Prior user rights have long been recognized in Canadian patent law. These rights, which are a defence against patent infringement, are seen as a means of ensuring fairness by allowing a person who has independently manufactured, used or acquired an invention that is subsequently patented to continue using the invention. A revised version of section 56 of the Patent Act, which defines prior user rights and is similar to section 64 of the UK Patents Act, came into force on December 13, 2018. The revised provision applies to an action or proceeding commenced on or after October 29, 2018, involving a patent issued from an application filed on or after October 1, 1989. The pith and substance of prior user rights under the revised provision had never been judicially interpreted until a recent Federal Court decision was handed down in Kobold Corporation v. NCS Multistage Inc. The two corporations involved in the case supply equipment used in the oil and gas industry for hydraulic fracturing. Kobold Corporation (hereinafter Kobold, the plaintiff) alleged that four of NCS Multistage Inc.’s (hereinafter NCS, the defendant) proprietary fracturing tools infringed Canadian Patent No. 2,919,561, and NCS petitioned the Court through a motion for summary judgment to dismiss the infringement action on the basis of prior user rights. In its analysis of section 56 in its current form, the Court considered the English and French versions of the section, legislative history, Canadian jurisprudence on the previous section 56 and the corresponding legislation in the UK. The Court began by pointing out that section 56 of the Patent Act, effective since December 13, 2018, grants broader rights than the former section 56 did, underscoring the three following differences: First, it noted that the previous legislation was limited to granting “a prior user the right to use and sell” a physical product, whereas the current provision “grants a prior user the right to commit an “act” that would have otherwise constituted infringement.” It added that the word “act” must be interpreted in light of section 42 of the Patent Act, which grants exclusive rights to “making, constructing and using the invention and selling it to others to be used,” which includes patented methods. This interpretation may limit the rights of prior users, and the Court gave the example of a prior user who previously manufactured and used a device—they can continue to manufacture and use it, but they cannot rely on a prior use defence under section 56 to begin selling the device, as selling is different from manufacturing or using within the meaning of the Act.   Second, it pointed out that whereas the previous legislation “limited the protection to the sale or use of the [...] physical manifestation of the invention”, section 56 as amended protects the commission of an act “that would have constituted infringement.” Third, it pointed out that the current legislation extends protection to a person who “made serious and effective preparations to commit [...] an act” of infringement prior to the claim date, which was not the case under section 56 in its previous form. The parties had different interpretations of the term “same act” contained in subsection 56(1), particularly as to the degree of similarity required. The Court determined that the word “same” in subsection 56(1) means “identical” with respect to an act, while subsections 56(6) and 56(9) “allow a third party defence of prior use on the less stringent standard of “substantially the same.”” The Court stated that a prior user may “add to or alter” aspects that “do “not [...] infringe the patent”, for example by changing a device’s paint colour, but the prior user may not alter an aspect that relates to the invention’s inventive concept. The Court then set out the factors that must be considered in assessing the defence of prior user rights under subsection 56(1). Verbatim, it stated: First, one must determine whether the acts being performed before and after the claim date are identical [...]. If they are, then there is no need to consider infringement, as subsection 56(1) would always provide a defence to any potential infringement. Second, if the acts are not identical, one must determine whether the acts infringe the patent, and if they do, which claims. If the post-claim acts do not infringe the patent, then there is no “otherwise infringing acts” and therefore no need to rely on subsection 56(1). If the pre-claim acts do not infringe the patent, subsection 56(1) cannot apply. If the post-claim date acts infringe a particular claim of the patent that the pre-claim date acts do not, subsection 56(1) cannot apply. Finally, if the pre- and post-claim date acts are not identical but only infringe the same claims, then one must determine whether the changes relate to the inventive concept of the patent. If they do not, then subsection 56(1) will provide a defence. The Court concluded that a motion for summary judgment is only appropriate in cases where acts committed before and after the claim date are clearly identical, and thus where it is not necessary to “construe the claims [...] or conduct an infringement analysis.” In this case, given that the acts performed by NCS before and after the claim date differed, the Court concluded that a full trial was required to analyze the issue of infringement and the application of subsection 56(1) of the Patent Act.  Conclusion This first detailed analysis of section 56 of the Patent Act as amended in December 2018 has clarified several aspects of a defence against patent infringement based on prior user rights. It will certainly serve as a foundation for future decisions involving this issue. However, the application of subsection 56(1) of the Patent Act was not examined in this motion for summary judgment. We’ll have to wait for a future trial on the issue for more insight on the scope of prior user rights under Canadian law.

