Date:
20110404
Docket:
T-121-10
Citation:
2011 FC 407
Toronto, Ontario, April 4, 2011
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
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EXCELSIOR MEDICAL CORPORATION
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Applicant
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and
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ATTORNEY GENERAL OF CANADA
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
Application deals with the payment of maintenance fees in respect of a pending
Canadian patent application and, more particularly, with whether those fees
were paid by the proper person and accepted by the Patent Office, and the
effect of that acceptance. The Patent Office ultimately took the position that
the application was “dead”. The Applicant herein, the person applying for the
patent, seeks a declaration that the application is not dead, and should
continue to be processed by the Patent Office.
[2]
For
the reasons that follow, I find that the application is dismissed with costs.
[3]
The
facts before the Court have been set out in the affidavit of Bill Anderson,
Vice-President of the Applicant Excelsior Medical Corporation, accompanied by
several exhibits and in the affidavit of J. Scott Vasudev, employed in the
Canadian Patent Office as Chief, Patent Administrative Policy, Classification
and International Affairs Division, which is also accompanied by several
exhibits. There was no cross-examination upon either affidavit.
[4]
The
following facts, as determined from this evidence, are relevant to the issue
before the Court:
1.
A
company known as Vasca Inc. filed a patent application outside Canada under the provisions of the international Patent Co-Operation Treaty (PCT)
on July 9, 2001. The application pertains to a medical device.
2.
Under
the provisions of the PCT, patent applications could subsequently be filed in
any one or more of the member countries, such as Canada, within a stipulated time
period and be afforded the filing date of the original application, July 9, 2001.
This is termed as entering the national phase.
3.
Vasca
engaged a United States patent attorney firm (Everest) to supervise the filing
of national phase patent applications through patent agents in various
countries in which Vasca wished to receive patents. Several countries were
selected, including Canada.
4.
An
application (entering the national phase) was filed in Canada on December 2, 2002 based on the earlier PCT application. The Canadian
Application was given number 2,414,481. At that time, the Canadian patent
agent firm of record was Fetherstonhaugh & Co. That firm was being
instructed by Everest.
5.
On
or about 13 September 2006, the Canadian patent application, together with related
patents and patent applications in other countries, were assigned by Vasca to
the Applicant Excelsior.
6.
The
Canadian Patent Act, RSC 1985, c P-4 and Patent Rules SOR/96-423,
require that periodic maintenance fees shall be paid in order that patent
applications and patents shall remain alive. A grace period is provided in the
event that the time for paying such a fee is missed.
7.
At
about the time of the assignment of the patent applications and patents from Vasca
to Excelsior the deadline for payment in respect of the payment of maintenance
fees for the Canadian application had been missed. However, the application
could be revived within the grace period.
8.
A
different firm of Canadian patent agents, Oyen Wiggs, was selected to continue to
prosecute the Canadian patent application on behalf of Excelsior. Instructions were
given to Fetherstonhaugh & Co., by Everest, to transfer the file to Oyen Wiggs.
That transfer took place some time after 6 March 2007.
9.
The
deadline for reinstatement of the Canadian application within the grace period,
by requesting reinstatement and paying the relevant fees, was July 10, 2007.
10.
On
July 9, 2007, Oyen Wiggs filed a letter with the Canadian Patent Office, requesting
reinstatement and paying the relevant fees. At that time, only Fetherstonhaugh
& Co., and not Oyen Wiggs, was the patent agent of record. The copy of
this letter found in the Patent Office file bears a stamp stating: “Retablissement
approuve par: Reinstatement Approved by:” with a signature and dated
July 19, 2007.
11.
On
August 8, 2007, the Canadian Patent Office sent a Notice of Reinstatement to Fetherstonhaugh
& Co. advising that the prescribed fee had been received and that “The
application has been reinstated”. This Notice indicates the owner as being
Vasca.
12.
On
August 22, 2007, the Canadian Patent Office sent a letter to Fetherstonhaugh &
Co. stating:
Please disregard the Acknowledgement of
reinstatement mailed to you on August 8, 2007.
The maintenance fee and reinstatement fee should not
have been accepted because the payor was not the authorized correspondent.
We apologize for any inconvenience which this error
may have caused.
13.
On
the same day, August 22, 2007, a similar letter was sent by the Canadian Patent
Office to Oyen Wiggs. It stated:
Reference is made to your letter dated July 9, 2007
regarding a maintenance and reinstatement fee payment.
When an application is pending, the fee to maintain
that application may only be paid by the authorized correspondent in regard to
that particular application. Please refer to the provisions of subsection 6 (1)
of the Patent Rules.
In accordance with section 4 of the Patent Rules, a
refund in the amount of $600.00, will be issued upon request.
14.
