New Patent and Trademarks Act Amendments

December 13, 2018

On December 13, 2018, Bill C-86, an omnibus budget implementation bill, received Royal Assent. The bill makes several important changes to Canada’s intellectual property laws under the Patent Act and Trademarks Act.

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Bill C-86's Patent Act Amendments

The bill's Patent Act amendments include substantive changes to patent law, including the addition of prosecution history estoppel, expanded exceptions to infringement, and provisions on standard-essential patents.

In particular, the changes include:

1. Prosecution history will be admissible in litigation to rebut representations made by the patentee on claims construction, a doctrine known in the US as “file wrapper estoppel” or “prosecution history estoppel”, which had previously been rejected by the Supreme Court of Canada in Free World Trust, 2000 SCC 66.
2. Prior use and experimental use exceptions to infringement will be defined and expanded from the existing law, which was not fully codified with respect to experimental use and limited to certain pre-claim date manufacturing with respect to prior use. The new provisions would expressly permit a prior “good faith” user to continue doing the “same act” without attracting liability, and secondly, experimentation relating to the subject-matter of the patent would not constitute infringement.
3. Standard-essential patents (SEPs) will be defined under new regulations if the Act is amended, and all “licensing commitments” in respect of SEPs will be binding on the patentee or its successors in interest. While there have been no details on the new regulations, it is anticipated that additional terms relating to SEPs may be proposed by the governor-in-council.

These Patent Act amendments appear to be aimed at trending patent litigation in respect of non-practicing or licensing entities, and clarifies certain contested issues relating to the scope of infringing activities.

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Bill C-86's Trademarks Act Amendments

Bill C-86 also makes several changes to the Trademarks Act. Among other amendments, the bill creates safeguards against entities who obtain trademarks without actually intending to use them (sometimes referred to as “trademark trolls”) and allow for official marks to be removed from the register:

1. Safeguards against “trademark trolls” – the bill addresses entities who do not actually use registered or applied-for marks, by the following measures:
2. adding “bad faith” as a basis to oppose a trademark registration,
3. providing the trademark office with the authority to issue confidentiality orders and award costs in opposition and Section 45 (i.e.non-use) proceedings, and
4. prevent registrants from obtaining relief in proceedings for trademark infringement or depreciation of goodwill in the first three years of the registration, unless registrants have use of the marks during that time or special circumstances exist explaining why there is no use.
5. A process to remove official marks from the register is provided, if the entity that has the official mark is not a public authority or no longer exists. Official marks are a uniquely Canadian trademark concept, referring to “any badge, crest, emblem or mark” adopted and used by a public authority for goods and services. Parties cannot adopt or register a trademark that is identical or similar to an official mark without the consent of the public authority.

These amendments appear to respond to some concerns regarding (i) the proposed amendments to the Trademarks Act and Regulations that are supposed to come into effect sometime next year that remove use as a requirement for registration, and (ii) the challenges in dealing with official marks on the register.

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