis.1 Meaning of "Time Limit" in Article 48(2). |
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| The reference to "any time limit" in Article 48(2) shall be construed as comprising a reference: |
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| (i) to any time limit fixed in the Treaty or those Regulations. |
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| (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. |
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| (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. |
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| 82bis.2 Reinstratement of Rights and Other Provisions to Which Article 48 (2) Applies. |
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| The provisions of the national law which is referred to in Article 48(2) concerning the excusing, by the designated or elected State, of any delay in meeting any time limit are those provisions which provide for reinstatement of rights, restoration, restitutio in integrum or further processing in spite of non-compliance with a time limit, and any other provision providing for the extension of time limits or for excusing delays in meeting time limits. |
| SECTION 12. RULES AND REGULATIONS |
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(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; |
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(...)
| SECTION 30. WHEN APPLICATIONS TO BE COMPLETED |
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| (1) Each application for a patent shall be completed within twelve months after the filing of the application, and in default thereof, or on failure of the applicant to prosecute the application within six months after any examiner, appointed pursuant to section 6, has taken action thereon of which notice has been given to the applicant, the application shall be deemed to have been abandoned. |
| (2) Abandoned application reinstated.- An abandoned application may be reinstated on petition presented to the Commissioner within twelve months after the date on which it was deemed to have been abandoned, and on payment of the prescribed fee, if the petitioner satisfies the Commissioner that the failure to complete or prosecute the application within the time specified was not reasonably avoidable. |
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SECTION 40. REFUSAL BY COMMISSIONER
| (2) 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 adressed to the applicant or his registered agent, notify the applicant of the refusal and of the ground of reason therefor. |
Patent Rules
| Section 61. (1) A petition for the reinstatement of an abandoned application shall be verified by affidavit and shall set out the facts that resulted in the abandonment, the date of discovery of the abandonment and the steps taken towards reinstating the application between that date and the presentation of the petition. |
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| (2) No petition for the reinstatement of an abandoned appplication shall be granted unless the Commissioner is satisfied that there has been unnecessary delay in presenting the petition and unless the applicant has, on or before the day of its presentation, taken the action that he should have taken within the time specified in section 30 of the Act in order to avoid the abandonment of the application or satisfies the Commissioner that he is unable to take such action but will be able to do so within a time fixed by the Commissioner. |
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| Section 134. An affidavit made under these rules may contain a statement of the facts within the knowledge of the deponent or may be based on information and belief, but an affidavit based on information and belief shall set out the grounds for such belief. |
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| Section 138. The Commissioner may fix a time for the taking of any action for which a time is not prescribed by the Act or these Rules and an application may be deemed to be abandoned if such action is not taken within the time so fixed. |
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| Section 139. 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 theses Rules or fixed by the Commissioner for doing any act should be extended, the Commissioner may, either before or after the expiration thereof, extend such time. |
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| Section 140. Where a time prescribed by these Rules is extended pursuant to section 139, the extended time shall be deemed for the purposes of these Rules to be the time prescribed by these Rules, but no extension of time shall affect any action properly taken by the Office before such extension was granted by the Commissioner. |
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ISSUES
The applicant raises the following issues:
| 1. Should the Acting Commissioner of Patents' decision be set aside because the Commissioner of Patents erred in law and exceeded his jurisdiction by failing to follow the established practice and policy of giving notice of the deemed abandonment of a patent application? |
| 2. Did the Commissioner of Patents' failure to give notice of the deemed abandonment constitute a violation of the rules of natural justice and fairness? |
| 3. Did the Commissioner of Patents err in law and otherwise improperly refuse to carry out his duty and exercise his discretion in refusing to consider the applicant's request for reinstatement of the subject International Application? |
| 4. Did refusing to consider the Applicant's reinstatement request under Rule 139 and 82bis of the Patent Cooperation Treaty Regulations render the decision a nullity and was it an error which tainted the entire proceeding? |
THE ARGUMENTS
The Applicant
According to the applicant, when an applicant fails to timely enter into the national phase of a state and the international application is deemed to be withdrawn, the equivalency to regular national filing effect of Article 11(3) of the PCT ceases in that state but the same consequences as the withdrawal of a national application must apply. Pursuant to Rule 82bis under the PCT, designated offices are required to apply to PCT applications the same remedial provisions regarding time limit as they apply to their own domestic or national applications. Accordingly, a designated office can only reject an international application on grounds of non-compliance with the PCT requirements if it has first given the applicant an opportunity to correct the application to the extent and in accordance with the procedure provided by the national office in the same or comparable situations in respect of domestic applications. In other words, in all respects an international application which has fulfilled the international filing requirements is regarded in the same manner as a national application.
