The last two years have seen a rapid evolution of Canadian IP law, particularly in the field of patents and patent applications. Updated legislation, recent court cases, and the new free trade agreement with the United States and Mexico, have all contributed significantly to the evolution of this space. We asked IP partner Jonathan Auerbach of Stikeman Elliott to talk us through these changes and what they mean for Canadian clients.
What is the Canadian Intellectual Property Office’s policy on extensions to patent applications?
The question here relates to requesting extensions of time to respond to an Office Action that issued from Patent Branch of CIPO during the examination of a patent application. Prior to October 2019, an applicant was provided six (6) months within which to respond to an Office Action that issued during examination of a patent application. Following the amendments to the Patent Act in October 2019, this time period was shortened to four (4) months.
Extensions of time of two (2) months may be sought (to get an applicant to the previous six-month period for responding) from CIPO but there is no guarantee that the extension will be granted. In this regard, the extension request must be made prior to the end of the initial four-month deadline and substantive reasons must be provided to warrant the extension. The granting of the extension is then entirely at the description of the Commissioner of Patents.
Given the uncertainty on whether or not an extension will be granted and depending on the circumstances of the client, we will often recommend not to seek the extension, allow the application to go abandoned and then file a full response within the 12-month reinstatement period accorded by the Patent Act. In this regard, the client will have certainty immediately as to the timeline of when a response needs to be filed and will have sufficient time to consider the objections raised in the Office Action.
How have Canadian courts defined what is and what is not “patentable subject matter”? How does this affect IP law going forward?
This question was relatively recently put forward in the Federal Court of Canada decision of Choueifaty v. Canada (Attorney General) 2020 FC 837 (“Choueifaty”) which was an appeal from a decision of the Commissioner of Patents refusing the appellant’s patent application on the grounds that the essential elements of the claimed invention fell outside the definition of “invention” as set out in Section 2 of the Canadian Patent Act.
Before the Choueifaty decision, it was very difficult to secure patents in Canada for inventions that covered computer implemented methods or business methods. Historically, obtaining a patent covering such subject-matter was rare. The door seemed to open 10 years ago when the Supreme Court of Canada confirmed that Amazon’s one-click method to make purchases was found to be patentable, however, the Patent Office still was very stringent on allowing this type of subject-matter. The hope in the patent profession is that following Choueifaty, there will be more opportunity to secure patents over a larger scope of computer-implemented method and business method inventions. In this regard, the Patent Office issued a practice notice last year to the profession providing guidance on how it will treat such patent applications upon examination which should in turn give applicants an idea of what will and will not be allowed.
Given the previous uncertainty and low chance to secure patents for computer-implemented methods or business methods, many companies opted to not seek patent protection. While there is no expectation that the flood gates will necessarily open up for these types of patents, there is optimism that Choueifaty will result in more patent filings in Canada given that more patents will likely issue now.
How will the USMCA/CUSMA affect IP law in Canada?
The amendments to Canadian IP legislation that will result from the adoption of the USMCA should have a beneficial effect for IP rights owners in Canada.
One of three main areas that will have a positive affect for patent owners is the implementation of a patent term adjustment to accommodate for delays that take place on the Patent Office’s end during examination of a patent application. Currently, in certain technology areas at the Patent Office, it could take upwards of two years to get to a first examination. If an Office Action issues, an applicant has four months to respond. It could then take weeks, months and in some cases a year or more for the patent examiner to get back to that application. Meanwhile, the term of protection afforded by the eventual patent to issue from that application remains the date the patent issues up until twenty years from the filing date of the application (no matter how long the patent application sits in examination). By granting an adjustment to the patent term, a patentee will not lose out on undue delays at the Patent Office when the application was awaiting examination or further examination. Adjustments are currently offered in the United States so this will bring Canada in line with USPTO current practices.
The second main area that will be touched is an extension of the copyright term for works. Currently, the term of copyright in most works is the life of the author of the work plus 50 years. Under the USMCA, the term will be increased to life of the author plus 70 years. Again, this is a big win for IP rights holders in Canada as one’s monopoly over copyright works will be extended by an additional 20 years.
The third area is on the trademark and copyright enforcement front whereby IP rights holders will be able to request Canada Border Services Agency to seize, inspect, detain and destroy goods that are suspected to be counterfeits that are passing through Canada. In the past, the Agency was not permitted to detain such goods that were not destined for Canada but where they only were transported through Canada. The USMCA will not grant the Agency the right to inspect such goods and to take appropriate action where there is a finding that the goods in question are counterfeits.
There are a number of additional areas that will be affected as well.
For IP rights holders, the adoption of the USMCA is advantageous as it expands on the protections previously afforded. The USMCA will also result in Canada being confirmed as a country which takes IP protection extremely seriously.
Do you believe there has been a shift away from litigation and towards summary judgments in Canadian IP law?
I do not believe that there has been a shift away from traditional litigation strategies of going to trial versus pursuing motions for summary judgment, however, the latter is definitely an option that should be considered and the Federal Court of Canada has definitely been more willing to grant summary judgments more recently.
Traditionally, summary judgments were pursued in rare circumstances where the evidence required to arrive at a decision was paper-based (by way of affidavit) and more particularly, where live witnesses were not required. In view of escalating costs of litigation and the reality that it could take many years to get to trial under the normal circumstances, summary judgment relief can save a party a lot of time and expense. An order is also final akin to an order that would issue following a full-fledged trial. Accordingly, there are definitely advantages to be had when one can proceed and benefit from such a recourse.
Do you have any other insights on helping clients navigate the intellectual legal landscape post/during COVID?
COVID either hit companies very hard or in some instances, COVID resulted in some companies becoming more profitable than ever. For companies that were hit hard, legal budgets for securing new intellectual property registration and for litigating matters were greatly reduced, and in some cases dried up overnight. That funding was re-allocated to other areas to keep companies afloat during very difficult times. For those clients who found themselves in these dire situations, we were called on to assess what was essential for clients to maintain, pursue and/or protect and what should be abandoned immediately or suspended until more certainty in the marketplace developed. The same assessment was conducted for litigation. In particular, more consideration was placed on what was worth pursuing and what can be abandoned or suspended for the time being. During these times, we witnessed a lot of out-of-court settlements on matters that were in the process of being litigated as this enabled parties to cut down on expenses and in some cases, secure needed settlement proceeds or licensing revenues.
For companies that started new COVID protective measure businesses or lines, we saw a large uptick in trademark filings covering hand sanitizers, disinfectant wipes, sprays, masks and a wide array of antiviral products. Some of these companies were extending current brands to cover these types of items while others developed new brands. We also saw an increase in patent and industrial design filings for new inventions and designs relating to various products relating to this industry.
On the transactional side of our legal offerings, we counselled clients with respect to leveraging their IP portfolios for restructurings, bankruptcies and financings. While this is always an occurrence, during COVID there was unfortunately an upsurge on this front.
Jonathan Auerbach is a partner, patent agent and trademark agent in the Intellectual Property Group at Stikeman Elliott. He has a broad range of experience in all aspects of intellectual property, with a particular emphasis on patent, trademark and copyright litigation, prosecution, licensing, counseling and transactions. He also has extensive experience in the acquisition, clearance, prosecution, enforcement and licensing of trademarks, including representing clients in trademark opposition proceedings and Section 45 expungement proceedings. He advises clients on Internet-related aspects of trademark and copyright law, including representing clients in domain name disputes.