Date: 20070423
Docket: T-1561-06
Citation: 2007
FC 425
Montréal, Quebec
April 23, 2007
PRESENT: The Honourable Maurice E. Lagacé
BETWEEN:
ACTELION
PHARMACEUTICALS LTD
Applicant
and
HER MAJESTY IN THE RIGHT OF CANADA
AS REPRESENTED BY
THE ATTORNEY GENERAL
AND THE COMMISSIONER OF PATENT
Respondents
REASONS FOR JUDGMENT AND JUDGMENT
[1]
Actelion Pharmaceuticals Ltd. (the “Applicant”) is seeking judicial review of
a purported decision of the Commissioner of Patents (“Commissioner”) dated
August 1, 2006, in which the Commissioner refused to accept payment of the
patent application maintenance fee and the reinstatement fee during the one
year reinstatement period for the Canadian Patent Application No. 2,454,417
(“417 Patent”).
[2]
The
Applicant requests a Writ of Certiorari to quash the Commissioner’s
decision and a Writ of Mandamus requiring the Canadian Intellectual
Property Office (“CIPO”) to reinstate the application of Actelion.
BACKGROUND
[3]
The
417 Patent relates to the use of benzo-fused heterocycles as the active
ingredient in pharmaceutical compositions of a particular general formula which
are useful as endothelin receptor antagonists. The 417 Patent originated from a
PCT International Application (No. PCT/EP02/08523) bearing an International
filing date of July 31, 2002. It entered the National Phase in Canada on January
20, 2004; however, the effective date of filing of the 417 Patent is the same
date as the International application (July 31, 2002).
[4]
The
second anniversary of filing on July 31, 2004 was the first date on which
payment of the maintenance fee was to be paid; however, the maintenance fee was
not paid and the application was deemed abandoned on August 2, 2004. According
to the Applicant, this error was a result of a clerical input error in the
Applicant’s Canadian agents diary database A clerk at the firm entered the
filing date as July 31, 2003 instead of 2002, and as a result, the due date for
the second anniversary maintenance fee was shifted from 2004 to 2005 in its records
[5]
CIPO
had sent a Notice of Abandonment to Applicant on September 27, 2004; however,
the Applicant maintains that this notice was never actually received. Thus, the
Applicant submits that there was no reason to believe that the application was
in a state of abandonment.
[6]
In
due course, the Applicant wrote a letter [AR,Vol. 1 at p.0014] to the Commissioner on
July 15, 2005 indicating:
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 …
[7]
In
response, CIPO sent a letter [AR,
Vol. 1, 5 at 0016] on September 7, 2005 refusing to accept the maintenance fee
or to deduct a reinstatement fee from the Applicant. The letter stated in part:
The maintenance fee was due on August 2,
2004.
Therefore, please note that if the fee to
maintain a patent application is not totally paid before the start of a
scheduled period, Canadian practice allows 12 months grace period within which
the required maintenance fee and a $200.00 reinstatement fee payment may be
paid. According to our records that period ended on August 1, 2005.
Consequently, we regret to inform you that this application is now dead.
In accordance with section 4(1) of the
Patent Rules, a refund in the amount of $100.00, will be issued upon request.
….
[8]
The
12-month period referred to in CIPO’s letter lapsed on August 2, 2005. What
followed was an exchange of letters between the Applicant and CIPO from
September 22, 2005 to August of 2006. An October 24, 2005 letter from CIPO
stated that since CIPO did not receive a request for reinstatement pursuant to
subsection 73(3) of the Patent Act within the prescribed period, then
the application was considered abandoned. In a reply letter dated February 13,
2006, the Applicant posited that its July 15, 2005 letter was a general
authorization statement and inherently contained a request for reinstatement.
[9]
In
a subsequent letter dated April 21, 2006 [AR, Vol.1 at p.0034], CIPO deemed
that it no longer had the legal authority to reinstate the application.
Further, CIPO stated that Notices of Abandonment are sent as a courtesy only
and it should not be assumed that one is sent every time. In addition, to give
effect to any general authorization statement, CIPO maintained that the request
must be, on its face, “…clear and obvious…” And since there was nothing in the
letter dated July 15 2005 to suggest that a reinstatement was being requested,
the Commissioner’s delegate made no error in not deducting any additional fees since
“… the Office no longer ha(d) legal authority to reinstate the application…”
[10]
The last
letter by CIPO dated August 1, 2006 merely reiterated its original stance.
