The Junk Folder Ate my Patent

Taillefer v Canada (Attorney General) 2024 FC 259 Furlanetto J

2,690,767 / Wide Ice Resurfacing Machine

A patentee must pay annual maintenance fees to maintain its patent in effect: s 46(1). If the annual fee is not paid in time, the patentee has a six month grace period during which it can pay the maintenance fee plus a late fee: s 46(2). If the fees are not paid during the grace period, the patent will lapse: s 46(4). However, the patent can be reinstated on request if the Commissioner determines that the failure occurred in spite of “the due care required by the circumstances having been taken”: s 46(5). This case discusses what “due care” looks like in the context of email communications.

The patentee’s arrangement with its Agent was that the Agent required instructions from the patentee before paying the annual maintenance fee [10]. For many years the fees were paid on time pursuant to those instructions [11]. In 2020 the Agent reminded the patentee that the fees would have to be paid, a full five months before the deadline [12]. The Agent heard nothing from the patentee. The Agent sent many email reminders to the patentee, but never heard anything back, and so did not pay the fee. The Agent sent more email reminders about the possibility of reinstatement, but still did not hear anything. The six month deadline expired, and on October 20, 2020, the Agent sent the patentee an email notifying him of this fact. Finally, nine days later, the patentee found this correspondence in his junk mail folder [16]. The evidence indicates that this was the problem all along – even though the Agent and the patentee had been successfully communicating by email for almost a decade, for some reason, in 2020 the Agent’s email started going to the patentee’s junk mail folder.

The patentee sought to have the patent reinstated pursuant to s 46(5). The Commissioner refused, on the basis that the “due care” standard had not been met. Furlanetto J affirmed.

The take-away is that if an Agent has been relying on email for years to communicate with their client without any problem, and the client stops responding, the Agent needs to double check that the emails are still getting through:

[41] In the circumstances applicable here, on a substantive review, it is my view that it was reasonable for the Commissioner to have looked at steps that could have avoided the communication failure and to have expected that the Agent would have additional communication mechanisms in place to make sure they could always correspond with the Applicant. It was likewise reasonable to have expected that in circumstances where numerous notices from the Agent had gone unanswered and where non-compliance could lead to expiry of patent rights that these alternative measures would have been used to ensure that the patentee was aware of the deadlines at issue. Particularly as there had been a consistent pattern of payment since 2012.

[42] Similarly, in my view it was reasonable for the Commissioner to expect that a reasonably prudent patentee would have a system in place to make sure that their email was operating effectively if they were relying on this as the primary communication means to pay their maintenance fees. This is especially so as the Applicant retained the responsibility to instruct the Agent on a yearly basis to pay the maintenance fee. Having retained this responsibility, it was reasonable for the Commissioner to find that it was incumbent on the Applicant to exercise due care to ensure that his email was properly receiving messages so that he could provide instructions to the Agent in a timely manner.

Pre-issuance Defects in Administrative Process Cannot Render a Patent Void

Apotex Inc v Pfizer Inc 2017 FCA 201 Gauthier JA: Stratas, Boivin JJA aff’g 2016 FC 136 Diner J
            1,339,132 / latanoprost / XALATAN

The precise issue in this case will probably never arise again, as it is “is the first and most likely the last case involving section 73 of the 1989 Act” [4]. Nonetheless, Gauthier JA’s decision for the Court sets out an important general principle that “pre-patent issuance defects in the administrative process for applying for a patent cannot be relied upon by an alleged infringer to render a patent void” [59]. The Court also suggested a principle of interpretation which may have even more far-reaching implications, to the effect that the courts should strive to interpret the Canadian Patent Act so as to achieve substantive consistency with the patent law of our trading partners.

The applicant that filed the application which matured into the ‘132 patent (Pharmacia Aktiebolag, Pfizer’s predecessor) was a large entity. It did not claim small entity status, and it paid large entity fees — except for the final fee, for which, for reasons which are unknown, it paid the small entity fee [8]. For reasons which are also unknown, the Patent Office accepted that fee, even though small entity status had not been claimed [9]. On subsequent inquiry by the patent agent, the Patent Office  acknowledged, erroneously, that large entity fees had been received [10]. Thus, the applicant was a large entity, and the proper large entity fee had never been paid [11].

