Mr. Speaker, I am pleased to support passage at third reading of these technical amendments to the Patent Act. The matter before us is very simple and straightforward. A court decision has determined that a well known practice followed by the Commissioner of Patents was beyond his authority and jurisdiction. As a result, many of the patent applicants and holders who had taken advantage over the years of the commissioner's practice of flexibility are now seeing the protection of their patent rights being jeopardized.
The bill provides a technical solution. It provides the patent applicants and holders with a 12 month period in which to make top-up payments.
Fees are applied to patents, trademarks and industrial designs. On January 1, 2004, a new fee structure came into effect. On filing an application for a patent, a small entity is required to pay $200 and a large entity $400. On requesting an examination, a small entity pays $400 and a large entity $800.
Maintenance fees on applications filed on or after October 1, 1989, vary according to the amount of time that has passed. For two to four years, for example, the maintenance fee is $50 for a small entity and $100 for a large entity. At the other end of the continuum, a small entity pays $225 to maintain a patent that is 15 to 19 years old and a large entity pays $450.
One can readily understand why an entity would prefer to pay at the lower amount. This is especially the case with individuals and small businesses. Often an inventor must keep a close eye on the expenses. The invention may one day land the inventor a windfall, but until that happy day comes, the inventor may have to scrape pennies to keep the operation going from one year to the next. But as the Dutch Industries case has shown, it is very important that an entity submit the correct fees; otherwise the patent may lapse.
I think it is very important also to bear in mind that the Commissioner of Patents and the patent applicants and patent holders have acted in good faith in these matters. The applicants and holders endeavoured to pay the right fees and sought corrective action by paying top-up fees if they found they had been mistaken in the past, and the Commissioner of Patents acted in good faith by providing the opportunity to take corrective action by paying top-up fees.
It took a court case to determine that this corrective action was beyond his jurisdiction and authority. Notwithstanding the fact that top-up maintenance fees have been accepted by the Commissioner of Patents, the courts have held that it was an improper exercise of the commissioner's discretion and not within his jurisdiction.
On September 24, 2001, the Canadian Intellectual Property Office issued an official notice stating that, as a result of the Dutch Industries decision, the office will not accept any corrective payments submitted after a due date unless the appropriate actions are taken as required by legislation or, in other words, a reinstatement or late fee in the correct amount is submitted with the prescribed period.
While the impact of the court's decision is understood for going forward, the bill allows for redress for those unexpectedly affected by the decision. But those entities that filed the wrong amount before the prescribed period are now in a state of limbo. Unless we take action with this technical amendment, their patents may lapse.
We should not be penalizing the inventors and innovators who mean so much to our economy. We should give them an opportunity to take corrective action by allowing them, for a period of time, to take the necessary action which results from the court decision.
Many inventors and innovators wait anxiously for our action in this matter. By some estimates, there are some 7,000 patents that may have been maintained with incorrect fees. The Dutch Industries case has put the validity of these patents into question, and until we make this technical amendment, the threat of intellectual property litigation hangs over them.
This technical amendment will provide the patent applicants and holders with 12 months in which they can make top-up payments.
I would point out to the House that during the committee phase, the patent agents, through their professional association, the Intellectual Property Institute of Canada, proposed two amendments to the bill. Neither of these amendments changes the fundamental purpose of the bill.
The first amendment of course provides for greater certainty. The bill is intended to apply to all past top-up payments and make them legal, but when one reads the wording of sections 78.1 and 78.4 of the Patent Act, it is not clear that this would be the case. These two sections of course provide that patent applications filed at certain specific dates are to be dealt with and disposed of in accordance with the provisions of the Patent Act as they read on these dates.
The provisions of this bill will not have been part of the Patent Act on those past specific dates. There is a concern that the technical changes before us would not apply to past filings. That is clearly not the intent of the bill, so a new proposed subsection 78.6(5) has been added to clause 2, stipulating that this section also applies for applications for patents mentioned in sections 78.1 and 78.4.
The second amendment deals with a compliance difficulty. In clause 2, certain information is required when applying to make top-up payments. One requirement is the day on which the prescribed fee was paid. Some of the payments may have been made 10 or 15 years ago. While the day of payment for examination fees or final fees is kept on record, the exact day on which a maintenance fee was paid may not be known. The amended bill now before us has deleted the requirement to provide the day on which the prescribed fee was paid.
These amendments improve a bill that is designed to provide tactical amendments to the Patent Act. The bill passed quickly through second reading and committee stage and I see no reason why it should be delayed here at third reading. I hope hon. members will join me in working for a swift passage of the bill.