ISSUES
[11]
The
Applicant submits the issue as follows:
a. What is the
appropriate standard of review from the Commissioner’s decision;
b. Did the
Commissioner err in law in refusing to recognize Applicant’s letter of July 15,
2005 was an instruction to pay all fees associated with the 2nd
anniversary maintenance fee, including any necessary reinstatement fee;
c. Did the
Commissioner err in law in declining to recognize Applicant’s letter of July
15, 2005 as a clearly implied request to reinstate the application; and
d. Are the
Commissioner’s reasons supporting the impugned decision manifestly
unreasonable?
[12]
The
Respondents have characterised the issues as follows: whether the evidence
establishes that the Applicant in fact took the actions that the law requires
to avoid abandonment of the application or to reinstate the abandoned
application?
[13]
The
regime for payment of fees in relation to patent applications is firmly
established by the Patent act [R.S.C. 1985, c.P-4, as amended] and the Patent
Rules [SOR/96-423, as amended]. Together, the various legislative
provisions set out a complete code governing the duty to pay certain fees, the
consequences of a failure to pay, and the steps that may be taken to avoid
those consequences.
[14]
The
provisions of section 27.1 of the Patent Act impose on an applicant for
a patent the duty to pay prescribed fees:
|
27.1 (1) An applicant for a patent shall, to maintain the application
in effect, pay to the Commissioner such fees, in respect of such periods, as
may be prescribed.
|
27.1 (1) Le demandeur est tenu
de payer au commissaire, afin de maintenir sa demande en état, les taxes
réglementaires pour chaque période réglementaire.
|
[15]
The
prescribed fees and timing are set out in the Patent Rules and in Schedule
II to the Rules. In particular, under Item 30 of Schedule II, an
applicant must generally pay a maintenance fee of a specific amount by the
anniversary date of the application each year. The amount here is not an issue.
[16]
Due
to a clerical error the maintenance fee here was not paid by the anniversary
date with the consequence that the “417 Patent” in issue was deemed to
be abandoned under the provisions of section 73 of the Patent Act
itself stating that:
|
73. (1) An application for a patent in Canada shall be deemed to be abandoned if the
applicant does not…
(c) pay the fees payable under section 27.1, within the time provided
by the regulations;
|
73. (1) La demande de brevet est considérée
comme abandonnée si le demandeur omet, selon le cas :
c) de payer, dans le délai réglementaire, les taxes visées à
l’article 27.1 ;
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[17]
Applicant
admits that the “417 Patent” was deemed abandoned without its knowledge when Applicant
sent the letter of July 15, 2005 to the Commissioner with instruction for the
payment of the maintenance fee required at the anniversary 2 of said Patent.
[18]
But
Applicant insists that when the maintenance fee was offered it was acting
within the prescribed twelve-month period
specified in section 152 of the Patent Rules to obtain a reinstatement
of the Patent in accordance with all the conditions set out in subsection
73(3) of the Patent Act reading as follows:
|
73.(3) An application deemed to be abandoned under
this section shall be reinstated if the applicant:
(a) makes a request for reinstatement to the Commissioner within the
prescribed period;
|
73. (3) Elle peut être rétablie si le demandeur :
a) présente au commissaire, dans le délai réglementaire, une requête
à cet effet;
|
|
(b) takes the action that should
have been taken in order to avoid the abandonment; and
|
b) prend les mesures qui s’imposaient pour éviter l’abandon;
|
|
(c) pays the prescribed fee before
the expiration of the prescribed period.
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c) paie les taxes réglementaires avant l’expiration de la période
réglementaire.