The applicant also argues that most major patent offices in the world provided the applicant or the attorney with a Notice of Abandonment of a national application, as they realize that certain time provisions run from the date of the abandonment. These notices seem to identify any inadvertent steps or misunderstandings that may have occurred. The applicant is then provided with a very significant time period to reinstate the application. Even though there may be no statutory or regulatory obligation upon the Commissioner to notify an applicant of the abandonment of an application, the Commissioner has a long established practice of issuing such a notice in connection with domestic applications. Similar to the CIPO practice for Canadian applications, some foreign states send notices to their national applicants before expiration of their national phase. Furthermore, since the national officers know the identity of applicants and their agents for international applications, such communication are typically sent to the agent of record for international applications.
According to the applicant, the CIPO currently does not regard and treat PCT applications which have been deemed abandoned the same way as patent applications which have been deemed abandoned under the Patent Act. This places a PCT applicant in a position where it may be under the misconception that an international application is pending and in good standing in Canada. Whereas in the case of the deemed abandonment of a domestic application the CIPO exercises considerable care in advertising the applicant of the abandonment of an application, no similar practice is undertaken for international applications which designate Canada.
Section 15(3) of the PCT Regulations under the Patent Act initially provided for a two month period for filing a petition for reinstatement of an international application deemed abandoned for failing to enter the national phase within the time limits. Section 15(3) was amended to provide for a twelve month period.12 More than two years before the coming into force of the amendment, the CIPO adopted a practice of favorably considering retroactive extensions of time. The applicant argues that the evidence confirms that the CIPO granted retroactive extensions of time for international applications beyond the two month reinstatement period set out in the PCT Regulations under the Patent Act and, at least once, granted a retroactive extension of time beyond a twelve month reinstatement period. International applications were reinstated based upon applicants' reliance upon Article 48(2) of the PCT, Rule 82bis.1 and 2 of the Rules under the PCT, Rule 15(3) of the PCT Regulations under the Patent Act and Rule 139 under the Patent Act. A very low threshold was also apparently required to be met to establish that the failure to comply with the national entry requirements was not reasonably avoidable.
The applicant also submits that the law will imply that the substantial requirements of justice shall not be violated and that the parties must be given an opportunity of being heard. The decision maker must give notice when he will proceed with the matter.13
In the applicant's opinion, the Commissioner established a practice and policy of sending a notice and created a reasonable expectation that this policy will be followed.
The applicant submits that an important aspect of the legislative regime for international applications was to excuse a delay in the entry of the national phase in Canada avoiding the potentially severe consequences of the loss of a property right and patent protection resulting from inadvertence or mistake. This important right was recognized by Parliament by inclusion of a provision permitting to reinstate an application upon proving that failure to comply was not reasonably avoidable. The Commissioner denied the applicant's reinstatement request without having due regard to the affidavit evidence before it, and instead made its decision solely on the basis that the reinstatement request was filed more than twelve months after the deemed abandonment date of the international application. In so doing, the Commissioner erred in refusing to exercise his discretion to retroactively extend the time for entry in the national phase. A fair and liberal interpretation of Patent Rule 139, Article 48 (2) of the PCT and section 82bis.1 and 2 of the Regulations under the PCT confirms that such discretionary power resided with the Commissioner.
The Respondent
The respondent submits that the Commissioner's power or discretion to revive an international application beyond the twelve month deadline exists by virtue of specific provisions in the PCT and its Rules. This power does not exist by virtue of the Patent Act and its Rules. Furthermore, an international applicant that has missed the deadline for reinstatement in order to be able to enter national phase still remains within the international phase. Accordingly, an applicant cannot invoke provisions only available within the national phase. Indeed, the phases are "mutually exclusive in time". The Commissioner has chosen to limit the exercise of that power to the twelve month deadline currently set for reinstatement by the PCT Regulations under the Patent Act that incorporate the PCT into Canadian law. The Commissioner's discretion exists by virtue of Article 48 (2) (a) and (b) of the PCT and by its Rule 82bis.2.
