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Patents - Maintenance Fees. Canada (Attorney General) v. Matco Tools Corporation
In Canada (Attorney General) v. Matco Tools Corporation (Fed CA, 2025) the Federal Court of Appeal allows a Crown appeal, this from a JR which granted a challenge to "a decision of the Commissioner of Patents".
Here the court considers the effect of a failure to pay a patent maintenance fee in a timely fashion:A. Obligation to Exercise Due Care Extended to Matco’s Agents and Other Authorized Representatives
[39] I preface my comments on this issue by noting that, unlike the other two issues discussed below, the Federal Court did not express agreement with Matco’s position on this issue. The Federal Court was of the view that the Commissioner should have taken into account the limited responsibilities and knowledge of Matco’s agents and other authorized representatives, but it did not express doubt that the actions of these third parties were relevant to the due care issue.
[40] There are two aspects to Matco’s argument that the due care obligation does not extend beyond Matco itself. The first is whether the actions of Matco’s Canadian patent agent, Ridout, are relevant to due care. If so, the second aspect of this issue is whether other representatives of Matco, such as its US counsel, Hahn, or its maintenance fee payment service provider, Dennemeyer, are likewise subject to a duty to exercise due care. In both cases, Matco’s main complaint is about a lack of reasoning in support of the Commissioner’s conclusion that these entities were expected to exercise due care, just as was Matco.
[41] With regard to the expectation that Ridout would exercise due care, the situation was quite straightforward, such that little explanation by the Commissioner was required. Ridout was Matco’s agent of record before the Patent Office for the purposes of the 194 Application. By virtue of this status, Ridout was the point of contact for the Patent Office concerning the 194 Application: see MOPOP, Chapter 5.08. In accordance with the usual practice concerning patent applicants represented by a patent agent, the Patent Office had no direct contact with Matco. Accordingly, the Notice (which, pursuant to paragraph 27.1(2)(b) of the Patent Act, advised of the failure to pay the maintenance fee due by January 10, 2022) was sent to Ridout just like all other notices concerning the 194 Application. In order for the obligation of due care to have any practical effect, it is evident that the duty to exercise due care must apply to the recipient of a notice regarding the failure to pay a maintenance fee. Otherwise, the provision for sending such a notice would be pointless.
[42] Matco criticizes the sending of the Notice to Ridout instead of directly to Matco as a "“trap”" for patent applicants created by the abandonment and reinstatement regime. Matco also criticizes the Commissioner for not addressing its "“trap”" argument.
[43] I see no reason that the Commissioner was obliged to do so. He reasonably concluded that Ridout was subject to the due care obligation, and that answered the "“trap”" argument. Moreover, I see no trap. The failure to forward the Notice to Matco seems to have arisen from Hahn’s interpretation of Matco’s instructions that Hahn was to take no further action with respect to the payment of maintenance fees. It would be problematic, in my view, if an applicant were able to reduce or evade the strict requirements of due care by simply citing the limited scope of its instructions to its agents and other representatives. Patent applicants should not be encouraged to limit the scope of their instructions for this purpose.
[44] Matco’s "“trap”" argument would require the Commissioner to send a notice pursuant to paragraph 27.1(2)(b) of the Patent Act, advising of the failure to pay the maintenance fee on time, directly to the applicant rather than to the agent of record. This cannot be what Parliament intended. Such a requirement would be unique in the context of the patent regime, both in terms of skirting the patent agent and in terms of requiring the Commissioner to send a notice to someone who may be located outside Canada. If this had been Parliament’s intention, I would have expected explicit wording to that effect: R. v. Wolfe, 2024 SCC 34, [2024] S.C.J. No. 34 at para. 35.