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[19]
In
turn, the prescribed fee, and the prescribed period, mentioned in subsection
73(3) of the Patent act are specified in section 152 of the Patent Rules :
|
152. In order for an application
deemed to be abandoned under section 73 of the Act to be reinstated, the
applicant must, in respect of each failure to take an action referred to in
subsection 73(1) of the Act or section 151, make a request for reinstatement
to the Commissioner, take the action that should have been taken in order to
avoid the deemed abandonment and pay the fee set out in item 7 of Schedule II
before the expiry of the twelve-month period after the date on which the
application is deemed to be abandoned as a result of that failure.
|
152. Pour que la demande considérée comme
abandonnée en application de l'article 73 de la Loi soit rétablie, le
demandeur, à l'égard de chaque omission mentionnée au paragraphe 73(1) de la
Loi ou visée à l'article 151, présente au commissaire une requête à cet
effet, prend les mesures qui s'imposaient pour éviter la présomption
d'abandon et paie la taxe prévue à l'article 7 de l'annexe II, dans les douze
mois suivant la date de prise d'effet de la présomption d'abandon.
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[20]
The
mandatory and declaratory effect of the provisions cited above contrast with a
number of provisions in the Patent Act that explicitly confers on the
Commissioner a duty of power and whereby he is called upon to do something. In
contrast, in the provisions relating to abandonment and reinstatement, the result
occurs solely by virtue of the legislation, and, according to Respondents, not
by virtue of any decision made by the Commissioner.
ARGUMENT
[21]
While
Applicant concedes that the Patent in issue was effectively in a state of deemed
abandonment without any discretionary power left to the Commissioner when the
payment of the maintenance fee was offered, still, Applicant insists that the
Commissioner made nevertheless a reviewable decision when he refused without
any valid reasons to receive payment of the prescribed fee for reinstatement of
the application.
[22]
The
Applicant submits that since the application was in a state of abandonment,
reinstatement was necessary in order to pay the second anniversary maintenance
fee. Therefore, it was obvious, according to the Applicant that a reinstatement
fee was required, and that the request to pay the maintenance fee clearly implied
a request to pay the reinstatement fee.
[23]
The
Applicant submits also that all three requirements under subsection 73(3) have
been met as there was an implied request to reinstate with instructions for both
the second anniversary maintenance fee and the reinstatement fee from its’
agent deposit account. Therefore an explicit reinstatement request was not
necessary. The Applicant cites United States v. Commissioner of Patents,
unreported T-1995-04, [United States] to support its
position.
[24]
The
Respondents do not accept these arguments. For them the Applicant’s application
was deemed abandoned as a result of the operation of the Patent Act and
its subordinate legislation, without any intervention or exercise of discretion
on the part of the Commissioner. This is also true of the non-reinstatement of
the application.
[25]
According
to Respondents and although the statute in subsection 73(3) (a) requires only a
request, that request must be explicit for a reinstatement to be
made; and there was no such request here. So the Commissioner had neither the
duty nor the authority to infer such a request. And since timely action to
reinstate the application was not taken, as a matter of law, it cannot be
reinstated.
[26]
Further,
the Respondents submit that the Applicant cannot rely on the decision in United
States as the facts in that case are not analogous.; since in that decision
the Applicant was simply asking a Commissioner to infer a specific payment
instruction within a more general one; and he was not seeking to have the
Commissioner infer a statutory precondition as is the case here.
ANALYSIS
[27]
The
question therefore is whether the Commissioner, by his Acting Director, was
correct to refuse the payment of the 2nd anniversary maintenance fee
since Applicant had not made a specific request for reinstatement as required
by subsection 73(3)(a) of the Patent Act.
[28]
The
statutory regime for the payment of maintenance fees, the rules for when
applications are deemed abandoned, and reinstatement of patent applications,
are governed under the Patent Act, R.S.C. 1985, c. P-4, as amended and
the Patent Rules, SOR/96-423, as amended.
[29]
In
Barton No-till Disk Inc. v. Dutch Industries Ltd., 2003 FCA 121, [2003] 4 F.C. 67 (C.A.),
201 N.R. 152 [Dutch Industries], the Court stated that the proper
approach to the interpretation of these two statutes is the principle outlined
in Driedger, Elmer A., Construction of Statutes, (2nd ed., Toronto:
Butterworth’s, 1983), at page 87:
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.
And at para. 30, the Court stated the
objective behind the required fees as follows:
There is no dispute about the statutory
objectives in play in this case. The fees payable under the Patent Act
and Patent Rules are intended to defray part or all of the cost of the
Patent Office. Fees are set at a lower scale for "small entities" to
provide modest monetary relief to inventors that are presumed to be of limited
means. The regime of annual maintenance fees was put in place to discourage the
proliferation of deadwood patents and patent applications by requiring
patentees and patent applicants, at least on an annual
basis, to take steps to keep them in good standing.
