Date: 20110211
Docket: A-65-10
Citation: 2011 FCA 55
CORAM: NOËL
J.A.
PELLETIER J.A.
TRUDEL
J.A.
BETWEEN:
UNICROP LTD.
Appellant
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR
JUDGMENT
NOËL J.A.
[1]
This
is an appeal by Unicrop Ltd. (the appellant) against a judgment of Boivin J. of
the Federal Court (the Applications Judge) wherein he dismissed the application
for judicial review brought against a decision of the Commissioner of Patents
(the Commissioner) who found the appellant’s Canadian Patent Application No.
2,531,185 (the application) completely abandoned as of July 5, 2008, because
the maintenance fees required by the Patent Act, R.S.C. 1985, c. P-4
(the Act) had not been paid in time.
[2]
The
appellant maintains that this decision results from an overly strict
interpretation and application of the Act and the Patent Rules,
SOR/92-423 (the Rules), and that in any event it is entitled to equitable
relief in the form of an order restoring its patent application.
[3]
For
the reasons which follow, I am of the view that the appeal cannot succeed.
THE FACTS
[4]
On
January 3, 2006, the appellant, a Finnish corporation, requested National Entry
under the Patent Cooperation Treaty for its application. At the same time, it
appointed the law firm of Bereskin & Parr as its patent agent. Pursuant to
section 27.1 of the Act, the appellant was required to pay annual fees to
maintain its application. Bereskin & Parr submitted the annual maintenance
fees for the first two years within the time prescribed by the Rules. [This
provision and the other relevant provisions of the Act and the Rules are set
out in Appendix I to these reasons.] The fees were to be paid annually by July
5.
[5]
The
third anniversary payment due on July 5, 2007 was not paid in time. The
application was consequently deemed abandoned by the Commissioner pursuant to
subsection 73(1) of the Act. On June 23, 2008, the law firm of Furman &
Kallio submitted, on behalf of the appellant, two letters to the Commissioner.
The first requested reinstatement pursuant to subsection 73(3) of the Act and
subsection 98(1) of the Rules, and included the reinstatement fee ($200) and
the third anniversary maintenance fee ($100). The second letter submitted the
fourth anniversary fee ($100).
[6]
In
a letter dated July 23, 2008, the Commissioner acknowledged the receipt of the
fourth year maintenance fee. However, the letter advised, referring to
subsection 6(1) of the Rules, that the fee to maintain the application “may
only be paid by the authorized correspondent in regard to that particular
application” (appeal book at p. 242).
[7]
On
August 12, 2008, Furman & Kallio submitted to the Commissioner an executed
appointment of agent.
[8]
On
October 17, 2008, the Commissioner advised Furman & Kallio that the
application could not be reinstated as the 12-month reinstatement period had
expired and that, by law, the application had been completely abandoned as of
July 5, 2008.
[9]
The
Commissioner acknowledged in a letter dated October 23, 2008, to Furman &
Kallio the receipt of the reinstatement and maintenance fees submitted in the first
letter sent on June 23, 2008. The Commissioner reiterated that, under the
Rules, payment could only be accepted from the authorized correspondent.
[10]
Following
the Commissioner’s refusal to reinstate its application, the appellant sought
judicial review of that decision before the Federal Court.
DECISION OF THE FEDERAL
COURT
[11]
The
Applications Judge conducted his review on a standard of correctness as in his
view the Commissioner’s expertise does not extend to the legal interpretation
of statutes (reasons at para. 15). He identified three issues: (i) whether the
Commissioner erred in refusing to reinstate the application; (ii) whether
subsection 3.1(1) of the Rules provides relief in this case; and (iii) whether
the equitable doctrines of relief against forfeiture or promissory estoppel
provide a remedy in this case.
[12]
Dealing
with the first, the Applications Judge noted that paragraph 73(3)(a) of
the Act provides that in order to reinstate an application deemed to be
abandoned, the applicant must “make a request for reinstatement to the
Commissioner within the prescribed period”. He further observed that both the
Act and the Rules “are silent as to what form the request should take, beyond
the general requirement that the request be explicit” (reasons at para. 18).
