The era of globalization and North American free trade has seen unprecedented levels of foreign investment in Canada. Proximity, common language, historically favorable exchange rates, and strong economic and political relations explain why U.S. companies now represent approximately 70 percent of all foreign-controlled non-financial companies operating in Canada.

As with any foreign jurisdiction, successful investment in Canada requires some familiarity with Canadian laws governing patents. And yet, little attention traditionally has been paid to Canadian patent laws until it is too late — either because investors and companies erroneously assume that the laws are virtually the same as the United States or, more likely, because people tend not to pay attention to patent laws until faced with a problem. For many U.S corporations filing patent applications in Canada, such assumptions can prove costly.

Major Similarities
Broadly speaking, the general purpose and process of the Canadian patent protection regime is substantially similar to the United States. For example:
• • Like the United States, Canada provides 20 years of protection, calculated from the filing date of the patent application once the Canadian patent office grants a patent.
• • Patent applications in Canada publish 18 months after their filing date like their U.S. counterparts. In both jurisdictions, a patent owner may claim compensation, on the grant date, back to the patent application’s publication date for unauthorized use of the patented invention.
• • Canadian patent law allows a 12-month grace period in which to file a patent application following public disclosure by the inventor, much like the United States.
Of course, for an unwary U.S. corporation or inventor looking to protect their invention in Canada, the devil is in the detail.

Speed is of the Essence
Canada is a first-to-file patent system, compared to the United States, which is a first-to-invent system. This poses some potential problems for U.S. applicants because the grace period is for 12 months prior to the Canadian patent application filing date. For example, suppose a U.S. applicant has previously disclosed an invention five months before filing a U.S. application and then files a corresponding Canadian application 10 months after the U.S. application, claiming priority from the U.S. application; the original U.S. disclosure, which was more than 12 months before the Canadian filing date, will anticipate the Canadian patent application.

In Canada, patent applications are not automatically taken up for examination. Instead, the applicant must request examination and has up to five years to do so once he files the application. Given that there is a considerable backlog of applications awaiting examination at the patent office, it might be prudent for U.S. applicants to take advantage of Canada’s advanced examination procedure. A request to “make special” in the United States to expedite examination must satisfy several onerous requirements. In Canada, the applicant merely asserts that “the failure to advance the application for examination is likely to prejudice the Applicant’s rights.” Neither affidavits nor evidence are needed, and, generally, a first office action issues within three to six months of the request. Compare this to the more typical delay of 18 months to three years for regularly examined applications, which on top of waiting for the full five years to request examination, will clearly erode the effective period of enforceability of the Canadian patent.

“Duty of Candor”
In Canada, there is no “duty of candor” regarding the filing of prior art. Patent examiners are, however, entitled to ask for details regarding the prosecution of corresponding foreign applications (e.g., prior art cited, state of any opposition proceedings, etc.). If the examiner does request such information, the applicant is obliged to file a complete and honest reply. It might also be to the applicant’s advantage to voluntarily file prior art to ensure that it is entered onto the prosecution record because if the patent is challenged in court, the prior art may have less of an impact.

Keep it in the Family
In the United States, the deft use of divisional, continuation, and continuation-in-part patent applications to expand patent family members is an extremely powerful tool in the arsenal of U.S. patent practitioners. Indeed, the much maligned, and now largely defunct, proposed changes to U.S. “continuation” practice received its harshest criticism from those industry sectors that rely heavily on “continuation” practice to bolster its patent portfolios. In Canada, the picture is rather more conservative. Often, U.S. practitioners file so-called voluntary divisional patent applications as part of a strategic move to, for example, obtain maximum patent term for a drug. In Canada, however, a recent Supreme Court decision distinguished between divisional applications, which were filed voluntarily, and those that were filed in response to a request from the patent office. Voluntarily filed divisional applications risk being held invalid under the “double patenting” doctrine. Divisional applications filed at the request of the Patent Office may be insulated from this problem. Therefore, at the time of filing the application in Canada, it is advisable to add all “divisional”-type claims and leave it up to the examiner to raise a unity of invention objection.