[30]
Section
73(3) makes it clear that three conditions must be met if an abandoned patent application
is to be reinstated as stated in Pfizer Inc. v. Canada (Commissioner
of Patents), [2000] F.C.J. No. 1801 (C.A.)(QL). If these three conditions
are not met, then the patent application lapses through no action on the part
of the Commissioner. The time limits to carry out these three requirements have
been set out in section 152 as a 12-month period after the date of abandonment.
In this case, the deadline for the request of reinstatement was August 2, 2005.
[31]
Section
152 of the Rules 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 deadline for making a request for reinstatement
was August 1, 2005. On that date the only document received by the Commissioner
was the letter dated July 15 from the Applicant’s agent with instructions
for payment of the maintenance fee due.
[32]
The
Applicant argues that this letter contains an implied request for reinstatement.
Respondents for their part submit that an explicit request for reinstatement
must be made pursuant to the Patent Act and the Patent Rules.
[33]
Since
Respondents do not contest that payment of the maintenance fee was offered before the expiry of the twelve-month period after the date
on which the application was deemed to be abandoned as a result of that failure
it appears therefore that the only issue left for the Court to decide is
whether the request for reinstatement can be implied
or must be made explicit ?
[34]
The parties were unable to find any decision on this precise
issue.
[35]
The
argument made by the Applicant
on this issue is unacceptable for the following reasons:
a. First, the
letter dated July 15, 2005 only made reference to payment of the maintenance
fee and “any additional fee”. It does not specifically indicate a desire for
reinstatement or that a reinstatement fee is to be debited from its account.
b. Second, there
is no authority provided under the Patent Act or Patent Rules to
allow the Commissioner to accept a general authorization statement in place of
a specific letter indicating a request for reinstatement. Section 73(3)(a)
explicitly requires from an Applicant to “make a request for reinstatement”.
This was not done, notwithstanding the Applicant’s argument that the request
was “implied”.
c. Third, the
Applicant failed to take steps “that should have been taken in order to avoid
the abandonment” as specified in Section 73(3)(b). In particular, a request was
not made and payment was not submitted for reinstatement prior to the expiry of
the prescribed period.
d. Fourth, the
Applicant did not know, at the time the letter dated July 15 was addressed to
the Commissioner, that the Patent in issue was deemed to be abandoned; so why the
Commissioner should have seen in this letter an implied request when the
Applicant had in mind then only the payment of the maintenance fee and
certainly not a request for reinstatement?
e. Six, if
Applicant’s reasoning was to be followed, the consequence for the future would mean,
every time payment of a maintenance fee is offered during the twelve-month
period after the date on which an application is deemed to be abandoned, that the
Commissioner should read in the payment an implicit request for reinstatement.
But what happens then with the other conditions (a) and (b) of Subsection 73(3)
of the Patent Act?
[36]
The
Court cannot ignore that Section 4 of the Patent
Act states that the Commissioner is to act pursuant to the provisions under
the Patent Act. The Act leaves him no discretion to exercise here. The
statutory provisions are to be read strictly; and it is the Applicant’s duty to
maintain the patent application in good standing. Any failure to comply with
the strict nature of the law will not authorize the Commissioner nor the
Applicant to deviate from fulfilling the precise terms of the law.
[37]
No
decision determinative of the appellant's rights was made by the Commissioner
here. The rights of the appellant were affected by the operation of the Act.
The Commissioner simply informed the Applicant that the conditions for a
reinstatement of Subsection 73(3) had not been met within the 12 months
prescribed period and that consequently there was nothing he could do to
reinstate the application.
[38]
The
Court sees no reason to intervene. On the contrary the Commissioner refusal to
reinstate the application was correct and there are no grounds for intervention
by this Court.
JUDGMENT
THIS COURT ORDERS that this application for judicial
review, a Writ of Certiorari to quash the Commissioner’s decision
and a Writ of Mandamus requiring the Canadian Intellectual Property
Office (“CIPO”) to reinstate the application is dismissed. Costs to the Respondents.
“Maurice E. Lagacé”
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