Although Canada has a

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1 FOCUS ON... CANADA Patent It in Canada by Gavin Manning Although Canada has a population of only 31.5 million people, a number of factors make protecting inventions in Canada highly beneficial. One significant consideration is the close integration of the Canadian economy with that of the United States. Canada accounts for a significant portion of the North American economy. In 2002 the country supplied 16.5% of all US imports of goods and services. Canada, in turn, purchased 19% of those exported from the United States. That year approximately US$1.2 billion in trade crossed the Canada US border daily. Canada is the United States largest trading partner. Because many products and services are offered in the North American market as a whole, a patentee who has both Canadian and US patent protection for an invention can choose to pursue infringers in Canada, the United States, or both. Canada has a modern and reasonably efficient court system, and Canadian litigation can provide a costeffective and relatively low risk alternative to US litigation. Canada has a large and growing biotech industry and a welleducated workforce. Most of the world s major pharmaceutical companies have significant research and manufacturing facilities there. Furthermore, patenting inventions 18 BioProcess International DECEMBER 2003 JOEY CHUNG ( in Canada is relatively inexpensive. A recent survey conducted by the Canadian government found that fees for filing and maintaining Canadian patent applications are among the lowest in the world. WHAT CAN BE PATENTED? With some notable exceptions, the Canadian Patent Act permits patenting of all manner of technology. The Patent Act defines invention as being any new and useful art, process, machine, manufacture, or composition of matter or any new or useful improvement in any art, process, machine, manufacture, or composition of matter (1). Some types of subject matter that are patentable elsewhere are currently not patentable in Canada. Methods of medical treatment are not patentable in Canada. The unavailability of claims for methods of medical treatment is alleviated somewhat by the availability of use claims such as: The use of [compound X] to treat [ailment Y]. But a use claim cannot recite specific steps in a method of medical treatment. For example, a claim reading The use of [compound X] to treat [ailment Y] by injecting a solution of [compound X] intra-muscularly would not be allowable. A recent decision of the Supreme Court of Canada appears to establish that higher life forms are not patentable there. This case considered the patentability of claims to the Harvard mouse. Claims to the mouse were rejected, although claims to fertilized mouse eggs and the process for producing the mouse (and other nonhuman mammals) were considered to relate to patentable subject matter (2).

2 Methods that require the application of professional skill or judgment, such as methods of performing speech therapy, are also not patentable in Canada. Subject matter claimed in a Canadian patent application must be adequately described. Accordingly, claims to biotechnology subject matter, such as monoclonal antibodies, may be rejected if the application lacks examples showing that the antibodies were successfully produced. However, if there is a factual basis for making a sound prediction that an invention will work, then patent protection may be available even if the utility of the invention has not yet been fully verified by tests. NOVELTY An interesting feature of the Canadian patent system is that it is possible to apply for patent protection in Canada even after it has become unavailable in many other countries because of the applicant s own activities. Canada has a modified absolute novelty system. The Canadian Patent Act bars the valid filing of a patent application only if an inventorderived publication of the invention occurred more than one year before the Canadian filing date or if the invention was published by someone else who did not obtain knowledge of it directly or indirectly from the applicant before the claim date. The claim date is typically the priority date for the Canadian application, if priority was claimed, or the Canadian filing date if priority was not claimed. As a result, the grant of a foreign patent is not a bar to the valid filing of a corresponding Canadian patent application as long as neither the foreign patent nor the application for the foreign patent was published more than one year before the actual Canadian filing date. Canada also has an unusually long period for entering the Canadian national phase from a Patent Cooperation Treaty (PCT) application that designates Canada. (See How the PCT Works ) The Canadian national phase can be validly entered up to 42 months after the priority date. (The Canadian filing fee is increased by CA$200 for applications that enter the Canadian national phase between 30 and 42 months after the priority date.) SMALL ENTITY STATUS The Canadian Patent Act permits small entities to pay reduced fees. Maintenance fees, filing fees, examination fees, and issue fees are all reduced by 50% for small entities. The Canadian Patent Rules define small entity as a university or an entity that employs 50 or fewer employees. A small entity cannot have transferred or licensed or be under a contractual or other legal obligation to transfer or license any right in the invention to another entity that does not qualify as a small entity. A number of aspects of this definition are unclear, including the definition of university. Does a general security interest over a business s assets granted to a bank (which typically will have more than 50 employees) constitute a right in the invention such that an entity that has granted such a security interest must pay large entity fees on all of its Canadian patent applications? And so on. The difference in cost over the full term of a patent is relatively small, usually less than CA$3,000. Completely aside from those questions, it is a poor idea to claim small-entity status in a Canadian patent application. Canadian courts have held that the improper payment of a fee on the small-entity scale can