The
affidavit of Vasudev, the employee of the Canadian Patent Office, explains the
above correspondence by stating that the procedures in place in that Office provide
for certain scanning and bar-coding of correspondence received without substantive
verification. Only later is the correspondence substantively reviewed. Certain
reply correspondence is generated automatically by the Office even before
a substantive review. This appears to be what happened in this case; the letter
of August 8, 2007 was generated automatically. The subsequent letters of August
22, 2007 were sent after a substantive review.
15.
By
letter dated December 10, 2007 Oyen Wiggs referred to the Patent Office’s letter
to them of August 22, 2007 stating that the application had been designated as
“dead” and requested a refund of the fees paid.
16.
By
letter dated June 18, 2008, the Canadian Patent Office refunded the fees to Oyen
Wiggs.
17.
On
December 23, 2009, Oyen Wiggs filed a letter with the Canadian Patent Office
including a document appointing Oyen Wiggs as associate patent agent, requesting
that they be made an associate patent agent of record in respect of the Canadian
patent application at issue. No previous attempt had been made to make that
firm of record as agent or associate agent. The letter stated that the document
was intended “...to reflect the de facto appointment which was in
place at the time…” July 9, 2007.
18.
On
January 28, 2010, the Canadian Patent Office sent a letter to Oyen Wiggs stating
that the patent application was dead beyond the point of reinstatement. In particular,
the letter stated:
The Current State of this application is Dead, and
is beyond the point of reinstatement.
All further prosecution of this case is terminated.
Consequently, all Office Action requests and payments have been refused and
declined, including the Appointment of Agent, the Requests for Reinstatement,
the Request for Examination, and the payment of Maintenance Fees.
A refund will be initiated upon written request only
19.
As
similar letter was sent by the Patent Office the same day to Fetherstonhaugh &
Co.
20.
This
present application was filed shortly after.
[5]
There
have been numerous cases in this Court and the Federal Court of Appeal dealing
with the payment of maintenance fees. Most of those cases deal with a situation
where there was no effort made to pay those fees until after the expiry of all
relevant time periods, in which case the Commissioner cannot accept the fees.
Other cases deal with a situation where fees were tendered within the relevant
period, but the Commissioner refused to accept them because they were not
tendered by a patent agent of record. Again, the Courts have found that the
Commissioner’s decision was correct.
[6]
In
the present case:
•
the
fees were tendered within the relevant time period;
•
the
firm tendering the fees was not a patent agent of record;
•
the
Patent Office accepted those fees and sent a notice to the patent agent of record
stating that the application had been reinstated;
•
the
Patent Office, a few days later, sent a further letter to the patent agent of
record stating that the earlier letter should be disregarded;
•
that
same day, the Patent Office sent a letter to the firm tendering payment offering
to refund the fees;
•
several
months later, the firm tendering the fees requested a refund. The fees were
refunded;
•
about
two years later, the tendering firm submitted to the Patent Office an
appointment of associate agent, the covering letter stating that it was intended
to reflect a de facto arrangement in place at the time the fees were originally
tendered;
•
the
Patent Office sent a letter to the firm and the patent agent of record stating
that the application could not be reinstated. This is the subject of this judicial
review.
[7]
The
evidence from the Applicant’s side consists of the affidavit of a Vice
President of the Applicant stating, particularly at paragraphs 22 to 25, that
it was always the Applicant’s intent to pursue its patent rights, that it instructed
others for that purpose, and it was only in late 2009 that the Applicant was
made aware that something was amiss. There was no cross-examination.
[8]
What
the Court does not have is any evidence from the United States Patent Attorney
or the Canadian Patent Agent firm of record or the firm that tendered the fees
and subsequently sought reimbursement, as to what happened from their point of
view, or why they took the actions they did, or did not take other actions. One
can speculate, but I will not do so. In sum, what the Court does not have is
any evidence of detrimental reliance by any of them on the letter sent from the
Patent Office, and subsequently revoked, that the application had been
reinstated.
[9]
The
Respondent filed the affidavit of a Patent Office employee, Vadusev, upon which
there was no cross-examination. That affidavit says, in effect, that at the
time period in question, the Patent Office gave only cursory examination of
correspondence paying maintenance fees. A subsequent substantive examination
would reveal errors. This practice is regrettable, and seems to have led to,
first, the letter advising as to the reinstatement, and then to the subsequent
letter withdrawing the first letter.
[10]
The
Applicant seeks to have this Court declare that the second letter revoking the
first is a nullity, and that the application is in good standing or, in the
alternative, quashing the second letter and directing that the Patent Office
continue the prosecution of the application.
[11]
The
Respondent objected to the jurisdiction of the Court to deal with such a
request on the basis that, if the second letter (the “revocation” letter) is a
nullity as the Applicant argues, then there is nothing upon which the Court may
make a judicial review. I reject that argument. It pre-supposes the result.