[13]
He
then proceeded to dismiss the appellant’s argument to the effect that the case
was governed by the principle set out in Sarnoff Corp. v. Canada (Attorney
General), 2008 FC 712 [Sarnoff], wherein Hughes J. found that the
patent application in that case had to be reinstated even if the reinstatement
period had expired. The Applications Judge then noted that in Sarnoff,
the evidence was unclear as to whether a notice of appointment had been filed
with the Commissioner. In this case, he found that the “evidence demonstrates
clearly that the law firm of Furman & Kallio did not file a Notice of
Appointment of Agent with [the Canadian Intellectual Property Office (CIPO)] as
required under the Act, nor were there any clear efforts to establish legal representation
prior to the application reaching the deadline for reinstatement” (reasons at
para. 25). The Applications Judge also found that there was no history of
communication between Furman & Kallio and the Commissioner with respect to
the application, and that Bereskin & Parr was recognized as the authorized
correspondent (reasons at paras. 23-25).
[14]
The
Applications Judge did not accept the appellant’s submission that there was in
this case a gap or an ambiguity of the type referred to in Dutch Industries
Ltd. v. Canada (Commissioner of Patents), 2003 FCA 121 [Dutch Industries]
that might be resolved in favour of the appellant. In his view, subsection 6(1)
could not be any clearer in requiring that all communications with the
Commissioner be conducted by the authorized correspondent. The Applications
Judge further observed that even though the appellant’s intention to appoint
Furman & Kallio is undisputable, “the fact of the matter is that CIPO
cannot be deemed to have knowledge of the said change and left to decide in
each instance whether an applicant’s direct communication with CIPO should be
considered or not”. Otherwise, the definition of “authorized correspondent”
would be pointless (reasons at para. 28).
[15]
The
Applications Judge went on to consider whether subsection 3.1(1) of the Rules –
a saving provision which provides an additional two-month delay when a clear
but unsuccessful attempt to pay the fees is made within the time prescribed for
doing so – was of assistance to the appellant in this case. He held that the
argument had been conclusively dealt with in Rendina v. Canada (Attorney
General),
2007 FC 914 [Rendina]. In that case, de Montigny J. held that the words
“subject to 6(1)” contained in subsection 3.1(1) mean that any attempt to pay
the reinstatement and maintenance fees had to be made by the authorized
correspondent. As Furman & Kallio was not the authorized correspondent,
subsection 3.1(1) of the Rules could not apply (reasons at paras. 32, 33).
[16]
Finally,
the Applications Judge held that the equitable doctrines of relief against
forfeiture and promissory estoppel did not provide a remedy in this case.
Contrary to the situation in Sarnoff, the Applications Judge noted that
the appellant in this case failed to comply with the statute. Moreover, relying
on F. Hoffman-La Roche AG v. Canada (Commissioner of Patents),
2003 FC 1381 [Hoffman-La Roche]; aff’d 2005 FCA 399, the Applications
Judge held that granting equitable relief to the appellant in this case would
have the effect of countering the time limit imposed by statute (reasons at
paras. 37, 38).
ALLEGED ERRORS
[17]
Relying
on section 3.1 of the Rules, the appellant submits that the Commissioner did
receive “a communication in accordance with which a clear but unsuccessful
attempt [was] made to pay the fee”. Had the Commissioner complied with the
spirit of section 3.1, the “July 23, 2008 letter would have been expressly
stated to be a Rule 3.1 notice, which would and could have been cured by the
August 12, 2008 letter from Furman & Kallio enclosing the appointment of
agent” (appellant’s memorandum at para. 41). The appellant adds that denying
the possibility of a saving provision “where a purely clerical matter (the
filing of the appointment of agent) has not been completed” is inconsistent with
the intent of section 3.1 (Ibid at para. 42). The appellant also submits
that Rendina, upon which the Applications Judge relied, “is incorrect in
light of the policies articulated in the later-decided Sarnoff case” (Ibid
at para. 43).
[18]
Relying
on Sarnoff and Dutch Industries, the appellant further submits
that there is an ambiguity as to when a Notice of Appointment of Agent has to
be submitted, and that this ambiguity should be resolved in its favour. The
appellant admits that Furman & Kallio did not send a Notice of Appointment
of Agent to the Commissioner, but it submits that it has complied with all the
statutory maintenance fee provisions. As such, and in light of the ambiguity as
to when a Notice of Appointment of Agent has to be filed, the appellant
contends that the Applications Judge erred in denying it the benefit of the
ambiguity (appellant’s memorandum at paras. 49-51).