Excess claim fees on the horizon As reported earlier, the Canadian government published proposed amendments to the Patent Rules on July 3, 2021. A significant component of the proposal is the introduction of excess claim fees on the order of $100 CAD for each claim beyond 20 claims, which will be payable when requesting examination, and will be re-assessed upon allowance to determine if further claim fees are due when paying the final fee based on changes in the number of claims during examination. Consider acting now In anticipation of the likely introduction of such a regime in early 2022 (which may be announced with only 30 days’ notice), Applicants may wish to begin assessment of their Canadian patent matters and consider requesting examination by the end of 2021 to avoid the payment of such excess claim fees and retain the right to present a larger number of claims for examination. Based on the transitional provisions in the proposed Rules, taking such action now shall avoid payment of such excess claim fees when requesting examination and when paying the final fee upon allowance. We thus recommend that Applicants consider taking such action this year to retain the benefits of the current regime, particularly for cases with a large number of claims as well as those which were already being considered for requesting examination in the short term. Stay Tuned! While the exact details and timing of the upcoming changes remain unknown, the earlier proposal suggests that they will likely be soon and with little advance notice. Please stay tuned for upcoming news in due course, and do not hesitate to contact a member of our patent team for guidance through the ultimate transition.

The first anniversary of the entry into force of the new Canadian Patent Rules, which significantly changed certain practices surrounding the filing and prosecution of patent applications in Canada, is an opportunity to look back at the major changes that have had a significant impact on Canadian patent practice. Indeed, the past year has allowed us to observe the changes, which in certain aspects seem to be confusing for patent applicants, and to observe their effect in practical terms. We discuss below the scope of some of the legislative amendments that came into force on October 30, 2019, to clarify such issues and assist patent applicants in Canada. Things are moving faster Under the new Rules, the time limit for filing a request for examination has been reduced from 5 years to 4 years, and the time limit for responding to an examination report is now 4 months instead of 6 months, thus shortening the process of obtaining a patent in Canada. Although there are mechanisms to extend these time limits by a few months, they result in additional costs to patent applicants and may also jeopardize priority examination procedures under paragraph 84(1)(a) of the Patent Rules. As a result, we have noted a generally accelerated pace of examination over the past year.  Time is running out for “latecomers” Canada was for a long time one of the only jurisdictions where it was possible to defer entry into the national phase until the 42nd month after the priority date as a matter of right by simply paying a late filing surcharge. However, under the new Rules, PCT applications will only be eligible for so-called “late” national phase entry if the failure to meet the initial 30-month deadline occurred despite "due care" (a suitable explanation will be required to demonstrate such a showing of due care). It is important to note that PCT applications with an international filing date (not a national phase entry date) prior to October 30, 2019 are subject to the old Rules in this respect, and therefore ”late” national phase entry in Canada between the 30th and 42nd month following the priority date is still possible for such PCT applications by paying the surcharge, without justification. Patent applicants would be advised to identify their pending PCT patent applications that are still eligible for “late” national phase entry under the old Rules, and file in Canada before the 42nd month expires in those cases where protection in Canada is desired.  Stricter deadlines for examination requests and maintenance fees – be careful Under the old Rules, for most of the time limits set by the Patent Act or the Commissioner of Patents, failure to meet such a time limit triggered a further 12-month period to fulfil the requirement in question via the abandonment and reinstatement system (applications), or the late payment of maintenance fees system (patents). Under the new Rules, this additional 12-month period no longer applies in cases of failure to meet the deadline for requests for examination and maintenance fees. However, the new system offers additional protection to applicants since failure to comply with the time limits for these actions triggers the issuance of a CIPO notice requesting the completion of the required action within a new time limit (usually 2 months). However, a “due care” requirement comes into effect after the expiry of the period specified in the notice or six months after the initial missed deadline, whichever is later. In addition to the “due care” requirement, third party rights may apply during the abandonment period. This leads to situations where a patent application is abandoned for two different reasons, with