Federal Court Examines “Due Care” Requirement

Section 73(3)(b) of the Patent Act permits the Commissioner of Patents to reinstate a patent that is deemed to be abandoned if he receives a proper application on time and if “the Commissioner determines that the failure occurred in spite of the due care required by the circumstances having been taken and informs the applicant of this determination.”

The Manual of Patent Office Practice sets out the due care standard.^[1] This standard was introduced by the Patent Law Treaty, which Canada adhered to and implemented with amendments to the Patent Act and Patent Rules on October 31, 2019.

The Federal Court examined the due care standard in Matco Tool Corporation v. Canada.^[2]

The facts were that Matco had a structured approach to maintaining its patents and patent applications:

1. Canadian Patent Agents were to manage the prosecution of applications but were prohibited from handling maintenance fees.
2. US Patent counsel gave Canadian patent agents instructions but were similarly prohibited from handling maintenance fees.
3. Specialized service providers handled maintenance fee payments.

Matco had a service provider who successfully handled the maintenance fee payments for the application at issue. Matco then changed service providers, and the new service provider imported the payment dates but indicated it was missing information on the application date for the subject application.

Matco did not follow up to provide the requested information.

The Canadian agent sent a reminder notice of the January 8, 2022, due date to US counsel. US counsel responded that the maintenance fees were being handled by the service provider. The Canadian agent sent the CIPO notice of non-payment to US counsel. That Notice was not flagged by United States Counsel or forwarded to Matco in view of instructions “to take no further action in these matters with regard to payment of annuities and maintenance fees.” Matco, therefore, did not receive the CIPO notice in a timely manner.

The six month grace period expired with no further action.

On August 6, 2022, CIPO sent the Canadian agent a notice of the abandonment of the application for failure to pay maintenance fees. The Canadian agent forwarded the notice to US counsel.

December 13, 2022, Matco, through the Canadian agent, requested reinstatement of the application and included the background facts.

On May 8, 2023, the Commissioner issued a letter indicating an intention to refuse reinstatement and invited Matco to share any additional comments.

On June 7, 2023, the Canadian agent submitted an affidavit from the VP of Matco, which submitted more detail about the communication errors.

On December 6, 2023, the Commissioner issued the refusal decision, determining that Matco had failed to meet the “due care” standard that had been implemented in the patent law.

Matco launched a judicial review of the Commissioner’s decision. The Federal Court determined that the Commissioner’s decision was reviewable on the standard of reasonableness.^[3]

The Court held that in determining

whether the “due care” standard has been met, the core question is whether the applicant took “all measures that a reasonably prudent [applicant] would have taken, given the particular set of circumstances to avoid the failure – and despite taking those measures – the failure nevertheless occurred”.^[4]

The Court found that the Commissioner erred by not considering the initial data entry error. It described this as the proximate cause of the failure. It found the Commissioner’s narrow interpretation was unreasonable.

The Court noted that a “robust due diligence inquiry should cover the entire chain of events, from the earliest root cause to the final opportunity for correction”.^[5]

As a result, the subject application and surrounding facts were to be examined following the Court’s reasons.

The decision emphasizes a more comprehensive approach to assessing whether “due care” has been exercised.

____________________

Applicants and patentees should use the opportunity to reassess their plans to avoid a lack of “due care” in avoiding abandonment.

^[1] See Sections 9.04.03 and 27.03.03 of the Manual of Patent Office Practice, which requires a reasonably prudent applicant to take all reasonable measures to avoid applicable failures.

^[2] See 2025 FC 118.

^[3] Citing Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65.

^[4] Citing Taillefer v Canada (Attorney General), 2024 FC 259 at para 25.

^[5] See Matco Tools Corporation v. Canada (Attorney General), 2025 FC