[45] Moreover, the answer to the further question of whether the obligation to exercise due care extended to Matco’s other representatives, such as Hahn, does not assist Matco. If Hahn was not subject to the due care obligation, then the question would become whether Ridout exercised due care in sending the Notice to Hahn only, and not to Matco. As stated in the Commissioner’s Decision, and in MOPOP, Chapter 9.04.03, the question of the exercise of due care turns on whether the applicant (or in this case, its agent) "“took all measures that a reasonably prudent applicant would have taken”". It is difficult to imagine that Ridout could meet this requirement by forwarding the Notice to someone who was not Matco (the applicant) and who had no obligation themselves to advise Matco of the Notice. Ridout indicated that it had no direct contact with Matco, and this was the reason that it forwarded the Notice to Hahn. But a prudent agent would do so only if it expected that Hahn would ensure that Matco was made aware of the Notice.
[46] In the end, either Hahn failed to exercise due care by not forwarding the Notice to Matco, or Ridout failed to exercise due care by forwarding the Notice to someone who could not be expected to forward it to Matco.
[47] In my view, it was not necessary for the Commissioner’s Decision to provide the foregoing discussion explicitly. I am confident that the Commissioner understood and considered Matco’s arguments on the extent to which the obligation of due care applied to parties other than Matco itself. The Commissioner’s Decision makes clear that he was unsatisfied both (i) with Ridout’s explanation to Hahn of the importance of responding to the Notice (though I note that the Notice itself clearly indicated that the 194 Application would be deemed abandoned if the maintenance fee and late fee were not paid by July 11, 2022), and (ii) with Hahn’s explanation for not forwarding the Notice to Matco.
[48] Though the Commissioner’s Decision does not provide much reasoning for imposing the due care obligation on agents and other representatives, the MOPOP and the WIPO Guidelines do. As alluded to above, Chapter 5.08 of the MOPOP indicates that correspondence to an applicant will be sent to its patent agent when one has been appointed. It stands to reason that that agent is expected, at a minimum, to forward such correspondence to the applicant for their action. It also stands to reason that sending such correspondence to an applicant’s US counsel (instead of to the applicant itself) would constitute due care only if that US counsel had an attendant duty at least to forward it to the applicant.
[49] Nothing in the Supreme Court of Canada’s recent decision in Pepa v. Canada (Citizenship and Immigration), 2025 SCC 21, on which the parties made post-hearing submissions, changes my view on this issue.
B. Relevance of Data Migration Error
[50] As indicated above, the Federal Court concluded that it was unreasonable for the Commissioner to treat the data migration error as not relevant, and that the Commissioner should have asked what caused the failure to pay the maintenance fee. In my view, that was not the question to be asked.
[51] As noted at paragraph 6 above, a request for reinstatement of a patent application that has been deemed abandoned is provided for in subsection 73(3) of the Patent Act. Among the requirements is that the applicant state, in the request, "“the reasons for the failure to take the action that should have been taken in order to avoid the abandonment”". It is important to focus on what precisely was the "“failure”"; it concerned the action that was required to avoid the abandonment. In this case, the abandonment is what occurred on July 11, 2022, and therefore the action that should have been taken to avoid the abandonment was the payment of both the maintenance fee and the late fee. It is that failure that should be the focus of the Commissioner’s determination as to "“whether the failure occurred in spite of the due care required by the circumstances having been taken”", per paragraph 73(3)(b) of the Patent Act.
[52] This is why, in my view, it was entirely reasonable for the Commissioner to state that the data migration error was not relevant. The Commissioner was properly concerned with measures that were taken, or could have been taken, to avoid the deemed abandonment after the deadline for paying the maintenance fee had passed. Here, the Commissioner was principally concerned with the failure to forward the Notice to Matco.
[53] In my view, the Federal Court’s focus on the data migration error represented an inappropriate failure to defer to the Commissioner’s reasoning. Instead, the Federal Court improperly asked itself what decision it would have made. For example, the Federal Court stated at paragraph 41 of the FC Decision that, "“[i]f the Commissioner finds that due care was taken to avoid [the initial failure to pay the maintenance fee], then the [194] Application ought to be reinstated.”" It is implicit in this statement that the Federal Court’s view was that reinstatement would be merited upon showing due care in respect of the initial maintenance fee, regardless of the absence of due care in response to the Notice.