[19]
On
the issue of equitable remedies, the appellant submits that the doctrine of
relief against forfeiture “transcends, and is not displaced, by statutory
regimes”. The appellant further submits that it meets all the requirements set
out by the Supreme Court of Canada in Saskatchewan River Bungalows Ltd. v.
Maritime Life Assurance Co., [1994] 2 S.C.R. 490 [Saskatchewan River
Bungalows], for the application of that doctrine. In any event, the
appellant submits that the equitable doctrines of legitimate expectations and
promissory estoppel apply in this case because it would be unfair to deny it
the right secured by the payments which it made (appellant’s memorandum at
paras. 54-59).
ANALYSIS AND DECISION
[20]
The
parties submit, and I agree, that correctness is the applicable standard
insofar as the Applications Judge’s review of the Commissioner’s decision not
to reinstate the application is concerned (Dutch Industries at para. 23;
Rendina at paras. 10, 11). The question which must be answered is
whether the Applications Judge applied this standard correctly in refusing to
intervene based on his interpretation of the relevant provisions of the Act and
the Rules (Canada Revenue Agency v. Telfer, 2009 FCA 23). Similarly, the
question whether equitable relief is excluded by reason of a clear statutory
rule turns on the interpretation of the relevant provisions and must be
assessed on a standard of correctness.
[21]
Before
addressing the appellant’s arguments, it is useful to briefly review the scheme
and operation of the legislation. Under section 27.1 of the Act, an applicant
must pay fees to the Commissioner in order to maintain a patent application in
effect. If an applicant fails to do so within the time prescribed by the Rules,
the application is deemed abandoned pursuant to paragraph 73(1)(c) of
the Act.
[22]
Subsection
73(3) provides that an application that is deemed abandoned may be reinstated
if the applicant “makes a request for reinstatement to the Commissioner within
the prescribed period”, takes the actions that should have been taken, and pays
the prescribed fee before the expiration of the prescribed period. Section 98
of the Rules sets the prescribed period at 12 months. Therefore, in order to
reinstate his application, the appellant had to, within the 12-month period
following the date on which the application was deemed to be abandoned, make a
reinstatement request and submit the reinstatement fee and the unpaid
maintenance fees.
[23]
In
Dutch Industries, this Court identified the purpose of the maintenance
fee provisions as follows (Dutch Industries at para. 30):
There is no dispute about the
statutory objectives in play in this case. The fees payable under the [Act] and
[Rules] are intended to defray part or all of the costs of the Patent Office…. 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 …
[My
emphasis]
[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.
[…]
|
[My emphasis]
[25]
Of
significance for present purposes is the fact that subsection 6(1) does not
merely authorize the Commissioner to deal with those who have filed the
appropriate notice; it effectively prohibits him from dealing with anyone else.
[26]
Section
2 defines “authorized correspondent” as, inter alia, the inventor, an
associate patent agent, or a patent agent appointed pursuant to section 20 of
the Rules, which provides that the appointment shall be made “in the petition or
by submitting to the Commissioner a notice signed by the applicant” (my
emphasis). Section 22 of the Rules provides that an act by a patent agent or an
associate patent agent has the same effect as an act done by the applicant.
[27]
While
recognizing that Furman & Kallio did not file a Notice of Appointment with
the Commissioner until after the reinstatement period had expired, the
appellant submits that there is an ambiguity in the legislation as to when such
a notice must be filed. Relying mainly on the decision of Hughes J. in Sarnoff,
the appellant suggests that this ambiguity should be resolved in its favour.
[28]
In
Sarnoff, the applicant had transferred in March 2004 the responsibility
for its patent application from one law firm to another. The latter, Dimock
Stratton, paid the maintenance fees for the 6th and 7th
anniversary maintenance fees on March 2, 2005 and March 8, 2006, respectively.
After receiving the 7th anniversary fee and one year after accepting
the 6th anniversary fee, the Commissioner advised Dimock Stratton
that the CIPO had no record of a change of agent or appointment of associate
agent respecting that firm. The fees submitted by Dimock Stratton were
therefore discarded and the patent application declared abandoned beyond
reinstatement. Hughes J. found the decision of the Commissioner not to
reinstate the patent’s application unreasonable because the question whether
Dimock Stratton was agent of record was unclear (Sarnoff at para. 26):
… [t]he evidence is far from
clear as to the Dimock Stratton firm not being in fact the agent of record or
associate agent. The [Commissioner] has failed to file any evidence that
would assist in determining why it showed the Dimock Stratton firm as agent on
its Web site and why, for about two years it communicated with that firm. I
find that these circumstances are sufficient to determine that the Patent
Office acted unreasonably in the circumstances of this case.