From 1991 to April 14, 1994, the Commissioner relied on Article 48 (2) (b) to extend the deadline for reinstatement from two to twelve months. Since then, the Commissioner complies with Article 48 (2) (a) by exercising his power to reinstate patent applications within the same deadline for both international and domestic application, that is, twelve months. The respondent does not deny that Article 48 (2) (b) of the PCT still offers the Commissioner the discretion to extend the deadline for reinstating beyond the twelve month deadline set by the PCT Regulations under the Patent Act. However, the Commissioner has consistently chosen to exercise this power only for applications made within the twelve month deadline.
The PCT system that the PCT Regulations14under the Patent Act brought into effect consists of two phases. The framework for the international one is set by the PCT itself, administered by the WIPO in Geneva. The framework for the national phase is set by the Patent Act and is administered by the Canadian Patent Office. The PCT Regualtions under the Patent Act draw a clear dividing line between the two frameworks.15
Following section 7 of the PCT Regulations under the Patent Act, the Patent Act and its Rules will apply in respect of an international application once the applicant has complied with the requirements of sections 13 and 14 of the PCT Regulations under the Patent Act, that is, provides a translation, if necessary, pays a basic national fee, and, where applicable, pays a maintenance fee. Unless these steps have all been completed, an application has not entered the national phase.
The deadlines for the completion of all these steps are established by section 15 of the PCT Regulations under the Patent Act. They are 20 months from the priority date where Canada has been designated and 30 months from the priority date where the election of Canada has been made before the expiration of the 19th month after the priority date. Section 15(2) of the PCT Regulations under the Patent Act provides that where the applicant fails to comply with those requirements, the international application shall be deemed to be abandoned.
Once an international application has been deemed to be abandoned, the Commissioner may reinstate the application if, within twelve months after the date on which it was so deemed, the applicant complies with all the requirements, pays the reinstatement fee and satisfies the Commissioner that the failure to comply with the requirements was not reasonably avoidable.16 These are the deadline and conditions within which the Commissioner has chosen to exercise his discretion pursuant to Article 48(2)(b) of the PCT and Rule 82bis.2 under the PCT.
Section 30(2) of the Patent Act sets a twelve month deadline and similar conditions for the reinstatement of patent applications deemed abandoned within the domestic regime and Rules 61(1) and (2) made under the Patent Act provide more detail for the preparation and granting of a petition for reinstatement. Rule 139 under the Patent Act gives the Commissioner discretion to extend some deadlines if, having regard to all the circumstances, he is satisfied by affidavit that any time limit should be extended.
According to the respondent, the applicant cannot invoke this Rule for two reasons. Firstly, the rule can only apply within the national phase of the PCT system and the applicant never entered the national phase for failure to get reinstated within the twelve month deadline from its date of abandonment. Secondly, by its own words,17 Rule 139 cannot apply to a deadline set by statute, that is, the twelve month deadline set by section 30(2) of the Patent Act.
The respondent submits that it is trite law that a Court should not interfere with the exercise of the Commissioner of Patents' discretion unless satisfied that it was wrongly exercised due to the application of some wrong principle of law or unless there is no evidence upon which the discretion could have been exercised in the manner in which it was.18
Concerning the Notices of Abandonment, the respondent argues that although there is no statutory obligation to do so, the CIPO does provide warning letters to patent applicants within the domestic application process. There is no history of the CIPO sending out warning letters to international applicants still within the international phase. Indeed, the WIPO provides international applicants with very explicit warnings that national offices do not provide such warnings.19 In fact, it would be impractical and very expensive for the CIPO to send such letters. Many international applicants initially designate Canada, but years down the road choose not to enter the national phase for a variety of considerations.
The respondent argues that it is appropriate for the Commissioner to consider what caused an applicant's failure to enter the national phase in deciding whether or not to exercise his discretion pursuant to Article 48(2)(b) of the PCT. The evidence set out in the applicant's request for reinstatement makes it clear that the applicant's failure to enter the national phase was due to an oversight on the part of the applicant's representatives. This oversight was not reasonably unavoidable. The oversight likely stemmed from an inadequate record-keeping system. It is also appropriate for the Commissioner, in deciding whether or not to exercise his disretion under Article 48(2)(b) of the PCT, to take into account the lapse of time between an oversight coming to light and an applicant sending a request for reinstatement.
