Rules Amending the Patent Rules: SOR/2022-120

Canada Gazette, Part II, Volume 156, Number 13

Registration
SOR/2022-120 June 3, 2022

PATENT ACT

P.C. 2022-612 June 2, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, under subsection 12(1)footnote a of the Patent Act footnote b, makes the annexed Rules Amending the Patent Rules.

Rules Amending the Patent Rules

Amendments

1 (1) The definition Administrative Instructions in subsection 1(1) of the Patent Rules footnote 1 is repealed.

(2) The definition presentation date in subsection 1(1) of the Rules is replaced by the following:

presentation date
means the date determined under subsection 103(2) or 202(2), as applicable. (date de soumission)

(3) The definition PCT sequence listing standard in subsection 1(1) of the Rules is replaced by the following:

PCT sequence listing standard
means Standard ST.26 of the World Intellectual Property Organization, Recommended Standard for the Presentation of Nucleotide and Amino Acid Sequence Listings using XML (eXtensible Markup Language), as amended from time to time. (norme PCT de listages des séquences)

(4) Paragraph (b) of the definition PCT national phase application in subsection 1(1) of the Rules is replaced by the following:

(5) Subsection 1(1) of the Rules is amended by adding the following in alphabetical order:

Administrative Instructions under the PCT
means the Administrative Instructions under the Patent Cooperation Treaty, including any modifications made from time to time. (Instructions administratives du PCT)

2 (1) The portion of subsection 3(3) of the Rules before paragraph (a) is replaced by the following:

Other authorized extensions

(3) The Commissioner is authorized to extend the period of time for the payment of a fee referred to in subsection 44(1), 68(1) or (2), 80(1), 85.1(5), 86(1), (1.1), (6), (10) or (12) or 112(1), paragraph 112(5)(a) or (c) or 154(1)(c), subsection 154(2) or subparagraph 154(3)(a)(iii) or (b)(i) or (ii) after the expiry of that period if the Commissioner considers that the circumstances justify the extension and if

(2) Section 3 of the Rules is amended by adding the following after subsection (3):

Extension — erroneous information

(4) The Commissioner is authorized to extend any period of time for the payment of a fee set out in Schedule 2 or 3 after the expiry of that period if the Commissioner considers that the circumstances justify the extension and if

3 The Rules are amended by adding the following after section 5:

Prescribed Fee

Small entity declaration filed after payment

5.1 Despite any provision of these Rules that sets out a small entity fee and a standard fee in respect of a patent or an application for a patent, if a patentee or applicant pays the standard fee and a small entity declaration is later filed in respect of that patent or application, the applicable fee is the standard fee.

Extension of time for payment of fee

5.2 For greater certainty, if the Commissioner extends the period of time for the payment of a fee under subsection 3(3) or (4), the applicable fee is

4 Subsection 14(2) of the Rules is replaced by the following:

Exception

(2) If it aids in presentation, figures, tables and chemical or mathematical formulas may appear sideways.

5 (1) The portion of subsection 15(1) of the Rules before paragraph (a) is replaced by the following:

Documents in English or French

15 (1) All documents or information submitted or made available to the Commissioner or the Patent Office must be in English or French, except for

(2) Paragraph 15(1)(b) of the Rules is replaced by the following:

(3) Subsection 15(1) of the Rules is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

(4) Subsections 15(2) and (3) of the Rules are replaced by the following:

Translation — previously filed application for patent

(2) If a copy of a previously filed application for a patent is submitted or made available under paragraph 67(2)(b) and all or part of that application is in a language other than English or French, the applicant must submit to the Commissioner an English or French translation of the application or part of the application in question.

Translation — specification and drawings

(3) If all or part of the text matter of the specification or the drawings that are contained in a document referred to in paragraph 71(d) that is submitted for the purposes of subsection 28(1) of the Act are in a language other than English or French, the applicant must submit to the Commissioner an English or French translation of that text matter.

Sequence listing — English and French

(3.1) If a sequence listing contains text matter that is both in English and in French, only the following version of the text matter is taken into account for the purpose of interpreting the scope of protection sought or obtained:

Sequence listing — other language

(3.2) Language-dependent free text that is contained in a sequence listing and that is in a language other than English or French is not taken into account for the purpose of interpreting the scope of protection sought or obtained.

(5) Subsections 15(5) and (6) of the Rules are replaced by the following:

Translation replaces original

(5) A translation submitted under subsection (2) or (3), or submitted after the notice referred to in subsection (4) is sent, replaces the text matter that was in a language other than English or French.

Restriction

(6) A translation of all or part of the text matter in a specification or a drawing, submitted under subsection (2) or (3), or submitted after the notice referred to in subsection (4) is sent, must not contain any matter not reasonably to be inferred from the specification or the drawings contained in the application on its filing date.

6 Subsection 26(6) of the Rules is replaced by the following:

Common representative by default — correction or decision

(6) Subject to subsections (9) and (11), in respect of an application for a patent in relation to which there are joint applicants and no common representative is appointed under subsection (3), if a correction has been made with respect to the naming of applicants under section 104 or subsection 154(6) and the correction has changed the identity of the applicants, or if a decision is made by the Commissioner under subsection 31(2), (3) or (4) of the Act, other than a decision refusing an application under one of those subsections, the joint applicant whose name appears first when listed in alphabetical order after that correction or decision — or if there is more than one correction or decision, or both a correction and a decision, after the most recent of those corrections or decisions — is deemed to be appointed as the common representative.

7 The portion of subsection 36(2) of the English version of the Rules before paragraph (a) is replaced by the following:

Exceptions

(2) For the purposes of filing an application for a patent, paying a fee under subsection 27(2) or section 27.1 of the Act, paying the additional fee for late payment referred to in subsection 154(4) of these Rules or complying with the requirements of subsection 154(1), (2) or (3) of these Rules,

8 Subsection 54(2) of the Rules is replaced by the following:

Statement

(2) The application must contain

Translation

(2.1) If all or part of a declaration referred to in paragraph (2)(c) is in a language other than English or French, the applicant must submit to the Commissioner an English or French translation of the declaration or part in question.

9 (1) Subsection 58(1) of the Rules is replaced by the following:

PCT sequence listing standard

58 (1) If a specification discloses a nucleotide sequence or amino acid sequence that must, in accordance with the PCT sequence listing standard, be included in a sequence listing and that is not identified as forming a part of the prior art, the description must contain the sequence listing in electronic form and both the electronic form and the content of the sequence listing must comply with the PCT sequence listing standard.

(2) Subsection 58(4) of the Rules is replaced by the following:

Sequence identification number

(4) If a sequence included in a sequence listing is referred to in the claims, the drawings or the part of the description other than sequence listings, the reference must include the sequence identification number, as defined in the PCT sequence listing standard, preceded by “SEQ ID NO:”.

10 Subsection 62(3) of the Rules is repealed.

11 Section 73 of the Rules is amended by adding the following after subsection (2):

PCT national phase application

(2.1) For greater certainty, in respect of an international application that has become a PCT national phase application, a priority claim made in accordance with the requirements of the Patent Cooperation Treaty before the application’s national phase entry date is considered to be a request for priority made in accordance with subsection (1), and the applicant is considered to have submitted the information required under subsection 28.4(2) of the Act in accordance with subsection (2).

12 (1) The portion of subsection 80(1) of the Rules before subparagraph (a)(i) is replaced by the following:

Fee for examination of application

80 (1) For the purposes of subsection 35(1) of the Act, the prescribed fee for the examination of an application for a patent is

(2) Paragraph 80(1)(b) of the Rules is replaced by the following:

(3) Section 80 of the Rules is amended by adding the following after subsection (1):

Claims defined in the alternative

(1.1) A claim that defines the subject-matter of an invention in the alternative, including a dependent claim within the meaning of section 63 that refers to more than one preceding claim, counts as a single claim for the purposes of subsection (1).

13 The Rules are amended by adding the following after section 83:

Date of payment

83.1 If an amount paid for the examination of an application for a patent is less than the prescribed fee set out in subsection 80(1) and an amendment is made to the application on or after the day on which the request for examination is made to reduce the number of claims such that the amount paid is greater than or equal to the amount of that prescribed fee, the fee is considered to have been paid on the day on which the amendment is made.

14 The portion of subsection 84(1) of the Rules before paragraph (a) is replaced by the following:

Advancing examination

84 (1) In respect of an application for a patent that is open to public inspection at the Patent Office, the Commissioner must advance out of its routine order the examination of the application under subsection 35(1) of the Act on the request of

15 The Rules are amended by adding the following after section 85:

Continued examination

85.1 (1) If three notices have been sent to the applicant under either or both of subsections 86(2) and (5) since the examination of an application for a patent under subsection 35(1) of the Act began, the examiner must, by notice, inform the applicant of the need to make a request for continued examination and pay the prescribed fee.

Continued examination — subsequent request

(2) If two notices have been sent to the applicant under either or both of subsections 86(2) and (5) since the most recent request for continued examination was made, the examiner must, by notice, inform the applicant of the need to make a request for continued examination and pay the prescribed fee.

Time limit for making request

(3) The applicant must make a request for continued examination and pay the prescribed fee not later than four months after the day on which a notice is sent under subsection (1) or (2) to inform the applicant of the need to make the request and pay the fee.

Notice set aside

(4) A notice of allowance or conditional notice of allowance that is sent to the applicant under subsection 86(1), (1.1), (6) or (10) is set aside if the applicant makes a request for continued examination and pays the prescribed fee not later than the earlier of

Fee for continued examination

(5) The prescribed fee for the continued examination is

Interpretation — number of notices

(6) For greater certainty, a notice sent under subsection 86(2) or (5) that is withdrawn by an examiner or by the Commissioner does not count as a notice for the purposes of subsection (1) or (2).

Non-application of subsection 3(1)

(7) Subsection 3(1) does not apply in respect of the times referred to in subsection (3) or (4).

16 (1) Section 86 of the Rules is amended by adding the following after subsection (1):

Conditional notice of allowance

(1.1) If an examiner has reasonable grounds to believe that, but for certain minor defects, an application for a patent would comply with the Act and these Rules, the Commissioner may by notice inform the applicant that the application has been found to be allowable subject to certain amendments being made and require the applicant to, not later than four months after the day on which the notice is sent, make those amendments, or submit arguments as to why the application does comply, and pay the final fee set out in item 14 of Schedule 2.

(2) Subsections 86(14) to (18) of the Rules are replaced by the following:

Withdrawal of notice of allowance

(14) If, after a notice of allowance is sent but before a patent is issued, the examiner has reasonable grounds to believe that the application for a patent does not comply with the Act or these Rules, the Commissioner must, subject to subsection (14.2),

Withdrawal of conditional notice of allowance — other defects

(14.1) If, after a conditional notice of allowance is sent but before a patent is issued, the examiner has reasonable grounds to believe that the application for a patent does not comply with the Act or these Rules in respect of defects other than those referred to in that notice, the Commissioner must, subject to subsection (14.2),

Exception to subsections (14) and (14.1)

(14.2) The Commissioner is not required to take the actions referred to in subsection (14) or (14.1) if the examiner has reasonable grounds to believe that the defects in the application for a patent would not affect the readability, clarity or validity of the patent, if it were granted.

Withdrawal of conditional notice of allowance after reply

(15) If an applicant replies in good faith to a conditional notice of allowance on or before the date set out in subsection (16) but the examiner, after receiving the reply, has reasonable grounds to believe that the application for a patent still does not comply with the Act or these Rules in respect of any of the defects referred to in that notice, the Commissioner must

Date

(16) For the purposes of subsection (15), the date is the last day of the period referred to in subsection (1.1) or, if the application for a patent is deemed to be abandoned under subsection 73(2) of the Act in the circumstances referred to in paragraph 132(1)(g), the day on which the conditions for reinstatement set out in subsection 73(3) of the Act are met in respect of that abandonment.

