Bill C-86, the Budget Implementation Act (the "Bill"), received its first reading in the House of Commons on October 29, 2018. Among other things, the Bill implements Canada's Intellectual Property Strategy, proposing amendments to various pieces of existing intellectual property legislation, and enacts the College of Patent Agents and Trademark Agents Act.

At this early stage in the legislative process it is unclear how the proposed amendments will look in their final form. Parliament's intention is made clear however, that the focus of these amendments is to provide (another) substantial update to the intellectual property laws in Canada.

Patent Act Amendments

The proposed amendments to the Patent Act aim to regulate Standard Essential Patents, exceptions to infringement and written demands made by patentees. The amendments also introduce file wrapper estoppel into Canadian law.

Standard Essential Patents

Standard Essential Patents ("SEPs") and related ("CSPs") are inventions that by definition must be used in order to implement an industrial standard (e.g. Wi-Fi), though the Bill does not include any definition for SEPs.

The proposed addition of subsection 52.1 to the Patent Act would make licensing commitments made with respect to SEPs or related CSPs binding on subsequent patent or CSP holders. Proposed subsection 52.2 would permit the Governor in Council to enact regulations with respect to licensing commitments.

These licensing commitments are sometimes required to be offered as FRAND licenses (fair, reasonable and non-discriminatory). The regulations that follow may define what does or does not constitute FRAND.

File Wrapper Estoppel

File Wrapper Estoppel, primarily a US doctrine, prevents a patent owner from taking a different position with respect to claims construction as was taken during prosecution of the patent.

Historically, file wrapper estoppel has been unavailable at law in Canada. The Supreme Court in Free World Trust rejected the doctrine finding the "Pandora's box of file wrapper estoppel" inconsistent with purposive construction, which places its focus on claim language, not extraneous evidence.[1]

The Federal Court more recently affirmed the unavailability of file wrapper estoppel in Canada in Pollard Banknote however in obiter voiced its dissatisfaction finding it "breathtaking" the patent owner took the opposite position for claims construction as it did during the patent's prosecution.[2]

The proposed subsection 53.1 of the Patent Act makes prosecution history evidence admissible before the court for the purposes of claim construction. Prosecution history of an original application for both divisional patents, and reissued patents would also be admissible under the new law.

Broadening Experimental and Prior use Defenses

Two statutory exceptions to infringement are broadened under the proposed amendments.

Proposed subsection 55.3 would provide an exception to an act of infringement for the purpose of experimentation going beyond the current section 55.2. Further, the proposed amendments would permit the Governor in Council to make regulations pursuant to subsection 55.3 including determination of what is permitted as experimental.

The prior use exception under section 56 of the current Patent Act would be broadened under the proposed amendments to include any acts that take place prior to the claim date and continue to be exempt from infringement on or after claim date. This expanded exception applies to individuals and their successor in title of the would-be infringing article.

Transitional provisions in the Bill would make the new section 56 effective as of October 29, 2018.

Written Demand Requirements

The addition of proposed subsection 76.2 requires any written demand that relates to a patent, CSP or analogous rights granted elsewhere to comply with prescribed requirements. At this stage, it is unclear what the requirements of written demands would be.

Any person who receives a written demand or is aggrieved by such a demand may bring a proceeding in the Federal Court in relation to it. If the Federal Court is satisfied the written demand does not comply with the prescribed requirements, it may provide relief in the form of recovery of damages, punitive damages, an injunction, a declaration or an award of costs.

In special cases, the agents of a corporation who sends a written demand may be held jointly and severally liable for written demands held not to comply with prescribed requirements.

The Governor in Council is granted the power under the proposed amendments to make regulations with respect to these provisions such as the requirements of a written demand and what factors the Court must take into account when deciding whether to enforce such a demand.

The addition of these provisions would likely impact the nature of cease and desist letters and the steps taken by patent holders and their agents in enforcing their rights.

Trademarks Act Amendments

Subdivision B of the Intellectual Property Strategy division of the Bill proposes several amendments to the Trademarks Act, including those set out below:

Bad Faith

The Bill would amend the Trademarks Act to add bad faith as a ground of opposition to the registration of a trademark and for the invalidation of a trademark registration.

Relief within the First Three Years of Registration

Under the proposed amendments, owners of a registered trademark would be prevented from obtaining relief for acts done contrary to section 19, 20, or 22 of the Trademarks Act during the first three years after the trademark is registered unless the trademark was in use in Canada during that period or special circumstances exist that excuse the absence of use.

Official Marks

The proposed amendments clarify that, despite any public notice of adoption and use, prohibitions in subparagraph 9(1)(n)(iii) and section 11 of the Trademarks Act do not apply if the entity that made the request for public notice is no longer a public authority or no longer exists.

The Registrar may, on their own initiative or at the request of a person who pays a prescribed fee, give public notice that subparagraph 9(1)(n)(iii) does not apply.

