Bill C-86 – Sweeping Changes for Canadian Patent Law

On October 29^th, Canada’s federal government tabled a budget implementation bill that includes over 800 pages of proposed legislative changes; some of which relate to patents, trademarks, and copyright. Within the section on the Patent Act, many of the proposed changes are directed to very narrow exceptions or are intended to only clean up the language of the Act; e.g. there are numerous amendments to ensure that relevant provisions apply to a certificate of supplementary protection for a patent. However, there are a number of substantial changes proposed by the bill which would affect patent practice in Canada. Many of these changes respond to concerns expressed by Canadian businesses, but these changes appear to primarily address how individuals interact with granted patents; there is nothing in the provisions that enhances or enables Canadian businesses to make better use of the Canadian patent system to protect their own innovations.

Standard Essential Patents

Two new sections in the Patent Act are proposed to address standard-essential patents. Standard-essential patents are directed to technology which has to comply with a technical or industry standard, for example, Bluetooth or the USB port. However, the proposed amendments regarding standard-essential patents do not address what would constitute a standard-essential patent or what the terms of a licensing agreement for such a patent would entail. Rather, the proposal gives the Governor in Council power to regulate these terms.

Prior User Rights

The section of the Patent Act governing prior user rights is proposed to be completely rewritten and expanded. The notable changes are:

1. Prior use will encompass both an “act that would otherwise constitute an infringement” and “serious and effective preparations” to commit the act, but the prior use must have been in “good faith” and the prior user must not have been able “to commit the act only because they obtained knowledge of the subject-matter… from the applicant”;
2. If the prior use is carried out by a business, the prior user right can be transferred;
3. Detailed provisions address use or sale of an article and use of a service.

Prosecution History/File Wrapper Estoppel

The bill also includes a proposal to add a section into the Patent Act to address file-wrapper estoppel. The proposed amendments will allow any written communication or part of such a communication to be admitted into evidence to rebut any representation made by the patentee during prosecution. This proposal seems to address a discontinuity between Canadian and US practice which has been debated for many years since the Canadian decision in Free World Trust.[1] A debate which was recently fuelled by a Federal Court judge who said “prosecution histories in many jurisdictions (including Canada) are now available on the internet. This raises the question whether it is time to revisit the rule against using extrinsic evidence in claim construction.”[2]

Written Demands

Following through on a commitment made earlier this year to address a perceived problem with patent trolls, the bill proposes that written demands are to be regulated. All written demands regarding a patented invention received by a person in Canada will have to comply with requirements to be prescribed by the Governor in Council. Failure to comply with the prescribed requirements may result in the Federal Court granting various types of relief, including punitive damages.

Experimentation

With respect to experimentation, the bill amends the provision defining an act committed for the purpose of experimentation relating to the subject matter of a patent, held not to be an infringement of the patent. More specifically, the amendment removes the requirement that the experimentation must be done for non-commercial use.

College of Patent Agents and Trade-mark Agents

The bill also proposes the creation of a new Act to establish a College of Patent Agents and Trade-mark Agents to enhance the public’s ability to secure right’s provided under the Patent and Trade-marks Acts. The College of Patent Agents and Trade-mark Agents Act will require that individuals obtain a licence in order to act as patent agents or trade-mark agents and that licensees comply with a code of professional conduct. The College is to have an Investigations Committee to receive complaints and conduct investigations into whether a licensee has committed professional misconduct or was incompetent, and a Discipline Committee to impose disciplinary measures if it decides that a licensee has committed professional misconduct or was incompetent. Also provided are new offences of claiming to be a patent agent or trade-mark agent and unauthorized representation before the Patent Office or the Office of the Registrar of Trade-marks.

As for other provisions amending other IP laws, the provisions are complex, and in many cases are amendments to previous amendments that are not yet in force. The scope and impact of many provisions will depend on Rules that are yet to be drafted, so this bill will require further study.