The Court is asked by the Applicant to make a declaration and, in the
alternative to grant, in effect, certiorari and mandamus. I
repeat what O’Reilly J. wrote in F. Hoffman-La Roche AG v Canada (Commissioner of Patents), [2004] 2 FCR 405, 2003 FC 1381, (aff’d 45 C.P.R. (4th)
1, 2005 FCA 399) at paragraphs 19 and 20:
19 I believe this issue was decided in
the case of Pfizer Inc. v. Canada (Commissioner of Patents)
(1999), 1 C.P.R. (4th) 200 (F.C.T.D.), overturned on other grounds: (2000), 9
C.P.R. (4th) 13 (F.C.A.). The Court held that judicial review was available in
respect of declarations, set out in letters from the Commissioner of Patents to
a patent holder, that a particular patent was valid. Judicial review is
available in respect of any "decision, order, act or proceeding of a
federal board, commission or other tribunal":
Federal Courts Act, R.S.C., 1985, c. F-7 [s. 1
(as am. by S.C. 2002, c. 8, s. 14)], subsection 18.1(3) [as enacted by S.C.
1990, c. 8, s. 5; 2002, c. 8, s. 27]; Markevich v. Canada,
[1999] 3 F.C. 28 (T.D.). To my mind, this language is broad enough to encompass
the Commissioner's notice to Hoffmann-La Roche that its patent had lapsed.
20 That is not to say, however, that
the Commissioner made a formal decision that would necessarily attract the
requirements of procedural fairness or other incidents of administrative
decision making. This will be discussed further below. For present purposes, I
need only find that judicial review is available here. In my view, that
threshold has been met.
[12]
The
Applicant raised four matters for consideration in oral argument at the
hearing:
1.
Is
Rule 6 (1) of the Patent Rules inconsistent with 73 (3) of the Patent
Act such that the Commissioner must accept payment of maintenance fees from
anyone purporting to tender them on behalf of the Applicant?
2.
Does
Rule 6 create a positive duty only on the Commissioner and no positive duty exists
on an Applicant to tender maintenance fees only through an authorized
representative?
3.
Will
the court grant relief as a matter of equity?
[13]
A
fourth point was raised, but not pursued without conceding that it could not be
raised on appeal; namely, that the December 2009 filing of an associate agent
appointment should have been accepted by the Commissioner with retroactive
effect. This point was not clearly raised in the Applicant’s written memorandum
and not actively pursued at the hearing. I will not give further attention to
this matter.
ISSUE #1 Is Rule 6 (1)
of the Patent Rules inconsistent with 73 (3) of the Patent Act
such that the Commissioner must accept payment of maintenance fees from anyone purporting
to tender them on behalf of the Applicant?
[14]
This
issue requires an examination of the Patent Act, RSC 1985, c P-4 and the
Patent Rules, SOR/96-423. The patent application at issue was filed with
an effective date of July 9, 2001; thus, the provisions of the post-October 1,
1989 Patent Act apply. The Patent Act contains an unusual
provision in section 12(2):
12. (2) Any rule or regulation made
by the Governor in Council has the same force and effect as if it had been
enacted herein.
[15]
There
has been no jurisprudence dealing specifically with this section. The Supreme
Court of Canada in Bristol-Myers Squibb Co. v Canada (Attorney General),
[2005] 1 S.C.R. 533, in dealing generally with the Patent Act and Notice
of Compliance Regulations wrote that the two
should be read together, but that
the Regulations were constrained by the Act. Binnie J. for the
majority wrote at paragraphs 37 and 38:
37 BMS
argues that once it is established that paclitaxel
is present in the Biolyse product, s. 5(1.1) bars the issuance of a NOC.
Biolyse responds that the BMS approach is too simplistic. Biolyse invokes the
modern approach to statutory interpretation, which it says is equally
applicable to regulations, as set out in Rizzo & Rizzo
Shoes Ltd. (Re),
[1998] 1 S.C.R. 27. In that case, the Ontario Employment
Standards Act provided for termination pay and severance pay for workers
where their employment was terminated by an employer. Rizzo Shoes went
bankrupt. The trustee disallowed the workers' claims because their jobs had
been terminated by the bankruptcy, not by the employer. The Ontario courts
agreed with the trustee. This Court reversed, Iacobucci J. observing as
follows:
At the heart of this conflict is an issue of statutory
interpretation. Consistent with the findings of the Court of Appeal, the plain meaning of the words of the provisions here in
question appears to restrict the obligation to pay termination and severance
pay to those employers who have actively terminated the employment of their
employees. At first blush, bankruptcy does not fit comfortably into this
interpretation. However, with respect, I believe this
analysis is incomplete.