Suspension of examination — abandoned application

(17) The examination of an application for a patent under subsection 35(1) of the Act is suspended for any period during which the application is deemed to be abandoned under section 73 of the Act.

Non-application of subsection 3(1)

(18) Subsection 3(1) does not apply in respect of the times referred to in subsection (1), (1.1), (6), (10) or (12).

17 Subsection 87(1) of the Rules is replaced by the following:

Final fee

87 (1) The prescribed final fee in respect of an application for a patent is

Claims defined in the alternative

(1.1) A claim that defines the subject-matter of an invention in the alternative, including a dependent claim within the meaning of section 63 that refers to more than one preceding claim, counts as a single claim for the purposes of subparagraphs (1)(a)(iii) and (b)(iii).

18 (1) The portion of section 91 of the Rules before paragraph (a) is replaced by the following:

Clarification

91 For greater certainty, the specification and the drawings contained in a divisional application, other than a divisional application resulting from a PCT national phase application, must not contain matter that is not in the specification and the drawings contained in the original application on its filing date, or if the original application is itself a divisional application, on its presentation date, unless

(2) Paragraph 91(b) of the Rules is replaced by the following:

19 (1) Paragraph 93(1)(d) of the Rules is replaced by the following:

(2) Paragraph 93(1)(f) of the Rules is replaced by the following:

(3) Section 93 of the Rules is amended by adding the following after subsection (1):

PCT national phase application

(1.1) In respect of an international application that has become a PCT national phase application and that is published by the International Bureau of the World Intellectual Property Organization under Article 21 of the Patent Cooperation Treaty on or before its national phase entry date, the requirement set out in paragraph (1)(b) is considered to be met only if the information referred to in that paragraph was furnished in accordance with the requirements of the Patent Cooperation Treaty before the day on which the international application is published.

20 Section 100 of the Rules is replaced by the following:

No amendment after notice of allowance or conditional notice of allowance

100 (1) Subject to subsection (2), the specification and the drawings contained in an application for a patent must not be amended by the applicant after a notice of allowance or conditional notice of allowance is sent, unless

Exception — obvious errors

(2) The applicant may amend the specification and the drawings contained in the application if it is obvious from the specification and the drawings contained in the application on the day on which the notice of allowance or conditional notice of allowance was sent that something other than what appears in the specification and the drawings was intended and that nothing other than the proposed amendment could have been intended. The amendments must be made

Effect of withdrawal or setting aside

(3) If a conditional notice of allowance is withdrawn by the Commissioner or set aside in accordance with subsection 85.1(4), any amendments made to the application during the period beginning on the day on which the conditional notice of allowance is sent and ending on the day before the day on which the conditional notice of allowance is withdrawn or set aside are considered never to have been made.

21 The portion of section 104 of the Rules before paragraph (a) is replaced by the following:

Error – naming of applicants

104 The Commissioner must, on request, correct an error with respect to the naming of applicants in an application for a patent, other than a PCT national phase application, if the request contains a statement to the effect that the error arose from inadvertence, accident or mistake, without any fraudulent or deceptive intention, and is made by the person who submitted the application not later than the earlier of

22 Sections 105 and 106 of the Rules are replaced by the following:

Error – naming of applicants

105 The Commissioner must, on request, correct an error with respect to the naming of applicants in an application for a patent if the request contains a statement to the effect that the correction does not add or delete the name of an applicant or change the identity of a named applicant and is made by the applicant on or before the day on which the final fee set out in item 14 of Schedule 2 is paid or, if the final fee is refunded, on or before the day on which the final fee is paid again.

Error – naming of inventors

106 The Commissioner must, on request, correct an error with respect to the naming of inventors in an application for a patent if

23 Paragraph 109(1)(a) of the Rules is replaced by the following:

24 Section 110 of the Rules is replaced by the following:

Non-application of subsection 3(1)

110 Subsection 3(1) does not apply in respect of the times referred to in section 104, 105 or 106 or subsection 107(1), 108(1) or 109(1), (3) or (4).

25 The portion of subsection 112(5) of the Rules before paragraph (a) is replaced by the following:

Exception

(5) For the purposes of subsection 46(1) of the Act, if a patent is granted on the basis of an application for a patent, in respect of which a fee was payable under subsection 27.1(1) of the Act for an anniversary of the filing date of the application that fell within the 12-month period preceding the day on which the patent was issued but that was not yet paid before that day, the prescribed fee to maintain in effect the rights accorded by the patent is, for the day of the first of the anniversaries of the filing date of the application that fall on or after the day on which the patent was issued, the total of

26 Section 131 of the Rules is amended by adding the following after subsection (2):

Delayed receipt of notice

(3) However, in the case of a notice under subsection 86(2) or (5) that was received by the applicant more than one month after the day on which it was sent, the Commissioner may extend the time prescribed by subsection (1) to up to six months after the day on which the notice was received if the applicant

27 (1) The portion of section 132 of the Rules before paragraph (a) is replaced by the following:

Application deemed abandoned

132 (1) Subject to subsection (2) and for the purposes of subsection 73(2) of the Act, an application for a patent is deemed to be abandoned if

(2) Subsection 132(1) of the Rules is amended by striking out “or” at the end of paragraph (d) and by replacing paragraph (e) with the following:

(3) Section 132 of the Rules is amended by adding the following after subsection (1):

Exception

(2) Paragraphs (1)(f) and (g) do not apply in respect of a notice of allowance or a conditional notice of allowance that is set aside in accordance with subsection 85.1(4).

28 The portion of subsection 133(3) of the Rules before paragraph (a) is replaced by the following:

Failure to pay certain fees

(3) If an application for a patent is deemed to be abandoned for failure to pay a fee referred to in subsection 68(1) or (2), 80(1), 85.1(5) or 87(1), the action that should have been taken in order to avoid that abandonment and that the applicant must take before the end of the time prescribed by subsection (1) in order to reinstate the application is

29 Section 134 of the Rules is replaced by the following:

Prescribed fee

134 (1) Subject to subsection (2) and for the purposes of subparagraph 73(3)(a)(iv) of the Act, the prescribed fee is, for each failure to take an action referred to in the request for reinstatement, the fee set out in item 15 of Schedule 2.

Interpretation — failure to take action

(2) If both of the following failures to take action are referred to in the request for reinstatement, they are considered to be a single failure to take action:

30 (1) The portion of subsection 139(1) of the Rules before paragraph (a) is replaced by the following:

Refund of fees

139 (1) Only the following fees may be refunded by the Commissioner:

(2) Subsection 139(1) of the Rules is amended by striking out “and” at the end of paragraph (h) and by adding the following after paragraph (i):

31 Section 140 of the Rules is amended by adding the following after subsection (2):

Waiver of fee — extension of time

(3) The Commissioner is authorized to waive the payment of the fee set out in item 1 of Schedule 2 that is payable for filing an application for an extension of the time for replying to a requisition made under subsection 86(2) or (5) if

32 (1) Paragraph 154(1)(b) of the Rules is replaced by the following:

(2) Section 154 of the Rules is amended by adding the following after subsection (5):

(3) The portion of subsection 154(6) of the Rules before paragraph (a) is replaced by the following:

Correction of error – naming of applicants

(6) The Commissioner must, on request, correct an error in the records of the Patent Office with respect to the naming of applicants in respect of a PCT national phase application if the request contains a statement to the effect that the error arose from inadvertence, accident or mistake, without any fraudulent or deceptive intention, and is made by the person who paid the basic national fee prescribed by paragraph (1)(c) or subparagraph (3)(a)(iii) not later than the earlier of

33 Subsections 155(4) and (5) of the Rules are repealed.

34 The Rules are amended by adding the following after section 155:

Translation — part of description or claims

155.1 (1) At or before the time that an international application becomes a PCT national phase application, the applicant must submit to the Commissioner a translation of any part of the description — other than any sequence listings — and any part of the claims that are in a language other than English or French.

Translation — abstract, request or statement

(2) At or before the time that an international application becomes a PCT national phase application, the applicant must submit to the Commissioner a translation of any of the following elements, or any part of the following elements, that are in a language other than English or French:

Error in translation — notice

155.2 (1) If the Commissioner, before a request for examination is made, or an examiner, in the course of examining an application for a patent, has reasonable grounds to believe that a translation submitted under paragraph 154(1)(b) or (b.1) or section 155.1 contains an error, the Commissioner or the examiner, as the case may be, must by notice inform the applicant of the error.

Error in translation — correction

(2) An applicant may correct a translation submitted under paragraph 154(1)(b) or (b.1) or section 155.1 that contains an error by submitting the following to the Commissioner before the day on which a notice of allowance or a conditional notice of allowance is sent or, if that notice is withdrawn by the Commissioner or set aside in accordance with subsection 85.1(4), before the day on which a notice of allowance or a conditional notice of allowance is sent again:

Date of replacement

(3) Subject to subsection (4), a corrected translation submitted in accordance with subsection (2) replaces the original translation and is considered to have been submitted on the day on which the original translation was submitted.

Open to public inspection — date

(4) For the purposes of subsection 55(2) of the Act, if a corrected translation of any part of the specification contained in an application for a patent is submitted under subsection (2) after the application became open to public inspection, in English or French, under section 10 of the Act, the specification is considered to have become open to public inspection, in English or French, on the day on which the applicant submits the corrected translation or, if more than one corrected translation of the specification is submitted, on the last day on which a corrected translation is submitted.

Restriction — translation of specification or drawings

155.3 A translation or corrected translation, submitted under section 155.1 or subsection 155.2(2), respectively, of all or part of the text matter in a specification or a drawing must not contain any matter not reasonably to be inferred from the specification or the drawings contained in the application on its filing date.

Complete copy

155.4 (1) An applicant who submits a translation under section 155.1 or a corrected translation under subsection 155.2(2) must, at the same time, submit the following to the Commissioner:

Integrated translation

(2) For the purposes of section 155.1 and subsection 155.2(2), if a complete copy is submitted in accordance with subsection (1), the applicant need not submit the translation or corrected translation as a separate document.

Translation replaces original — description

155.5 (1) If a translation is submitted under paragraph 154(1)(b), the translation replaces the entirety of the description other than any sequences listings.

Translation replaces original — claims

(2) If a translation is submitted under paragraph 154(1)(b.1), the translation replaces the entirety of the claims.

Translation replaces original — element of application

(3) If a translation is submitted under section 155.1, the translation replaces the corresponding text matter in the PCT national phase application.

Failure to provide translation — certain elements

(4) If the applicant fails to provide a translation of a part of the description or claims or of any text matter in a drawing, in accordance with subsection 155.1(1) or paragraph 155.1(2)(b), respectively, the corresponding untranslated text matter in the PCT national phase application must not be taken into account for the purpose of interpreting the scope of protection sought or obtained.

Failure to provide translation — statement

(5) If the applicant fails to provide a translation of all or part of the statement referred to in paragraph 155.1(2)(e) in accordance with that paragraph, the statement may be disregarded by the Commissioner.

Failure to provide translation or complete copy

(6) If the applicant fails to provide a translation in accordance with paragraph 155.1(2)(c) or (d) or a complete copy in accordance with paragraph 155.4(1)(a), (b) or (c), the Commissioner may by notice require the applicant to provide the translation or complete copy no later than three months after the date of the notice.

Amendments to specification and drawings

155.6 (1) If all or part of the text matter of the specification or the drawings contained in an international application on its international filing date is in a language other than English or French, the specification and the drawings contained in the PCT national phase application must not be amended to add matter not reasonably to be inferred from both

Sequence listing

(2) For the purposes of paragraph (1)(a), if the international application contains, on its international filing date, text matter in a sequence listing that is both in English or French and in a language other than English or French, the text matter that is in a language other than English or French is considered not to have been included in the application on that date.

Divisional application

(3) The specification and the drawings contained in a divisional application resulting from the division of a PCT national phase application must not be amended to add matter that may not be or could not have been added — under subsection 38.2(2) of the Act, subsection (1) of this section or this subsection — to the specification and the drawings contained in the application for a patent from which the divisional application results.

