Patents

The New Gold Rush: Open Innovation in Canada

“It’s impossible for any organization to have all the best ideas”

~ General Electric, Open Innovation Manifesto

Open Innovation as an R&D strategy may seem counter-intuitive; traditional corporate culture dictates the use of secret R&D labs that operate in an information silo. However, open innovation can offer many competitive advantages, such as complimenting your company’s internal skills and know-how with external knowledge and ideas, lowering R&D costs, and increasing differentiation in the market.

For example, in 2000, the Canadian gold mining company Goldcorp Inc. crowdsourced gold prospecting in an under-performing mine; Goldcorp knew they were sitting on a literal and figurative gold mine but their geologists could not find the main deposits of gold. Goldcorp created a challenge for the general public; they released all Goldcorp’s geological data (going back as far as 1948) and offered $575,000 in prize money to the innovators that could find the elusive gold deposits. At the time, this type of open innovation was contrary to traditional mining practices: Goldcorp was admitting they were unable to find the gold and was releasing all their proprietary data. However, Goldcorp’s challenge led to more than 110 gold deposits that yielded over $6 billion worth of gold.

So, if that doesn’t answer why open innovation is a worthy consideration for any business, consider that patent filings in Canada have not increased significantly in the past ten (10) years. However, this stagnation is not an issue of lack of funding. Indeed, statistics from Industry Canada indicate that Canada is second only to the United States when it comes to venture capitalist funding.


Collaboration between companies and with the public at large should be considered to invigorate innovation in Canada. In another successful example of open innovation, Bombardier held a contest to solicit urban mobility designs. They created a social media open innovation community integrated with live, offline workshops. The contest rules stipulated that the winners must transfer their IP to Bombardier in exchange for a small prize. Bombardier also kept a right of first refusal for a year for all non-winning ideas. By creating a community around innovation, even outside their company, Bombardier created a sense of self-determination and pride in the community, that resulted in innovation pouring into Bombardier. Indeed, Bombardier received input from 2,486 participants from 102 countries that contributed 4,239 designs, 25,979 evaluations, 8,565 comments and 3,445 messages on Bombardier’s proposed urban transportation projects. As a bonus to uncovering a gold mine of innovation, Bombardier customers were very receptive to their more open and customer-orientated brand.

However, it is important to note that “open” innovation does not necessarily mean the innovation is in the public domain; the devil is in the details. IP ownership provisions should be clearly outlined in an agreement between all involved parties. The following questions can be helpful in outlining the preferred ownership details:

  • Who will own the IP stemming from the project (foreground IP)?
    • What about jointly created IP (joint ownership/management of IP assets should be approached with caution)?
    • Consider motivation factor for crowdsourcing when innovators own their IP?
    • Does a royalty-free license in perpetuity make sense given the motivations of the IP owner (i.e., the company or the innovator)?
  • What IP do the innovators and the company already own (background IP)?
  • Who owns the feedback stemming from the project?
  • Should a right of first refusal be included for IP that is not exploited during the project?

The bottom line: open innovation can be a great way to invigorate innovation within your company without resorting to a significant increase in R&D funding.

Canada is Modernizing its Patent Act and Rules to Streamline Procedures for Applicants

By: Edward Wu

Following the Government’s recent decision to ratify the Patent Law Treaty (PLT), the Orders in Council (OIC) published that the amendments to the Patent Act and Patent Rules under the Economic Action Plan 2014 Act and Economic Action Plan 2015 Act will come into force on October 30, 2019. Furthermore, the new Patent Rules will be published on July 10, 2019, under the Registration Number SOR/ 2019-0251.

The following important changes will be coming into force on October 30, 2019:

42-Month Deadline for National Phase Entries No Longer “As of Right”

The 42-month deadline for Patent Cooperation Treaty (PCT) National Phase entries is no longer “as of right”. To utilize the 12-month extension, Applicants must submit a statement that the failure to meet the regular 30-month deadline was unintentional. Clients should be aware of the shortened period for national entries and make corresponding arrangements.