invalidate any resulting patent. If the error is not corrected within 12 months from the date that the fee in question was due, then it is impossible to correct the situation. As a result, for the foreseeable future, if a Canadian patent for which any fee was paid on the small-entity scale is litigated, the litigation is likely to involve whether or not the fee in question was properly paid on the small-entity scale. That complication increases the cost of litigating such cases. HOW THE PCT WORKS The Patent Cooperation Treaty (PCT) allows inventors to submit one patent application that can designate any of more than 120 countries and regions for eventual protection. A PCT international application does not result directly in the grant of any national or regional patents. To obtain patents from a PCT application, an inventor must enter the national phase in designated countries or regions. Entering the national phase typically involves paying fees and filing documents, including a translation if the PCT application is not already in a national language, in the appropriate national or regional patent offices. In most countries the deadline for entering the national stage is 30 months from the earliest claimed priority date. Furthermore, there is currently uncertainty about when small-entity status ought to be determined. Most Canadian patent agents thought that the correct time for determining small-entity status was the date the fee was actually paid to the Canadian Intellectual Property Office (CIPO). A recent case decided by the Federal Court of Appeal disagreed (3). According to the court, the law is that small-entity status is determined at the time a Canadian patent application is filed and does not change subsequently. However, that case has been appealed to the Supreme Court of Canada, so the Federal Court of Appeal s decision is not necessarily the final word on the matter. The Canadian government is planning changes to the patent rules that will clarify the legal framework surrounding paying fees on the small-entity scale. In the meantime, it is advisable to pay all Canadian fees on the large-entity scale even in cases where an applicant appears to be a small entity. DECEMBER 2003 BioProcess International 19

3 FORMALITIES Filing a Canadian patent application includes minimal formalities. All documents required to obtain a Canadian filing date can be signed on an applicant s behalf by a Canadian patent agent. The only materials required to obtain a Canadian filing date are an indication in English or French that the granting of a Canadian patent is sought; the name of the applicant; the address of the applicant or of a patent agent for the applicant; a document in English or French that, on its face, appears to describe an invention; and the appropriate application fee. A Canadian patent application also requires an abstract; a petition in the appropriate form; one or more claims; drawings, where appropriate; and in cases that describe new nucleotide or amino acid sequences, a sequence listing in hard copy and computer readable form. When a Canadian patent application is filed in the name of a company or anyone other than the inventor(s), the CIPO requires an assignment. It is convenient to file the assignment at the time of filing the Canadian application. If the assignment is not filed within one year of the Canadian filing date, then the CIPO will set a three-month deadline within which the assignment must be filed. An original assignment is not required: A photocopy or fax copy will suffice. The signature of the assignor must, however, be witnessed, notarized, accompanied by the affidavit of a subscribing witness, or accompanied by other proof to satisfy the Canadian Commissioner of Patents that the assignment was signed and executed by the assignor. The CIPO will typically record an assignment even if the assignor s signature was not witnessed if it has been recorded in the United States Patent and Trademark Office (USPTO) and is filed in Canada with a copy of the USPTO Certificate of Recordation, as long as the assignment conveys worldwide or Canadian rights in the invention. The Canadian patent rules require that, in the case of an application 20 BioProcess International DECEMBER 2003 referring to a deposit of biological material, the applicant must make the deposit with an international depository authority on or before the application s filing date. Furthermore, the accession number of the deposit must be provided before the application is laid open for public inspection. Those time limits are not extendable. For Canadian national phase entries of PCT applications that have an international filing date after 1 July 1998, sequence listings that have numeric data element identities in compliance with World Intellectual Property Organization standard ST-25 are acceptable in Canada. However, for non-pct applications and PCT applications having an international filing date before 1 July 1998, written data element headings are currently required. In the case of PCT applications, sequence listings must be filed within 36 months of the priority date to prevent deemed abandonment of a Canadian patent application. Sequence listings are not required, however, if the sequence is identified as forming part of the prior art. Unlike those of the United States, current Canadian patent rules do not impose restrictions on the number of sequences that may be included in a single patent application. Lengthy patent applications may be filed in Canada on CD-ROM in TIFF format. In many cases the sequence listing portion may be filed in ASCII format. FORMAT The rules relating to the format of Canadian patent applications are quite similar to the rules in most other countries. Below are some issues that come up reasonably frequently in the prosecution of Canadian patent applications originally drafted for filing in other countries. Canadian patent practice does not permit other documents to be incorporated by reference in a Canadian patent application. The CIPO will object to any attempt to incorporate another document by reference. That objection can be dealt with during prosecution either by deleting the incorporation by reference or sometimes by incorporating material from