On these facts, in the context of s 8 litigation, Apotex sought a motion for summary judgement that the 132 patent is invalid for failure to pay the proper application fee [12]. Diner J dismissed the motion, and Apotex appealed.

Apotex made a straightforward argument [49]. It relied on s 59, which provides that when defending an infringement action, a defendant “may plead […] any fact or default which by this Act or by law renders the patent void,” in combination with subsection 27(1) of the 1989 Act, which provided (my emphasis):

inventor […] may, on presentation to the Commissioner of a petition setting out the facts […] and on compliance with all other requirements of this Act, obtain a patent granting to him an exclusive property in the invention

27(2) The requirement to pay the fee is the in Act, so the applicant had not complied with all other requirements of the Act, and this, the argument went, renders the patent void. The wording of the current 27(1) is slightly different, but the same argument would arise, as it provides that the Commissioner shall issue a patent if “all other requirements for the issuance of a patent under this Act are met.”

Gauthier JA remarked that the “literal approach” advocated by Apotex was attractive, but she rejected it in light of the context and purpose [50]-[51]. The FCA held that it was bound by Fada Radio [1927] SCR 520, in which the SCC had held that an untrue statement in the application (that the invention had not been patented with the applicant’s knowledge in any country) would not invalidate a granted patent, which stands for this “essential concept”:

[57] pre-patent issuance defects in the administrative process for applying for a patent cannot be relied upon by an alleged infringer to render a patent void.

Similarly, the FCA cited its own prior caselaw for the principle that

[58] defects in the pre-patent issuance process that do not come within the ambit of provisions dealing expressly with the voidance of a patent, like section 53 of the 1989 Act, cannot be relied upon by an alleged infringer to render a patent void.

This is evidently a general principle, not tied to the 1989 version of 27(1).

Gauthier JA also referred to the absurdity of “enabling an alleged infringer to void a patent (here a successful pharmaceutical patent worth millions if not billions of dollars) say ten years later or even after its expiration, on the basis that the petitioner was a few pennies short” [72].

Therefore, “the law” referred to by s 59 is substantive patent law, not administrative law matters which might be raised on judicial review: [69], [70]. Gauthier JA noted that the Economic Action Plan Act, s 138, not yet in force, “makes it clear that non-payment of fees payable before the issuance of a patent will not invalidate the said patent” [3], but this played no part in her reasoning, so the interpretation stands even if this provision is never proclaimed in force.

This seems to me entirely sound as a purposive analysis of the Act. It also strikes me as consistent with the literal text of the Act. S 59 refers to any fact which renders the patent void, and nothing in 27(1), then or now, refers to validity; it refers to the conditions on which the Commissioner may (or, now, shall) issue a patent.

The Court’s final observation may have even more wide-ranging implications:

[77] Considering the importance of patents nowadays, and the importance given to intellectual property law in trade treaties, courts should obviously be careful before adopting an interpretation that would put Canada at odds with its trading partners. Thus, I am comforted by the fact that my purposive interpretation of the 1989 Act does not require the addition or the recognition of the new grounds of invalidity that Apotex’s view in respect of sections 27 and 59 would entail and that could be in direct conflict with those generally recognized in England, Europe and the United States.

This observation is entirely salutary. It is consistent with the observation of the House of Lords as to the importance of establishing a common approach in Europe (see e.g. HGS v Lilly [2011] UKSC 51, noting that the Bundesgerictshof is of the same view). Of course, in Europe the common basis of the EPC provides an additional rationale for harmonization, but Lord Neuberger [96]-[99] also remarked on the importance of more general harmonization in promoting the basic objective of the patent system, to provide an incentive to innovation.

The UKHL has adopted harmonization with the EPO has a principle of interpretation of the UK Act. The FCA in this decision has not gone so far. Gauthier JA simply “drew comfort” from the observation, and it did not play any direct part in her reasoning. Nonetheless, it opens the door to invoking the desirability of harmonization as an independent principle of interpretation of the Patent Act.