different deadlines and requirements for reinstatement, increasing the risk of confusion for applicants. Consider a hypothetical case where an applicant who was unsure whether they wanted to pursue a patent application decided to allow the application to become abandoned by not responding to an examination report by the November 1, 2019, deadline, and to retain the option of reinstatement the following year. In this now abandoned application, the applicant also did not pay the maintenance fee initially due on December 1, 2019, triggering a 6-month delay to pay the maintenance fee and a late fee. Non-payment of the maintenance fee and late fee by June 1, 2020 would thus result in a second reason for abandonment. However, in October 2020, the applicant finally decided to continue with the application, and to respond to the examination report with a request for reinstatement and payment of the reinstatement fee, thereby removing the first reason for abandonment. However, for the second reason for abandonment, the request for reinstatement must also include a statement that the non-payment of the maintenance fee and late fee within the prescribed time limit occurred despite the fact that the applicant exercised “due care” in attempting to make the payment. It is therefore important that patent applicants who deliberately abandon an application, but wish to retain the possibility of reinstatement at a later date, be well aware of the “due care” requirement and of the third party rights that may apply in certain circumstances, including ensuring that the time limits for requests for examination and maintenance fees are respected in order to avoid loss of rights. Manage your priorities well You are now required to file a certified copy of any priority application, or to refer to a digital library providing access to this document (CIPO accepts the “WIPO-DAS” code assigned to a priority application in this regard). For Canadian applications resulting from PCT applications, if the PCT requirements for a certified copy in the international phase have been met, it is not necessary to resubmit a certified copy upon entry into the Canadian national phase. However, for Canadian applications with a priority claim under the Paris Convention, the certified copy or digital library reference must be filed within 4 months of filing or 16 months of the priority date, whichever is later. Also, it is now possible to restore the priority of a Canadian application within 14 months of the priority date where the failure to file an application within the prescribed 12-month period was unintentional. The time limit for requesting restoration of priority is two months from the filing date for non-PCT filings, and one month from the national phase entry date for PCT filings. No longer lost in translation – more flexibility for non-PCT filings Prior to October 30, 2019, it was required to submit a patent application in one of Canada’s two official languages (English/French) and pay the prescribed filing fee at the time of filing to get a filing date in Canada for both non-PCT filings and PCT national phase entries. Under the new Rules, and only for non-PCT filings, it is possible to file an application in a language other than the two official languages and/or not to pay the prescribed fee at the time of filing. In such cases, CIPO will issue a notice requiring that a French or English translation of the application be provided and/or that the filing fee be paid within a specified period of time. This flexibility for non-PCT filings does not apply to filings based on PCT applications. For national phase entries of a PCT application filed in a language other than English or French, applicants must ensure that they have a translation of the application on hand at PCT national phase entry in Canada. Registration of documents and transfers It was previously necessary to register a copy of a document evidencing a transfer of rights (e.g., an assignment) and pay a registration fee in order to effect a change in ownership of a patent application or patent. However, under the new Rules, the registration of a transfer of ownership and the registration of evidence of the transfer (e.g., a signed transfer document) are separate actions for which separate fees must be paid. It is important to note that the mere registration of a document evidencing a transfer only results in that document being recorded, but is not treated as a request to record a transfer.   It is also important to note that former section 51 of the Patent Act—which provided that any assignment is void against any subsequent assignee, unless the assignment is registered as prescribed by those sections, before the registration of the instrument under which the subsequent assignee claims—has been repealed and replaced by subsection 49(4), which in turn refers only to transfers of patents. Thus, the priority is to record the transfer. In light of this, it is strongly recommended that patent applicants and patent holders promptly register any transfer of rights with CIPO in order to update their Canadian file and to prevent any subsequent and illegitimate transfer registration in favour of a third party. Conclusion If you have any questions or require further information on these or any other aspects of Canadian patent practice, feel free to contact a member of our team!

