Thursday, April 14, 2011

Payment of Fees by the Wrong Agent – A Glimmer of Hope

Excelsior Medical Corporation v. Canada (Attorney General) 2011 FC 407 Hughes J

Hot on the heels of Unicrop 2011 FCA 55 affm’g 2010 FC 61 (discussed here), Excelsior Medical is another case in which an applicant changed patent agent but failed to notify the Patent Office of the change, with the result that maintenance fees were not tendered by the “authorized correspondent,” as required by Rule 6(1), prior to the expiry of the grace period for reinstatement of an application that has been deemed abandoned for failure to pay those fees. Unicrop held that the Commissioner is entitled to refuse payment, with the result on the facts that the application was held to be incurably abandoned.

Excelsior Medical provides a slender ray of hope for such an applicant. Where in Unicrop the Patent Office had refused the fees paid by the wrong agent, in Excelsior Medical the Patent Office accepted the fees and sent a notice to the agent of record stating that the application had been reinstated [6]. This was apparently an automatic response, generated without substantive review. On review, the Patent Office sent a further letter rescinding the reinstatement, on the basis that the fee should not have been accepted [4.12]. By the time this letter was received, the grace period had expired. Hughes J held that when the Commissioner receives and acts upon a communication, the application is reinstated, and the Commissioner cannot “un-perform” that function [38], [41]. (Unfortunately for the applicant, on the facts the new agent had subsequently requested and accepted a refund, and the application then became incurably dead [42].) 

While this result is fair and reasonable, it is perhaps difficult to reconcile with the mandatory language of Rule 6(1), which states that the Commissioner “shall only have regard to communications from[] the authorized correspondent.” But a line must be drawn somewhere; it seems inconceivable, for example, that a patent could be declared invalid ab initio after having been granted and enforced, if it were discovered that fees had been paid by the wrong agent at some point during the application process. On the modern approach to statutory interpretation, the text must be interpreted in light of its purpose, and not in a purely literal fashion.

Hughes J also indicated that if detrimental reliance had been established, which it had not been on the facts, he would have considered the possibility of ordering equitable relief. The difficulty with this thought is that both levels of court in Unicrop refused to invoke equitable principles to order the reinstatement of the application despite expiry of the deadline: “equitable relief cannot be invoked in order to counter the application of a clear statutory rule” [FCA 38].

In the end, Hughes J did his best to temper the application of Rule 6(1), but all he could do was to provide a narrow window that will benefit few applicants. The root of the problem lies with the rule itself.

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