Patents

• Author: David Vaver
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 113-172

CHAPTER 3

PATENTS

A. INTRODUCTION

Patents for inventions are issued and protected solely under the Patent

Act} Intended to stimulate the creation and development of new tech-

nologies, they are granted to inventors of new, useful, and unobvious

ideas with practical industrial application: new machines, products,

processes, or improvements to existing technology. Without patents,

ideas have little protection. As soon as a product implementing the new

idea hits the market, anybody can copy it and compete with the original

producer without incurring the initial costs of invention and product

development. A patent gives its holder a lengthy breathing-space to

enable the invention to be developed and marketed without competi-

tion except from non-infringing substitutes. The patentee can thus

recoup its initial outlay plus recover a profit commensurate with the

value the market puts on the invention.

R.S.C.

1985, c. P-4 [P Act[; in this chapter, called the "Act" [unless otherwise

indicated, references are to the Act as amended]. The discussion deals mainly with

patent applications made after the

Patent

Rules, 1996 [PR] (the "Rides"), and the

amendments to the P Act effected by the

Intellectual

Property Law

Improvement

Act,

S.C.

1993, c. 15, took effect, namely, 1 October 1996. Previous applications and

patents may be affected by transitional provisions that, for reasons of space, cannot

be discussed here.

113

1

114 INTELLECTUAL PROPERTY LAW

A patent is granted by the Patent Office (PO) and now generally

lasts twenty years from the date of filing the application.2 Its holder

obtains an absolute monopoly: nobody may make, sell, or use the pat-

ented invention, even if he arrives at it independently without knowing

of the earlier inventor or patent.3 More than 25,000 applications are

filed annually in Canada. In 1993-94, 14,000 patents were issued, and

in 1994-95,

11,000.

Annual maintenance fees (starting at $100 per year

and rising progressively to $400 for each of the last five years) must be

paid to the PO to keep the patent alive. More than 120,000 fees were

paid in 1994-95, while 31,500 patents lapsed for non-payment. Sole

inventors, small businesses, and universities usually pay half-rate.4

1) Trade Secret Protection for Ideas

Some protection can be granted at common law for ideas outside the

patent system, through contracts and the breach of confidence action.

Firms can erect a wall of secrecy around their operations to protect their

trade secrets, potentially forever, against faithless employees, industrial

spies,

and co-venturers using trade secrets and other confidential infor-

mation outside the purpose for which they were given it. Anything of

potential economic value can be protected anywhere in the world. A

trade secret confided in China and wrongly used in Canada may be pro-

tected if the Chinese confider sues in Canada. But common law protec-

tion is volatile. It can disappear despite the owner's best efforts. Some-

one may learn of the secret independently or may reverse-engineer it or

the product that contains it; innocent buyers from an industrial spy may

profit from their purchase and can end up destroying its value as a trade

secret by publicizing it. Departing employees can also use information

that has become part of their general skills and knowledge. The most

the ex-employer can do is restrict the ex-employee by contract from

2

P

Act,

ibid.,

s. 45; s. 2 def. "filing date"; for the filing date of an application made under

the Patent Cooperation

Treaty,

2 October 1989, Can. T.S. 1990 No. 22 [PCT], see

section A(4), "International Patenting," in this chapter. The Statute of Monopolies

(U.K.),

1624, 21

Jac.

1, c. 3, provided fourteen years protection from grant.

The present monopoly period is effectively less than twenty years. Thus, monetary

compensation for infringement is available only from when the specification is

published, which may be as long as eighteen months after filing:

PAct,

ibid.,

s. 55(2).

Before 1989, patents lasted seventeen years from date of grant, which could be long after

the date of application because of delays in the PO. Some delays were unavoidable.

Others were deliberately caused by applicants intent on prolonging their monopoly.

3

PAct,

ibid.,

ss. 42 & 44.

4 PR, above note 1, s. 2, def. "small entity," Sch. II.

Patents 115

working in a particular field. Such restrictions are still vulnerable. They

may, for example, not be enforced if they do not reasonably balance the

employer's interests against the public interest in employee mobility,

especially in times of economic instability and job insecurity.

2) Applying for a Patent

Patent drafting is an arcane art best left to professional patent agents.

These agents are trained to make trifling advances look like Galilean

leaps.

In fact, a patent agent must be employed at least to handle the

application after filing if anyone other than the inventor applies.5 The

application is anachronistically called a "Petition." This terminology

dates back to the time when English patent applications were "humbly"

made "To The Queen's Most Excellent Majesty." Until 1 October 1996

Canadian applications still contained vestiges of this ancient language,

such as the final flourish that "Your Petitioner(s) therefore pray(s)" for

a patent. These phrases, mercifully, have been

eliminated.11

The petition

can be made by the inventor or by his assignee, guardian, or

executor.7

It comes with a patent "specification," comprising a "disclosure" detail-

ing the invention and how it is carried out (often with drawings) and

"claims" staking out the monopoly sought.

Timing is everything. The right to a patent depends on the claim

date of the application, usually its filing date. An earlier inventor will

lose out to one who arrives first at the PO with an application. If both

arrive the same day, the timing is "deemed" a dead heat entitling both

to patents.8 The claim date may be even earlier

if

the Canadian applica-

tion is filed within twelve months of an earlier filing in a Paris Conven-

tion or WTO state. The foreign filing date then becomes the Canadian

claim date, bumping later local filings. Because applications are often

rushed, technical defects are common but curable by amendment dur-

ing PO proceedings or by filing a new application within twelve months.

The second application can take the first's claim date if the same inven-

tion is retained. The PO will not allow major redelineations; and if by

accident it does, the resulting patent can be

invalid.9

5

PR,

above

note l,s.

20(1).

6 Ibid., Sch.

I,

Form 3.

7

P

Act, above note 1, s. 27; s. 2 def. "legal representative."

8 PAct,

ibid.,

s.

27(1.5).

9 PAct,

ibid.,

s.

28.1;

Martin

v.

Scribal

Pty.

Ltd. (1956), 95 C.L.R. 213

(PC)

[Martin];

Canadian Intellectual Property Office, Manual of

Patent Office

Practice,

§§ 7.01-

7.06

[MOPOP]

(Convention priority).