The Commissioner has not received many requests for reinstatement of international applications twelve months beyond their date of deemed abandonment. The few received to date have been refused and the respondent submits that the exception referred to by the applicant is not an exception but rather an anomaly20 where very special circumstances have occurred.21
Finally, the respondent submits that it is acceptable to set limits to an applicant's rights to a fair hearing in accordance with the principles of fundamental justice. Setting a twelve month deadline within which an applicant must seek such a hearing constitutes such an acceptable limit.22
EXERCISE OF DISCRETION
Sub-rule 2(b) of Article 48, clearly confers a broad discretion on the Commissioner to excuse a delay.
It is a well-established principle of law, that if a public body is entrusted by Parliament with discretionary powers and duties, whether express or implied, those public bodies cannot divest themselves of these powers or duties but may adopt policies, administrative rules or guidelines to assist them in the exercise of their discretion. However, where there is a discretion to be exercised, a public body must not adopt a rigid policy.23
In Ainsley Financial Corp. v. Ontario Securities Commission,24 Doherty J.A. wrote:
| The Commission performs its duties and exercises its discretion within the framework established by the pertinent statutory provisions and Regulations. These statutory instruments do not, however, tell the whole regulatory story. The Commission has developped various techniques, including policy statements, designed to inform its constituency and further the goals described above. These non-statutory instruments have increased in number and gained in prominence as securities regulation has become more complex and the problems to which the Commission must respond more diverse. Contemporary securities regulation involves an amalgam of statutory and non-statutory pronouncements and seeks to regulate by means of retrospective, ad hoc, fact-specific decision-making and prospective statements of policy and principles intended to guide the conduct of those subject to regulation. |
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| The authority of a regulator, like the Commission, to issue non-binding statements or guidelines intended to inform and guide those subject to regulation is well established in Canada. The jurisprudence clearly recognizes that regulators may, as a matter of sound administrative practice, and without any specific statutory authority for doing so, issue guidelines and other non-binding instruments: Hopedale Developments Ltd. v. Oakville (Town) (1965) 1 OR 259 at p. 263, 47 DLR (2d) 482 (CA); Maple Lodge Farms Ltd. v. Canada (1982) 2 SCR 2 at pp.6-7, 137 DLR (3d) 558; Capital Cities Communications Inc. v. Canadian Radio-Television & Telecommunications Commission (1978) 2 SCR 141 at p. 170, 81 DLR (3d) 609 at p. 629; Friends of Oldman River Society v. Canada (Minister of Transport) (1992) 1 SCR 3 at p.35, 88 DLR (4th) 1; Pezim, supra, at p. 596; Law Reform Commission of Canada, Report 26, Report on Independant Administrative Agencies: Framework for Decision Making (1985) at pp.29-31. |
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| Non-statutory instruments, like guidelines, are not necessarily issued pursuant to any statutory grant of the power to issue such instruments. Rather, they are an administrative tool available to the regulator so that it can exercise its statutory authority and fulfil its regulatory mandate in a fairer, more open and more efficient manner. |
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| Having recognized the Commission's authority to use non-statutory instruments to fulfil its mandate, the limits on the use of those instruments must also be acknowledged. A non-statutory instrument can have no effect in the face of contradictory statutory provision or regulation: Capital Cities Communications Inc., supra, at p.629; H. Janish, "Regulating the Regulator: Administrative Structure of Securities Commissions and Ministerial Responsibility" in Special Lectures of the Law Society of Upper Canada: Securities Law in the Modern Financial Marketplace (1989), at p. 107. Nor can a non statutory instrument pre-empt the exercise of a regulator's discretion in a particular case: Hopedale Developments Ltd., supra, at p. 263. |
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In its Report entitled Independent Administrative Agencies,25 the Law Reform Commission of Canada explained as follows:
| Policy statements can facilitate voluntary compliance, ensure greater consistency in decision making and encourage accountability. The Supreme Court of Canada sees them as not only permissible, but "eminently proper" rules, and do not thereby fetter their discretion in making decisions (see Capital Cities, (1978) 2 S.C.R. 141 and Maple Lodge Farms, (1982) 2 S.C.R. 2). Therefore, agencies need no legislative authority to adopt them. |
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In Maple Lodge Farms Ltd. v. Canada,26 McIntyre J. wrote:
