Changing The Rules - Patent Prosecution Strategies Under the new Patent Rules
June 10, 2022
Amendments to the Canadian Patent Rules (Rules) will soon come into effect and will introduce new provisions that are aimed at reducing prosecution times. These amendments will require applicants to abandon some long-standing practices for prosecuting patent applications in Canada. A few of the major changes to the Rules are discussed below along with some recommendations to mitigate against potential effects on applicants.
Why the changes?
The Canada-United States-Mexico Agreement (CUSMA) came into force on July 1, 2020 and, among other obligations, the CUSMA requires Canada to provide for patent term adjustments in the event of “unreasonable delays” in the patent granting process. The CUSMA defines a delay as being unreasonable at least in circumstances where a patent is not granted within five years after a patent application is filed or within three years after examination of the patent application is requested, whichever is later. Where an unreasonable delay is attributable to the Canadian Intellectual Property Office (CIPO), the CUSMA requires that the owner of a Canadian patent must be compensated by means of a patent term adjustment (PTA), whereby the term of the patent is extended by a prescribed period. Canada has until January 1, 2025 to put the PTA provisions in place, and these will apply retroactively to all patent applications filed on or after December 1, 2020.
It is against this backdrop that the government of Canada proposed various amendments to the Rules with the stated aim of streamlining the patent examination process and avoiding unreasonable or unnecessary delays. However, the amendments to the Rules are, at their core, designed to change “applicants’ behaviour” with respect to how patent applications are prosecuted.
When will the changes take place?
While some of changes to the Rules will come into effect on July 1, 2022, the more concerning changes (discussed further below) will come into effect on October 3, 2022. It should be noted that the latter changes will only be applicable to applications for which examination is requested on or after October 3, 2022. The current Rules will be applied to any application for which examination is requested before such date.
So, what’s changing?
Three of the more significant changes to the Rules are: 1) the introduction of “excess claims fees” into Canadian practice; 2) a limit on the number of examination reports, or office actions, that will be issued for applications, including a new requirement for a Request for Continued Examination; and 3) removal of the ability to withdraw an application from allowance to enter further amendments.
- Excess claims fees come to Canada!
Under the current Rules, patent applications in Canada may contain any number of claims without requiring additional government fees. This feature of Canadian practice allows applicants to comprehensively protect their inventions without incurring additional costs based on the number of claims they pursue. This has proven to be quite valuable for applications that relate to complex inventions, such as those in the life science or computer-implemented fields, as well as inventions that relate to technologies in highly competitive sectors. In each of these examples, it is understandable that applicants may require a larger number of claims to obtain a scope of protection to which they are entitled.
Under the new Rules, applicants will be required to pay “excess claims” fees of $100 for each claim over 20. These fees will be calculated at two time points in the prosecution phase: 1) when examination of the application is requested; and 2) when the final fee is paid after the application is found to be allowable. At the second time point, the applicant will be given credit for any previously paid excess claims fees.
It should be noted that the excess claims fees at the second time point will be calculated based on the number of claims that were “included in the application at any time” during the examination process, regardless of whether the total number of claims is reduced by the time of allowance. Thus, the excess claims fees would be considerable for many applications.
While the concept of claims fees is well-known in practice before other patent offices, such as in Europe and the United States, an applicant in those jurisdictions is able to avail themselves of strategies to mitigate against such fees. For example, in Europe, applicants may be able to recite optional features in claims thereby minimizing the number of dependent claims, and in the U.S., applicants can utilize a Continuation filing strategy to pursue one or more groups of claims. These options are generally not available in Canada. Moreover, owing to the prohibition in Canada against double patenting, the option of filing voluntary divisional applications is also fraught with risk, leaving applicants no alternative but to first introduce all divisional claims in a parent application. With the wording of the new Rules, this necessary strategy may become very expensive.
2. Three office actions, you’re out!
An application being prosecuted in Canada under the current Rules can receive any number of office actions until such time as the examiner concludes that the application is in condition for allowance, in which case a notice of allowance is issued, or that the application must be refused, in which case a final action is issued.
The new Rules will allow for only three office actions to be issued after examination of an application is requested. At such point, the only recourse available to the applicant, to prevent abandonment of its patent application, is to file a Request for Continued Examination (RCE), which is another provision introduced by the new Rules. The RCE will require the payment of a fee equivalent to the fee for requesting examination. Once an RCE is submitted, the applicant is entitled to receive only two more office actions, after which another RCE would be necessary to prevent abandonment. It should be noted that the new Rules do not distinguish between a substantive office action and one where only a lack of unity is raised.
3. Once allowed, the amendment door is closed!
At present, an applicant wishing to further amend an application after receiving a Notice of Allowance may request (with a fee) withdrawal of the application from allowance and re-enter prosecution by filing a voluntary amendment.
The new Rules will no longer include a provision for withdrawing an application from allowance. Instead, an applicant will be required to file an RCE to return its application to examination. This procedure will be necessary in situations where further amendments are desired such as, for instance, where an applicant wishes to add further claims to encompass other features described in its application; to include proposed claims for a divisional application in an effort to avoid a future double patenting objection; or to remove claims to avoid or minimize the excess claims fees.
What should I do?
The new Rules will undoubtedly result in modifications to current and long-standing practices followed by applicants for their Canadian patent applications. A few recommendations are provided below to minimize the effects of the new Rules for both pending and future applications.
1. As noted above, the new Rules will only apply to applications for which examination has been requested on or after October 3, 2022. It is therefore highly recommended that applicants request examination of their pending patent applications well ahead of that date so that their applications can be prosecuted under the current Rules. This will, in some cases, mean accelerating an applicant’s prosecution strategy in Canada, so the costs for doing so must be balanced against the potentially higher costs resulting from excess claims fees and RCE fees.
2. Applicants with any pending PCT international applications are urged to consider entering the national phase in Canada, and requesting examination, before October 3, 2022 so that the Canadian applications are not subject to the changes discussed above. In some instances, this will require pursuing national entry, and incurring prosecution costs, well ahead of the national entry deadline. This recommendation would particularly apply to PCT applications containing a large number of claims, applications describing more than one invention, or to applications where the International Search Report identified potential citations that may lead to complicated prosecution.
3. For applications that are subject to prosecution under the new Rules, it is recommended to defer requesting examination in Canada so as to allow the examination in one or more foreign jurisdictions to proceed first. This would allow an applicant to address potential objections in other jurisdictions before initiating examination in Canada with the goal of minimizing the number of office actions. This strategy would, however, delay the grant of the Canadian patent.
4. Where a divisional application is under consideration for an application subject to the new Rules, it is recommended that only independent claims be first introduced for review by the examiner. Dependent claims may be added once the divisional application is filed. This would minimize the number of claims added during prosecution of the parent application and, consequently, minimize the excess claims fees.
5. Where suitable, Applicants should consider incorporating multiple dependencies to minimize the number of dependent claims. Unlike in other jurisdictions, multiple dependencies are not subject to any claims fees, or excess claims fees, in Canada.
6. In view of the new limit on office actions, applicants would be advised to proactively take steps to amend their applications with the goal of minimizing the number of office actions required during the prosecution phase. As noted above, it is recommended that applicants regularly monitor the progress of their applications and consider examiner interviews where possible to pre-emptively address any issues that may arise.
As mentioned above, the changes to the Rules will disrupt current patent prosecution strategies in Canada. Although there still remains some time before the above-mentioned changes come into force, applicants are urged to review their portfolios of pending or proposed Canadian patent applications and to implement one or more of the above recommendations as part of their Canadian strategy. Please contact any member of the CPST team of professionals should you have any questions regarding this issue.
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