[My
emphasis]
[29]
On
appeal (Attorney General of Canada v. Sarnoff Corporation, 2009 FCA 142)
the decision of Hughes J. was upheld in the following terms (para. 1):
… we have not been
persuaded that the applications judge’s finding of fact that the Patent Office
“had to have had an appointment of associate agent” was manifestly or palpably
wrong as required by Housen v. Nikolaisen, [2002] 2 S.C.R. 235. There
is some evidence in the record to support the factual finding as described in
the reasons of the applications judge.
[My emphasis]
[30]
In
the present case, it is clear that Furman & Kallio were not agent of record
since another firm, Bereskin & Parr, were shown as authorized correspondent
and no notice of revocation or notice of appointement was filed with the
Commissioner. Moreover, besides the communication relating to the two letters
of June 23, 2008, there is no history of communication between the Commissioner
and Furman & Kallio. As such, the reasoning of Hughes J. in Sarnoff
is of no assistance to the appellant.
[31]
As
stated by the Applications Judge, the appellant’s submission that its intention
to appoint Furman & Kallio as its agent should nevertheless prevail would
require that the definition of “authorized agent” be read out of the Rules.
Accepting the appellant’s submission would create the very uncertainty which
the definition seeks to eliminate as the Commissioner would be left to decide
in each case if the communication pertaining to an application should be
considered or not. I note in this respect that the provisions relating to the
“authorized correspondent” not only provide certainty from the perspective of
the Commissioner but also from the perspective of all those interested in a
patent. This was echoed by de Montigny J. in Rendina at para. 20:
… Various persons (i.e.,
inventor, multiple joint inventors, legal representative of inventor or joint
inventors, associate patent agent or patent agent) may wish to communicate with
and direct communications to the Commissioner of Patents regarding a particular
patent application. Having multiple correspondents is an administrative burden
for CIPO, creates the potential for conflicting requests, instructions and
responses, and the potential for lack of instructions because of uncertainty as
to who would act, with the consequence of missed deadlines. I agree with the
respondent that subsection 6(1) was designed to prevent that confusion and is a
reflection of the need that was felt to delineate who the Commissioner must
communicate with and whose communications the Commissioner must have regard to
with respect to a particular patent application.
[32]
It
has also been held that the intention to keep a patent application alive cannot
counter the effect of the statutory and regulatory requirements. In Eiba v. Canada (Attorney General), 2004 FC 250,
Mosley J. stated at paragraphs 43 and 44 that:
[43] … While the affidavit
evidence filed in this proceeding reveals that the application in the present
case was not intended to be abandoned, I am satisfied that the maintenance
fee provisions of the Act and the Rules must be interpreted strictly by the
Commissioner, and also this Court, in order to ensure compliance by applicants
through the timely and diligent filing of fees.
[44] It is clear that the
Commissioner has no authority pursuant to the Act and the Rules to extend the
deadline for payment of maintenance fees: [Pfizer Inc. v. Canada
(Commissioner of Patents), [2000] F.C.J. No. 1801 (C.A.)(QL)], and [Dutch Industries].
[My
emphasis]
[33]
In
P.E. Fusion, LLC v. Canada (Attorney General), 2004 FC 645
at paragraph 22, Mosley J. made a similar observation:
… Unfortunate as it is for the
applicant, Parliament has devised a legislative scheme for the payment of
maintenance fees that does not contain any relief provisions, beyond the
allowable one year reinstatement period, and has not vested the Commissioner
or the Court with any discretion to correct mistakes, even ones by
well-intentioned patentees, from the strict rules related to the payment of the
prescribed fees when such payment is neglected past the reinstatement time
period.
[My
emphasis]
[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.
[36]
The
appellant nevertheless invokes the spirit of Rule 3.1. It submits that the
benefit of this provision should not be denied where an attempt is made to make
the payment within the grace period even if the attempt is made by someone
other than the “authorized correspondent”. The difficulty with this argument is
that the Governor-in-Council has focussed on this very issue and has provided
in clear and inescapable language that the Commissioner cannot have regard to
“communications” – which includes communications requesting the reinstatement
of a patent and the payment of outstanding fees – unless they emanate from an
“authorized correspondent”.