... Elmer Driedger in Construction of Statutes
(2nd ed. 1983) best encapsulates the approach upon which I prefer to rely. He
recognizes that statutory interpretation cannot be founded on the wording of
the legislation alone. At p. 87 he states:
Today there is only one principle or approach, namely, the
words of an Act are to be read in their entire context and in their grammatical
and ordinary sense harmoniously with the scheme
of the Act, the object of the Act, and the intention of Parliament.
. . .
Although the Court of Appeal looked to the plain meaning of the
specific provisions in question in the present case, with respect, I believe that the court did not pay sufficient attention to
the scheme of the ESA, its object or the intention of the legislature; nor was
the context of the words in issue appropriately recognized. I now
[page558] turn to a discussion of these issues. [Emphasis added; paras. 20, 21
and 23.]
38 The
same edition of Driedger adds that in the case of regulations, attention must
be paid to the terms of the enabling statute:
It is not enough to ascertain the meaning of a regulation when
read in light of its own object and the facts surrounding its making; it is
also necessary to read the words conferring the power in the whole context of the
authorizing statute. The intent of the statute transcends and governs the
intent of the regulation.
(Elmer A. Driedger, Construction of Statutes
(2nd ed. 1983), at p. 247)
This
point is significant. The scope of the regulation is constrained by its enabling
legislation. Thus, one cannot simply interpret a regulation the same way one
would a statutory provision. In this case, the distinction is crucial, for when
viewed in that light the impugned regulation cannot take on the meaning
suggested by BMS. Moreover, while the respondents' argument draws some support
from the language of s. 5(1.1) isolated from its context, it overlooks a number
of significant aspects of the "modern approach".
[16]
An
analogous situation was dealt with by Justice de Montigny in M-Systems Flash
Disk Pioneers Ltd. v Canada (Commissioner of Patents) (2010), 83 CPR (4th)
423, 2010 FC 441 (affirmed 2011 FCA 112). He discussed an earlier decision of
Justice Mosley in DBC Marine Safety Systems Ltd. v Canada (Commissioner of Patents) (2007), 62 CPR (4th) 279. Justice de Montigny
wrote at paragraphs 35 and 40:
35 The facts in that case were quite
similar to the situation at bar. The applicant had been sent an Office Action
with two requisitions, one pursuant to Rule 29 and one to Rule 30. The
applicant in that case was also warned of the risk of multiple abandonments
with the standard language quoted in paragraph 29 above. The applicant replied
to the Rule 30 requisition within the delay, but overlooked the Rule 29
requisition. The application was deemed abandoned pursuant to section 73(1)(a)
of the Act and the one year delay for reinstatement
started running. The maintenance fee was accepted and no formal or informal
notice of the deemed abandonment was communicated to the applicant. As in the
present case, a notice of abandonment was prepared but never sent to the
applicant. The applicant eventually filed the missing documents and
unsuccessfully sought reinstatement, after the expiry of the provided deadline.
. . .
40 As for the argument that the
required information could be found by the patent examiner in foreign patent
databases, I find it immaterial. The Governor in Council has seen fit to impose
on the applicant the obligation to provide the particulars of the prosecution
of any foreign patent application for the same invention. So long as Rule 29
has been validly enacted pursuant to section 12 of the Act and is not incompatible with s. 73 of that same Act, it must be applied. It is not for this Court to
second guess the policy behind that Rule.
[17]
I
also refer to Sullivan and Driedger on the Construction of Statutes (4th)
ed. Butterworth, at page 272:
Statutes are paramount over regulations. The
presumption of coherence applies to regulations as well as to statutes. It is
presumed that regulatory provisions are meant to work together, not only with
their own enabling legislation but with other Acts and other regulations as
well. In so far as possible the courts seek to avoid conflict between statutory
and regulatory provisions and to give effect to both. Where conflict is
unavoidable, normally the statutory provision prevails.
[18]
Given
the foregoing and, in particular, section 12(2) of the Patent Act, the
Court is required to interpret the Act and Rules as working
together harmoniously.
[19]
It
is only where there is a clear contradiction that the Act must prevail.
Ambiguities are to be resolved on the basis of a homogeneous working together
of the Act and the Rules.
[20]
In
the present circumstances, I turn first to the Patent Act. Sections
27(1) and (2) require that an application for a patent must be filed by the
inventor or the inventor’s legal representative:
Commissioner may grant patents
27. (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.
Application requirements
(2) The prescribed application fee must be paid and the
application must be filed in accordance with the regulations by the inventor or
the inventor’s legal representative and the application must contain a petition
and a specification of the invention.
[21]
Section
2 defines “legal representative” as those acquiring an interest in the title
from a patentee:
“legal representatives” includes heirs,
executors, administrators, guardians, curators, tutors, assigns and all other
persons claiming through or under applicants for patents and patentees of
inventions;
[22]
The
inventor may assign his or her interest in a patent as set out in section 50(1)
of the Act:
Patents to be assignable
50. (1) Every patent issued for
an invention is assignable in law, either as to the whole interest or as
to any part thereof, by an instrument in writing.