| It is clear, then, in my view, that the Minister has been accorded a discretion under s. 8 of the Act. The fact that the Minister in his policy guidelines issued in the Notice to Importers employed the words: "If Canadian product is not offered at the market place, a permit will normally be issued; ..." does not fetter the exercise of that discretion. The discretion is given by the Statute and the formulation and adoption of general policy guidelines cannot confine it. There is nothing improper or unlawful for the Minister charged with responsibility for the administration of the general scheme provided for in the Act and Regulations to formulate and to state general requirements for the granting of import permits. It will be helpful to applicants for permits to know in general terms what the policy and practice of the Minister will be. To give the guidelines the effect contended for by the appellant would be to elevate ministerial directions to the level of law and fetter the Minister in the exercise of his discretion. Le Dain J. dealt with this question at some lenght and said, at p. 513: |
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| The Minister may validly and properly indicate the kind of considerations by which he will be guided as a general rule in the exercise of his discretion (see British Oxygen Co. Ltd. v. Minister of Technology (1971) A.C.(H.L.) 610; Capital Cities Communications Inc. v. Canadian Radio-Television Commission (1978) 2 S.C.R.141, at pp.169-171), but he cannot fetter his discretion by treating the guidelines as binding upon him and excluding other valid or relevant reasons for the exercise of his discretion (see Re Hopedale Developments Ltd. and Town of Oakville (1965) 1 O.R.259. |
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In regard to the highly technical competence vested to administrative tribunals or Boards or Commissions, the Supreme Court of Canada ruled:27
| The issue that arises therefore is whether the Commission or its Executive Committee acting under its licensing authority, is entitled to exercise that authority by reference to policy statements or whether it is limited in the way it deals with licence applications or with applications to amend licenses to conformity with regulations. I have no doubt that if regulations are in force which relate to the licensing function they would have to be followed even if there were policy statements that were at odds with the regulations. The regulations would prevail against any policy statements. |
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| In my opinion, having regard to the embracive objects committed to the Commission under s. 15 of the Act, objects which extend to the supervision of "all aspect of the Canadian broadcasting system with a view to implementing the broadcasting policy enunciated in section 3 of the Act", it was eminently proper that it lay down guidelines from time to time as it did in respect of cable television. The guidelines on this matter were arrived at after extensive hearings at which interested parties were present and made submissions. An overall policy is demanded in the interests of prospective licensees and of the public under such a regulatory regime as is set up by the Broadcasting Act. |
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In Pezim v. B.C. (Superintendent of Brokers),28 Iacobucci J. wrote:
C. The Role of the Commission
| In the case at bar, the Commission's primary role is to administer and apply the Act. It also plays a policy development role. Thus, this is an additional basis for deference. However, it is important to note that the Commissioin's policy-making role is limited. By that I mean that their policies cannot be elevated to the status of law; they are not to be treated as legal pronouncements absent legal authority mandating such treatment. |
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While a regulator can lay down guidelines or policies, the jurisprudence establishes that such a non-statutory instrument cannot pre-empt the exercise of discretion in a particular case and cannot fetter the discretion by treating the guidelines or policies as binding and excluding other valid or relevant reasons for the exercise of the discretion. These guidelines or policies cannot be elevated to the status of law.
CONCLUSION
The applicant contends that the Commissioner was under a duty to provide it with a written notice of abandonment in the international phase. There is nothing in the PCT or in the Regulations nor in the conduct of the Commissioner to support that proposition and I reject it. This disposes of issues 1 and 2.
I turn now to the applicant's request for reinstatement set out in issues 3 and 4.
The time within which the applicant had to seek reinstatement of its application following any deemed abandonment consisted of two months under s. 15(3) of the PCT Regulations under the Patent Act at that point in time, and a further ten months pursuant to the Commissioner of Patent's power or discretion under Article 48(2)(b) of the Treaty. Thus, the deadline was February 9, 1994, that is, within twelve months from the date of deemed abandonment.
It was not until June of 1994, that this oversight came to the applicant's attention. At that point, the applicant investigated the matter. On October 12, 1994, Dennison & Associates, as Canadian patent agents for the applicant, sent a letter to the Commissioner of Patents requesting an extension of time, under Patent Rule 139, to enter the national phase. This letter was sent approximately 20 months after the application had been abandoned, 8 months after it had been deemed abandoned, and almost 3" months after the oversight had come to light.