the original document. Canadian practice requires that trademarks in the specification be identified as such. This can be done by placing a TM to the right of any trademarks in the specification. Canadian practice permits the use of multiply dependent claims. The fees for filing Canadian patent applications are not based on the number of claims in the application. It is often possible to modify a set of claims that were prepared in US format (without multiply dependent claims) to provide a broader range of dependent claims by modifying some of them to be multiply dependent. Canadian patent practice permits both US and European claiming styles. In some cases, claims of different scope have been allowed in corresponding US and European applications. It is possible for those applicants to obtain broader coverage in the Canadian application by presenting both the European and US claims. PUBLICATION A Canadian patent application is automatically laid open 18 months from its priority date. Copies of the full text and drawings of Canadian patent applications that have been laid open can be downloaded from the CIPO website ( ic.gc.ca/intro-e.html). The contents of CIPO files, including office actions, amendments, and other correspondence to and from applicants agents are also available for inspection and copying at the CIPO. The Patent Act permits patentees to seek reasonable compensation (pre-grant damages) for use of the invention during the period between the laying open of the Canadian patent application and the ultimate grant of a Canadian patent. An applicant can request that its application be laid open early to increase the period during which pre-grant damages can accrue. The patentee must wait until the patent

4 is granted before bringing an action to recover pre-grant damages. EXAMINATION Canada permits a patent applicant to defer requesting examination for up to five years from the Canadian filing date. Some applicants prefer to do this to obtain allowed claims in other jurisdictions before requesting examination of the Canadian application. It is currently taking two to four years from the date that a request for examination is filed and the examination fee paid until the CIPO issues a first examiner s report on the merits. A process for expedited examination is available. The process currently requires only the payment of a fee accompanied by a statement that the applicant s rights would be prejudiced if the application was not advanced out of its routine order. (The fee is currently CA$100. There is a proposal by the CIPO to increase it to CA$500 on 1 January 2004.) When expedited examination is requested, it is typical to receive a first examiner s report within a few months after the expedited examination is granted. Expedited examination does not begin until after the Canadian patent application has been laid open. EXAMINER S REPORTS AND AMENDMENTS Canadian examiner s reports alleging that the invention defined in the claims is anticipated and/or obvious in light of certain prior art are typically fairly sketchy in comparison to office actions issued by the European Patent Office or the USPTO. It is typical for a Canadian examiner to request the status of any corresponding applications in the United States, Europe, and/or Japan as well as to request a list of prior art cited in corresponding patent applications in those jurisdictions. Canadian patent law requires that each patent application be limited to one invention. However, Canadian law defines invention quite broadly. The requirement is that the claims share an inventive concept. Consequently, it is rare to receive a restriction requirement merely because the application includes claims to multiple categories of invention such as method claims and apparatus claims or method claims and composition of matter claims. A Canadian examiner may, however, raise a restriction requirement if he or she believes the claims are directed to more than one invention. Amendments to Canadian patent applications are implemented by filing replacement pages in the CIPO. It is unnecessary to provide a marked-up version of the specification or claims. To facilitate the preparation and entry of amendments, provide an electronic copy of the application to the Canadian associate at the time of filing or at the time of providing instructions for responding to the examiner s report. Because Canadian patent prosecution often happens after prosecution in other countries (because of the possibility of deferring examination and the relatively long pendency before a first examiner s report), often claims have already been allowed in other jurisdictions when substantive prosecution of a Canadian patent application begins. In many cases, allowance of a Canadian patent application can be expedited by amending the Canadian claims to be the same as those allowed in a corresponding US or European patent application. Do not lose sight of the fact, however, that you can sometimes obtain broader claims in Canada than may have been allowed in other jurisdictions. ENFORCEMENT A patentee wishing to sue someone for infringing a Canadian patent has a choice of courts. The federal court has jurisdiction across Canada. Its judges are familiar with patent matters. Most patent cases are brought in the federal court because of its national jurisdiction. It has exclusive jurisdiction in patent impeachment actions and has special rules for handling patent cases. It lacks jurisdiction in relation to contractual and other civil disputes among parties. The superior courts of the provinces have concurrent jurisdiction over patent infringement matters. However, the provincial courts have territorial jurisdictions limited to the province in which each court is located. (Canada comprises ten provinces and three territories.) The provincial and federal courts have different procedures for dealing with requests for interlocutory relief. In many patent cases, either level of court could be chosen. MARKETING NEW PATENTED MEDICINES IN CANADA Canada s food and drug regulations require a party who wishes to sell a medicine in Canada to obtain a Notice of Compliance for the medicine. The Patented Medicines (Notice of Compliance) Regulations (NOC regulations) establish