In a previous newsletter 1, we discussed a change in Canadian patent practice in respect of the patent-eligibility of claims relating to medical uses, further to a decision from the Federal Court 2. Following this decision, the Canadian Intellectual Property Office (CIPO) issued a revised Practice Notice 3 concerning the examination of medical use claims, indicating that claims defining as an inventive feature a fixed dosage or fixed dosing schedule, are patent-eligible. In contrast, claims defining as an inventive feature a dosage range or a dosing schedule that includes a range, are considered to interfere with or require the professional skill of a medical professional and are thus generally rejected by Canadian Examiners. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> In a recent decision 4, the Patent Appeal Board (PAB) has determined that claims defining as an inventive feature a dosage regimen that includes a range do not necessarily interfere with the professional skill of a physician and may be acceptable, depending on the circumstances, in contrast to the more strict position taken during examination. Claim 1 under review in this case reads as follows: Use of calcitonin (CT) in combination with one or more oral delivery agents selected from N-(5-chlorosalicyloyl)-8-aminocaprylic acid, N-(10-[2-hydroxybenzoyl] aminodecanoic acid or N-(8-[2-hydroxybenzoyl]amino) caprylic acid, or a disodium salt, hydrate or solvate thereof for the manufacture of a medicament for the treatment of a disorder responsive to the action of calcitonin, wherein said medicament is for oral administration to a human host from about 5 minutes to 2 hours prior to a meal. The goal of the invention is to solve the problem of low bioavailability of calcitonin (CT) that arises when an oral formulation comprising CT is taken with food. The solution proposed is to orally administer the pharmaceutical composition comprising CT during a short time window prior to food intake, i.e. from about 5 minutes to 2 hours prior to a meal, as recited in claim 1.  The Examiner rejected the claims under section 2 of the Patent Act, alleging that the claims related to a method of medical treatment involving the professional skill of a physician because the essential element only serves to instruct a medical professional “how” to treat a patient, notably the instructions to take the formulation during the period of time from about 5 minutes to 2 hours prior to a meal. The PAB overturned the Examiner’s final decision, asserting that a person of ordinary skill in the art would appreciate that any time during the recited time window would overcome the low bioavailability observed when administering an oral formulation of CT with a meal, and thus a physician’s judgment is not required in selecting a particular time within this range. Stated otherwise, once the physician has decided to prescribe the oral CT formulation to be taken shortly before a meal, no exercise of the physician’s skill or judgment is required. The PAB thus concluded that the subject matter defined by the claims does not amount to a method of medical treatment, and thus falls within the definition of “invention” under section 2 of the Patent Act. This decision confirms that claims relating to medical uses may constitute patent-eligible subject matter, even when the inventive feature of the claims is somehow based on a dosage or dosing schedule defined in terms of a range, as long as it may be established that practicing the claimed invention does not interfere with or require the professional skill of a physician. Patent applicants would be well advised to consider this change to Canadian patent practice when seeking patent protection in Canada for these types of inventions.   Recent developments on patent-eligibility of medical use claims in Canada AbbVie Biotechnology Ltd. v Canada (Attorney General), 2014 FC 1251. PN 2015-01, issued March 18, 2015. Commissioner’s Decision 1418