Modernization of the Conduct of Proceedings before the Registrar of Trademarks

Costs Orders

The proposed amendments would permit the Registrar to award costs in an objection to geographical indication, opposition, or non-use cancellation proceeding. A certified copy of an order for costs may be filed in the Federal Court and may be enforced as an order of that Court.

Withdrawal of Objection or Opposition

If an opponent or objector fails to pursue the continuation of the respective opposition or objection to geographical indication, the Registrar may, after giving notice, treat the opposition or objection as withdrawn unless the default is remedied within the specified timeframe.

Confidentiality Orders

Parties to an objection to geographical indication, opposition, or non-use cancellation proceeding may request a confidentiality order from the Registrar. The Registrar may, on any terms he or she considers appropriate, order that evidence be kept confidential or give notice that he or she is not satisfied that the evidence should be kept confidential. A certified copy of a confidentiality order may be filed in the Federal Court and enforced as a court order.

Case Management

The Governor in Council may make regulations respecting case management by the Registrar of objection to geographical indication, opposition, or non-use cancellation proceedings.

Evidence on Appeal

Under the current Trademarks Act, an appeal from an opposition or non-use cancellation proceeding permits parties to serve new evidence before the Federal Court as of right. The amendments would require leave of the Federal Court to adduce evidence in addition to what was before the Registrar.

Other proposed amendments

Subdivision B of the Intellectual Property Strategy division of the Bill also makes certain housekeeping amendments to the Trademarks Act enacted by the Economic Action Plan 2014 Act, No. 1 and the Combating Counterfeit Products Act.

The Bill clarifies that subsection 34(1) of the Trademarks Act, establishing priority in Canada based on an application abroad, does not apply for some analyses of distinctiveness, use or proposed use, and proposed divisional applications. In each case, the date the application was filed would be the relevant date.

College of Patent Agents and Trademark Agents Act

Subdivision D of the Intellectual Property Strategy division of the Bill proposes to enact the College of Patent Agents and Trademark Agents Act ("CPATA"). CPATA establishes the College of Patent Agents and Trademark Agents, which is to be responsible for the regulation of patent agents and trademark agents in the public interest.

CPATA, among other things:

  • requires that trademark and patent agents get a license and comply with a code of professional conduct;
  • authorizes the College's Investigations Committee to receive complaints and conduct investigations into whether a licensee has committed professional misconduct or was incompetent;
  • authorizes the College's Discipline Committee to impose disciplinary measures if it decides that a licensee has committed professional misconduct or was incompetent; and,
  • creates new offences of claiming to be a patent agent or trademark agent and unauthorized representation before the Patent Office or the Office of the Registrar of Trademarks.

Copyright Act Amendments

The Bill also proposes several substantive amendments to the Copyright Act.

In general, the proposed amendments seek to reform the practices and processes of Copyright Board, prohibit the inclusion of specific content in notices issued under the notice and notice regime, and limit the availability of statutory damages for collective societies with respect to certain acts.

Copyright Board Reform

Last year the Federal Government announced the launch of consultations with the objective of reforming the Copyright Board.[3] One of the key issues sought to be addressed was the rate at which the Copyright Board performs its decision-making function, and perceived excessive delays in the setting of tariffs.

In view of this background, it appears that the amendments to the Copyright Act proposed in the Bill aim to improve the speed at which the Copyright Board makes decisions by clarifying proceedings and decision-making processes. Paraphrasing the overview provided in the Bill itself, the proposed amendments seek to: (a) codify the Copyright Board's mandate and establish decision making criteria; (b) establish timelines in respect of Board matters; (c) formalize case management of proceedings; (d) reduce the number of matters before the Board; (e) streamline procedural steps across different tariff contexts; (f) amend relevant enforcement provisions; and (g) modernize existing language and structure for greater clarity and consistency.

Prohibited Content in Notices

With respect to the so-called "notice and notice regime" under sections 41.25 - 41.27 of the Copyright Act, the Bill contains amendments that would curtail what information may be included within the notice provided to alleged copyright infringers. Specifically, the Bill seeks to prohibit the inclusion of offers to settle, requests or demands for payment or personal information, and references to such offers, requests or demands (e.g. hyperlinks). The Bill further proposes that limitations to the content of notices may be prescribed by regulation.

Conclusion

While the Bill still has a long way to go before becoming law, given the potential impacts on patent, trademark and copyright law and practice it will be worth keeping an eye on the proposed legislation in the months ahead as the Bill undergoes debate in Parliament.

[1] Free World Trust v Électro Santé Inc, 2000 SCC 66 at paras 63-67.

[2] Pollard Banknote Limited v BABN Technologies Corp, 2016 FC 883 at paras 237-238.

[3] https://www.canada.ca/en/innovation-science-economic-development/news/2017/08/consultations_launchedonreformingcopyrightboardofcanada.html.