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Benefits of a Canadian Patent Filing for High-Tech Innovators

January 16, 2018

Treatment of computer-implemented inventions by the Canadian Intellectual Property Office (CIPO) has remained consistent for many years.  CIPO’s predictable treatment of computer-implemented inventions has likely contributed to the uptick in computer-implemented invention patent filings since 2011.  Indeed, patent filings for computer-implemented inventions have increased almost 50% following the 2011 Federal Court of Appeal decision in Canada (Attorney General) v. Amazon.com, the last judicial consideration of computer-implemented inventions in Canada.

Recent case law has also increased the value of a Canadian patent by making patents more difficult to attack and by highlighting how Canadian remedies for patent infringement may, in appropriate cases, result in very large awards.  These changes, coupled with the booming technology sector and economy generally, suggest that high-tech companies that are not already filing in Canada may want to give Canada a second look.

Following is a summary of some of the many reasons applicants are increasingly filing high-technology patent applications in Canada.

 

Potential for Substantial Remedies for Patent Infringement

Canadian patentees are afforded with a patent infringement remedy that is not available in the U.S. for utility patents and this remedy can, in appropriate circumstances, result in very high patent infringement awards.  A successful patentee in a Canadian patent infringement proceeding can elect either damages or an accounting of the infringer’s profits.  That is, the successful patentee can decide to either be made whole for the damage that they suffered due to the infringement, or they can instead elect to disgorge the infringer of all profits made from the infringement. 

An accounting of profits can, in some circumstances, result in a very large award.  For example, in Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 637, the Federal Court awarded Dow an accounting of profits of approximately $645 million.  The size of this award is significantly greater than the top awards for patent infringement in many jurisdictions around the world and is large even compared to typical awards in the United States.  Despite the disparity in size between the Canada and United States markets, this award ranks among the top 20 awards for patent infringement in North America.

In the United States, the option of an accounting of profits was dropped as a remedy for patent infringement of a utility patent in 1946. However, the option remains for a U.S. design patent.  This provision was highlighted in the long-running dispute between Apple and Samsung where a federal jury awarded Apple $399 million for infringement of a design patent and many have already recognized the value of having the option to elect an accounting of profits. 

In some circumstances, an accounting of an infringer’s profits can lead to an award which far exceeds the award that would be available if damages were the only remedy.

 

Recent Changes make Canadian Patents More Difficult to Attack

In June 2017, the Supreme Court of Canada issued a decision in AstraZeneca Canada Inc. v. Apotex Inc. 2017 SCC 36 which abandoned the “promise doctrine,” which has been used in recent years to invalidate patents in Canada.  Under the promise doctrine, patents which promised more than they could provide were deemed invalid for lack of utility.  The Supreme Court of Canada found that the promise doctrine is excessively onerous and that it runs counter to the scheme of the Patent Act.  In rejecting the promise doctrine, the Supreme Court recognized that there is a potential for unfair consequences if the Patent Act were to be interpreted to require all uses disclosed in a patent specification to be met for a patent’s validity to be upheld.  For example, under the promise doctrine, a patent that describes an otherwise useful invention could be deprived of patent protection because not every promised use was sufficiently demonstrated or soundly predicted by the filing date.  The Supreme Court recognized that invalidating otherwise useful inventions under the promise doctrine would be unfair.

The abolishment of the promise doctrine is a welcome development that strengthens the presumption of validity for Canadian patents. 

 

Predictable Outcomes for Computer-Implemented Inventions

Canadian law regarding computer-implemented inventions has remained static for over six years.  The last judicial consideration of patentable subject matter issues in Canada was the 2011 Federal Court of Appeal decision of Canada (Attorney General) v. Amazon.com, Inc., 2011 FCA 328.  Following this decision, examination of patent applications directed to computer-implemented inventions remained in a temporary state of flux until the Canadian Intellectual Property Office released guidance to practitioners in 2013.  Canadian examiners are relatively consistent in their application of these guidelines and it is usually possible to predict with a high degree of confidence at an early stage whether a given patent application will be deemed to be directed towards excluded subject matter.

