Several years ago, in Dutch Industries Ltd. v. Canada [link], the Canadian Federal Court of Appeals ruled that an irrevocable loss of patent rights could result if, at any time, a government patent fee payment was erroneously made at the small entity rate. This decision resulted in the immediate lapse of numerous Canadian patents and patent applications
In response to this onerous decision, the Canadian Patent Act was recently revised to create a time-limited window to make catch-up fee payments in those Canadian patents and patent applications that irrevocably lapsed as a result of the Dutch Industries Ltd. decision. New section 78.6 of the Canadian Patent Act will come into force on February 1, 2006. The new section recognizes the legitimacy of previously made corrective “top up” fee payments. More importantly, the new section provides a one-time only twelve month window during which any incorrectly made small entity payment case be corrected by paying the difference between the relevant large and small entity fee at the relevant time. A corrective payment must be accompanied by information about (i) the day on which the underpayment was made; (ii) the service or proceeding in which the fee was paid; and (iii) the patent or application in which the fee was paid.
Practice Suggestion
A small entity in Canada is a corporation with 50 employees or less. This number is quite low. So it is quite possible that the change from small to large entity status in Canada might go unnoticed. Also the difference between large and small entity fees is generally quite small. Many Canadian Associates, therefore, recommend always paying the large entity fee regardless of the applicant’s status in order to avoid the possibility that a patent or application might irrevocably lapse as a result of paying the incorrect fee.
NOTE: This post comes from the files of Blair Hughes. Blair is a partner at MBHB LLP and has extensive experience in protecting patent rights, in both the U.S. and abroad.
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From Sander Gelsing: As a result of Bill C-29, and to assist one in determining whether a corrective payment needs to be made, the Canadian patent office recently made Fee Payment Histories available through our patent database (see: http://www.gelsing.ca/blog/?p=128 ).