Canada: Patents

Last Updated: February 27 2015
Practice Guide by Bereskin & Parr LLP

The Patent System

The patent system is based on the principle that, as a matter of public policy, it is desirable to encourage the making and exploitation of inventions. The system provides a bargain between the government and the inventor. The inventor is required to make a full disclosure of the invention to a government patent office. The disclosure must be sufficient to enable other skilled workers to practice the invention and is eventually made available to the public. In exchange, the inventor is given the right to exclude others from practicing the invention for a fixed term.

What is a Patent?

A patent can be characterized as a negative right, in that it gives that inventor or patent owner the right to exclude others from making, using or selling the invention - it does not necessarily give the patent owner the right to make the invention. For example, where an invention is an improvement on some existing technology, for which one or more patents are still in force, the owner of an improvement patent may require permission (such as a license agreement) from the owner of an earlier patent in order to work the invention. Furthermore, patent owners are responsible for enforcing their own patent rights such as by launching legal proceedings against a competitor who is thought to be infringing their patent.

Generally, a patent is granted under the law of each country, and hence a patent is only effective in the relevant territory. The patent term will be governed by national law, which for many countries is 20 years calculated from the filing date.

Why Obtain a Patent?

A patent enables the owner to exclude competitors from making, using or selling their invention.

This exclusivity allows inventors and patent owners to profit from their inventions by restricting competition and enables the costs of research and development, new tooling, and market development to be recovered. Patents can be transferred in much the same way as other types of property. For example, if the patent owner is unable to exploit the invention directly, a patent can be sold outright or licensed to others. In deciding whether patent protection should be pursued, one major issue is whether the financial return expected from the period of exclusivity justifies the costs in pursuing and maintaining a patent. For example, where large amounts of time and money have been spent on research, development, and new production equipment, these fixed costs will undoubtedly need to be recouped over a period of time and a patent can provide the necessary umbrella of protection. This is particularly desirable where a new product can be readily reverse engineered by competitors who would not be concerned with recovering research costs.

What Sort of Inventions are Patentable?

To be patentable, an invention must be of a technical nature and be considered patentable subject matter by the governing law. For example, in Canada, the definition of an invention includes any new and useful method, use, process, machine, manufacture, or composition of matter or improvement thereof. If the invention is embodied in some piece of equipment or apparatus, it will generally be considered to be patentable subject matter. Similarly, processes or methods (e.g., chemical processes or methods of molding articles), will be considered to be patentable subject matter. However, ideas or creations that do not have practical application, or which are purely artistic, will not be considered to be patentable. For example, pure scientific principles, abstract theorems, or works of art are not considered patentable subject matter.

In the biotechnology area, proteins, vaccines, and lower life forms, such as bacteria and viruses, are considered patentable. Higher life forms cause more difficulty, and currently are not patentable in Canada, although they may be patentable elsewhere, notably in the United States.

Whether or not isolated human DNA molecules are patentable subject matter has come under scrutiny in the United States, but the most recent court decision has agreed with the longstanding practice of allowing so-called "gene patents." Software-related inventions are a growing field, and again the boundary between patentable and unpatentable subject matter is difficult to define and varies from country to country. Where a software-related invention is clearly associated with some conventional patentable type of technology, then the overall invention will usually be patentable.

Novelty and Inventiveness

An invention must also be considered both 'novel' and 'inventive' by a patent examiner at a national patent office to result in the grant of a patent. Whether an invention is new or not is usually a straightforward question. The test in Canada, and many other countries, is simply whether the invention has previously been sufficiently disclosed to the public by any means anywhere in the world before the filing date of the first patent application so as to enable a skilled person to make the invention. Thus, disclosures in patents (i.e., printed publications of any sort, oral disclosures, or simple uses of the invention), can put an invention in the public domain. This includes both disclosures by others and disclosures by the inventor.

The issue of inventiveness is determined by inquiring whether the invention is obvious to a person skilled in the relevant field. This test is subjective and standards vary from country to country. An invention will be held to be obvious if it is something that would immediately occur to a skilled person, if it is more or less "self-evident" that what is being tried ought to work, or if there is some reason or basis in the art to consider making the proposed modification or change. On the other hand, where an invention is contrary to conventional teaching or produces some new and unexpected result, than this suggests that it is indeed inventive or non-obvious, and hence patentable.

Inventorship and Ownership

The rights to an invention start with the inventor and an inventor is any individual who has made a significant contribution to the "inventive concept" of an invention. Persons who merely contribute to verification of the inventive concept, or collection of experimental data, are not likely inventors. Most inventions are made in the course of employment, and routinely inventions are assigned to the employer. To avoid any dispute on this issue, companies employing technical staff who may make inventions should ensure that their contracts of employment govern ownership of inventions.

The Patentability Search

Before going to the expense of preparing and filing a patent application, it is usually worthwhile to do a patentability search in order to determine whether a patent can be obtained for the invention at all, and if so, what the scope of protection may be. This type of search is done by reviewing relevant existing patents, and possibly other publications and publicly available information in order to see if the invention is likely to be considered novel and inventive. The results of such searches should be conducted under the direction of, and interpreted by, a qualified lawyer or patent agent.

When Should an Application be Filed?

For most countries, the rights to a patent are awarded to the first person to file a patent application (assuming that person is the genuine inventor or has obtained rights from the inventor). For this reason, it is always advisable to file a patent application as soon as possible, since it is conceivable that another person may independently make the same invention and file earlier.

A further and more practical consideration when deciding to file is that the novelty of an invention is judged against any information that is publicly available at the earliest filing date.

Hence, the later an application is filed, the more information becomes available for a patent office examiner to rely on to challenge the novelty of the invention. At a minimum, for many countries it is essential that the first application be filed before the invention has been in any way "publicly disclosed" by the inventor or anyone else. For North America, in some circumstances, it may be possible to file after a public disclosure by the inventors during a one year grace period.

Obtaining Foreign Patent Protection

Canadian patents apply in Canada only. Patent protection in foreign countries must be separately obtained. This may be done either by applying directly to the patent office of the relevant foreign country, or applying for the foreign patent through the deferred filing route under the Patent Cooperation Treaty (PCT). Regardless of which route is chosen, the local laws of the relevant country will ultimately apply. Most countries other than Canada and the United States require absolute worldwide novelty and do not provide the inventor with any grace period in which the invention can be made available to the public prior to filing.

Marking Patented Products

Products no longer have to be marked as "patented" in Canada, but incorrectly so stating is an offense under the Patent Act. It is generally advisable to mark patented products as "patented" or "patent pending" if a patent application has been filed as appropriate, in order to warn off potential infringers. The law governing marking patented products varies in different countries and inappropriate markings can potentially result in significant fines. Consult a qualified lawyer or patent agent in order to develop a suitable marking strategy for your product.

Alternative Protection - Trade Secrets

Certain inventions can be practised, sold, or licensed in secret. Persons to whom the invention is communicated in confidence, or who are under a contractual obligation to keep it secret, can be restrained from using it in an unauthorized manner and may be liable to pay damages for any unauthorized use. However, there is no recourse against persons who independently make the invention, and such a person could obtain a patent and thereby obtain exclusive rights to that invention. Also, there is only protection as long as secrecy is maintained and it is very difficult to do so in many technology areas for any prolonged length of time. It is important to treat any information you wish to maintain as a trade secret as confidential and put measures in place to ensure that the relative secrecy of the information remains intact.

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This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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