Mr. Speaker, I am pleased to rise today in my place to begin the third reading of Bill C-29, which makes technical amendments to the Patent Act. Hon. members will recall that the changes provided in this bill are strictly technical and narrow in scope. We have made some further changes in the bill since it was introduced in the House last December.
The modifications to the bill are the result of representations received from intellectual property practitioners and that were presented to the committee which looked at some of the serious concerns.
Neither of these amendments materially changes the purpose or objective of Bill C-29 but both amendments are required for the bill to be effective in protecting intellectual property rights.
Before addressing the substance of these two amendments, let me remind this House of the issue at hand. Let me reiterate the points that were made during second reading of this bill.
We introduced Bill C-29 to respond to an unexpected court decision known as the Dutch case. The decision has raised uncertainties about the status of some patents. In order to apply for and maintain a patent application or patent, a set of fees must be paid. One of the factors affecting the fee payment is the size of the entity that is applying for the patent. If someone is a small entity, defined as an individual, a university or a business with 50 employees or less, the entity's fees will generally be half of those of large entities.
The definition of large and small entities sometimes becomes clouded when a business begins as a small entity but grows to a large entity, or a small entity is merged into a large entity, for example. This uncertainty of entity size sometimes leads to mistakes in determining the amount of fees that should be submitted.
The Commissioner of Patents administers the system and sets and collects the fees. In the past, if an entity had made an honest mistake in determining the level of the fee, the commissioner acted on the principle that the entity had acted in good faith. He gave the benefit of doubt and the entity was given an opportunity to top up his own fees.
That was the practice, but the Dutch case has terminated this practice and we now need to take corrective action, as the court found that the Commissioner of Patents had no legal authority to accept top up payments.
The case was appealed to the Federal Court of Appeal and on March 7, 2003, the court agreed with the lower court that late top up fees could no longer be taken.
Furthermore, the Federal Court of Appeal ruled that the determination as to whether an applicant would be considered a small or a large entity is to be fixed at the time of entry into the patent regime. This interpretation means that any applicant who had entered as a large entity and later became small, and paid commensurate fees, suddenly found themselves in the position of having underpaid the prescribed fees. These applicants and patent holders risk invalidation of their rights.
This creates a very difficult situation for holders of patents who may have not paid the right fee. An estimated 7,000 patents and applicants could be declared invalid if contested in the courts on the grounds that certain fees have not been paid at the proper entity level. Until this bill is passed, there is no legal way for these patent holders and applicants to rectify their situation. Bill C-29 seeks to end that confusion and remove the uncertainty.
As hon. members will recall from the second reading debate, the amendments contained in the bill provide a 12 month timeframe for patent holders and applicants who are negatively affected by the court decision to maintain their rights by making necessary top up payments.
This brings me to the two amendments to Bill C-29 that have been recommended by intellectual property practitioners in their representation to the committee.
The first amendment can best be described as an amendment to provide greater certainty. After the introduction of the bill on December 3, the Intellectual Property Institute of Canada advised the Canadian Intellectual Property Office that as currently worded it is not absolutely clear that clause 2 of Bill C-29 would apply to complex transitional provisions already found in the Patent Act.
We want to make it very clear that clause 2 will apply to the Patent Act's transitional provisions. Following the recommendation of the committee, the bill has been amended by adding at the end of the proposed new section 78.6 the following text:
(5) For greater certainty, this section also applies to applications for patents mentioned in sections 78.1 and 78.4.
The House will readily see that this amendment does not change the purpose of Bill C-29. In fact, it greatly clarifies the intent and ensures that all patents and patent applications caught by the Dutch decision are covered by this bill. Not proceeding with the amendment might leave some uncertainty in a bill that has been specifically introduced to clarify an uncertainty.
This brings me to the second amendment recommended at the committee stage. It also responds to the representations of intellectual property practitioners. They have told us and the committee that the requirement to provide information with respect to “the day on which the prescribed fee was paid” would create a significant compliance problem because patent agents may not being able to provide such information in every situation.
What would happen in the event that a patent agent could not accurately report the day on which the fee had been paid? What would happen, for example, if the fee had been paid many years ago and the relevant document is no longer available? According to the bill, as introduced last December, this would cause otherwise valid patents or patent applications to still be at risk.
The inability to provide information concerning the day on which the fee was paid should not invalidate a patent. Our objective is to create a system where innovation is protected, not one where innovators can be tripped up by red tape.
In the amended bill before us, the specific requirement of section 78.6(2) to provide information on the day in which the patent was paid has been removed. As in the case of the first amendment, this will not materially affect the purpose or objective of Bill C-29. It would make sure that the requirements can be met by practitioners.
These amendments are straightforward. They improve a bill that is designed to provide technical amendments to the Patent Act, amendments designed to clear up uncertainties. The bill had speedy passage at second reading and there is nothing in the minor amendments that would warrant a prolonged debate during third reading.
Although these technical amendments may seem like minor adjustments, they are in fact very important to the holder of patents potentially in default of the Dutch case. We should not delay this legislation. We should move quickly to clear up the uncertainties and thereby maintain Canada's reputation as a country that protects intellectual property rights.
Finally, let me remind the House that Bill C-29 also makes a technical amendment to the Jean Chrétien Pledge to Africa legislative provisions adopted during the last Parliament. It provides the other place with equal participation in assessing and recommending candidates to an expert advisory committee. This amendment clears up an oversight in the original legislation. No objections or concerns regarding these provisions were raised at the committee hearings.
I urge hon. members to pass the third reading of Bill C-29 as quickly as they can and allow it to proceed to the other place.