On June 6, 2008, the Federal Court of Canada released its decision in a case involving payment of maintenance fees, Sarnoff Corporation v. Attorney General of Canada.1 The Court's decision is noteworthy not only for its analysis of the payment issue but also for its comments on the entitlement to equitable relief from forfeiture.
At the time when Sarnoff filed its patent application, the Gowlings law firm was acting as Sarnoff's patent agent. Gowlings paid all maintenance fees up to the fifth anniversary of the application. In March 2004, Sarnoff transferred responsibility for the application to another firm, Dimock Stratton. Dimock Stratton paid the 6th and 7th anniversary maintenance fees on a timely basis and the Patent Office accepted the fees without complaint. After the 7th anniversary payment, the Patent Office notified Dimock Stratton that it had no record of a change of agent or appointment of associate agent respecting that firm and because maintenance fees had not been paid by the appropriate person, the application was abandoned. A request for reinstatement by Dimock Stratton (along with repayment of the 7th anniversary fee and payment of the 8th anniversary fee) was rejected. Gowlings requested reinstatement (again submitting both the 7th and 8th anniversary fees) and was advised that no maintenance fees had been paid, the one-year grace period had expired and the application was deemed abandoned.
Hughes J noted that the Canadian Patents Database, however, had listed Dimock Stratton as the agent of record as of April 21, 2006 (i.e., shortly after the 7th anniversary). Hughes J also took note of the fact that the Patent Office accepted the 6th anniversary payment and that the Patent Office continued to communicate with Dimock Stratton and not Gowlings. After an analysis of the relevant statutory provisions, Hughes J found the decision of the Patent Office unreasonable. He stated that the legislation regarding who can pay maintenance fees and when a notice of appointment of associate agent is necessary are ambiguous, and given the facts of this case, "it would be absurd and lead to dire consequences to interpret the [Patent] Rules as nullifying any correspondence and payment actually accepted by the Patent Office". The Patent Office was directed to process the application.
Hughes J went on to analyze a second issue, that of relief from forfeiture. He stated that assuming that the Patent Office had decided reasonably, the question becomes whether the consequence of abandonment of the patent application can be the subject of relief by way of Court order. Hughes J described several factors that would weigh in favour of granting such a remedy including the conduct of the Applicant, the gravity of the breach and the disparity between the value of that which is forfeited and the damage, if any, caused by the breach. In the circumstances of this case, Hughes J found that Sarnoff would be in an equitable position to obtain relief from forfeiture. Whether equitable relief would be available to other parties in other circumstances will have to be determined on a caseby-case basis.
Footnotes
1. 2008 FC 712
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