A frequent interaction with the Canadian Intellectual Property Office is the registering of documents against pending or granted patents and trademarks. Assignments of intellectual property rights, changes of corporate name, reorganizations and security interests are all commonly registered. As part of changes expected later this year, this practice is likely to change, reducing some formalities.
For the approximately 23,000 patents granted in 2018, around 20,000 of these types of documents were registered. With a government fee of $100 per document, around $2 million in government fees were paid to register various documents against the granted patents.
Currently, for patents, sections 49 and 50 of the Patent Act provide certain guidance as to the assignments of patents and the registration of assignments against patents and patent application. In particular, section 50(2) says that “Every assignment of a patent … shall be registered in the Patent Office in the manner determined by the Commissioner.”
The Patent Act also sets out guidance as to the proving the assignment stating at s.50(3) “No assignment, grant or conveyance shall be registered in the Patent Office unless it is accompanied by the affidavit of a subscribing witness or established by other proof to the satisfaction of the Commissioner that the assignment, grant or conveyance has been signed and executed by the assignor and by every other party thereto.” The Manual of Patent Office Practice (MOPOP) says that the patent office will accept a variety of proofs, including:
- A statement from the requestor that to their knowledge the document effecting the transfer has been signed and executed by all parties (for patents), or by the assignor (for patent applications);
- A similar statement by a witness;
- The signature of a witness or a corporate seal on the assignment document;
- A document showing that the assignment was registered in a patent office of another country.
The applicable sections of the Patent Act will be amended, likely in the fall of 2019, as part of significant changes to the Patent Act (see Bill C-43) to read in part as follows:
49 (2) The Commissioner shall, subject to the regulations, record the transfer of an application for a patent on the request of the applicant or, upon receipt of evidence satisfactory to the Commissioner of the transfer, on the request of a transferee of the application.
(3) The Commissioner shall, subject to the regulations, record the transfer of a patent on the request of the patentee or, upon receipt of evidence satisfactory to the Commissioner of the transfer, on the request of a transferee of the patent.
Similar changes are being made to the Industrial Designs Act (also part of Bill C-43) and the Trademarks Act (see Bill C-31) which will standardize the practice to some degree.
The Patent Office practices for the new Act and Rules are still being finalized but a consultation on the procedures was announced earlier this year and is open until May 27th. These procedures are based on the draft Patent Rules published in the Canada Gazette at the end of 2018. In addition to referring to all updates to chain of title of patents and patent applications as ‘transfers’, the procedures will allow an applicant or the patentee to record a transfer without additional evidence (i.e. without any underlying documentation). Only if the request is made by a transferee will documentation be required, to a similar standard as is required under the present rules. This will reduce the need for providing specific supporting documentation in some circumstances.
Other documents such as security agreements may continue to be registered against patent and patent applications as permitted under new proposed Patent Rule 125 and under similar sections for trademarks and industrial designs.
The Patent Act and Rules currently and under the proposed amendments do not have an explicit priority system for registered liens and security interests. New s49(4) of the Patent Act, that voids transfers if a subsequent transfer if the transfer to the subsequent transferee has been recorded, only appears to apply to transfers, not the registration of other documents. There have been few reported cases on the effect of registering documents and particularly assignments with respect to priority but see Verdellen v. Monaghan Mushrooms Ltd, 2011 ONSC 5820, where the lack of a registered assignment was a key fact in determining ownership of patents.
We expect that the practice of registering transfers as well as security interests in egistered intellectual property will continue under the new rules coming into force later this year and that applicants will take advantage of the reduced formalities to reduce the transaction costs in Canada.