Non-application of subsections (1) and (3)

(4) Subsections (1) and (3) do not apply if it is admitted in the specification contained in the divisional application that the matter is prior art.

Clarification — divisional application

155.7 For greater certainty, the specification and the drawings contained in a divisional application resulting from the division of a PCT national phase application must not contain matter that is not in the specification and the drawings contained in the original application on its filing date, or if the original application is itself a divisional application, on its presentation date, unless

35 Sections 159 and 160 of the Rules are replaced by the following:

Non-application of certain provisions of Act

159 (1) Subsection 27(7), sections 27.01, 28 and 28.01, subsections 38.2(3) and 78.1(2) and section 78.2 of the Act do not apply in respect of a PCT national phase application.

Non-application of paragraph 38.2(3.1)(a) of Act

(2) Paragraph 38.2(3.1)(a) of the Act does not apply in respect of a divisional application resulting from the division of a PCT national phase application.

Non-application of section 78 of Act

160 Section 78 of the Act does not apply in respect of a time period referred to in that section that ends before the national phase entry date of a PCT national phase application.

36 The definitions application preceding the coming-into-force date, category 2 application and coming-into-force date in subsection 165(1) of the Rules are repealed.

37 (1) Subsection 168(1) of the Rules is replaced by the following:

Non-application of certain provisions of these Rules

168 (1) Sections 14, 47 to 51, 55, 56, 58 to 63, 65 and 74, subsection 86(1.1), subparagraphs 87(1)(a)(iii) and (b)(iii), sections 93 to 96, subsections 97(2) and (3) and sections 98 and 104 do not apply in respect of a category 1 application.

(2) Subsection 168(3) of the Rules is repealed.

38 Paragraph 171(b) of the Rules is replaced by the following:

39 Division 3 of Part 3 of the Rules is repealed.

40 Subsection 188(3) of the Rules is repealed.

41 Section 190 of the Rules is replaced by the following:

Extension of time

190 The Commissioner is authorized to extend, in respect of a category 3 application, the time referred to in the former Rules for payment of the fee referred to in subsection 3(3), (5) or (7) of the former Rules or the time referred to in subsection 199(2) or (5) of these Rules for the payment of the final fee, after the expiry of that time, if the Commissioner considers that the circumstances justify the extension and if the conditions referred to in subsection 3(3) of these Rules are met.

42 (1) Section 203 of the Rules is amended by striking out “or” at the end of paragraph (c) and by replacing paragraph (d) with the following:

(2) Section 203 of the Rules is renumbered as subsection 203(1) and is amended by adding the following:

Exception

(2) Paragraphs (1)(d) and (e) do not apply in respect of a notice of allowance or a conditional notice of allowance that is set aside in accordance with subsection 85.1(4).

43 Paragraph 204(b) of the Rules is replaced by the following:

44 (1) Subsection 205(1) of the Rules is replaced by the following:

Non-application of subsections 97(2) and (3)

205 (1) Subsections 97(2) and (3) do not apply in respect of a patent granted on the basis of a category 1 application.

(2) Subsection 205(3) of the Rules is repealed.

45 Subsection 207(2) of the Rules is replaced by the following:

Extension of time

(2) The Commissioner is authorized to extend the time for payment of the fee referred to in subsection 3(8) of the former Rules in respect of a patent issued on the basis of a category 3 application — after that time, including a period of grace, has expired — if the Commissioner considers that the circumstances justify the extension and if the conditions referred to in subsection 3(3) of these Rules are met.

46 Subsection 210(2) of the Rules is replaced by the following:

Fee considered paid

(2) If the Commissioner has, under section 190 of these Rules or subsection 26(3) of the former Rules, extended the time for the payment of a fee referred to in subsection 3(5) or (7) of the former Rules, and the fee is paid before the end of the extended period, for the purposes of subsection (1), that fee is considered to have been paid on the day on which the amount of the small entity fee was paid.

47 Section 211 of the Rules is replaced by the following:

Extension of time — section 208

211 The Commissioner is authorized to extend the time for the payment of a fee referred to in subsection 112(1), as modified by section 208, after the expiry of that time, if the Commissioner considers that the circumstances justify the extension and if the conditions referred to in subsection 3(3) are met.

48 Section 215 of the Rules is replaced by the following:

Communication sent before refusal

214 (1) In respect of a communication in relation to an application for a patent for which the filing date is before October 30, 2019, or in relation to a patent granted on the basis of such an application, the reference to “four months” in subsections 11(1) and (2) is to be read as a reference to “six months” if the refusal to recognize the person to whom that communication is sent as a patent agent or an attorney occurred on October 30, 2019 or within six months following that date.

Communication sent before removal

(2) In respect of a communication in relation to an application for a patent for which the filing date is before October 30, 2019, or in relation to a patent granted on the basis of such an application, the reference to “four months” in subsection 11(3) is to be read as a reference to “six months” if the name of the person to whom that communication is sent is removed from the register of patent agents on October 30, 2019 or within six months following that date.

Documents not in English or French

215 Despite section 15, the Commissioner must have regard to any document or part of a document that is submitted or made available in a language other than English or French under subsection 196(1) of these Rules, or provided under subsection 29(1) or paragraph 58(1)(a) of the former Rules or filed under section 89 or 180 of the former Rules, in a language other than English or French.

49 The portion of section 218 of the Rules before paragraph (a) is replaced by the following:

Representation — application filed before October 30, 2019

218 In respect of an application for a patent for which the filing date is before October 30, 2019 — other than a divisional application that has a presentation date on or after October 30, 2019 — for which there are joint applicants and in respect of which no common representative is appointed under paragraph 26(3)(a) or (c), in respect of which no correction or decision referred to in subsection 26(6) was made — other than a decision made before October 30, 2019 — and in respect of which subsection 26(9) does not apply,

50 The portion of section 221 of the Rules before paragraph (a) is replaced by the following:

Representation — patent granted on or after October 30, 2019

221 In respect of a patent, other than a reissued patent, granted on or after October 30, 2019, on the basis of an application for a patent for which the filing date is before October 30, 2019, for which there are joint patentees and in respect of which no common representative is appointed under paragraph 26(3)(a), if, immediately before the patent was granted, no common representative was appointed in respect of that application,

51 The portion of section 222 of the Rules before paragraph (a) is replaced by the following:

Representation — patent reissued on or after October 30, 2019

222 In respect of a patent that is reissued — on the basis of an application for a patent for which the filing date is before October 30, 2019 — on or after October 30, 2019 for which there are joint patentees and in respect of which no common representative is appointed under paragraph 26(3)(a), if, immediately before the patent was reissued, no common representative was appointed in respect of the original patent,

52 The portion of section 229 of the Rules before paragraph (b) is replaced by the following:

Final fee paid before October 30, 2019

229 If, before October 30, 2019, the applicant of an application for a patent for which the filing date is before that date, paid, in respect of that application, the applicable final fee set out in item 6 of Schedule II to the former Rules and that fee was not refunded before that date,

53 The Rules are amended by replacing “item 13” with “item 14” in the following provisions:

54 The Rules are amended by replacing “Administrative Instructions” with “Administrative Instructions under the PCT” in the following provisions:

55 The Rules are amended by replacing “the coming-into-force date” and “immediately before these Rules come into force” with “October 30, 2019” and “before October 30, 2019”, respectively, in the following provisions:

56 Schedule 2 to the Rules is amended by replacing the references after the heading “SCHEDULE 2” with the following:

(Sections 3, 4, 19, 22 to 24, 44, 45, 68, 70, 73, 80, 82, 84, 85.1, 86, 87, 100, 105, 106, 109, 112, 115, 117, 119, 121, 122, 124 to 127, 129, 132, 134, 136 to 140, 147 to 151, 154, 171, 199, 203, 208, 212, 213 and 229)

57 Item 10 of Schedule 2 to the Rules is replaced by the following:
Item

Column 1

Description

Column 2

Amount ($)
10 Fee for examination of an application for a patent  
(a) the basic fee,  
(i) if the application for a patent has been the subject of an international search by the Commissioner in the Commissioner’s capacity as an International Searching Authority,  
(A) small entity fee 100.00
(B) standard fee 204.00
(ii) in any other case,  
(A) small entity fee 408.00
(B) standard fee 816.00
(b) fee for each claim in excess of 20 that is included in the application  
(i) small entity fee 50.00
(ii) standard fee 100.00
58 Items 13 and 14 of Schedule 2 to the Rules are replaced by the following:
Item

Column 1

Description

Column 2

Amount ($)
13 Fee for continued examination of an application for a patent  
(a) small entity fee 408.00
(b) standard fee 816.00
14 Final fee  
(a) the basic fee  
(i) small entity fee 153.00
(ii) standard fee 306.00
(b) fee for each page of specification and drawings in excess of 100 pages 6.12
(c) fee for each claim in excess of 20 included in the application in respect of which the fee set out in paragraph 10(b) was not paid  
(i) small entity fee 50.00
(ii) standard fee 100.00
59 The portion of item 15 of Schedule 2 to the Rules in column 1 is replaced by the following:
Item

Column 1

Description
15 Fee for reinstatement of an application deemed to be abandoned, in respect of each failure to take an action…

Transitional Provisions

60 In respect of an application for a patent that has a filing date before the day on which this section comes into force, a sequence listing may, for the purposes of subsection 58(1) of the Patent Rules, comply with the PCT sequence listing standard as defined in subsection 1(1) of the Patent Rules as they read immediately before the day on which this section comes into force.

61 Subsections 80(1) and 85.1(1) and subparagraphs 87(1)(a)(iii) and (b)(iii) of the Patent Rules do not apply in respect of the examination of an application for a patent if all of the following actions are taken before October 3, 2022:

Coming into Force

62 (1) Subject to subsection (2), these Rules come into force on July 1, 2022, but if they are registered after that day, they come into force on the day on which they are registered.

(2) Subsections 1(1), (2), (4) and (5) and sections 2 to 8, 11 to 59 and 61 come into force on October 3, 2022.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Rules.)

Executive summary

Issues: Timeliness in patent application processing is a key pillar in the overall business strategy of the Canadian Intellectual Property Office (CIPO). Initiatives that reduce patent prosecution time align with the Canada–United States–Mexico Agreement (CUSMA)’s commitment that parties make best efforts to process patent applications in an efficient and timely manner.

Recent amendments to the Patent Cooperation Treaty (PCT) in relation to the form of sequence listings in a patent application require signatories to amend their national patent laws to ensure national requirements do not conflict with international requirements. Canada must bring changes to the Patent Rules in force before July 1, 2022, in order to meet its international obligations in respect of the PCT.

Description: The amendments will introduce reasonable limits on patent application processing and application sizes, while also providing the flexibility to exceed those limits, subject to conditions. New to the Canadian patent system will be a request for continued examination requirement, which will encourage faster and more efficient prosecution of patent applications. A new fee for excess claims over 20 claims will encourage applicants to file compact applications. A new notice from CIPO to applicants named a “conditional notice of allowance” will seek to reduce the number of communications to which applicants must respond. The amendments also include necessary modifications to the Patent Rules that ensure compliance with new sequence listing requirements in the PCT, including the adoption of World Intellectual Property Organization (WIPO) Standard 26 (ST.26). Other miscellaneous amendments will introduce an extension of time mechanism for incorrect fee payments as a result of erroneous information provided by CIPO, waivers for extensions of time to respond to examination reports when there are significant delays in the delivery of communications from CIPO, and the ability to correct errors in translation of certain documents provided to CIPO.

Rationale: Amendments to the Patent Rules that are expected to influence applicant behaviour and result in reduced patent pendency will assist Canada in creating faster and more efficient patent protection for applicants. The amendments in respect of the form of sequence listings will ensure Canadian patent law is compliant with the PCT.

