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“Due Care” Required to Overcome Missed Patent Deadlines

A recent decision of the Federal Court endorsing the position of the Canadian Intellectual Property Office is a warning to patent practitioners on communication practices with their clients. In determining whether there had been sufficient ‘due care’, it found that more was needed than sending email reminders where no responses had been received from the client.

In Taillefer v. Canada (Attorney General), 2024 FC 259, the Federal Court considered the ‘due care’ provisions of the Patent Act for the first since they are implemented in 2019. These provisions allow an applicant to reinstate a patent or patent application if an annual maintenance fee was not timely paid.

If an annual fee is not paid by the due date, the Patent Office must send a notice to the patent agent fixing a two month deadline for reinstatement. If this further deadline is missed, the applicant must establish the deadline was missed in spite of appropriate ‘due care’ being taken to meet the deadline.

Prior to 2019, an applicant could reinstate their patent or patent application simply by paying the required fees within 1 year of the missed deadline. No explanation was required as to why the fee was missed.

The sections of the Patent Act require that the patentee (or applicant in the case of a pending application) provide along with the request and fees, “the reasons for the failure to pay the prescribed fee and late fee before the later of the end of six months after the applicable prescribed date and the end of two months after the date of the notice”. The patent office will then determine if the failure “occurred in spite of the due care required by the circumstances having been taken” – see sections 46(5) and 73(3) of the Patent Act.

According to the facts recited in Taillefer, the patent agent had used email to seek instructions from their client for many years. Unfortunately, in this case, the agent had sent several email reminders leading up to the original due date, and further emails after receiving the notice that the maintenance had not been paid. These emails to the client had said that no action would be taken without instructions. After the time periods had expired, the patentee located the emails in his junk email folder. The patentee argued that it was unanticipated that emails would go to the junk folder when the same email address had been used reliably for years.

The Court found that it was reasonable for the patent office to have found, “that the Applicant must ensure the communication system between themselves and their Agent is working so that reporting can be made and instructions given” and “looked at steps that could have avoided the communication failure and to have expected that the Agent would have additional communication mechanisms in place to make sure they could always correspond with the Applicant.”

The Canadian Intellectual Property Office has been listing instances where it has made determinations on due care. Of the 154 determinations from 2023, only 31 (20%) were a determination that due care had been taken. In 75% of the situations where the applicant responded with an explanation of why due care was met, it was determined that due care had not been taken and the patent or patent application was therefore deemed expired.

Neither the patent office, nor the court describe what appropriate measures would be but did note that in this case there was no evidence of “other supporting mechanisms in place to mitigate the risk associated with the primary channel of communication” and that it would have been reasonable to use “alternative measures” to ensure that the patentee was aware of the deadline.

The Court in Taillefer, also suggested that there were obligations on the patentee, not just the patent agent, regarding having an operating email system: “Both the Agent and the Applicant must ensure that mitigation systems are in place so that the Agent’s role can be completed.” The Court also noted that the patent office had found a lack of evidence on the patentee’s efforts to pay the missed fee, stating, “it is reflective of the expectation that the Applicant would have been aware of the yearly maintenance fee for the 767 Patent, its importance, and the need to provide instructions for its payment and would have made checks of his email system, and of his Agent, when the regular notice for maintenance fee payment had not been received.”

This decision and the application by the patent office of the ‘due care’ provisions in the Patent Act, point to the occasionally harsh consequences of missing a required fee or deadline in the patent system. The decision indicates it is incumbent on both patent agents and patent applicants and owners to monitor these deadlines, have suitable communication mechanisms in place and ensure that deadlines are met.

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