[54] The Commissioner did not overlook the importance of the data migration error to the situation. It may be true that the data migration error was the proximate cause of the failure to pay the maintenance fee, but the deemed abandonment that Matco sought to set aside with its request for reinstatement occurred later after the failure to respond to the Notice by paying the maintenance fee and the late fee by the deadline to avoid abandonment. The Commissioner did not err by focusing on the time between the Notice (February 21, 2022) and the deemed abandonment deadline (July 11, 2022).
C. Explanation for Not Forwarding Notice to Matco
[55] As indicated above, the Federal Court concluded that it was unreasonable for the Commissioner to state that no explanation had been provided as to why the Notice was not forwarded to Matco. The Federal Court cited the fact that Ridout had no direct contact with Matco, but had forwarded the Notice to Hahn, from whom it had been receiving instructions regarding the 194 Application. With regard to Hahn’s failure to forward the Notice to Matco, the Federal Court cited the fact that Hahn (i) was unaware of the data migration error (and hence had no reason to doubt that Dennemeyer would make any necessary maintenance fee payments), and (ii) had been instructed to take no further steps with regard to the payment of maintenance fees.
[56] These may indeed be reasons that Hahn did not itself pay the maintenance fee, or the late fee. However, they do not contradict the Commissioner’s conclusion that no explanation had been provided for failing to forward the Notice to Matco.
[57] First, it was reasonable for the Commissioner to find that Matco’s claim that Hahn was "“completely unaware”" of the data migration error did not fully align with the information it had that the maintenance fee in question had not been paid on time. At a minimum, Hahn had reason to be concerned that there was a problem with the payment of the maintenance fee on the 194 Application.
[58] Second, Matco’s instructions to Hahn not to pay any maintenance fees did not amount to instructions not to forward the Notice to Matco, or otherwise inform it of the missing maintenance fee payment.
[59] Again, I am concerned that the Federal Court failed to defer to the Commissioner’s analysis of the facts, and formed its own conclusions regarding what Hahn knew and what it had been instructed to do (or not do). . Canada (Attorney General) v. Matco Tools Corporation
In Canada (Attorney General) v. Matco Tools Corporation (Fed CA, 2025) the Federal Court of Appeal allows a Crown appeal, this from a JR which granted a challenge to "a decision of the Commissioner of Patents".
Here the court considers the deemed abandonment of a patent "following the non-payment of a periodic maintenance fee and associated late fee":[1] The Attorney General of Canada (the AGC) appeals a decision of the Federal Court (2025 FC 118, per Justice Russel W. Zinn, the FC Decision) that granted an application for judicial review of a decision of the Commissioner of Patents (the Commissioner). That decision (the Commissioner’s Decision) refused a request by the respondent, Matco Tools Corporation (Matco), to reinstate its Canadian Patent Application No. 3,086,194 (the 194 Application) pursuant to subsection 73(3) of the Patent Act, R.S.C. 1985, c. P-4, which had been deemed abandoned pursuant to paragraph 73(1)(c) following the non-payment of a periodic maintenance fee and associated late fee.
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II. Legislative Framework
[4] Canada’s patent regime provides for the payment of annual fees for the maintenance of patents and patent applications. This is to discourage the proliferation of deadwood patents and patent applications: Dutch Industries Ltd. v. Canada (Commissioner of Patents), 2003 FCA 121, [2003] 4 F.C. 67 at para. 30. For patent applications, these payments are contemplated in section 27.1 of the Patent Act and prescribed in the Patent Rules, S.O.R./2019-251. If a prescribed maintenance fee is not paid on time, abandonment of the patent application can be avoided by payment of the missing maintenance fee as well as a late fee within a prescribed time. The deadline for such late payment is the later of (i) six months after the date the maintenance fee was originally due, and (ii) two months after the date of the Commissioner’s notice to the applicant of the failure to pay the maintenance fee on time.