Failure to Pay the Large Entity Fee Does Not Invalidate a Granted Patent

Apotex Inc v Pfizer Inc 2016 FC 136 Diner J
            1,339,132 / latanoprost / XALATAN

Pharmacia Aktiebolag (Pfizer’s predecessor) paid a small-entity final fee prior to issuance of the 132 patent, when it should have paid the large entity fee [16]. Nor did it top-up the payment during the grace period provided by 78.6(1) [40]. This motion consequently addressed a single legal issue: does failure to pay the proper fee invalidate the granted patent? Diner J held that it does not.

The main authority relied on by Apotex to argue that the patent was invalid was Dutch Industries FCA 2003 FCA 121 var’g [2002] 1 FCR 325. Dutch Industries involved an application (904) and an issued patent (388) for which small entity fees had been paid, and the Commissioner had subsequently accepted large entity fees as a top-up after statutory deadlines had passed. The Federal Court held that the Commissioner did not have the authority to accept late payment and remanded to the Commissioner for redetermination on that basis, with the implication that the 904 application was abandoned and the 388 patent lapsed [FC 54]. The FCA affirmed that “the Commissioner lacks the authority to permit a deficient maintenance fee to be topped up after the date upon which the fee was due” [26] (though with some apparent criticism of the complexity of the regime and the harshness of the result [3]-[4]). However, the FCA held that the patentee was in fact a small entity at the time the patent was granted, and that status did not change, so the 388 patent was not invalid [47], though the 904 application was deemed to be abandoned because the patentee was a large entity while it was still pending [48]. Evidently as a response to Dutch Industries, 78.6(1) was enacted, providing for a grace period for top-up payments.

Pfizer relied primarily on Weatherford 2011 FCA 228, in which the court held that non-compliance with 73(1)(a) of the Act (requiring an applicant to reply in good faith to a requisition) cannot result in invalidation of a granted patent: “To be clear, the concept of abandonment in paragraph 73(1)(a) operates during the prosecution of the application for a patent. Its operation is extinguished once the patent issues” [150]. The FCA emphasized that “The jurisprudence distinguishes between an “application for a patent” and a “patent” and considers the issuance of the patent to be a demarcation point,” [145], and post-grant invalidation for misrepresentations is left to s 53(1) [149].

Diner J held that to the extent that there was any inconsistency between Weatherford and Dutch Industries, Weatherford was to be followed as clarifying the prior case law [66]. Moreover, Diner J recognized the force of the law and policy reflected in the Weatherford decision. In addition to relying on Weatherford itself, he reviewed the case law emphasizing the long-standing distinction between the application and post-grant status of patents [71], [77], [81]. As a matter of policy, Diner J emphasized the distinction between the substantive patent bargain – the patentee provides an invention which is in fact new, useful, inventive and properly disclosed in return for a limited period of exclusive rights [82] [86] – and administrative consdierations, aimed at the operation of CIPO and clearing the system of deadwood [83], [88]:

[87] Indeed, the non-compliance of a patent holder will either be rooted in administrative or substantive breaches of the statute. It is consequently the type of non-compliance that will ultimately determine whether the breach invalidates the patent: does the breach go to the substantive heart of the patent bargain, or rather administrative dealings with the Patent Office, such as fee for service payments? Breaches which go to the heart of the patent, namely those which require the inventor to pay the figurative hard coinage, can be fatal to issued patents. [original emphasis]

While Weatherford dealt with 73(1)(a), and the requirement to pay prescribed fees is found in 73(1)(f), Diner J noted that “[i]f one paragraph of a given section cannot invalidate an issued patent, the others cannot do so either, without some express direction otherwise” [74].

Diner J's reasoning strikes me as entirely persuasive, with a couple of caveats. 

One caveat is that the FCA in Weatherford distinguished Dutch Industries on the basis that “Canadian Patent Application No. 2,146,904 was deemed abandoned. No patent regarding that application had issued” [151]. While that is true, the FCA made no mention of the 388 patent; while that was granted, the FCA in Dutch Industries was clearly of the view that the same principle would have applied. It seems to me that there is actually a conflict between the two cases, even if Dutch Industries can be formally distinguished on the basis that no granted patent was held invalid. With that said, Weatherford is both more recent and substantively preferable, in my view, and in any event, regardless of how persuasive the distinction might be, it was the FCA's explanation of its own prior decision, and Diner J was certainly entitled to rely on it. An unpersuasive distinction is a way of over-ruling a prior decision sotto voce.