[23]
Where
the applicant for a patent is apparently not a Canadian resident, a
“representative person or firm” must be nominated, which person is deemed “for
all purposes of this Act” to be the representative of the patentee including for
service of proceedings. Section 29(1) and (2) of the Patent Act provide:
Non-resident applicants
29. (1) An applicant for a patent who does not appear to reside
or carry on business at a specified address in Canada shall, on the filing date
of the application, appoint as a representative a person or firm residing or
carrying on business at a specified address in Canada.
Nominee deemed representative
(2) Subject to this section, a nominee of an applicant shall be
deemed to be the representative for all purposes of this Act, including the
service of any proceedings taken under it, of the applicant and of any patentee
of a patent issued on his application who does not appear to reside or carry on
business at a specified address in Canada, and shall be recorded as such by the
Commissioner.
[24]
It
must be noted that such person is the representative for all purposes
of the Act.
[25]
Section
73(3) of the Patent Act provides for reinstatement of an application by
the applicant:
73. (3) An application deemed to be abandoned under this section
shall be reinstated if the applicant…
[26]
Turning
to the Patent Rules, Rule 20(1) provides for an appointment of a patent
agent to prosecute an application:
20.
(1) An applicant who is not an inventor shall appoint a patent agent to
prosecute the application for the applicant.
[27]
It
is to be noted that the “patent agent” is not necessarily the “representative”,
although it may be the case, and usually is, that the agent is both.
[28]
Rule
6(1) of the Patent Rules is critical to this case. It provides that the
Commissioner shall only have regard to communication, including those
respecting maintenance, from an “authorized correspondent”:
6.
(1) Except as provided by the Act or these Rules, for the purpose of
prosecuting or maintaining an application the Commissioner shall only
communicate with, and shall only have regard to communications from, the
authorized correspondent.
[29]
Rule
2, “authorized correspondent”, defines such a person as the applicant where no
patent agent has been appointed, or the patent agent where one has been
appointed:
"authorized correspondent" means, in
respect of an application,
(a)
where the application was filed by the inventor, where no transfer of the
inventor's right to the patent or of the whole interest in the invention has
been registered in the Patent Office and where no patent agent has been
appointed
(i)
the sole inventor,
(ii) one of two or more joint inventors
authorized by all such inventors to act on their joint behalf, or
(iii) where there are two or more joint
inventors and no inventor has been authorized in accordance with subparagraph
(ii), the first inventor named in the petition or, in the case of PCT national
phase applications, the first inventor named in the international application,
(b)
where an associate patent agent has been appointed or is required to be
appointed pursuant to section 21, the associate patent agent, or
(c)
where paragraphs (a) and (b) do not apply, a patent
agent appointed pursuant to section 20;
[30]
The
Federal Court of Appeal has recently considered many of these provisions in Unicrop
Ltd. v Canada (Attorney General), Feb 11, 2011, 2011 FCA 55. Noël J.A. for the
Court wrote at paragraphs 24, 34 and 35:
24 The Rules also determine who may
communicate with the Commissioner. At the core of this appeal is subsection
6(1) of the Rules, which provides that the Commissioner shall only communicate
with the authorized correspondent:
6. (1) Except as
provided by the Act or these Rules, for the purpose of
prosecuting or maintaining an application the Commissioner shall only
communicate with, and shall only have regard to communications from, the
authorized correspondent.
* * *
6. (1) Sauf
disposition contraire de la Loi ou des présentes règles, dans le cadre de la poursuite ou du maintien d'une demande, le
commissaire ne communique qu'avec le correspondant autorisé en ce qui concerne
cette demande et ne tient compte que des communications reçues de celui-ci à
cet égard.
. . .
34 In the present case, the relevant
provisions of the Rules could not be clearer. Subsection 6(1) directs that the
Commissioner shall not have regard to communications other than those from an
authorized correspondent. The wording of section 3.1, which deals with the late
payment of fees, makes it clear that this prohibition extends to communications
relating to all such payments as it operates "subject to subsection
6(1)".
35 It
follows that there is no ambiguity to be resolved in favour of the appellant.
The scheme of the Act contemplates there can only be one authorized
correspondent at any given point in time. If, as here, there is an authorized
correspondent on record, that correspondent continues in office until its
appointment is revoked and another is appointed. Only an appointment or a revocation
filed with the Commissioner pursuant to section 20 of the Rules can operate a
change and neither can take effect before being filed with the office of the
Commissioner.
[31]
In
the case now before me, the Applicant argues that, since the provisions of section
73(3) of the Patent Act clearly provide that the applicant can
seek reinstatement of an application by paying the appropriate fee, then the
applicant or any agent can do so. The restriction of Rule 6(1) stating
that the Commissioner shall only have regard to communications from an
authorized correspondent does not apply, or, if seemingly applicable, cannot
apply since it is in conflict with sections 73(3) of the Act.
