Canadian patent fees to significantly increase in 2024: how to avoid the increase and save money

Under recent legislative amendments to the Canadian Patent Rules, the tariff of official fees payable to the Canadian Patent Office in respect of patent applications and issued patents will increase starting January 1, 2024.

The official fees significantly increase in some cases, with some tariff items increasing from 25 per cent and up to 36 per cent. A comparison of current standard official fees and the new increased fees for some common payments are shown below:

*All fees above for standard (non-small) entities, and in Canadian dollars

A complete comparison of tariff items under the current tariff and the amended tariff, for both regular entities and "small entities" can be found here.

A cost-saving recommendation for most applicants - pay future fees early before new tariff takes effect.

It is possible to pay official fees due after January 1, 2024 (such as maintenance fees and examination fees) now, under the current tariff, and doing so can save hundreds and in some cases thousands of dollars for most applicants.

For example, requesting examination can be deferred for up to four or five years from the filing date for patent applications filed in Canada[1]. However, an applicant can save $294 or 36 per cent off the examination fee by requesting examination before January 1, 2024.

In another example, maintenance fees must be paid in Canada each year for the life of the patent, starting from the second anniversary of the filing date. Maintenance fees may be prepaid any time before their due date, and therefore significant savings can be realized by prepaying future maintenance fees before January 1, 2024. A patentee paying all annual maintenance fees (i.e. the second to the 19^th anniversary maintenance fees) under the new tariff would pay a total of $6740; in contrast, the patentee would only pay a total of $5136 if all the maintenance fees were paid before January 1, 2024 under the current tariff, resulting in a total savings of $1604[2].

Applicants newly qualifying as a "small entity" under the new broadened definition may save more under new fee tariff.

In another important change, the definition of "small entity" starting January 1, 2024 is broadened to include an entity that has fewer than 100 employees, from the current definition which defines a "small entity" to include an entity that has only 50 employees or less[3].

Under the current tariff, standard official fees are discounted by 50 per cent for applicants that meet the definition of small entity. Notably, most official fee increases for standard fees under the new tariff are disproportionately higher compared to the official fee increases for small entity fees under the new tariff. Thus while applicants that qualify as a small entity under the current definition would still save more by paying future official fees prior to January 1, 2024 under the current tariff, applicants that qualify as a small entity under the new broadened definition but not under the current definition may wish to wait until after January 1, 2024 to claim small entity status and pay small entity fees under the new tariff in order to save considerably more.

Some caution, however, should be exercised when determining whether an applicant is entitled to pay official fees at the small entity rate under the broadened definition. Canadian Courts have clarified that entity status is determined only once, when the patent regime is first engaged, and that subsequent fees must be paid based on this initial determination, notwithstanding the fact that it may change after the filing of an application or during the life of the patent[4].

Therefore, an applicant intending to take advantage of the discounted small entity fees under the new tariff must determine that it had employed less than 100 employees at the filing date of a direct Canadian application or at the Canadian national phase entry date of an international PCT application[5]. For instance, an applicant that currently employs less than 100 employees and that filed a direct Canadian application before January 1, 2024 must first determine the number of employees it had when the application was filed in order to determine whether it is entitled to small entity fee discounts under the current or new tariff. If the applicant had 50 employees or less and otherwise met the current definition of small entity at the application filing date, it can claim small entity status and pay official fees at the small entity rate under the current tariff. If the applicant had between 51-99 employees and otherwise met the small entity definition at the application filing date, then it can claim small entity status after January 1, 2024 under the broadened definition and pay official fees at the small entity rate under the new amended tariff.

Note that an applicant that qualifies as a small entity under the new broadened definition but not under the current definition and has already made one or more payments to the Canadian Patent Office at the standard rate, will typically not be entitled to claim a partial refund of patent fees which were paid prior to January 1, 2024. This is because the amendments to the Patent Rules which come into force January 1, 2024 and introduces the broadened small entity definition do not have retroactive effect prior to January 1, 2024. Moreover, Section 139 of the Patent Rules provides only a very narrow list of fees that may be refunded. While subsection 139(h) does include provision for the Patent Office to refund fees for: "(h) any overpayment of fees," due to the applicant/patentee being a large entity at the time of payment, such would thus not constitute an "overpayment of fees."[6]

For more information or for clarification as to how you may possibly avoid the increased fees coming into force January 1, 2024, feel free to reach out to the authors.