Requirements of Certified Copies for Priority Documents

After October 30, 2019, certified copies of priority documents must be filed with the Office; however, this requirement does not apply if the priority document is an earlier Canadian Application or, in the case of a national phase entry, where the PCT priority document requirement has already been satisfied. Clients should be aware of this change and make preparations for document certification, if necessary.

Easier to Obtain Filing Dates

International clients can now obtain a filing date without translating the Description because the new Patent Rules will no longer require an English or French Description for obtaining a filing date. The translation of the Description may now follow at a later date.

Furthermore, the new Patent Rules will allow Applicants to obtain a filing date on any day of the year by filing electronically, even on days where the Patent Office is closed for a holiday or the weekend. This important change will allow Applicants to obtain a quick filing date prior to any disclosures being made.

Restoration of Priority Claim

The new Patent Rules provide relief for Applicants that unintentionally miss the deadline for a priority request. The 12-month period for priority claims may be extended to fourteen (14) months if the Applicant submits that the delay was unintentional. However, the Federal Court may revoke the priority request if they later determine that the delay was intentional. Clients should be aware of the limited application of this new right of restoration for priority claims.

Please refer to Brion Raffoul’s previous article for more information regarding the new Patent Act and Patent Rules.

Ms. Dominique Lambert to attend BIO International Convention from June 3-6

Ms. Dominique Lambert will be representing the patent team at the BIO International Convention (BIO) being held in Philadelphia from June 3 to June 6, 2019.

https://convention.bio.org/

BIO attracts 16,000+ biotechnology and pharma leaders who come together to discover new opportunities and promising partnerships, bringing together a wide spectrum of life science and application areas including drug discovery, biomanufacturing, genomics, biofuels, nanotechnology and cell therapy.

Protecting Your Innovation: Improvement Patents

“Build a better mousetrap, and the world will beat a path to your door.”

Blockchain, nanomaterials, AI, CRISPR – disruptive technologies can transform entire industries.  A common misconception is that patents are only for protecting cutting-edge and disruptive innovation. Indeed, only technology that is new and non-obvious can be protected by a patent. However, these requirements do not mean that only disruptive technologies can be protected. In fact, the Canadian Intellectual Property Office (CIPO) estimates that 90% of patents are for improvements to existing patented inventions. For example, a patent was granted this week for a bar of soap!

An improvement patent is based on technology that builds on a previous idea or invention – a better mouse trap if you will. An improvement patent does not give you the right to use the original patented invention as the patent holder can exclude others from using their invention. However, an improvement patent gives you the right to exclude others from using the improvement.

Exclusivity over the improvement can be a valuable defensive tool when faced with the threat of an infringement suit. Companies can avoid protracted and expensive patent litigation by aligning with would-be competitors or infringers and cross-licensing your technology with the patent holder of the original invention.
A cross-license is an agreement to grant mutual rights to each party’s respective patents.

A perfect example of a beneficial cross-licensing relationship is Google and Samsung Electronics, who signed a broad cross-licensing agreement in 2014. By joining forces, Google and Samsung Electronics mitigated their risk of infringement, allowing the companies to place a larger emphasis on innovation. Cross-licensing agreements are especially effective for companies that target different markets, creating a win-win for everyone.

Far too often companies underestimate the value of small improvements made to existing technology. By protecting incremental improvements, companies can bolster their IP portfolio and create new opportunities to license other technology.

CIPO OPENS PUBLIC CONSULTATION ON DRAFT ADMINISTRATIVE TOPICS FOR THE UPCOMING NEW PATENT RULES

By Dominique Lambert

Following the amendments to the Patent Act to comply with the requirements of the Patent Law Treaty (PLT), and proposed amendments to the accompanying Patent Rules, the Canadian Intellectual Property Office (CIPO) has drafted revised administrative procedures for the Manual of Patent Office Practice (MOPOP).