Further, for many computer-implemented inventions, the tests described in the guidelines are not unduly onerous.  Generally, if the claimed solution could not be performed without the use of a computer and the computer is not simply included for convenience, the applicant will have good arguments as to why the patent application is not directed to excluded subject matter.

The static state of eligibility considerations in Canada is likely a reason why IP investors have recently suggested  that investing in patents in Canada as a good strategy among a volatile climate for patent valuations in the U.S.

 

Cost Effective

Prosecution costs in Canada are comparatively inexpensive to those in most other jurisdictions, particularly when a corresponding application is filed in another jurisdiction. 

The reasonableness of fees in Canada are due to various factors.  First, the Canadian Intellectual Property Office’s fee schedule is quite short.  Excluding annuities (which are also comparatively low), most applicants will pay only a filing fee ($400 CDN), a request for examination fee ($800 CDN) and a final fee ($300 CDN).  There is no equivalent in Canada to an RCE (request for continued examination) or an IDS (information disclosure statement) fee.

Further, it is very common for Canadian Examiners to rely on foreign examination reports when preparing an office action.  In most cases, the Canadian examiner includes a notation indicating that the cited prior art was also cited in another jurisdiction.  Often, arguments and amendments that were successful in addressing an objection in another jurisdiction may be relied upon to address the same objection in Canada, resulting in low prosecution costs in Canada.

It is also possible to delay requesting examination in Canada for up to five years.  Some applicants take advantage of this time period to further reduce prosecution costs.  For example, an applicant might delay examination in Canada to avoid parallel prosecution. Once a notice of allowance has been issued in another jurisdiction, they might then request examination in Canada and may optionally file a voluntary amendment to place the Canadian claims in a form that was found to be allowable elsewhere.

Lastly, the Canadian dollar often helps to manage costs since the Canadian dollar generally trades below many other major currencies, including the US dollar and the Euro.

 

Possibility for More Extensive Protection

Due to very lenient rules regarding claim numbers and dependencies in Canada, it is often possible to obtain more extensive protection in a Canadian patent than in a corresponding United States patent.  Due to the fee structure for patent claims, U.S. applicants often restrict themselves to no more than twenty total claims and no more than three independent claims and they also generally avoid multiple dependencies.  Canada has no restrictions on the number of claims, the number of independent claims or the use of multiple dependent claims.  The Canadian claim set can, therefore, be made more extensive than the U.S. claim set without increasing costs.  For example, by simply including multiple dependencies in the claims, the Canadian claim set may recite combinations that are not explicitly claimed in the U.S. application. 

The freedom to include a more-extensive claim set in a Canadian patent application may be of particular interest to applicants filing applications for computer-implemented inventions since numerous claim strategies may be appropriate in such applications.  There is no need to weigh the relative benefit of a computer readable medium claims, method claims, device claims and system claims – Canadian applicants can include all desired claim types.

 

Possibility of Late Filings

In some circumstances, a public disclosure may act as a bar to a patent filing in many countries.  Canada, however, allows Applicants to benefit from a one year grace period after making an invention public.  That is, after disclosing an idea to the public, there is a one year period during which an application can still be made for a Canadian patent.  Canada may be an attractive filing jurisdiction when a planned or inadvertent disclosure has occurred.

Canada also has generous deadlines for effecting a PCT national entry which allows an applicant to enter the national phase in Canada when the deadline in other jurisdictions has long expired.  While Canada has a standard deadline of 30 months to enter national phase, this deadline can be extended an additional twelve months upon payment of a $200 CDN government fee. 

 

The Canadian Economy and Canadian Tech are Thriving

Canada was widely expected to lead the G7 in GDP growth in 2017 and technology has been an important focus for both private corporations and the government.  The Federal Government has indicated an intention to foster the growth of private technology companies in Canada and has recently expanded support for incubators and accelerators and provided $950 million to support business-led innovation superclusters.  These superclusters perform R&D in areas that are thought to have the greatest potential to accelerate economic growth.  Possible “superclusters” include a digital technology supercluster which may relate to data visualization platforms, data analytics platforms and data analytics platforms, and also an artificial intelligence supercluster.

 

 

Notice:  The information provided in this document is for general information only.  It should not be used as a substitute for legal advice from patent counsel.  If you have any questions concerning patents, you should obtain the legal advice of qualified patent counsel.