Another caveat is that there appears to be no sanction for failure to pay the top-up fees within the grace period. It might be suggested that in responding to Dutch Industries with the grace period in 78.6(1), the legislature was implicitly affirming that if the top-up payments were not made within that grace period the Dutch Industries rule would still apply. I don’t think this argument is strong enough to counter the Weatherford reasoning, but it does seem to me that the whole matter would be clarified if the act would provide an administrative penalty, such as triple fees, for an administrative failure. Any law that provides that provides a sanction that is disproportionate to the offence will make for an unsatisfactory jurisprudence.

First Interpretation of Rule 3.1 re Grace Period for Failed Attempt to Pay Fees

Karolinska Institutet Innovations AB v Attorney General of Canada, 2013 FC 715, Hughes J

This decision of Hughes J is the first interpretation of the grace period provided for by Rule s 3.1(1) when a “clear but unsuccessful” attempt is made to pay a fee. Hughes J’s decision was a fairly straightforward application of s 12 of the Interpretation Act, which requires that an enactment be given an interpretation “as best ensures the attainment of its objects.”

On September 4 and 15, 2008, the Applicants filed patent applications under the PCT in Sweden and the US. The crucial dates for late entry into the Canadian national phase under Rule s 58(3) (42 months, rather than 30 months), were therefore 4 and 15 March 2012. The letter requesting national phase entry was filed electronically 29 Feb 2012. However, due to a clerical error in office of the Canadian agent, the total fee was sufficient to cover only the basic fee (10(a)) and the second year maintenance fee (30(a)(i)), and not the late payment fee (11); the total tendered was $250, when it should have been $450. CIPO consequently refused entry into the national phase, on the basis that s 58(3) requires payment of fees prior to the expiry of 42 months from the priority date.

The decision concerned the application of Rule s 3.1(1) which provides for a grace period

if, before the expiry of a time limit for paying a fee set out in Schedule II, the Commissioner receives a communication in accordance with which a clear but unsuccessful attempt is made to pay the fee.

In such a case, the Commissioner is required to (“shall”) send a notice requesting payment of the deficiency: s 3.1(2). The Commissioner did not do so.

CIPO argued that it was not “clear” that the Applicant intended to pay the late payment fee. Hughes J’s description of CIPO’s argument was very brief: “Counsel relies on the words ‘the fee’ in Rule 3.1” [36].

Treating the interpretation of s 3.1(1) as a matter of first instance [29], Hughes J appealed to s 12 of the Interpretation Act [37], and held, in effect, that “the fee” should be interpreted to mean the fee that was payable for the thing that the applicant was clearly trying to do [38]. Thus Rule 3.1 was applicable, and the Commissioner’s decision not to apply the grace period was unreasonable.

It seems to me that Hughes J’s decision was straightforwardly correct. I find it very difficult to think of an interpretation that would support CIPO’s position. Perhaps CIPO was of the view that there must be a clear attempt to pay the full fee, and the provision is only operable if the attempt is unsuccessful for technical reasons? I don’t see any reason why the requirement of a subjective intent to pay the full fee should be read into this Rule. In any event, I am just speculating as to what CIPO’s position might have been. I wonder if what happened is that someone at CIPO simply forgot about Rule 3.1(2), and so sent out a refusal instead of a request for payment, and this litigation was an attempt to justify that error post hoc?

Thanks to Alan Macek's IPPractice for making this decision available before it has been posted on the Federal Court website.

