Rules Amending the Patent Rules: SOR/2024-50

Canada Gazette, Part II, Volume 158, Number 8

Registration
SOR/2024-50 March 25, 2024

PATENT ACT

P.C. 2024-253 March 25, 2024

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

Rules Amending the Patent Rules

Amendments

1 Paragraphs 3(4)(c) and (d) of the Patent Rules footnote 1 are replaced by the following:

2 The Rules are amended by adding the following after section 139:

Waiver — paragraph 3(4)(d)

139.1 (1) In the case where the Commissioner considers that the circumstances do not justify requiring the statement and the application referred to in paragraph 3(4)(c), the Commissioner is authorized to waive, in favour of the applicant or patentee, payment of the difference referred to in paragraph 3(4)(d) if the Commissioner considers that the circumstances justify the waiver.

Additional waiver

(2) In the case where the Commissioner waives payment under subsection (1), the Commissioner is also authorized to waive, in favour of any applicant or patentee, payment of the difference between the amount specified in the erroneous information provided by the Commissioner and the amount that should have been specified if

Non-application of subsection 3(1)

(3) Subsection 3(1) does not apply to the time referred to in paragraph (2)(c).

Coming into Force

3 These Rules come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Rules.)

Issues

The Canadian Intellectual Property Office (CIPO) is introducing a mechanism that would empower the Commissioner to address and rectify insufficient payments resulting from administrative errors or unintended omissions in situations involving a large number of affected fee payers. This mechanism aims to provide a scalable solution for addressing such issues in the future.

Background

Canadian Intellectual Property Office

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 (IP) in Canada.

Service Fees Act and the Low-materiality Fees Regulations

Since January 1, 2021, many of the patent-related fees have been adjusted annually through the operation of the Service Fees Act (SFA). Some patent-related fees are considered low-materiality fees, as per the Low-materiality Fees Regulations (LMFR) and, as such, are exempted from the annual adjustment.

Subsection 3(4) of the Patent Rules acts to alleviate the consequences of insufficient payments resulting from administrative error or unintended omissions. The use of this safeguard mechanism requires actions from the fee payer to request an extension and to notify the patent office of the source of erroneous fee-related information they relied on. This mechanism was intended to be used in isolated situations and does not allow the Commissioner to efficiently address and rectify insufficient payments resulting from administrative errors or unintended omissions in situations involving a large number of affected fee payers.

Objective

The amendments provide the Commissioner with the authorities needed to efficiently remedy the insufficient payment of a fee, designed to operate at scale, when the insufficient payment was the result of an administrative error. They also provide the Commissioner with discretion to waive the unpaid portion of the fee and requirements for the applicant or patentee to take action to remedy a fee payment error, when the Commissioner provided erroneous information in regard to the fee and when the Commissioner considers that the circumstances justify the waiver. The Commissioner will also be authorized, for a limited period of time, to waive a portion of a fee that is yet to be paid for other fee payers when they are likely to be impacted by the same erroneous information.

The amendments grant the Commissioner specific powers to effectively address cases of insufficient fee payments caused by administrative errors, with a focus on scalability. These powers include

For example, if the Commissioner inadvertently provided incorrect fee information for a patent maintenance fee, resulting in several affected fee payers underpaying their fees, these new powers would enable the Commissioner to waive a portion of the fee for those affected parties and would also enable the Commissioner to implement a transitional period where the portion of the fee is waived for future fee payers that would otherwise be likely to pay at the incorrect rate.

Description

The amendments to the Patent Rules bring a significant improvement to the existing safeguard mechanism outlined in subsection 3(4). Specifically, these amendments are designed to efficiently address situations involving a large number of fee payers without necessitating any action from applicants and patentees. The new authority will enable the Commissioner to extend the period of time for the payment of a fee when the Commissioner provided erroneous information in writing concerning the amount of the fee, there was an insufficient payment as a result, and the Commissioner considers the circumstances do not justify requiring an application for an extension of time. When this new authority is exercised, the Commissioner will notify the public of the body of applications and patents to which the extension of time applies.

Another authority will allow the Commissioner to waive the unpaid portion of a fee that was the subject of an insufficient payment. This will ensure widespread fee payment errors become corrected, at the discretion of the Commissioner, without requiring applicants and patentees to incur administrative and legal costs associated with paying what may be small discrepancies in fee payments.

Lastly, the Commissioner has the discretion to put in place transitory measures, for a period of time after waiving fees for applicants and patentees that paid a fee at an incorrect amount. This will apply to patent applicants and patentees who pay the incorrect fee amount for a period of up to four months after the waiver when the Commissioner has provided erroneous information.

Regulatory development

Consultation

These amendments are relieving in nature and have no significant impact. As a result, additional consultations with stakeholders were not required.

Modern treaty obligations and Indigenous engagement and consultation

The initial assessment 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

These amendments to existing provisions provide additional flexibilities to the Commissioner to not cause any undue harm as a result of an administrative error.

Regulatory analysis

In the event that CIPO provides erroneous fee information, affected patent fee payers would be notified and the matter would be resolved on a case-by-case basis. Where necessary, the fee payer would have to pay the remaining fee amount alongside any other required fees. Since almost all patentees and patent applicants rely on patent agents to assist them and hiring a patent agent, even minor errors can result in cost many times greater than the initial incorrect payment. In short, the affected fee payers could incur significant costs as a result of erroneous information provided by CIPO. In addition, there is a risk of loss of IP rights.

The resources required for CIPO to address each incidence of incorrect payment are substantial. Reconciling incorrect payments for a large number of patentees or patent applicants would be a significant cost for CIPO.

The amendments will allow fee payment errors to be remedied, at the discretion of the Commissioner, without fee payers incurring a late fee or a reinstatement fee. The Commissioner will have the authority to extend the period of time for the payment of a fee when an insufficient payment was made as a result of erroneous information provided by the Commissioner. They will also enable the Commissioner to waive the difference between the amount that was paid and the amount of the fee that was owed. The Commissioner will also be authorized to waive portions of fee amounts up to four months into the future to ensure a smooth transition.

The regulatory amendments will benefit patent owners and applicants by saving them from paying extra fees and losing their rights due to incorrect fee payments. Fee payers will also avoid the costs of hiring patent agents to fix their errors. Additionally, the amendments will reduce the administrative burden on CIPO to handle these issues.

As a result of the regulatory amendments, CIPO will not collect the revenue from the waived fees. The amount will be equal to the fee savings of CIPO’s clients mentioned above.

Small business lens

Analysis under the small business lens concluded that the amendments will impact small businesses. The amendments may provide cost savings to small businesses if it were determined a use of the new authorities is required in a situation that impacts small entities. The amendments allow the Commissioner to proactively correct minor administrative inconsistencies, avoiding the risk of negative consequences, without intervention from small business stakeholders. As a result, no flexibility mechanisms were deemed appropriate.

One-for-one rule

The one-for-one rule does not apply, as there is no incremental change in administrative burden on businesses and no regulatory titles are repealed or introduced.

Regulatory cooperation and alignment

There are no opportunities for regulatory cooperation and alignment. Both the United States Patent and Trademark Office and the European Patent Office have provisions for waiving or refunding fees in certain circumstances.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan 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 upon registration.

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