June 2, 2007
Amendments to the Canadian Patent Rules — Effective June, 2007
The main changes include:
 1) New definitions for small entity and a mechanism to correct most payments made at the wrong rate in good faith;
2) Requirements to file a Declaration as to the Applicant's Entitlement to apply for and be granted a patent, instead of an assignment from the inventor; and
3) Adoption of the PCT Sequence Listing standard.
Small Entity
An applicant who qualifies as a small entity is entitled to pay most government fees at half the standard rate. In a case known as Dutch Industries it was held that failure to pay fees at the correct rate results in invalidity of the patent in question. The Federal Court of Appeal determined that entity status only need be determined when the applicant first engages the Canadian patent system.
The amended Rules have changed the definition of "small entity" to read as follows:
"small entity," in respect of an invention, means an entity that employs 50 or fewer employees or that is a university, but does not include an entity that
(a) is controlled directly or indirectly by an entity, other than a university, that employs more than 50 employees; or
(b) has transferred or licensed or has an obligation, other than a contingent obligation, to transfer or license any right in the invention to an entity, other than a university, that employs more than 50 employees.
In order to be eligible to qualify as a small entity the amended Rules clarify that the applicant must meet the applicable definition of "small entity" on the PRESCRIBED DATE, which:
(i) in the case of an application other than a PCT national phase application, is the FILING DATE of the application; or
(ii) in the case of a PCT national phase application, is the NATIONAL ENTRY into Canada of the PCT international application.
As before, the new rules retain the concept of establishing small entity status just once, when the patent system is first engaged; this status is retained for the life of the application and any resultant patent, irrespective of any large entity later acquiring rights in the invention.
The amended Rules introduce a mechanism for correcting certain fee payments mistakenly made at small entity rate in good faith. To correct a small entity fee payment, an applicant must:
(i) file a statement to the effect that the small entity fee was paid in good faith;
(ii) request an extension of time to pay the correct fee without undue delay after having become aware of the mistake;
(iii) pay the difference between the standard and small entity fees owing; and
(iv) pay the appropriate extension fee in respect of each fee mistakenly paid at the small entity level.
The Commissioner of Patents has discretion to determine whether or not the circumstances surrounding the incorrect payment justify the grant of an extension to correct the fee payment.
Recommendations
In view of the fact that the Commissioner has discretion not to grant an extension to correct the fee payment, and the fact that a number of difficulties remain with respect to the amended definition of "small entity," we strongly advise that all clients file as a large entity and pay the standard government fees.
Declaration as to the Applicant's Entitlement
Formerly, it was necessary for an applicant for a Canadian patent to register documentation transferring title to the applicant from the inventor(s). This was usually by way of assignment. The amended Rules now require for all cases filed after on or after June 2, 2007 the filing of a Declaration as to the Applicant's Entitlement to apply for and be granted a patent. The Declaration is based on Rule 4.17 (ii) of the Regulations under the PCT, and must indicate how the applicant became entitled to apply for a patent.
For PCT National Phase Entries filed in a name that is different from the applicant originally named on the PCT Request form, an assignment or other title document still is required.
If the Declaration is not included with the filing of the application, then, in order to avoid payment of a "completion fee" the declaration must be filed:
(i) for other than a PCT national phase application, within 15 months after the filing date or priority date of the application, whichever is the earlier; and
(ii) for a PCT national phase application, within 3 months after the applicant enters the national phase in Canada.
Further, for an application filed before June 2, 2007 the applicant may substitute filing an assignment where required, with a Declaration as to the Applicant's Entitlement.
PCT Sequence Listing
The previous Patent Rules required that a sequence listing in a non-PCT application be presented in the old WIPO ST.23 Standard (text headings), rather than the updated WIPO ST.25 Standard (numeric headings) of 1998. The amended Rules incorporate the Standard for the Presentation of Nucleotide and Amino Acid Sequence Listings in International Patent Applications (the "PCT sequence listing standard"). The following definitions now follow the PCT sequence listing standard:
i. amino acid sequence
ii. nucleotide sequence
iii. sequence listing
A sequence listing is not required to obtain a filing date, but is required to complete the application. Pursuant to the amendments, if a sequence listing is required, the specification must contain a sequence listing in electronic form. A paper copy of the sequence listing is no longer required.
For an application filed before the coming into force of these Rules, the applicant can comply with the amended Rules for filing a Sequence Listing, in place of the former Rules.
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