The amendments will encourage applicants to file high quality patent applications, tailored to Canadian requirements. By implementing fees for applications with large numbers of claims and that require more of CIPO’s examination resources, applicants will be motivated to file concise applications and to bring their applications more quickly into compliance with the Canadian Patent Act and Patent Rules. For those applicants that pay the fees, they will assume costs that are proportional to the services they use. The amendments will promote a better balance between the financial burden borne by the average applicants and those applicants that consume more of CIPO’s resources. This approach will help ensure that CIPO and applicants are efficiently processing and disposing of applications.

Following stakeholder reaction to the proposed regulations in the Canada Gazette, Part I (CG1) the regulations have been amended to address some concerns and provide greater certainty. Clarification has been brought to the conditional notice of allowance (CNOA) and request for continued examination (RCE) prosecution mechanisms, as well as the criteria used to determine excess claim fees (ECF). Responsive to stakeholder concerns, the transition period from registration to entry into force has been extended. Additional safeguards clarifying the conditions for reinstatement following a failure to respond to an examination report and a RCE, and the fees owed when an insufficient/incorrect fee is paid have been introduced. Obsolete regulations have been repealed and technical corrections made.

The amendments will result in both costs and benefits to affected stakeholders, but will have a positive net impact. The total monetized benefit is estimated at $63.5 million over the period 2022–2023 to 2031–2032, most of which will comprise of revenues to CIPO generated from the collection of fees (i.e. $8.2 million from domestic patent applicants and $52.8 million from foreign patent applicants), which will be used to recover the costs borne by CIPO to examine patent applications and to implement the amendments. The total cost associated with the amendments is estimated at $50.6 million. Overall, the amendments will result in a net benefit of $12.9 million.

Issues

Both the applicant and CIPO play a role in the efficient processing of a patent application, with a view towards concluding examination. In Canada, applicants have a significant influence over the duration of the examination of patent applications since they control the contents of the application. Canada’s patent regime, when compared to that of other jurisdictions, provides CIPO with fewer and more limited levers to suspend or terminate examinations and to compel applicants to make their applications compliant with the Patent Act and the Patent Rules within a set time frame. The impact of delays in the granting of patents mainly affects the patentee in a negative way by reducing the effective term of the patent and increases costs for CIPO by increasing prosecution time.

The patent term adjustment (PTA) obligation in CUSMA requires that Canada, at the applicant’s request, adjust the term of the patent if there are unreasonable delays in the issuance of a patent. Canada has until January 1, 2025, to implement PTA domestically. Because of the applicant-driven nature of Canada’s patent regime, the introduction of the PTA into the current Canadian patent framework, without further amendments to the regime, could induce undesirable results. For example, some applicants may prolong examination in ways that could potentially lead to PTA compensation while also requiring a disproportionate amount of CIPO’s resources.

In relation to patent pendency and examination reports, the current regulatory framework does not contain an effective mechanism to ensure that prosecution of the application is concluded in a timely manner. This can manifest itself in prolonged exchanges between CIPO and patent applicants, which take the form of written reports and responses. The average number of examination reports before granting of a patent in fiscal year (FY) 2020–2021 was 1.7 examination reports; however, the maximum number was 16. It is typically in the interest of CIPO, the applicant, and the public that patent prosecution is concluded in an efficient and timely manner; however, with the introduction of patent term adjustment, not all applicants will retain this interest. Long patent pendency through prolonged prosecution increases the risk of unreasonable delays and increases marketplace uncertainty while the patent is pending.

Canadian patent applications have, on average, a higher number of claims than patent applications in other jurisdictions. This can be attributed to there being no limit for the number of claims in a patent application in Canada. Because the claims define the scope of the protection sought, patent examiners spend a disproportionate amount of time analyzing the claims over other portions of the specifications. There is an inherent link between the number of claims in an application and the time required for an examiner to analyze an application.

CIPO has observed that applications with larger claim sets tend to result in prolonged and more inefficient examination. Currently, applicants are encouraged to take advantage that there are no excess claims fees in Canada by filing large claim sets. Applicants are exploiting flexibilities in the Canadian system that are not available in other jurisdictions and ultimately result in longer prosecution times.

In addition, amendments are required to Canada’s regulation to ensure it meets the requirements of the Regulations under the Patent Cooperation Treaty (PCT Regulations) in respect of sequence listings. A sequence listing is a part of the description of patent applications related to biotechnology that gives a detailed disclosure of the nucleotide and/or amino acid sequences. Sequence types that are common today (nucleotide analogs, D-amino acids, branched sequences, etc.) are not covered by the current standard in the PCT Regulations and therefore are not present in searchable databases. The current format of the sequence data is also not compliant with public database requirements; therefore, data is lost when the sequence data is entered into those databases. These databases are commonly used by the scientific community and general public. As a result, the World Intellectual Property Organisation (WIPO) has adopted a new standard for sequence listings which will enter into force in the PCT Regulations on July 1, 2022.

Further, Canada will need to include regulatory requirements to ensure that submissions under the new PCT requirements also conform to Canada’s official language requirements (French or English) for patent applications. These provisions establish the translations into English or French which are required in respect of an international application which is used to enter national phase in Canada. These changes must be in place in Canada before July 1, 2022, for Canada to remain in compliance with the PCT while ensuring these new PCT requirements also meet Canada’s official language obligations.

Lastly, CIPO has a series of housekeeping, technical corrections, and minor changes resulting from the Patent Law Treaty (PLT) to address ambiguities introduced during the repeal and replacement of the Patent Rules in 2019, align client services with those in other jurisdictions, and provide greater certainty through technical corrections and safeguards.

Background

CIPO is a special operating agency of Innovation, Science and Economic Development Canada (ISED) and is responsible for the administration and processing of the greater part of intellectual property in Canada. CIPO’s mission extends beyond delivering services directly to those seeking intellectual property (IP) rights and includes the following:

CIPO funds its operations on a cost-recovery basis from revenues it generates through fees paid by clients for IP services such as the examination of patent applications. Therefore, fees must recover the costs of the associated activities in order to adequately fund and support CIPO’s operations. The organization is guided by the principle of financial neutrality in establishing new fees. Neutrality is considered in the context of the total revenue and costs of the organization, and not necessarily on the basis of financial neutrality for individual services offered. CIPO has used activity-based costing extensively for the past 10 years to evaluate the relationship between costs, activities, products and services in order to manage its business strategically.

Examination process

In Canada, a patent currently grants the patentee the exclusive rights to make, use or sell the claimed invention for 20 years from the filing date of the application in exchange for a full public disclosure of the invention. To be granted a patent, an applicant must publicly disclose the invention, pay the prescribed fees, and make a formal request for examination (RE) [an event that initiates examination of the application]. Once a RE has been made, the application is examined by a patent examiner to determine whether the application is compliant with the Patent Act and the Patent Rules. When an examiner identifies defects in an application, the applicant is notified in an examination report and provided with an opportunity to comply. There is no limit on the overall duration of a patent examination, which helps to ensure that a thorough patent examination is conducted and high-quality patents are granted. A patent application may be voluntarily abandoned or withdrawn, allowed, or refused.

A large percentage of applications require more than a single examination report before they are determined to be allowable (i.e. the state where the applicant will be granted the patent by paying the final fee). In FY 2020–2021, 7% of patent applications were granted without an examination report being required, 47% required one report, 28% required two reports, 11% required three reports, and 7% required four or more reports. There is no limit in the Patent Rules for the number of examination reports CIPO may have to issue.

The time to examine an application can vary greatly and is dependent on a number of factors, including the quality of patent application drafting, the applicant’s prosecution strategy, the state of foreign prosecution on corresponding applications, the complexity and completeness of the application, and the nature of the claims. Two of the factors that tend to prolong patent examination times are the number of claims in the application and the number of examination reports required before the application is transitioned out of the examination process.

The claims in an application are the legal foundation defining the subject matter of the invention. They form a boundary around the invention and define the scope of rights protected by the patent. Currently, there is no limit on the number of claims in a patent application, nor are there any additional fees for large numbers of claims. An application with 40 claims would be subject to the same examination fee as an application with 20 claims, despite the significant difference in time it may take to examine.

Internationally, excess claims fees are applied in most major patent systems. These fees are present in the five largest IP offices [i.e. the European Patent Office (EPO); the Japan Patent Office (JPO); the Korean Intellectual Property Office (KIPO); the National Intellectual Property Administration of the People’s Republic of China (CNIPA); and the United States Patent and Trademark Office (USPTO)] and also in jurisdictions comparable in size to Canada such as Australia, the United Kingdom, India, Singapore and New Zealand. It is known from statistical reporting from foreign patent offices that the introduction of excess claims fees has had meaningful impact on applicant behaviour and resulted in a reduced number of claims in an application and more uniform patent application sizes.

Some jurisdictions have implemented strict time limits for applicants to bring their patent applications into compliance with legal requirements. For example, the United Kingdom and Australia require that the application be in a condition for allowance within 12 months from the first examination report. Non-compliance results in additional fees for time extensions or require a new application to be filed in some cases. The 12-month time limit serves to influence the quality of patent applications and discourage applicants from unnecessarily prolonging examination. Other jurisdictions, such as the United States (U.S.), have divided their examination process into stages delineated by a request for continued examination (RCE). This allows examination to continue to the next stage on request and the payment of a fee, or for examination to conclude when it is no longer in the interest of the applicant. While Canada is not unique in its current approach of permitting an unrestricted number of iterations between the applicant and CIPO, this approach is not ideal in terms of ensuring efficient use of CIPO’s resources.

Patent term adjustment (PTA) in the Canada–United States–Mexico Agreement (CUSMA)

In 2018, Canada signed the Canada-United States-Mexico Agreement (CUSMA) and, on March 13, 2020, passed the Canada–United States–Mexico Agreement Implementation Act. The Government of Canada intends to make changes to Canada’s IP system to ratify CUSMA. Article 20.44 of CUSMA requires that each of the parties (Canada, the U.S., and Mexico) provide PTA in their respective jurisdictions by providing the means to, and at the request of the patent owner, adjust the term of a patent to compensate for unreasonable delays in the issuance of the patent. CUSMA states an unreasonable delay at least shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later. The PTA obligation applies to all patent applications filed on or after December 1, 2020. Under CUSMA, Canada negotiated a 4.5-year transition period from the July 1, 2020, coming-into-force date of the CUSMA Implementation Act, ending on January 1, 2025, to implement PTA. During this period, the Government will conduct a thorough review of the commitment, and consult with a broad range of stakeholders.

Patent Cooperation Treaty (PCT)

The PCT is an international treaty with more than 150 contracting states. The PCT makes it possible to seek patent protection for an invention simultaneously in a large number of countries by filing a single “international” patent application instead of filing several separate national or regional patent applications. Canada has been a member of the PCT since 1990.

At the 62nd session of the WIPO General Assembly held October 2021, amendments to the PCT Regulations introducing the new WIPO standard ST.26 for the presentation of sequence listings were adopted by Contracting States with an implementation date of July 1, 2022.

Patent Law Treaty (PLT)

The PLT is a treaty adopted in 2000 by the WIPO. It aims to internationally harmonize and streamline administrative procedures with respect to patent applications and patents. The PLT addresses issues such as the provision of grace periods to avoid loss of rights, representation before the intellectual property office, and red-tape reduction. It does not seek to harmonize substantive patent laws (e.g. what is patentable).

Canada signed the PLT in 2001, which required changes to the Patent Act and Patent Rules. These changes came into force on October 30, 2019. However, the repeal and replacement of the Patent Rules in 2019 created minor ambiguities related to national phase applications which need to be addressed.

Objective

The broad objectives of the amendments are to increase the efficiency of the patent examination process, to reduce the average number of examination reports required prior to disposal of a patent application, to reduce the average number of claims in patent applications, to ensure the sequence listing standard in the Patent Rules remains aligned with the international standard in the PCT, and to introduce important new safeguards to prevent loss of rights. It also allows compliance with Canada’s international legal obligations under the PCT.