[32]
While
I have much sympathy with this argument, a matter which I canvassed in Sarnoff
Corp. v Canada (Attorney General) (2008), 66 CPR (4th) 167, 2008
FC 712, the Federal Court of Appeal in Unicrop, supra, has described
these comments as “obiter”. In any event, to the extent that such arguments
were not raised in Sarnoff or Unicrop, I interpret Rule 6(1),
when read harmoniously with subsection 73(3) of the Patent Act, as well
as the other provisions of that Act and Rules previously referred
to, as creating an orderly scheme for the prosecution of applications and
payment of maintenance fees through the applicant; or, where a patent agent has
been appointed, through that agent. The numerous cases that have arisen where
hardship has resulted largely through inadvertence, speaks to a need to reform
the Rules. As they stand, the Rules provide for a generous grace
period to seek reinstatement, but do not provide to the Commissioner or the
Court a discretion to bend the Rules. In my view, the Rules may
be one-sided in protecting only the needs of the Patent Office and not of
private practitioners. This may require revision to the Rules, but not
by the Court.
ISSUE #2 Does Rule 6
create a positive duty only on the Commissioner and no positive duty exists on
an Applicant to tender maintenance fees only through an authorized representative?
[33]
Rule
6(1) states that the Commissioner shall have regard only to
correspondence to and from an authorized correspondent. The Applicant argues
that there is no obligation on the applicant or the applicant’s agent to
communicate with the Commissioner only through an authorized correspondent. I
repeat Rule 6(1):
6.
(1) Except as provided by the Act or these Rules, for the purpose of
prosecuting or maintaining an application the Commissioner shall only
communicate with, and shall only have regard to communications from, the
authorized correspondent.
[34]
I
have found Rule 6(1) to be in harmony with the Patent Act and the other
pertinent Patent Rules. The Commissioner may safely ignore
communications respecting an application or maintenance fees which do not come
from an authorized representative. However, what is the result, as in this
case, where the Commissioner does not ignore the communication, but acts upon
it? What is the effect of a subsequent attempt by the Commissioner to withdraw
what was done?
[35]
The
late Justice Cullen of this Court dealt with such an issue in Pfizer Inc. v Canada (Commissioner of Patents) (1999), 1 CPR (4th) 200, where maintenance
fees were paid in respect of several patent applications. Some of those fees
were paid beyond the time for reinstatement. The Patent Office sent a notice
saying that all the applications were reinstated. Subsequently, it sent a
notice saying that there was a mistake respecting those applications where the
fee had been paid too
late. Justice Cullen found that the
Commissioner could not retract the notice of reinstatement and that the
reinstatement prevailed. He wrote at paragraphs 29 to 32:
29 In light of the applicant's patent
agents' letter of 2 March 1998, which specifically requests reinstatement
(albeit in the language of petitioning), the earlier letter of 10 March 1997
cannot be read as a similar request for reinstatement. The Patent Act requires
that a request for reinstatement be made. This implies something be asked for,
which is an overt act in itself. The letter is not capable of being construed
as a request for reinstatement-while it certainly contains a request, per se,
it requests an amendment to the application itself and fails to deal in any way
with the issue of reinstatement, unlike the later letter of 2 March 1998.
30 Notwithstanding
this lapse and apparent failure to satisfy the requirements of section 73(3),
the Patent Office issued a Notice of Reinstatement on 24 February 1998. Nothing
in either the Patent Act or Patent Rules provides for the withdrawal or
retraction of a Notice of Reinstatement.
31 Tribunals have limited
post-decision powers that allow for reconsideration in very narrow
circumstances. These include, inter alia, instances where a party was not
notified of the proceeding, required procedure was not followed, or clerical
errors. Aside from such circumstances, a tribunal is considered functus officio
once a decision has been rendered.
32 In
the instant case, the Notice of Reinstatement was sent to the applicant, and
the applicant adjusted its affairs on the basis that its 371 application was
reinstated and being processed through the Patent Office. Nothing in the Act or
Rules permits the Patent Office to retract such a notice, and until or unless
the applicant abandons its application, the Notice of Reinstatement should
govern.