In the United States, a “Continuation-in-Part” patent application introduces new matter to the pending application. In Canada, the applicant must file a completely new patent application if he wishes to add new matter. The new Canadian application will have a new filing date; however, any intervening prior art between the new filing date and the original application might be citable during prosecution.

Reinstatement Provisions
The Patent Act in Canada is very forgiving, to a point. If a patent application or an issued patent goes abandoned for, for example, failure to timely pay a maintenance fee, the Patent Act provides a 12-month reinstatement term during which the applicant can take corrective action. No explanation is necessary, and certainly no explanation as to whether the abandonment was “unintentional” or “unavoidable,” as is the case in the United States.

Weaved into this provision is the allowance for late Patent Cooperation Treaty (PCT) national phase entry. For most contracting states of the PCT, a 30-month deadline, which is calculated from the priority date, is available for national phase entry. In Canada, the “late” PCT national phase entry is available up to 42 months if the applicant misses the 30-month deadline. In this case, the patent office considers the PCT application abandoned, but provides a 12-month reinstatement period in which to rectify the situation by payment of a modest $200 reinstatement fee.

Entitlement to Control and Prosecute
In Canada, it is not necessary to have a Declaration or a Power of Attorney signed by the inventors, unlike the United States. An assignment of rights from the inventors to the applicant is no longer necessary; the applicant now merely files a “Declaration of Entitlement” setting out the reasons by which the applicant has acquired the right to file the application. The declaration provides the applicant with the power to control and prosecute the patent application without having authorization to do so by the inventors.

Fees: Size Does Matter
Patent protection in Canada can be a bargain if the correct procedures are adhered to. For all government fees associated with obtaining patent protection in Canada, a 50 percent fee reduction is available if the applicant can prove that it is eligible. Compare this to the United States, where to qualify for such reduced fees, an entity must have fewer than 500 employees; in Canada a small entity has fewer than 50 employees. Establishing this criteria in Canada can very tricky because this status is lost if the company is “controlled” by a large entity. Universities are allowed to pay government fees at the small entity rate in both countries. It is therefore advisable to file patent applications under the regular entity status.

Compared to the United States, where maintenance fees are due 3.5, 7.5, and 11.5 years after the date of issuance of the patent, maintenance fees are due in Canada on an annual basis, on the anniversary of the filing date of the patent application.

One advantage of the Canadian system is that there are no excess claim fees, unlike the United States. Generally speaking, products, processes, and method of use are all examined in a single application and can provide significant bang for your buck. This means that U.S. applicants can claim their inventions in many different aspects and use multiple dependent claims, too.

Claim Types and Patentable Inventions
Unlike the United States, where almost “anything under the sun” can be patented, it cannot be in Canada. One notable difference lies in medical treatment applications. Canada has adopted the so-called Swiss type format of “use” claims; therefore, to avoid receiving a rejection on the grounds of non-statutory subject matter, U.S. applicants are advised to have the claims amended from methods of medical treatment format to “use” format prior to filing in Canada. After the much maligned Harvard Mouse case — in which Harvard researchers filed a patent application for a genetically altered mouse — higher life forms such as transgenic animals are not considered patentable subject matter in Canada. Stem cells are patentable if they are not capable of transforming into a mammal. Software is not patentable per se, but if method steps are embedded onto a computer readable medium, then this may be patentable. Methods of doing business involving professional skills or computer automation of a professional task are viewed with suspicion, but may be considered patentable if they satisfy the patentability criteria as laid out in the Patent Act.

Despite the many similarities between U.S. and Canadian patent laws, the differences clearly warrant retaining a Canadian patent agent or lawyer at an early stage if a U.S. corporation or inventor wishes to patent its invention in Canada. Such an agent or lawyer can provide advice that will likely result in a smoother passage of the patent application through the Canadian patent office with fewer rejections and expedited allowance with broad, commercially relevant claims, thereby saving the applicant time, aggravation, and expense.