[37]
The
appellant maintained throughout that this “strict” reading of the provisions is
no longer warranted in light of Sarnoff. In this respect, I note again
that Sarnoff involved different facts. Moreover, what Hughes J. said
with respect to subsection 6(1) – i.e. that it should not be read too
restrictively – is obiter as he had already decided that the
Commissioner’s decision was unreasonable (Sarnoff at para. 22). Finally,
there is nothing “strict” about the reading proposed by the Applications Judge
in the present case. The strictness lies in the Rules themselves as the
relevant provisions cannot be read otherwise.
[38]
This
in effect disposes of the appellant’s alternative argument based on equity. As
was stated by O’Reilly J. in Hoffman-La Roche at paragraphs 40 to 42,
equitable relief cannot be invoked in order to counter the application of a
clear statutory rule:
[40] It is clear that this Court can grant equitable relief to
prevent the forfeiture of property under a private contract, such as a
lease: Comtab Ventures Ltd. v. Canada, [1984] F.C.J. No. 922 (QL)
(T.D.); Holachten Meadows Mobile Home Park Ltd. v. The
Queen in Right of Canada and Lakahahmen Indian Band, [1986] 1 F.C. 238
(QL) (T.D.).
[41] However, the situation is entirely different when the
forfeiture results from a statutory rule. Judges must give effect to the
statute: Canadian Northern Railway Co. v. Canada (1922), 64 S.C.R.
264; Martin Mine Limited v. British Columbia, [1995] B.C.J. No. 2309; Olympia
& York Developments Limited v. Calgary (City), [1983] A.J. No. 808
(QL).
[42] Hoffmann-La Roche concedes the authority of these cases but
suggests that the situation should be different when a person loses a property
right, in part, because of a government agency’s error. This would be true,
perhaps, if there were room for discretion or compromise in the language of the
governing statute. However, I cannot see any room for relief in the case before
me. The statute is clear. If I were to extend the time for paying the
maintenance fee in this case, I would be substituting my own deadline for that
enacted by Parliament. As Lord Parmoor stated in the Canadian Northern
Railway case, above, “if the power given to the Court to relieve against
penalties applied to statutory penalties, this would, in effect be giving an
authority to enable the Court to repeal statutes” (R. v. CNR Co., CNR
Co. v. R., [1923] 3 DLR 719 (QL) (PC), at p. 725). I decline to recognize
such a power.
[My emphasis]
[39]
I
believe it useful to nevertheless comment briefly on the appellant’s further
submission, relying on Sarnoff, that Furman & Kallio acted
reasonably and therefore the first element of the test for relief against
forfeiture, as set out by the Supreme Court in Saskatchewan River at paragraph
34, is met.
[40]
In
Sarnoff at paragraph 36, Hughes J. said, in obiter, that relief against
forfeiture could be an appropriate remedy in that case because the conduct of
the applicant could not be criticized since it had paid the required fees and
the Commissioner having dealt with Dimock Stratton for over two year “had to
have had an appointment of associate agent” (Sarnoff at para. 28). It
follows that no blame of any sort could be attributed to the applicant or its
agent.
[41]
This
is not the case here. As found by the Applications Judge, Furman & Kallio
failed to file a Notice of Appointment in due time and it is this failure to
comply with the Rules which resulted in the Commissioner being prevented from accepting
instructions from that firm.
[42]
The
appellant finally submits that, in any event, the equitable doctrines of
legitimate expectations and promissory estoppel apply to the case at bar.
According to the appellant, the Commissioner has, by accepting the
reinstatement and maintenance fees, “made a promise or assurance which was
intended to have legal effect and to be acted on” (appellant’s memorandum at
para. 59). As such, the appellant submits that it would be unfair to be denied
the right secured by the payment of those fees.
[43]
I
can see no merit to this argument. In two letters to Furman & Kallio dated
July 23, 2008 and October 23, 2008, the Commissioner acknowledges receipt of
the reinstatement and maintenance fees and states that they cannot be accepted
due to the fact that Furman & Kallio was not the authorized agent. The
letters go on to indicate that the fees will be refunded upon request (appeal book
at pp. 51 and 242). It cannot therefore be said that the Commissioner made any
form of promise capable of giving rise to promissory estoppel.
[44]
I
would dismiss the appeal with costs.
“Marc
Noël”
“I
agree
J.D. Denis Pelletier J.A.”
“I
agree
Johanne Trudel J.A.”
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