[36]
The
Federal Court of Appeal in its decision reported at (2000), 9 CPR (4th)
13 reversed this decision. The applications were already dead and could not be
reinstated, even if the
Commissioner inadvertently sent a
notice of reinstatement. Isaac J.A. for the Court wrote at paragraph 23:
23 From a reading of the Act, it is
plain that subsection 73(3) of the Act provides that reinstatement of an
abandoned patent application will occur if three statutory requirements are met
and not when the Patent Office issues a Notice of Reinstatement. The three
requirements are: (1) a request for reinstatement has been made; (2) the action
which should have been taken to avoid the abandonment has been taken; and (3) a
reinstatement fee has been paid. Section 152 of the Rules clearly requires that
the request for reinstatement of a patent application be made within 12 months
from the date on which a patent application was deemed to be abandoned. In this
case, the date of abandonment was 27 January 1997. Thus, the deadline for
making a request for reinstatement was 27 January 1998. The respondent failed
to make its request until 5 February 1998. This is clearly outside the
statutory time limit prescribed by section 152 of the Rules. As a consequence,
the application could not be reinstated in law.
[37]
The
present case is different from the case in Pfizer in that, as of the
date that the fees were submitted, the application was not “dead”. It was still
alive. The Patent Office accepted those fees, even if submitted by somebody
other than the “authorized correspondent”, and notified the correct party, the
patent agent of record, that this application had been reinstated. Only a few
days later, after the relevant time period was passed, did the Patent Office
notify the patent agent of record that it should not have reinstated the
application. By then, it was too late. The Applicant or its agents, or
somebody, had made a mistake (I made no finding in this regard). The Patent
Office had made a mistake. It could not be made right. The Patent Office is unwilling
to share any responsibility. Its letter of August 22, 2007 to Fetherstonhaugh
& Co. simply states, “We apologize for any inconvenience…” a phrase
one hears too often.
[38]
Nothing
in Rule 6 or elsewhere in the Patent Act or Patent Rules says
anything about what happens when the Commissioner, notwithstanding Rule 6(1),
receives and acts upon a communication. All of this was done in the present
case when the application was alive, not dead. The payment of a maintenance
fee, unlike the prosecution of a patent application, is a simple clerical
function. Where that function has been performed within the relevant time
periods, there is no provision to “un-perform” that function.
[39]
This
case is different from that considered by the Federal Court of Appeal in Actelion
Pharmaceuticals Ltd. v Canada (Attorney General), (2008), 64 CPR (4th)
381, 2008 FCA 90. In that case, the applicant endeavoured to rely on a very
general statement made in a letter paying a first maintenance fee as
authorizing the payment of all fees. The reasons of the Court delivered by
Sexton J.A. repeat this letter at paragraph 4:
4 Assuming
that it was paying the first maintenance fee, on July 15, 2005 the appellant
wrote the following letter to the Commissioner ("the appellant's
letter"):
Included in today's payment is the maintenance fee of $100.00
which is required for anniversary 2 for this case. The applicant has elected to
pay this fee as a Regular entity.
The Commissioner is hereby authorized to debit any additional fee
or credit any overpayment associated with this communication directly from or
to our deposit account...
[40]
Sexton
J.A. rejected the argument that this letter authorized payment of all maintenance
fees. He wrote at paragraphs 11 and 12:
11 I also agree with the concerns of
the applications judge with respect to the possible implications of the
appellant's reasoning: it would lead to the absurd result where every time
payment of a maintenance fee is offered using the sort of boiler-plate form
noted above, the Commissioner should read into the payment an implicit request
for reinstatement or some other implicit request in order to maintain their
patent application in good standing. CIPO receives many patent applications and
letters relating to such patent applications each year. Would staff members of
CIPO now have to read every letter that comes into its office with a view to
inferring some intention of the writer not clearly specified? Such an outcome
would lead to potentially inconsistent results. This outcome seems even more
serious when one considers third parties who may be scrutinizing the file of a
patent application and relying on the contents of that file. Will they also
have to see whether or not certain words can possibly be construed as a request
for reinstatement? Those third parties may wish to rely on an apparent absence
of a request for reinstatement and take action which would constitute
infringement in the event that the patent eventually issues. The appellant's
interpretation of the Patent Act and the
boiler-plate language would force innocent third parties to choose between
waiting for some resolution of the problem or proceeding with actions which may
put themselves at risk. Finally, it is difficult to imagine what other
implications there would be if the appellant's interpretation is accepted. What
other uncertainties would be created?
12 The
onus is on the applicant to comply with the Patent Act, rather than on the Commissioner to attempt to
interpret vague communications. That was the approach taken by Justice
Létourneau in F. Hoffman-LaRoche AG v. Canada (Commissioner of Patents), [2005] F.C.J. No. 1977, 2005 FCA 399 at paragraph 6:
However, whatever errors the Commissioner may have committed in
its own internal classification of the patent for administrative purposes,
these errors do not have the effect of relieving the
appellant of its statutory obligations under the Act. Nor do they have the
effect of creating, in relation to section 46, a joint or shared responsibility
that would allow avoidance of the legal consequences resulting from the
appellant's failure to comply with section 46.
[Emphasis added.]
I
recognize that this case was about a re-issuing of a patent and not a
reinstatement of a patent application but the principle remains the same.