Rule 139 made under the Patent Act gives the Commissioner the power or discretion to extend some deadlines. The applicant could not invoke this rule because it only applies within the national phase of the PCT system and the applicant never entered the national phase or applied to be reinstated within the twelve month deadline from its date of deemed abandonment.
In this case, the Commissioner's discretion falls to be exercised under sub-rule (2)(b) of Article 48 and not under section 139 of the Patent Rules, since the patent application had not yet entered the national phase.
In spite of the PCT Regulations under the Patent Act, the Commissioner of Patents does have the power or discretion to revive an international patent application beyond the twelve month deadline for reinstatement. This power exists by virtue of Article 48(2)(b) of the PCT and by virtue of its Rule 82bis.1. In Application des Gaz's Application29, Mr. Justice Falconer referred to the decision of Lord Diplock in E's Applications30 with respect to the intention of sub-rule 2(a) of Article 48 of the PCT. Respecting extensions of time limits, reviewing offices and Patent Offices of designated states are bound to treat international applications no less favourably than national applications, although they are at liberty to accord international applications more favourable treatment than national applications. Therefore, it is clear that sub-rule 2(b) of Article 48 of the PCT allows a further discretion to the Commissioner in respect of the extension of time for international applications.
The Commissioner of Patents, however, has chosen to limit the exercise of that power to the twelve month deadline currently set for reinstatement by the Regulations that incorporate the PCT into the Canadian law. Originally, the PCT Regulations under the Patent Act set a two month limit for reinstating international patent applications beyond their date of deemed abandonment. Experience soon proved this deadline to be too short. An amendment to the Regulations was sought to extend it to twelve months, being the same as the one set for the reinstatement of abandoned applications within the confines of the Canadian Patent Act and its Rules.
The amendment extending the deadline was first drafted in 1991 but it did not become effective until April 14, 1994. During this period, the Commissioner of Patents exercised his power by virtue of the PCT provisions and its Rules to reinstate all international patent applications deemed abandoned beyond the two month deadline but within the twelve month deadline. Since 1991, the Commissioner of Patents has chosen to exercise his power or discretion to reinstate international patent applications only when application for reinstatement was made within twelve months of deemed abandonment.
The Commissioner of Patents relied on the permissive authority in Article 48(2)(b) to extend the deadline for reinstatement from two to twelve months for the period from 1991 to April 18, 1994. Since then, the Commissioner has complied with the mandatory directive of sub-rule (2)(a) of Article 48 and has exercised his power to reinstate patent applications within the same deadline for both international and domestic applications, that is, twelve months.
However, sub-rule (2)(b) of Article 48 gives the Commissioner the authority and discretion to extend the deadline for reinstating international patent applicants beyond the twelve month deadline set by the PCT Regulations. There are no statutory guidelines to the exercise of the Commissioner's discretion under sub-rule (2)(b) of Article 48. However, the Commissioner, has decided to exercise this power only for applications for reinstatement made within the twelve month deadline.
Although the length of a delay is a proper consideration, it cannot prevail to the exclusion of any other relevant consideration especially where the very purpose of the grant of a discretion is to allow time limits to be extended.
In my opinion, the acting Commissioner has improperly fettered his discretion under sub-rule (2)(b) of Article 48 of the PCT by refusing to exercise it in all circumstances where the request for reinstatement is made beyond the self-imposed deadline of 12 months. In the words of Mr. Justice Le Dain in Maple Lodge Farms v. Canada31, the Commissioner "cannot fetter his discretion by treating the guidelines as binding upon him and excluding other valid or relevant reasons for the exercise of his discretion."
Accordingly, the application for judicial review is allowed and the decision of the Commissioner is set aside with a direction to exercise the discretion found in Article 48(2)(b) according to law.
__________________________
Judge
Ottawa, Ontario
March 5, 1997
__________________
1 See s. 15(1)(b) of the PCT Regulations under the Patent Act.
2 This twelve month period consists of two months under s. 15(3) of the PCT Regulations under the Patent Act at that point in time, and a further ten months pursuant to the Commissioner's power or discretion to reinstate under Article 48 (2) (b) of the PCT. On April 14, 1994, an amendment to section 15(3) came into force. A twelve month period is now prescribed by that section.