a link between the issuance of an NOC and patent protection for the medicine. In particular, the NOC regulations permit patentees to provide to the Minister of National Health and Welfare a patent list that includes relevant Canadian patents claiming the medicine itself, use of the medicine, dosage forms and strength, or routes of administration. The NOC regulations define a medicine as a substance intended to be used or capable of being used for the diagnosis, treatment, mitigation, or prevention of a disease, disorder, or abnormal physical state or the symptoms thereof (4). The patent list must include a statement that the patents are owned by the seller or that the seller has an exclusive license to sell the medicine or that the seller has the patentee s consent to include the patent in the patent list. If a second seller (usually a generic drug manufacturer) applies for an NOC for a medicine already on the market, it cannot obtain one until the patents in the patent list for the medicine expire. If the second seller does not want to wait until the patents expire, it can allege that nonexpired patents in the list are invalid or would not be

5 infringed and bring an action for judicial review to settle the matter. Since their establishment in 1993, the NOC regulations have created a great deal of litigation. The scope of the regulations is currently under review by the Canadian House of Commons Standing Committee on Industry, Science and Technology ( click Committee Business ). PATENTED MEDICINE PRICES REVIEW BOARD The Patented Medicine Prices Review Board (PMPRB) (www. pmprb-cepmb.gc.ca) is empowered by the Patent Act to ensure that the cost of patented medicines in Canada is not excessive (5). The PMPRB has the power to determine whether the price being charged for a patented medicine is excessive and, if so, to order patentees to reduce those prices. The PMPRB has published guidelines that set out tests for excessive prices (6). The tests vary depending on whether the medicine is an existing or new medicine. The guidelines include three categories of new medicines. Category 1 medicines are essentially different formulations or dosage forms of existing medicines. Category 2 medicines are breakthroughs or provide substantial improvements over comparable existing medicines. Category 3 medicines provide moderate, little, or no therapeutic advantage over comparable existing medicines. The tests include considerations such as the category of a new medicine, the prices of different dosage forms of the same medicine, the prices of the medicine in other countries, and the prices of clinically equivalent medicines. In some cases, patentees have dedicated Canadian patents to the public (surrendered all Canadian patent rights for a medicine) to avoid the jurisdiction of the PMPRB. lower value than the US dollar. The relatively low cost of Canadian litigation is also because discovery is significantly more limited in Canada than it is in the United States. Canadian rules permit the oral examination of the inventor in a patent case as well as of one or more representatives of the plaintiff and defendant. As such, the Canadian rules permit broader discovery than is available in Europe. However, extensive depositions, as are common in US litigation, are typically unavailable in Canada. Moreover, jury trials are not typical in Canadian patent cases. Another interesting feature of Canadian patent cases is that the courts have consistently rejected the doctrine of file wrapper estoppel. The file wrapper is the file containing correspondence between an inventor's patent agent and the Patent Office examiner during prosecution. It sometimes contains statements differentiating between the inventor s idea of his or her invention and the prior art. In the United States, statements made in the file wrapper are relevant to the scope of the claims in any resulting patent. Canadian courts have consistently held that the interpretation of the scope of the claims of a Canadian patent is a matter of law for the court to decide and that the file wrapper is irrelevant to this determination. Canadian law does not provide treble damages for willful infringement of a patent as does US law, although exemplary or punitive damages may be available in cases where the defendant s conduct has been flagrant. The successful party in a Canadian patent litigation will typically be awarded costs at a level that stops short of indemnity for all costs incurred. The typical recovery is of the order of 25% to 30% of costs incurred. Canadian patent protection provides a good ratio of benefit to cost. Canadian patent prosecution is generally quite straightforward, particularly because it is often delayed until after patentability issues have been resolved in other jurisdictions. Canadian courts are reasonably efficient and can provide a lower cost alternative to litigation in the United States if infringement is ongoing in Canada and the United States. REFERENCES 1 Patent Act. RS 1985, c. P-4; Consolidated Statutes and Regulations, s laws.justice.gc.ca/en/p-4/index.html. 2 Harvard College v. Canada (Commissioner of Patents), 2002 reported at 2002 SCC 76, 21 CPR (4th) Barton No-Till Disk Inc. v. Dutch Industries Ltd reported at 2003 FCA 121, 24 CPR (4th) Patented Medicines (Notice of Compliance) Regulations (SOR-93/133) section 2. 5 Patent Act. RS 1985, c. P-4; Consolidated Statutes and Regulations, s laws.justice.gc.ca/en/p-4/index.html. 6 Compendium of Guidelines, Policies and Procedures, See in particular Chapter 1: Excessive Price Guidelines. Gavin N. Manning is a partner with the firm of Oyen Wiggs Green & Mutala 480-The Station, 601 West Cordova, Vancouver, BC, Canada, V6B 1G1; ; fax: ; Manning is an intellectual property lawyer, a registered patent agent, and a registered trademark agent. The views expressed in this paper are his personal views and cannot be attributed to the firm or its clients. LITIGATION Canadian litigation is less expensive than US litigation. That is partly because the Canadian dollar has a 22 BioProcess International DECEMBER 2003 CANADIAN PATENTS WORTHWHILE Because of Canada s position in the North American market and the relatively low costs of obtaining patent protection in Canada,