Description

The amendments to the Patent Rules are described according to the following three main themes:

Streamlining patent examination

Under the new process, a request for examination (RE) will entitle the applicant to receive a maximum of three examination reports or a notice of allowance (NOA). After this, if the applicant wishes to continue examination, they must request continued examination (RCE) and pay a prescribed fee of $816. In accordance with CIPO’s current approach to fee setting for small entities, this fee will be reduced by 50% for small entities ($408).

If an applicant elects to RCE and pay the prescribed fee, the application will be returned to the examiner for further examination. The same reasoning for limiting the number of examination reports after a RE holds for limiting the number of examination reports after an RCE. The applicant will then receive up to two additional examination reports to bring the application into compliance or, a NOA.

Following three examination reports after RE or following two examination reports after an RCE, the consequence of failing to RCE again within the subsequent four-month period is deemed abandonment of the application. In the event the application is deemed abandoned, the applicant will have another 12 months to reinstate the application by making a request for reinstatement and RCE and paying the prescribed fee. In this case, only a single fee for reinstatement is required.

An RCE can also be made after a NOA but the application will not result in abandonment if it was not made. This RCE after a NOA replaces the request to withdraw an application from allowance and return it to examination. Without this RCE, the application will proceed to grant or, if the final fee required for grant is not paid, abandonment.

The existing fee for making a RE ($816 for a standard entity in 2021) and the final fee (event which concludes examination and initiates grant of the patent, $306 for a standard entity in 2021, and $6.12 per page for each page of the specification and drawings other than a sequence listing over 100) required to grant a patent will be augmented to introduce a new component to each of these fees for each claim in excess of 20 claims in a patent application. The standard fee for each excess claim over 20 will be set at $100. The fee for small entities will be $50. Applications that retain 20 claims or fewer at all times during the period between RE and payment of the final fee will not be subject to these new fees and will pay only the current rate for a RE or the final fee.

The fees are to be applied at two distinct points in the application process:

The amendments will also create a new notice called a Conditional Notice of Allowance (CNOA). A CNOA will be issued at the discretion of the Commissioner and will inform the applicant that the application is in condition for allowance, but certain minor defects in the application must be addressed. The CNOA will require that the applicant address these defects and only these defects, and pay the final fee. By satisfying the requirements of the CNOA, the application will proceed to grant. For the purposes of RCE, the CNOA will have the same effect as the NOA, and applicants will also be able to RCE after receiving a CNOA.

PCT sequence listing standard

The definition of “PCT sequence listing standard” is replaced with a reference to the new PCT sequence listing standard set out in WIPO Standard ST.26.

In various sections of the Patent Rules, amendments to the translation requirements will ensure that at least one of the languages in the text matter contained in the sequence listings is in English or French.

Housekeeping and other minor amendments

Amendments to the Patent Rules in October 2019 limited the ability for applicants to correct translation errors after a PCT international application in a foreign language enters the national phase in Canada. The amendments will provide some flexibility to correct obvious errors in translations. Other amendments address ambiguities introduced during the repeal and replacement of the Patent Rules in 2019, align client services with those in other jurisdictions, and provide greater certainty through technical corrections and safeguards.

Regulatory development

Consultation

In July 2020, CIPO held a closed consultation with a targeted group of stakeholders to receive views on, and ideas for, streamlining patent examination in Canada. This consultation allowed CIPO to receive feedback from users of the patent system on the full range of possibilities for streamlining patent examination, including non-regulatory approaches. CIPO’s largest organizational stakeholders, top filing law firms, large and small Canadian entities were convened for a virtual roundtable. Fourteen stakeholders participated and the feedback received has been used to inform the proposal. Their comments are summarized as follows:

Comments questioning the need for reduced patent pendency: Some IP law firms viewed CIPO’s patent pendency as being low enough or too low. They felt CIPO is already meeting the CUSMA target of less than 36 months’ delay from a RE to patent grant and that there is no need for further streamlining initiatives to reduce patent pendency. They noted that they and their clients were satisfied with the current timeliness of examination and that current patent pendency in Canada, in relation to foreign offices, is a direct result of Canadian examination practices in respect of patentable subject matter and double patenting. Resolving these practices could further improve timeliness and examination without the need for regulatory change. It was indicated that other approaches to reducing pendency, including reducing the turnaround time on reviewing applicant responses to examination reports, could be explored if CIPO desired to lower pendency further.

Response: While the average pendency of applications is under the CUSMA target of less than 36 months from RE, CIPO is concerned about the volume of applications that remain over the threshold and outlier applications that are significantly above the average. The amendments are expected to bring the pendency of applications that are over the current average pendency closer to the current average. CIPO is investing in reducing the turnaround time for reviewing applicant responses to examination reports and, since the July 2020 consultation, has amended performance targets in this area.

Comments related to aspects of the Canadian patent system that lead to higher patent pendency and a high number of claims: Some IP firms and industry groups claimed there are underlying issues with the Canadian patent system that are the leading causes of a high number of claims and protracted prosecution. It was suggested to address those issues before considering other solutions. It was advanced that one reason for a high number of claims and protracted prosecution with Canadian applications is the unique double patenting laws in Canada. To protect against double patenting, some applicants submit patent applications with claims that include many possible embodiments or inventions such that CIPO identifies all the different inventions. This identification of different inventions by CIPO provides some level of immunity against double patenting attacks when the identified inventions are present in different patents. These stakeholders also commented that the lack of clarity surrounding the patentability of certain subject matter areas, such as computer-related inventions, is a leading cause of long pendency. Small business applicants noted a different perspective in that applicants are often motivated to file larger claim sets simply because they can in Canada, without additional fees. They also noted that when it is in their interest to delay prosecution, for example, to wait for prosecution to conclude in a foreign jurisdiction, they will utilize the available flexibilities in the system.

Response: The perceived issues noted with the Canadian patent system are complex issues related to legislative aspects of the Patent Act. There is a recognition of the need to explore all types of solutions, including at the legislative, regulatory and operational levels.

Comments related to the excess claim fees and a limit on the examination process: Some IP firms and industry groups commented that elements common to other jurisdictions, such as excess claim fees and limits on examination, do not necessarily integrate with the Canadian patent system since Canada is not a first-tier market for patent protection. It was argued that while jurisdictions in higher tiers can impose excess claim fees and compel behavioural changes from applicants during examination, adopting similar approaches in Canada would result in applicants simply avoiding engaging Canada’s patent system. One IP firm commented that excess claim fees and limits on examination would only increase costs for applicants and complexity in the system. Other IP firms commented that the proposals were reasonable and familiar to applicants, as they were common to many foreign jurisdictions. One IP firm and one small business supported and advocated for limits on the number of examination reports rather than a fixed time limit for examination, as seen in the United Kingdom and Australia.

Response: CIPO believes the regulatory amendments with respect to fees will not deter applicants’ engagement with the Canadian patent system. The fees generally align with those in other similar size markets. For example, Australia is a comparable market in terms of size for patent protection, and its fee for every claim over 20 but less than or equal to 30 claims at the point of acceptance is AU$125 (about CAN$118), and AU$250 (about CAN$236) for every claim over 30 claims at the point of acceptance. By comparison, the Canadian regulatory amendments are less costly and easier for the applicants to avoid the impact of fees by only pursuing the necessary scope of protection.

Comments on non-regulatory approaches to reduce patent pendency: Industry stakeholders and IP firms recommended that non-regulatory options to further reduce patent pendency be adopted by CIPO instead of regulatory amendments, arguing that such an option would not impact applicants financially and the Canadian patent system in a negative way. Suggested non-regulatory options included curbing the practice of piecemeal examination, increasing the use of the patent examiner interview service, and clarifying the examination practice in respect of patentable subject matter.

Response: CIPO’s internal audit indicates that piecemeal examination is not a systemic issue but rather isolated occurrences where defects in applications are not brought to the attention of the applicant at the earliest point in time. CIPO provides training against piecemeal examination and monitors examiner performance on this issue within its quality system. CIPO already promotes the examiner interview service and applicants can request its use as necessary. CIPO implemented a new examination practice in respect of patentable subject matter in November 2020 that aligned with guidance from an August 2020 Federal Court case. The patentability of certain subject matters is a difficult issue and is one faced by applicants in all jurisdictions.

Prepublication in the Canada Gazette, Part I (CG1) in July 2021

On July 3, 2021, a draft of the Regulations was published in the Canada Gazette, Part I (CG1) for a public comment period of 30 days. CIPO received a total of 12 submissions from IP firms and individual agents (5), IP professional associations (3), IP consortiums and IP applicants (2), and other interested parties (2). During this consultation period, an informal discussion was also held with members of the Intellectual Property Institute of Canada (IPIC) on July 19, 2021.

Respondents expressed general support with the Government of Canada’s intention to introduce measures that better streamline the patent examination process and encourage the harmonization of the Patent Rules with other jurisdictions where appropriate, with a view to avoiding unreasonable or unnecessary delays in the granting of patents as part of the implementation of the PTA obligation in CUSMA. However, many respondents expressed that if patent examination is to be restructured to promote compact examination and shorter pendency, then CIPO should take a more holistic approach that considers all relevant law and practice such that regulatory changes are complementary. Respondents raised concern with other aspects of the Canadian patent system, many of these having broader implications than the intent of the CG1 consultation, such as double patenting law, rules for filing divisional applications, rules and practice concerning clarity and conciseness of claims, final action practice and Commissioner Review. A few submissions commented on other amendments proposed in CG1 including extensions of time, corrections, and refunds.

After carefully considering all comments received, minor changes have been made to the Regulations to address some of the concerns, to correct some technical defects, and to provide additional administrative relief. Respondents provided the following specific feedback on the proposed amendments:

Small business lens (SBL): One of the larger IP professional associations indicated that the SBL analysis in CG1 appeared to be based on the number of applicants self-identifying as “small entities” under the Patent Rules. It was noted that the definition used for the purpose of the SBL analysis was inconsistent with both the Treasury Board of Canada Secretariat’s definition of a “small business” used for policy development and ISED’s definition of small business used for economic analysis. The professional association noted that the definition of “small business” applied in the CG1 Regulatory Impact Analysis Statement (RIAS) appeared to have excluded all companies with 51–99 employees, and included universities which generally have more than 100 employees. The SBL therefore did not accurately reflect the impact of the proposed RCE and excess claim fee regimes on Canadian small businesses. As a result, the professional association asserted that the fees proposed in CG1 could not be avoided by small businesses with 51–99 employees.

Response: The comments concerning the definition of small business are correct, and the limitation in the analysis provided in the SBL is acknowledged. The Patent Rules provides that entities having 50 or fewer employees and universities may declare themselves small entities; however, in practice, most universities file as regular entities. Despite best efforts, no alternative data sources have been identified, and the small entity data captured during patent prosecution is the most reliable and accurate data available. The SBL has been updated to reflect the data limitations. CIPO is confident that the current data provides the best possible analysis at this time. Further, while there is no fee reduction for small businesses with 51–99 employees, the impact of the new fees is avoidable or minimized through changes in applicant behaviour.

Excess Claim Fees (ECF): Respondents noted that Canada’s unique approach to double patenting may be one of the reasons for larger claim sets, particularly when applicants seek protection from double patenting by introducing claim sets obtained in various jurisdictions and/or from various applications into one application. Respondents indicated another reason for larger claim sets in Canada stemmed from the Canadian legislation and practice around claim drafting, notably preferred embodiments and dosage claims. It was noted that without counterbalancing mechanisms, the introduction of ECF in Canada would be costly for some applicants and may weaken the protection afforded by Canadian patents. Some respondents indicated that there was an apparent flexibility to request examination with reduced claims, and later introduce more claims, which could be a way to avoid payment of ECF at RE. One respondent also indicated that there was ambiguity in the manner in which the claims would be counted.

Response: Canada’s approach to double patenting is not believed to be the primary cause of larger claim sets. Canada’s patent system provides mechanisms to voluntarily file divisional applications and to protect against double patenting. However, additional remedies sought in respect of double patenting go beyond the intent of the current proposal, which seeks to streamline examination. Legislation and the practice on claim drafting in Canada align with that in many other jurisdictions where more stringent claim fees exist.