3 Peter Johnstone, Affidavit of Pierre Trépanier sworn on February 1, 1996, exhibit "N".
4 Lawrence John Dyson, Affidavit of Pierre Trépanier, exhibit "O".
5 The last paragraph of that letter reads as follows:
"In a letter dated November 21, 1994, Mrs C.R. Demers of the PCT section denied the request to extend period of reinstatement. After reviewing the evidence submitted, I do not see any reason why the refusal should be reversed. The refusal to extend the reinstatement period is therefore maintained."
There is nothing to indicate what evidence was considered.
6 For a description of the Patent Cooperation Treaty process, see:
-Hughes and Woodley on Patents, Butterworth, pp. 915 ss. -Henderson, Gordon F., Patent Law of Canada, Carswell, Toronto, 1994, pp. 83-99. -Takach, George Francis, A Canadian Compendium of Law and Practice, Juriliber, Edmonton, 1993, pp. 192-205.
7 Specific portions of this affidavit, sworn on February 1, 1996, were struck out by me at the opening of the hearing on a motion made by the applicant.
8 60 F.T.R. 128, confirmed by 166 N.R. 69 (C.A.).
9 For Canada, the international searching authority is the European Patent Office (the "EPO").
10 See PCT Rule 15(3) under the Patent Act.
11 The Patent Rules and PCT Regulations have been repealed and are now combined in new Patent Rules SOR/96-423, 28 August 1996.
12 The amendment became effective on April 14, 1994.
13 Parke Davis & Co. v. Fine Chemicals of Canada Ltd., (1959) 32 C.P.R. 43 (Ex. Ct.), at pp. 49-50.
14 These Regulations were made on September 21, 1989 and brought the PCT into effect in Canadian law as of January 2, 1990. Before, an amendment was made to the Patent Act authorizing the Governor in Council to make rules or regulations "notwithstanding anything in this Act, for carrying into effect the terms of the Patent Cooperation Treaty."
-Patent Act, R.S.C. 1985, c. P-4, s. 12 (1) (i).
15 Celltech Ltd. v. Commissioner of Patents, (1993) 46 C.P.R. (3d) 424 at 438 (Fed. T.D.), confirmed by the F.C.A. in (1994) 55 C.P.R. (3d) 59.
16 Section 15(3) of the PCT Regulations under the Patent Act.
17 139 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 for doing any act should be extended, the Commissioner may, either before or after the expiration thereof, extend the time.
18 Hercules v. Commissioner of Patents, (1985), 4 C.P.R. (3d) 289 at p. 297 (F.C.A.).
19 See Affidavit of Pierre Trépanier at paragraphs 58-66 & Exhibit "C" at pp. 2-3, paragraph 12, Exhibit "D", Annex, paragraph 3 and Exhibit "E" at paragraph 5.
20 The "Thesus Research Inc. Application".
21 See Respondent's Application Record, at pp. 184-185.
22 American Home Products Corporation v. ICN Canada Ltd. , (1985) 5 C.P.R. (3d) 1, at p.3 (F.C.A.). American Home Products Corporation v. Commissioner of Patents , (1983) 71 C.P.R. (2d) 9, at pp. 9-10 (F.C.A.).
23 See : -Garant , Patrice, Le droit administratif, 4e édition, 1996, Les Editions Yvon Blais, vol. 2 Le Contentieux, pp.386ss. -Craig P.P., Administrative Law, Sweet and Maxwell, London, 1994, 3rd. ed., pp.391-400. -Gordon, Richard, Judicial Review: Law and Procedure, Sweet and Maxwell, London, 1996, pp. 210-216. -De Smith, Woolf & Jowell, Judicial Review of Administrative Action , Sweet and Maxwell, London, 1995, 5th. ed., pp.505-519.
24 (1995) 21 O.R. (3d) 105 (CA), at pp. 108-109.
25 Law Reform Commission of Canada, Report 26, 1985, at p.31.
26 (1982) 2 S.C.R. 2, at p. 6.
27 Capital Cities Comm. Inc. v. C.R.T.C. (1978) 2 S.C.R. 141, at pp. 170-171.
28 (1994) 2 S.C.R. 557, at p. 596.
29 (1987) R.P.C. 279 (Patent Court).
30 (1983) R.P.C. 231 at 251. (H.L.).
31 (1981) 1 F.C. 500, at p. 513. Mc Intyre J. referred to Le Dain J.' s opinion in (1982) 2 S.C.R. 2, at p.6.
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