[41]
In
the present case, the letter tendering the maintenance fees (9 July 2007) was
very specific as to the patent application in question and as to the fees to be
paid. Once that letter and fees had been received and accepted by the
Commissioner during the period where the application was alive, that was the
end of the matter. The Commissioner had no authority to undo the situation.
[42]
However,
that is not the end of the matter. In the letter of August 22, 2007 from the
Patent Office to the firm that had paid the maintenance fee, the Office offered
a refund upon request. In December 2007, that firm requested a refund. In June
2008, that refund was given. Therefore, there were no maintenance fees paid effective
as of June 2008. The patent application was truly dead at that time when the
refund was given.
[43]
Had
a timely dispute been raised in or about August 2007 when the Commissioner sent
the letter revoking the reinstatement, whether in the Patent Office or in the
Court, the situation would have been different. As of that time the maintenance
fees had been paid and accepted. As of June 2008, the maintenance fees had been
returned. The application lay dead.
[44]
In
December 2009, the firm that had tendered the fees used what I can only
describe as a “Hail Mary” play attempting to persuade the Patent Office that
they had been an associate patent agent all along by tendering a nunc pro
tunc appointment to that effect. The Patent Office rightly rejected that attempt.
[45]
As
a result, the patent application was certainly dead as of June 2008 when the
fees were returned.
ISSUE #3 Will
the court grant relief as a matter of equity?
[46]
The
Applicant, as an alternative, asks the Court to invoke its equitable
jurisdiction to rectify what it calls, and what I also call, a purely technical
error in which the only party to suffer was the Applicant itself.
[47]
Section
20(2) of the Federal Courts Act, RSC 1985, c F-7 gives this Court
jurisdiction in many intellectual property matters not only arising from an Act
of Parliament, but also at law or in equity:
20. (2) The Federal Court has concurrent
jurisdiction in all cases, other than those mentioned in subsection (1), in
which a remedy is sought under the authority of an Act of Parliament or at law
or in equity respecting any patent of invention, copyright, trade-mark,
industrial design or topography referred to in paragraph (1)(a).
[48]
However,
the Court cannot invoke its equitable jurisdiction randomly, or simply upon
request. A proper basis for invoking that jurisdiction must be demonstrated.
[49]
The
Applicant refers to relief against forfeiture, a matter that I referred to in Sarnoff,
supra. The Applicant also cited the Supreme Court of Canada decision in
Kenora (Town) Hydro Electric Commission v Vacationland Dairy Co-operative Ltd.,
[1994] 1 S.C.R. 80. I repeat what Major J. for the majority wrote at pages 111
to 112 in order to emphasize what was written in the middle of that paragraph;
namely, that in that case, the record showed that the party had acted to its
detriment in reliance upon the mistaken actions of the other party:
A statute can only affect the operations of the
common law principles of restitution, and bar the defence of estoppel or change
of position where there exists a clear positive duty on the public utility
which is incompatible with the operation of those principles. The application
of the principles of restitution to the case at bar can be briefly summarized.
A benefit in the form of electricity was conferred on the Co-op at the expense
of Kenora Hydro. The law of restitution would normally force the Co-op to
return the value of the benefit to Kenora Hydro unless that value was no longer
in the Co-op’s possession because of a change of position. In this case, the Co-op
successfully proved that it acted to its detriment in reliance on the billing
statements for its own billing and budgetary purposes and that therefore the
value of the electricity no longer existed for the purposes of restitutionary
relief. Kenora Hydro conceded that this was in fact the case in the Court of
Appeal and confirmed it before this Court. The defence of estoppel is thus an
expression of what the common law has considered to be sufficient justification
to release a defendant from liability in the pursuit of fairness, and applying
those principles to this case, the Co-op would no longer be liable to Kenora
Hydro.
[50]
I
have no such evidence in the present case. The affidavit filed by the Applicant
simply says that the Applicant relied upon its United States attorney and
Canadian patent agent and simply assumed things were in good order until late
2009. There is no evidence from that attorney or that agent as to what they did
or what reliance was placed on the Patent Office’s actions, if any. The record
indicates that, by requesting a refund of fees in December 2007, the Canadian
patent agent firm that had tendered the fees apparently acquiesced in what the
Patent Office did.
[51]
Under
these circumstances, there is nothing to trigger consideration as to equitable
relief.
CONCLUSION AND
COSTS
[52]
In
conclusion, therefore, the application must be dismissed. The Respondent is
entitled to costs at the upper end of Column III, including fees for a senior
and junior counsel at the hearing.
JUDGMENT
FOR
THE REASONS given:
THIS COURT
ADJUDGES that:
1. The application is
dismissed; and
2. The
Respondent is entitled to costs at the upper end of Column III, including fees
for a senior and junior counsel at the hearing.
“Roger
T. Hughes”
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