CIPO recognizes the need for applicants to pursue their desired scope of protection and flexibility to protect their inventions. The Regulations are changed to account for how the ECF of the final fee is calculated. At the final fee stage, the fee due is based on the maximum number of claims in the application after a RE is made and before the final fee is paid. This provides applicants the opportunity to pursue any desired claim set whilst providing reasonable compensation to CIPO for the examination effort. The language describing how claims are to be counted for the purposes of assessing ECF has also been clarified.

Request for continued examination (RCE): Respondents noted that Canada’s unique approach to double patenting may also be one of the reasons for protracted prosecution, particularly when applicants seek protection from double patenting. It was noted that generally, substantive examination does not begin until resolution of a unity defect which is usually raised in a standalone examination report. A few respondents also noted the so-called piecemeal examination, where examiners do not identify all defects at the earliest opportunity, prolongs prosecution. Some respondents noted that from a fairness perspective, the introduction of RCE would need to be accompanied by an examination practice where each examination report fully detailed all defects. One respondent also noted that this proposal introduces an artificial limitation on the collaborative process and would create a more adversarial system. There were also concerns around the types of reports that would count toward an RCE and the ability to appeal a report that triggered one.

In addition, it was noted by respondents that, unlike the U.S. that introduced RCE with the implementation of PTA in 2000, the timing of the introduction of RCE into Canadian legislation did not align with the implementation of PTA. If CIPO desired to continue with the proposal, it should be introduced in 2025 with PTA rather than now.

Response: Preliminary data analysis indicates that double patenting defects account for less than 1% of defects raised in examination reports, that approximately 7% of REs received annually are divisional applications and approximately 12% of examination reports cite unity of invention defects. Canada’s approach to double patenting cannot readily be linked to protracted prosecution, and additional remedies sought in respect of double patenting may subvert the intent of the current proposal.

CIPO’s Quality Management System (QMS) consistently demonstrates that defects are identified at the earliest time point and regular reporting ensures that any divergence from this practice can be readily addressed. However, there are circumstances (e.g. unity of invention defect, new matter in a divisional application, or absence of a sequence listing) where it may be more efficient to defer substantive examination, as outlined in CIPO’s Manual of Patent Office Practice (MOPOP).

The proposed limitations and availability of voluntary amendments provide sufficient opportunity for applicants to conclude the examination process. Relief in respect of certain types of examination reports would be seen as unfair, as it would shift the cost burden onto other applicants who place their application into compliance within a reasonable number of reports. However, consideration to an applicant’s ability to respond to examination reports has been addressed by introducing a provision for applicants to extend the time to respond to examination reports that are received more than one month after the day on which they are sent, provided that certain conditions are met.

The Regulations have been amended to explicitly define the conditions for reinstatement, extensions of time, and abandonment in respect of RCE. In comparison to CG1, the regulations now only require one reinstatement fee when reinstatement is sought following the failure to both respond to an examiner’s requisition and request for continued examination.

The Regulations have also been amended to redefine the conclusion of stages of examination, without changing the policy intent and framework presented in CG1. CIPO recognizes that the concept of “cessation” of examination introduced some ambiguity. There are occasions where examination work might be performed on an application after examination is concluded (e.g. a protest is received, an amendment after allowance) and CIPO would prefer not to introduce any ambiguity. Conceptually, examination is suspended at particular points in time, and the Regulations have been amended to better capture this concept.

In respect of the timing of the Regulations, CIPO notes that applications filed in Canada have been eligible for PTA since December 1, 2020.

Conditional Notice of Allowance (CNOA): Respondents welcomed the Conditional Notice of Allowance (CNOA) proposal. One respondent noted, though, that the complexity of the proposed CNOA did not seem worthwhile, particularly if the applicant did not address the defects. It was noted that in the case of amendments being made in response to the CNOA, where the amendments do not successfully address the defects in the CNOA or go beyond those requisitioned, the stage of examination was unclear.

Response: The Regulations provide a clear indication of the circumstances under which a CNOA (or NOA) would be withdrawn. This includes the situation where an applicant responds to a CNOA with more than the limited amendments requisitioned in the CNOA. It is also clarified that if the CNOA is withdrawn, or if the applicant makes a RCE following a CNOA, that any of the amendments made between the date of the CNOA and the RCE or the date the CNOA is withdrawn will be considered as never having been made. These changes to the CNOA regulations help clarify the amendments that are before the examiner and the conclusion of a stage of examination.

Examiner interviews: Respondents indicated that applicants and agents would initiate more interviews with examiners, likely to avoid a first or subsequent RCE. These interviews may be a way of advancing prosecution without the need for examination reports which would count towards RCE, but place additional burden on examiners. While the current interview service process tends to focus on non-substantive, minor issues, some of which may be replaced by the proposed CNOA, respondents welcomed the opportunity for more interviews on substantive issues. Respondents also suggested that CIPO could change its communication policies such as by permitting document exchange via e-mail and videoconferencing directly with examiners.

Response: An increase in applicant initiated interviews is possible with the coming into force of the RCE provision, though this increase is not expected to be significant. The breadth of reasons for an examiner to initiate an interview may change since some minor defects and issues would be addressed through the newly introduced CNOA, whereas an applicant initiated interview would likely address more substantive examination issues. Should an applicant initiate an interview, there would be no guarantee that a report was not forthcoming. An impasse at the interview stage would still result in the examiner issuing a subsequent report. In such cases, it is unclear whether the interview service would be beneficial in the overall advancement of prosecution but it is another avenue available to applicants. While the interview service is out of scope of the regulatory amendments, CIPO continues to encourage applicants and examiners to initiate interviews when appropriate.

Transition period: Some respondents raised concerns that the previously proposed 30-day period between the registration of the regulatory amendments and the coming into force date was inadequate for information technology transfer. Respondents advised CIPO that client management considerations are also a key factor and would require agents to be provided a longer notice period. Respondents requested that the period be increased to three full months from registration, or preferably publication.

Response: The Regulations have been amended to define the coming into force date as October 3, 2022, with the exception of the Sequence Listing ST.26 related amendments which will come into force on July 1, 2022.

Modern treaty obligations and Indigenous engagement and consultation

These proposed amendments are not expected to impact treaties with the Indigenous peoples of Canada. CIPO conducted an initial assessment that examined the geographical scope and subject matter of the initiative in relation to modern treaties in effect and did not identify any potential modern treaty impacts.

Instrument choice

In efforts to reduce pendency and streamline the patent examination process, CIPO considered a range of options, including taking no action (status quo), non-regulatory options, and regulatory options. Ultimately, it was determined that a regulatory approach was the most effective approach to achieve the objectives.

Status quo

The current patent application examination process can be largely applicant-driven. The status quo offers limited mechanisms to reliably ensure applicants make the most efficient use of the process. CIPO has service standards in respect of the timeliness of examination and in CUSMA, the Government of Canada committed to make best efforts to process patent applications in an efficient and timely manner, with a view to avoiding unreasonable and unnecessary delays. In the status quo scenario, inefficient use of the patent system by applicants can create unnecessary resource pressures for CIPO which could result in CIPO not meeting its service standards in respect of the timeliness of examination. Regulatory controls on the size of patent applications and the pendency of examination are needed to ensure applicants utilize the resources of the office efficiently.

Non-regulatory approach

The non-regulatory options included developing additional guidance to assist applicants in filing applications that are fully compliant with Canadian patent laws; encouraging applicants to voluntarily address defects cited in international applications prior to requesting examination of a PCT national phase application in Canada; further improving CIPO’s capacity to expedite examination; or making additional process changes. These options were not considered adequate as they would not provide the necessary incentives for applicants to submit applications that are streamlined, free of defects and unnecessary claims, and would not address the sources of delays that are under the control of applicants.

Recently, CIPO has increased its capacity and made a number of changes to processes and practices, such as automating the sending of certain notices to applicants, updating examination training, encouraging use of online payments, introducing an examination interview service to expedite examination, and modifying the granting process to reduce the amount of time it takes. While these initiatives streamline some operational aspects, they do not encourage applicants to conclude examination in a timely manner, nor do they compensate for any additional examination effort required.

Regulatory approach

To improve the efficiency of the patent examination process, it is desired to impose reasonable limits and to incentivize changes in applicants’ behaviour with respect to the prosecution of applications before CIPO. Regulatory amendments, including introducing fees for excess claims, a request for continued examination mechanism, and a conditional notice of allowance, are considered to be the most efficient way to achieving these objectives. In addition, aligning the Patent Rules with the international standard in the PCT can only be made through regulations. Using a regulatory instrument is the most appropriate tool to achieve these objectives and is therefore the selected option.

Regulatory analysis

Benefits and costs

The amendments seek to streamline patent examination and align aspects of the Canadian patent system with international norms, resulting in identifiable benefits and costs to patent applicants and patentees, patent agents, and the Government of Canada.

The amendments will increase examination-related fees for patent applicants who require more examination time and for those who seek protection for additional claims they believe to be valuable. It is estimated that up to 17.6% of patent applicants will submit a request for continued examination and pay the applicable fees, and up to 17% of patent applicants will be subjected to excess claim fees (ECF). The incremental costs to patent applicants will be used to recover the costs incurred by CIPO to examine patent applications, to implement the amendments, and to support CIPO’s operations. The net present value of the quantified impacts over a 10-year period will be a net benefit of $12.9 million (annualized amount of $1.8 million), with a total benefit of $63.5 million and total cost of $50.6 million. Present values are discounted to 2022 using a rate of 7%.

The amendments are expected to result in changes in applicant behaviour that will lead to a reduction in the number of examination reports and the number of claims in patent applications. Applicants are expected to avoid paying for new fees by being more proactive in amending applications to correct known defects and carefully considering the scope of protection sought. The behaviour changes will alter trends in examination and are expected to result in reduced patent pendency. The increased efficiency of the patent examination process will allow CIPO to increase its production capacity and deploy examination resources where they are needed most.

Amendments to the Patent Rules to adopt the new PCT sequence listing standard will ensure continued international harmonization for ease of processing patent applications with sequence listings in Canada.

Finally, the amendments introducing new safeguards and flexibilities in respect of extensions of time for incorrect fee payments and correcting obvious errors in translations provided to CIPO are intended to result in less risk of loss of rights.

The impacts of the amendments have been assessed qualitatively and quantitatively.

Analytical framework

Benefits and costs associated with the amendments are assessed by comparing the baseline scenario against the regulatory scenario. The baseline scenario depicts what is likely to happen in the future if the amendments are not implemented. The regulatory scenario provides information on the expected incremental impacts on all affected stakeholders as a result of the amendments. Patent applicants and patentees, patent agents, and CIPO will be affected by the amendments.

The expected behaviour changes were modelled based on international examination trends, applicant behaviours in countries with similar features in their patent systems, and consultation with subject matter experts. Both the baseline and regulatory scenarios assume that 6% of applications having requested examination are from small entities, with the same distribution of foreign (86.5%) and domestic applicants (13.5%).

Following the Treasury Board Secretariat’s Cost-Benefit Analysis Guide, costs and benefits attributed to Canadians are forecast. The incremental costs of paying the new fees will primarily be borne by foreign applicants since 86.5% of applicants seeking patent protection in Canada are foreign. Those fees paid by both domestic and foreign applicants will fund additional examination efforts and other associated costs of CIPO’s operations.

The impacts of the amendments are forecast over a 10-year period from FY 2022–2023 to FY 2031–2032. Unless otherwise stated, all costs are in present values, discounted to 2022 using a 7% discount rate and in 2022 Canadian dollars. The results of the analysis differ slightly from what was presented in the Canada Gazette, Part I, owing to a revised entry into force date and updated forecast of REs and grants for the 10-year period.

A detailed cost-benefit analysis report is available upon request to cipoconsultations-opicconsultations@ised-isde.gc.ca.