Speculative Prejudice to Third Parties in Reinstating a Patent

Repligen Corporation v. Canada (Attorney General) 2012 FC 931 Near J

Repligen’s former patent agent transposed two digits of Repligen’s patent 1,341,486, to 1,314,486, when it engaged Computer Patent Annuities to pay maintenance fees on the patent. Consequently, the fees were paid against the “14" patent, which was held by Rolls-Royce. Sometimes the fees would be paid first on behalf of Rolls-Royce, sometimes on behalf of Repligen. The second payor would to be told that fees had already been paid and would request a refund. While duplicate fees were paid on the "14" patent, no fees were paid on Repligen’s “41" patent and CIPO sent a Maintenance Fee Notice to Repligen’s former agent advising that the patent would lapse unless payment was made within twelve months. Repligen’s former agent did not respond [5], and the “41" patent lapsed.

Repligen then switched agents. Its new agent attempted to have the patent reinstated, arguing that the Commission should exercise her discretion to correct the clerical error under s 8 of the Act and reinstate the patent. The Commissioner refused, primarily on the basis of the lengthy delay and the potential for prejudice to third parties who might have relied on the register showing the patent as lapsed [#1 59].

In Repligen #1 2010 FC 1288 Lemieux J held that the Commissioner had not properly exercised her discretion. A crucial point was that the Commissioner’s concern regarding prejudice to third parties was speculative as she had no evidence of third party prejudice. Lemieux J contrasted this with Bristol-Meyers (1998), 82 C.P.R. (3d) 192 (FCA) in which two other companies had filed priority claims for similar drugs [#1 60(f)]. Lemieux J noted the “catastrophic consequences” of the loss of patent rights [#1 59], and insisted that the Commissioner take into account the impact on Repligen in deciding whether the patent should be reinstated [#1 60(a)].

I am inclined to think that the Commissioner was right on this point. There may be many cases in which a third party would have relied on the lapse of the patent in a way that could not come to the attention of the Commissioner. For example a third party might have done patent clearance search before deciding to invest in developing a new product and then proceeded after having determined that its product would infringe the Repligen patent, but that the patent had lapsed. Given the nature of third party rights, it seems likely that it would be only in relatively unusual circumstances, such as those in Bristol-Meyers, that the Commissioner could become aware of the prejudice to third parties. It is true that the consequences to Repligen of the loss of its patent rights can be catastrophic, but it is also true that infringement of those rights could be catastrophic to a third party.

In any event, this was not the view of Lemieux J, who remitted the matter to be reconsidered by a different official in the Patent Office. The Commissioner once again refused to correct the error, and Repligen once again sought judicial review, leading to this decision in Repligen #2. This time the Commissioner focused on potential prejudice to Rolls-Royce. The Commissioner argued that “‘[c]orrecting Repligen's error today could retroactively have the effect of causing the Rolls-Royce patent to have expired in 2008' since the payments originally applied to it would automatically turn over to the Repligen Patent” [# 2 16]. Near J rejected this argument, rightly in my view. Fees were always paid in respect of Rolls-Royce’s patent, which never lapsed and has now expired [# 2 31]. I see this argument by the Commissioner as a way of attempting to point to an actual prejudice rather than a speculative prejudice in order to satisfy the direction by Lemieux J. It is an unsatisfactory attempt, as the Commissioner identified the real issue correctly in the first instance; the real question is whether the Commissioner should consider harm to third parties who may have relied on the lapse, unbeknownst to the Commissioner. Lemieux J, and now Near J, have held that it should not.

The matter had been remitted to the Patent Office once again. Even if the patent is reinstated, I am not sure Repligen’s troubles are over. Loss of patent rights is not “catastrophic” if those rights are never exercised. But if Repligen has the patent reinstated and then brings an infringement action against a competitor who can show that it did in fact rely on the lapsed patent, there is a a very strong argument that that defendant should have some kind of equitable defence. If the defendant can say “I searched for patents before undertaking my business, I found this patent that I would have infringed, I determined that it had lapsed, and I then invested $10 million in reliance on that,” it would be a serious failure of the patent system to allow Repligen to enforce against that defendant.

FCA Takes a Hard Line on Payment of Fees by the Wrong Agent

Excelsior Medical Corporation v. Canada (Attorney General) 2011 FCA 303 Pelletier JA: Noël, Layden-Stevenson JJA, aff’g 2011 FC 407 Hughes J

Patent Rule 6(1) states that the Commissioner shall only have regard to communications from the authorized correspondent. This means that if the patentee changes its agent, but does not notify the Patent Office of the change, the original agent remains the agent of record. In these circumstances the Patent Office will refuse payments made by the new agent. The result is that the patent may be deemed to be abandoned for non-payment of fees, even though payment has been tendered, albeit by the wrong agent. This point has recently been affirmed by the FCA in Unicrop.