[5] If the prescribed maintenance fee and the late fee are not paid by the deadline, the patent application is deemed abandoned: paragraph 73(1)(c) of the Patent Act.
[6] A patent application that is deemed abandoned may be reinstated pursuant to subsection 73(3) of the Patent Act. In order to reinstate a patent application under this provision, the applicant must, within the prescribed time, (i) make a request for reinstatement with the Commissioner, (ii) state, in the request, "“the reasons for the failure to take the action that should have been taken in order to avoid the abandonment”", (iii) take "“the action that should have been taken in order to avoid the abandonment”", and (iv) pay the prescribed reinstatement fee. The deadline for requesting reinstatement is 12 months after the day on which the application for a patent is deemed, as a result of the failure to take action, to be abandoned: subsection 133(1) of the Patent Rules.
[7] Pursuant to paragraph 73(3)(b) of the Patent Act, another requirement for reinstatement of an abandoned patent application is that "“the Commissioner determines that the failure occurred in spite of the due care required by the circumstances having been taken and informs the applicant of this determination.”" . Taillefer v. Canada (Attorney General)
In Taillefer v. Canada (Attorney General) (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal from a JR against "the Commissioner of Patents’ decision [the Decision] to reject the Appellant’s reinstatement request for Canadian Patent No. 2,690,767 [767 Patent]" for failure to pay annual patent maintenance fees:[1] ... The 767 Patent was deemed to have expired in 2020 because the Appellant and his patent agent [Agent] failed to pay a mandatory annual maintenance fee on it, as required by section 46 of the Patent Act, R.S.C. 1985, c. P-4 [Act], following an email communication failure.
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[3] Where a patentee fails to pay the annual maintenance fee by the prescribed deadline, the patent is deemed to have expired pursuant to subsections 46(1) to 46(4) of the Act, unless the patentee pays the maintenance fee and a late fee before the expiry of the prescribed late fee period. To have its patent reinstated, the patentee must meet the requirements of subsection 46(5) of the Act. Notably, under paragraph 46(5)(b), the Commissioner must be satisfied that the patentee’s failure to pay the maintenance and late fees by the prescribed date “"occurred in spite of the due care required by the circumstances having been taken.”" ....
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[7] The Appellant claims that the Commissioner failed to adequately justify its interpretation of the due care standard under the Act. This argument is without merit. At the beginning of their detailed reasons, the Commissioner observed that the Act and Patent Rules, SOR/2019-251 were amended in 2019 in order to implement provisions of the Patent Law Treaty, 21 May 2001, Can TS 2019 No 25 (entered into force 28 April 2005, ratification by Canada 30 July 2019), an agreement administered by the World Intellectual Property Organization [WIPO] and aimed at simplifying and harmonizing the administrative practices of national IP offices.
[8] Consistent with these amendments’ objective of aligning the Canadian regime more closely with international standards, and following the non-binding guidance provided in section 27.03.03 of the Manual of Patent Office Practice [MOPOP], the Commissioner referred to the international guidance set out in paragraph 166M of the WIPO Receiving Office Guidelines [WIPO guidelines] to establish the meaning of the due care standard in paragraph 46(5)(b) of the Act. The WIPO guidelines note that a request for restoration of priority under the Patent Cooperation Treaty, 19 June 1970, Can TS 1990 No 22 (entered into force 24 January 1978, ratification by Canada 02 October 1989) should be approved if the applicant’s failure to file the international application within the priority period occurred "“in spite of due care required by the circumstances having been taken,”" and that this due care standard can only be met if the applicant has taken all measures which a reasonably prudent applicant would have taken in light of the facts and circumstances of each particular case. For the identically worded due care standard in paragraph 46(5)(b) of the Act, the Commissioner adopted an analogous standard which asks whether the patentee took all measures that a reasonable patent holder would have taken, given the particular set of circumstances, to avoid the failure.
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