Baseline scenario

In 2020–2021, 37 164 applications were filed in Canada and 21,451 patents were granted by CIPO. Of these, 14.8% of the applications were filed by Canadians, and 9.8% of the patents were granted to Canadians. Patent applicants and patentees are typically represented in the process of obtaining patent rights by licensed patent agents.

In FY 2022–2023, under the baseline scenario, it is forecast that approximately 33 531 REs will be received. The number of REs is forecast to increase to a peak of around 39 000 by 2024 before reducing to 28 750 by 2032. This expected peak is a result of the reduction from five years to four years of the deferred examination period, which is the time limit to RE after filing, introduced in the October 2019 repeal and replacement of the Patent Rules.

In the absence of the claim limits and associated fees, the number of claims per application is expected to remain the same through the period of analysis, with 46% of applications having greater than 20 claims. This will result in the same proportion of additional time being devoted to the examination of these applications.

In the absence of examination limits and associated fees, the number of examination reports to allowance of an application will follow the current distribution of the number of reports to grant: 8.74% of patents grant without an examination report, 46.31% grant with one examination report, 24.94% with two, and 20% in three or more reports.

Regulatory scenario

The number of patent applications filed annually will be the same as the baseline scenario. However, with the amendments, it is expected that

Benefits

The mechanisms that will be introduced to streamline patent examination are forecast to create efficiencies within the patent examination process by reducing the total volume of examination work products by 3.5%, reducing patent pendency by 5–8 months for 4.4% of patents, and reducing patent pendency by 9–12 months for 2.4% of patent applications. It is expected, as a result of more compact prosecution and compact applications, that there will be an increase in the quality of examination and granted patents thus providing greater marketplace certainty. Further, the reduction in patent pendency and the efficiency gains will assist CIPO to process patent applications in an efficient and timely manner as set out in CUSMA, with a view to avoiding unreasonable or unnecessary delays leading to granting term adjustments.

Modernization of the PCT sequence listing standard, and changes to translation and language requirements will align Canada with international norms and provide greater flexibility and certainty to applicants. Housekeeping and miscellaneous amendments will introduce new safeguards for applicants, resolve various ambiguities, and correct minor errors.

The present value of the quantified benefits total $63.5 million, which are from monetized efficiency gains in patent examination ($2.5 million) and revenues from additional fees collected from Canadian applicants ($8.2 million) and foreign applicants ($52.8 million).

Benefits to the Government

Revenues from fees paid

There will be an increase in revenues to CIPO as a result of the additional fees collected from patent applicants. As shown in Table 1, the total incremental revenues from fees paid by patent applicants and patentees over a 10-year period are estimated to be $61 million. This includes revenues collected from domestic ($8.2 million) and foreign ($52.8 million) patent applicants and patentees.

Table 1: Revenues from RCE and excess claim fees
Source Domestic applicants Foreign applicants 10-year total (present value)
Claims at RE $5,496,250 $35,216,714 $40,712,964
Claims at final fee $810,061 $5,190,393 $6,000,454
RCE $1,833,114 $11,745,510 $13,578,624
RCE from applicant election to set aside NOA / CNOA $94,440 $605,116 $699,556
Total $8,233,865 $52,757,733 $60,991,598

Revenues generated from patent-related fees are used in CIPO’s overall cost recovery, including many services and functions that do not generate fees (e.g. educational outreach, promoting innovation and IP interests in Canada and abroad). The expected revenues will be used to cover the cost of implementing and administering the amendments and CIPO’s operations and service delivery, which will increase CIPO’s ability to be responsive to any changes in examination trends resulting from the introduction of PTA in Canada.

Time savings from efficiency gains

The introduction of compact prosecution mechanisms (RCE and CNOA) will result in a decrease in the number of examination reports, which is forecasted to result in an annual average savings equivalent to four full-time employees (FTEs) by 2026 (steady state). Additional examination time above the average allotted for applications containing an excess number of claims will be reduced, and this is forecasted to result in an average of 400 hours per year of examination time saved. These efficiencies will translate into a reduction in patent pendency and allow CIPO to shift resources to other functions. It will also better position CIPO to reduce the likelihood of unreasonable delays in the granting of patents, supporting the Government’s commitment in CUSMA to make best efforts to avoid delays in the granting process.

Table 2 illustrates the monetized forecasted efficiency gains that will be realized by CIPO from the amendments.

Table 2: Time savings benefits
Savings Annualized amount 10-year total (present value)
Time savings from fewer examination reports (RCE and CNOA) $324,317 $2,277,869
Time savings from fewer applications with a large number of claims $34,486 $242,215
Total $358,803 $2,520,084

Alignment with international norms and obligations

Canada is out of step with international norms on the number of permissible claims in a patent application without requiring additional fees. Introducing excess claim fees will align Canada’s patent system with its largest trading partners who have adopted similar mechanisms to ensure efficient application processing. Improving alignment of the Canadian patent system with international norms may attract foreign and domestic investments in Canada.

An additional benefit to the Government of Canada is that amendments to the Patent Rules related to the sequence listing standard in the PCT will ensure Canada remains compliant with the PCT.

Benefits to patent applicants and patentees

Excess claim fees will encourage applicants to file and prosecute patent applications with fewer claims or to pay a fee for additional claims that they believe to be valuable. It is expected that applicants in Canada will file and prosecute fewer claims per application.

Approximately 80% of applications enter the Canadian system from the PCT, and the majority (98%) of applications filed in Canada have family member applications in other jurisdictions (i.e. a collection of patent applications containing the same or similar inventions and having common inventors). Since the amendments will increase alignment between Canada’s patent system to those of our trading partners, it is expected that applicants who have filed corresponding applications in other jurisdictions will be more likely to align their Canadian application with their foreign applications, potentially leading to reduced costs and administrative burden to prepare the Canadian application.

The RCE mechanism will benefit applicants, as it provides flexibility to applicants who require more examination time while keeping costs lower for the majority of applicants who file and amend their applications to comply with Canadian law earlier during the examination process. Applicants filing in Canada through the PCT have already received a preliminary opinion on patentability, which they can leverage to address issues prior to examination before CIPO. The introduction of the CNOA will further benefit applicants, as it will allow them to address minor formality defects without having to request further RCE and pay the associated fees. Further, the CNOA will reduce patent pendency by 5–8 months.

Applicants will also benefit from the examination and prosecution efficiencies gained from the amendments, both in terms of reduced patent pendency, and possibly reduced prosecution fees paid to agents for services rendered. While reduced patent pendency is not quantifiable, there are increased benefits to obtaining a patent rather than having a patent pending, for example, the potential for increased marketability and saleability, improved access to capital, and increased financial compensation in the event of infringement.

A number of changes provide additional benefits to applicants, namely the introduction of flexibilities to correct translation errors prior to the allowance of an application, as provided in other jurisdictions, the changes to address errors and ambiguities which obscure the policy intent and adoption of the PCT sequence listing standard to comply with PCT obligations, as adopted by other trading partners.

Benefits to patent agents

Licensed patent agents represent applicants in 98% of patent applications in Canada. Nearly all applications filed in Canada have family member applications in other jurisdictions, and 80% enter through the PCT. As Canadian patent agents prepare applications to be filed globally and provide instructions to foreign patent agents and attorneys, increased harmonization of the Canadian patent system with international counterparts will benefit agents.

Costs

The amendments will result in a total quantified cost of $50.6 million, with $8.2 million of this cost assumed by Canadian patent applicants and $42.3 million by CIPO. Additional costs, such as the transactional costs for applicants and patent agents to prosecute patent applications according to the modified examination process, are considered qualitatively. Transactional costs for applicants are presumed to be low and/or offset by savings to applicants.

Costs to Canadian patent applicants

Canadian patent applicants will assume increased costs for requesting examination of applications with more than 20 claims, and when requesting to continue examination after an examination has been suspended. The total costs of the fees to Canadian applicants, from FY 2022–2023 to FY 2031–2032, will be $8.2 million, annualized to $1.2 million as shown in Table 3.

Excess claim fees

The amendments will introduce a fee set at $100 for standard fee paying entities and $50 for small entities (i.e. a university or a business with 50 or fewer employees) for each claim in excess of 20 evaluated at the RE and for each claim in excess of 20 at the payment of final fee for those claims for which an excess claim fee was not paid at the RE. For FY 2022–2023, CIPO modelled 46% of patent applications containing greater than 20 claims with an average number of excess claims being 15 (35 claims at the RE). CIPO’s model forecasts that the average number of claims per patent application will decrease to a steady state of 17 claims in 2026–2027, with 17% of applications containing claims greater than 20 claims, and the average number of excess claims being 11 (31 claims at the RE). Over the forecast period (FY 2022–2023 to FY 2031–2032), it is expected that 8 932 applications filed by Canadian applicants will be subject to ECF, resulting in costs to applicants totalling $6.3 million ($5.5 million at RE and $0.8 million at final fee).

Request for continued examination fees

Under the regulatory scenario, 17.6% of applications will be subject to RCE fees. As RCE fees are required after a third examination report, it is expected that applicants will begin requesting continued examination for this reason in 2025. From that point forward, it is expected that 520 applications filed by Canadian applicants will be subject to at least one RCE each fiscal year (FY 2025–2026 to FY 2030–2031). Applying the RCE fee of $816 (reduced to $408 for small entities) to continue examination after three examination reports and two examination reports after RCE(s) to the estimated volume of applications that will be received over the period of analysis, the total cost to Canadian applicants associated with RCE is estimated to be $1.9 million.

Table 3: Present value of costs to domestic applicants
Note: The analysis assumes that 13.5% of applicants are domestic (Canadian).
Fee type Annualized amount 10-year total (present value)
Excess claims fees at RE $782,542 $5,496,250
Excess claims fees at final fee $115,335 $810,061
Request for continued examination fees $274,440 $1,927,554
Total $1,172,317 $8,233,865
Costs to the Government

CIPO will assume fixed implementation costs (Information Technology investments, training) as well as annual expenditures (administrative and examination time, quality control) to administer the amendments. The costs have been categorized and are presented in Table 4.

In respect of RCE, it is expected that examiners will require an average of 1.5 additional hours per application to increase quality control of examination work products at specific stages to ensure high quality examination. This will ensure more comprehensive patent examination and identify defects in patent applications at the earliest moment. Administrative processing time will be required for processing RCEs and ECF, on the order of 7.5 to 15 minutes per task.

Table 4: Present value of net regulatory implementation and administration costs to CIPO
Net costs Annualized amount 10-year total (present value)
Implementation of the amendments $391,944 $2,752,849
Systemic and organizational changes related to the amendments $5,637,581 $39,596,008
Total $6,029,525 $42,348,857
Cost-benefit statement
Table 4a: Monetized costs
Impacted stakeholder Description of cost 2022–2023 2027–2028 2031–2032 Total (present value) Annualized value
Canadian patent applicants ECF $887,659 $840,389 $851,874 $6,306,311 $897,877
RCE fees $7,202 $451,376 $404,521 $1,927,554 $274,440
Canadian Intellectual Property Office Implementation of the amendments $2,945,548 $0 $0 $2,752,849 $391,944
Systemic and organizational changes related to the amendments $2,861,635 $6,188,396 $5,798,410 $39,596,008 $5,637,581
All stakeholders Total costs $6,702,044 $7,480,161 $7,054,805 $50,582,722 $7,201,842
Table 4b: Monetized benefits
Impacted stakeholder Description of benefit 2022–2023 2027–2028 2031–2032 Total (present value) Annualized value
Canadian Intellectual Property Office Revenue from ECF $6,575,251 $6,225,100 $6,310,180 $46,713,418 $6,650,940
Revenue from RCE fees $53,350 $3,343,524 $2,996,452 $14,278,180 $2,032,892
Time savings benefits $17,731 $580,716 $540,014 $2,520,084 $358,803
All stakeholders Total benefits $6,646,332 $10,149,340 $9,846,646 $63,511,683 $9,042,635
Table 4c: Summary of monetized costs and benefits
Impacts 2022–2023 2027–2028 2031–2032 Total (present value) Annualized value
Total costs $6,702,044 $7,480,161 $7,054,805 $50,582,722 $7,201,842
Total benefits $6,646,332 $10,149,340 $9,846,646 $63,511,683 $9,042,635
NET IMPACT −$55,712 $2,669,179 $2,791,841 $12,928,961 $1,840,793
Sensitivity analysis

A sensitivity analysis was conducted to determine how sensitive the estimates were to changes to key variables such as the discount rate. The central analysis used a 7% discount rate as recommended by the Treasury Board of Canada Secretariat. The results of the sensitivity test using a 3% or a 10% discount rate are presented in 2022 dollars in Table 5a (results from the central analysis are indicated in bold). The magnitude of the estimates varies with the choice of the discount rate but there is no change in direction.