In the decision under appeal in this case Hughes J had created a glimmer of hope for a patentee in this situation. He held that if the Patent Office accepts the fees from the wrong agent and sends a notice to the agent of record stating that the application had been reinstated, the application is thereby reinstated and the Commissioner cannot “undo” the reinstatement. In my post on that decision, I suggested that while this result seems fair, it is 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.” On appeal, the FCA extinguished that glimmer of hope, faint though it was:

The acceptance of maintenance fees, whether within or outside the reinstatement period, from someone other than the applicant’s authorized correspondent does not reinstate a patent application. Contrary to the application judge’s view, the Patent office’s acceptance of those fees did not create rights and its return of those fees did not extinguish rights. To hold otherwise would be to create a situation in which the Patent office’s administrative errors created or extinguished rights independently of the statutory scheme. [5]

Nor did the FCA show any sympathy for the patentee in this situation: “there is no basis for invoking the Federal Court’s equitable jurisdiction on the facts of this case. This is simply another in a line of case where the most elemental precautions were not taken when accepting a patent prosecution mandate” [8]. It is therefore clear that there is no prospect of judicial relief in cases in which fees have been paid by the wrong agent.

(Note that on the facts Hughes J refused to order the patent reinstated, as the new agent had subsequently requested and accepted a refund, and the application then became incurably dead. Thus the FCA dismissed the appeal.)

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.

Maintenance Fees Must be Paid by the Authorized Correspondent: Why?

Unicrop Ltd. v. Canada (Attorney General) 2011 FCA 55 Noël JA: Pelletier, Trudel JJA affm’g 2010 FC 61 Boivin J

In Unicrop the FCA affirmed that maintenance fees must be paid by the authorized correspondent, and that the Commissioner is entitled, and indeed apparently required, to refuse payment from anyone else. It is difficult to argue with this conclusion, given the text of the Patent Rules; the question is why the Rules impose such a stringent requirement.

Unicrop’s representatives on filing were Bereskin & Parr LLP, who also paid the first two annual maintenance fees. The third annual fee was not paid in time and the application was deemed abandoned. Just prior to the one year grace period for reinstatement, the applicant attempted to reinstate the application through their new agent, Furman & Kallio. However, the notice of appointment of agent had not been submitted to CIPO prior to the grace period deadline [FC 27]. CIPO therefore refused to accept the fee payment, on the basis that it had not been submitted by the authorized correspondent. The Appointment of Agent form was submitted to CIPO after the deadline, but CIPO was of the view that the application could not be reinstated, as the grace period had elapsed.

The FCA affirmed Boivin J, who had upheld the Commissioner’s decision: "the relevant provisions of the Rules could not be clearer. Subsection 6(1) provides that “for the purpose of prosecuting or maintaining an application the Commissioner shall only communicate with, and shall only have regard to communications from, the authorized correspondent.” The wording of section 3.1, which deals with the late payment of fees, makes it clear that this prohibition extends to communications relating to all such payments as it operates ‘subject to subsection 6(1)’” [34]. The decision of Hughes J in Sarnoff Corp. v. Canada (Attorney General), 2008 FC 712, aff'd 2009 FCA 142 was persuasively distinguished on the basis that Hughes J, faced with ambiguous evidence, had found as a fact that the notice of appointment of agent had been received by CIPO [29, FC 20].

The Court’s analysis is entirely convincing as a matter of law, but the result is not satisfactory. As Hughes J pointed out in Sarnoff “The seemingly minor fault in having maintenance fees actually paid, received and recorded by a firm which, arguably, at the time was not the patent agent or associate agent of record, results in the wholly disproportionate result of loss of all rights to receive the grant of patent monopoly rights should the application otherwise prove to be acceptable.” [32]. It is true that the facts in Unicrop were different enough to compel a different result, but the point remains that the loss of all rights is disproportionate to the fault.