Table 5a: Impact of changes to the discount rates on final estimates
Discount rate Undiscounted 3% 7% 10%
Net benefits $92,309,681 $78,059,478 $63,511,683 $55,063,039
Net costs $72,169,205 $61,500,203 $50,582,722 $44,206,424
Net impact $20,140,476 $16,559,275 $12,928,961 $10,856,615

To address the effect of uncertainty and variability on assumptions made in respect of behaviour changes, a sensitivity analysis was performed on the following variables: RCE and CNOA. For RCE, a 10% shift in applicant behaviour was used for the central analysis, whereas the sensitivity analysis presents the results should there be a 20% shift in applicant behaviour (increased RCE avoidance). For CNOA, the central analysis evaluated the impact of 4.4% of patents being granted following a CNOA. The sensitivity analysis presents the results should 10.5% of patents be granted following a CNOA (increased CNOA use).

It is forecast that 2.4% of applications will grant 9 to 12 months sooner than the baseline scenario due to the combination of RCE avoidance by applicants and use of the CNOA by CIPO, and that if both RCE avoidance and CNOA use are increased above the expected behaviour change, then up to 5.2% of applications will be granted 9 to 12 months sooner than the baseline scenario (Table 5b, last column). The results of the analysis on benefits and costs are shown in 2022 dollars in Table 5b (results from the central analysis are indicated in bold).

Table 5b: Impact of sensitivity analysis on behaviour changes to revenue
Scenario Domestic Foreign Total revenue % paying RCE % changed applicant behaviour
Forecast RCE and CNOA $1,833,114 $11,745,510 $63,511,683 17.60% 2.40%
Increased RCE and Forecast CNOA $1,739,510 $11,145,747 $62,828,384 16.50% 3.50%
Forecast RCE and increased CNOA $1,670,182 $10,701,534 $62,601,772 15.80% 4.20%
Increased RCE and Increased CNOA $1,582,614 $10,140,452 $62,828,384 14.80% 5.20%
Distributional analysis

As previously described, Canadian and foreign patent applicants will be impacted by the amendments. Within Canada, the volume of patent applications filed at CIPO varies by province and territory. A distributional analysis of cost to Canadian patent applicants across Canada is shown in Table 6. The majority of the costs will be assumed in Ontario, Quebec, Alberta and British Columbia.

Table 6: Cost to Canadian applicants by province or territory
Note: The percentage of Canadian patent applicants was derived from distribution between FY 2017–2018 and FY 2020–2021.
Province or territory Percentage of Canadian patent applications Annualized 10-year total
Alberta 16.5% $193,875 $1,361,698
British Columbia 13.0% $152,795 $1,073,169
Manitoba 2.3% $26,659 $187,239
New Brunswick 0.8% $9,493 $66,674
Newfoundland and Labrador 0.4% $5,026 $35,302
Northwest Territories 0.3% $3,706 $26,026
Nova Scotia 1.0% $12,056 $84,676
Nunavut 0.0% $71 $498
Ontario 39.6% $463,757 $3,257,237
Prince Edward Island 0.3% $3,407 $23,926
Quebec 23.0% $269,086 $1,889,947
Saskatchewan 2.7% $31,852 $223,713
Yukon 0.1% $535 $3,759
Canada 100% $1,172,317 $8,233,866

Small business lens

An analysis under the small business lens has determined that the amendments will result in increased costs to small businesses for the examination of patent applications in Canada. As described previously, the analysis carried out under the small business lens is limited by the data available to CIPO, which is the payment of fees by entities who have declared themselves small entities as defined in the Patent Rules. This definition includes entities having 50 or fewer employees and universities. In practice, most universities do not declare small entity status and instead pay the standard fee. In Canada, approximately 6% of patent applicants declare themselves as small entities, and 40% of these are Canadian entities. CIPO provides flexibilities to reduce any disproportionate burden from the amendments on small businesses, including a 50% fee reduction for small entities as defined in the Patent Rules. The new fees introduced subscribe to this reduction. As small businesses are more cost sensitive and may seek to avoid these fees, the actual costs to small businesses may be lower than the costs estimated by CIPO.

In the 10-year period, from FY 2022–2023 to FY 2031–2032, CIPO forecasts receiving an average of 1 886 requests per year for the examination of patent applications from small businesses. Approximately 40% of these requests, a total of 754 annually, will be made by Canadian small businesses and the remainder by foreign entities. CIPO forecasts that a request for continued examination will be made in approximately 17.6% of applications and excess claim fees will be paid in approximately 17% of applications.

New fees related to excess claims in a patent application are expected to increase costs for Canadian small businesses by an average of approximately $76 per application. New fees for continuing the examination of applications are expected to increase costs for Canadian small businesses by an average of approximately $46 per application. The cost to return an application to examination after a notice of allowance will not change for small entities. The introduction of a conditional notice of allowance mechanism is expected to benefit small businesses with modest savings as a result of avoiding a potential requirement to request continued examination on a report that will otherwise trigger that requirement.

There are some costs to small businesses that have not been captured in this analysis. One cost that was not quantified was any transactional costs to prosecute patent applications according to the modified examination process, due to a lack of data and since the cost to applicants is presumed to be low. Savings to small businesses from the amendments were also not quantified. However, based on feedback received during the July 2020 consultation, CIPO assumes that small businesses may save money on the preparation and prosecution of their patent applications by directing their patent agents to align their Canadian applications more closely with those in foreign jurisdictions. Addressing known defects earlier to increase the possibility of an early grant, as well as drafting more concise applications with fewer claims to avoid fees are also the anticipated behaviours of small businesses. There may be additional benefits to small businesses, but these are not estimated due to lack of reliable data.

Small business lens summary
Table 7: Compliance costs for Canadian small businesses
Activity Annualized amount 10-year total (present value)
Excess claims fees at RE $71,711 $503,666
Excess claims fees at final fee $9,800 $68,833
Request for continued examination fees $49,618 $348,495
Total compliance cost $131,129 $920,994

One-for-one rule

The one-for-one rule does not apply because the rule does not apply to fees and the amendments will not impose an administrative burden on businesses. There are no associated reporting or record-keeping requirements in the amendments. ISED is not introducing new or incremental requirements to demonstrate compliance, including collecting, processing, reporting or retaining information.

Regulatory cooperation and alignment

The amendments as a whole are not related to a work plan or commitment under a formal regulatory cooperation forum (e.g. the Canada–United States Regulatory Cooperation Council, the Canadian Free Trade Agreement Regulatory Reconciliation and Cooperation Table, the Canada–European Union Comprehensive Economic and Trade Agreement Regulatory Cooperation Forum).

The amendments streamlining the patent examination process align with CUSMA’s requirement that parties make their best efforts to avoid unreasonable or unnecessary delays in the granting of patents. In developing the amendments, CIPO considered approaches in other jurisdictions. Internationally, there is no single approach to some of the common issues facing patent offices worldwide. Globally, it is common to see regulations that streamline patent examination, including addressing a Patent Office’s approach to the examination process, and mechanisms to motivate applicants to file concise applications, to prosecute applications expeditiously, and to utilize the resources of a Patent Office in an efficient manner.

CIPO studied the patent systems in several countries and regional groups, including in the U.S., the European Union, Australia, New Zealand, the United Kingdom, Japan, China and Mexico. There is a variety of approaches used in the different jurisdictions to ensure efficient patent prosecution and while there are some similarities, these approaches are not necessarily aligned. In most patent systems surveyed, a fee for excess claims is a common feature. CIPO proposed a Canadian approach that focused on simplicity and affordability while also providing sufficient motivation to alter current behaviour in respect of claim drafting. Elements of the Canadian approach, such as the claims threshold and the fee amount for excess claims, are aligned primarily with elements of the U.S. and Australian approaches. Likewise, no patent system has the same approach to encourage the efficient use of its Patent Office’s resources and to encourage the timely disposal of patent applications. In this respect, CIPO proposed a Canadian approach that will be aligned with elements of the U.S. request for continued examination system but tailored to the observed historical Canadian applicant behaviours. The Canadian request for continued examination system will be familiar in concept to Canadian patent applicants who engage the U.S. patent system, and will be simple to navigate and understand. It will also offer more flexibility to applicants when compared to approaches in other jurisdictions like the U.S., Australia and the United Kingdom.

The amendments to the Patent Rules in respect of changes to the form of sequence listings will be compliant with those of the PCT. The PCT requirements incorporated flexibilities to permit Canada to introduce minor modifications that ensure amendments to the Patent Rules also conform to the official language requirements (French and English) for patent applications in Canada. The PCT now has 153 contracting states and as such, the new requirements in respect of sequence listings will be aligned with a large number of jurisdictions.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary analysis concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

ISED conducted a preliminary gender-based analysis plus (GBA+) scan to determine if any groups or individuals, including the general public, applicants, patentees and IP agents, will be affected differently than others based on factors such as gender, sex, age, language, education, geography, culture, ethnicity, income and ability. No GBA+ impacts have been identified for these amendments.

Implementation, compliance and enforcement, and service standards

Implementation

The amendments will come into force on October 3, 2022, with the exception of the Sequence Listing ST.26 related amendments which will come into force on July 1, 2022. It is anticipated that affected stakeholders will have sufficient time between publication in the Canada Gazette, Part II, and the coming-into-force date to familiarize themselves with the regulatory changes and to implement any changes needed to their processes, documentation and information technology.

As part of the implementation, CIPO will notify stakeholders of the coming-into-force date of the amendments via email. CIPO will answer general questions regarding the amendments. Outreach will be proactive and conducted via direct email and social media posts. The Manual of Patent Office Practice (MOPOP), CIPO’s website and information technology will be updated to support the implementation of the amendments.

Compliance and enforcement

CIPO will ensure compliance using existing tools under the Patent Act and the Patent Rules. When patent applications do not comply with the requirements in the Patent Act and the Patent Rules, CIPO issues notices and reports to the applicant giving them an opportunity to comply. As with other requirements in the Patent Act and the Patent Rules, non-compliance can lead to late fees, the deemed abandonment of the application and ultimately, loss of rights. No new compliance and enforcement activity will be required for the amendments and there will be no change in the manner the requirements in the Patent Rules are enforced.

Service standards

Existing service standards (Client Service Standards of the Canadian Intellectual Property Office) will be used for the RE fee and the final fee, which comprise a new excess claims fee component. For a fee paid to request continued examination, CIPO will implement the same service standard associated with the current fee for withdrawal of notice of allowance and return to examination. The service standard for RCE will be to send a confirmation, within one month of receipt of a compliant request and payment of the prescribed fee, that the application has been returned to examination.

In cases where a service standard is not met, a portion of the fee will be remitted to the client in accordance with the Service Fees Act, the Treasury Board Directive on Charging and Special Financial Authorities, and the CIPO remission policy.

Contact

Virginie Ethier
Assistant Commissioner and Director General
Patent Branch
Canadian Intellectual Property Office
Innovation, Science and Economic Development Canada
Telephone: 819‑997‑2949
Email: virginie.ethier@ised-isde.gc.ca