The new Patent Act and Patent Rules are expected to come into force in the Fall of 2019. Many sections of the MOPOP will need to be revised.

This Public Consultation is an opportunity for IP practitioners, IP owners, or any person interested in the Canadian Patent regime to provide feedback on the revised procedures that will be applied by the Office.

The Consultation will be open from March 26, 2019 until May 27, 2019.

Meaningful Progress or Mere Signal Transient?

By Dennis Haszko

“A transient event is a short-lived burst of energy in a system caused by a sudden change of state.” –Wikipedia

Recently, the U.S. Patent & Trademark Office (USPTO) published the 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG) which has predictably caused a stir in the field of business method patents.

After the U.S. Supreme Court’s key decisions over the last decade in Bilski v. Kappos, 130 S. Ct. 3218 (2010); Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), and Alice Corp. Pty. Ltd. V. CLS Bank International, 134 S. Ct. 2347 (2014), the courts in the US have increasingly found certain computerized methods of doing business to be unpatentable.  Moreover, patent examiners at the USPTO have been brought to near deadlock in many instances where patent applications become mired in the threshold question of whether the invention constitutes patent eligible subject matter under 35 U.S.C. 101.

To date, the USPTO has applied the key decisions inconsistently and oftentimes seemingly arbitrarily.  This has made negotiating with patent examiners less a science and more of an art.  Typical rejections under 35 U.S.C. 101 include a blanket assertion that the subject matter “forms an abstract idea” and “fails to constitute something significantly more.” 

The 2019 PEG is an effort by the USPTO to provide clarity and consistency during the patenting process. Patent examiners are now directed to review and analyze patent applications in a more stringent manner.  The updated analysis can be distilled to the following steps:

  1. Does the claimed subject matter recite a judicial exception related to:
  1. Mathematical concepts— mathematical relationships, mathematical formulas or equations, mathematical calculations;
  • Certain methods of organizing human activity—fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); or
  • Mental processes – concepts performed in the human mind (including an observation, evaluation, judgment, opinion)?
  • If a judicial exception is identified, then is it integrated into a practical application? If so, then the invention is at least subject matter eligible, though it must still be analyzed for novelty and non-obviousness.
  • If a judicial exception is identified, but not integrated into a practical application, then the claimed subject matter may only be considered subject matter eligible if it provides an inventive concept where the claimed subject matter forms “significantly more” than the recited judicial exception.

While this updated analysis under the 2019 PEG still reflects a lot of gray area, it does clearly lay out the types of claimed subject matter in a more distinct list.  Moreover, the analysis provides patent practitioners with a more “scientific” or logical approach to arguing that a practical application exists.  This is better than the previous, more ambiguous approach of arguing that the invention provides “significantly more.”  As experienced patent practitioners can attest, previous USPTO attempts at dealing with business method inventions had led to arguments that can, at best, be characterized as mere throws of the dice.  The 2019 PEG, at the very least, should provide a seemingly logical blueprint for crafting suitable arguments.

Only time will tell whether the 2019 PEG is a mere signal transient or something more meaningful in terms of obtaining business method patents from the USPTO.

Canada’s Patent Rules: Changes Coming!

By Stacey Dunn and Dominique Lambert

Recent implementation of the Patent Law Treaty has required Canada to update its Patent Rules. While the expected changes will modernize patent laws and their administration, patent owners should be mindful of some of the anticipated pitfalls.

Filing Dates

Under the new Rules, an Applicant can obtain a filing date by submitting: an indication that a Canadian patent is sought; the Applicant’s information; and a document describing the invention in any language. A translation of the invention description document into English or French and the filing fee may now follow at a later date.

Late translations and late filing fees do not apply to PCT national phase applications.

Furthermore, Applicants may now obtain a filing date on a holiday or on the weekend as electronic communications will be deemed received on the day they are submitted, even if the Patent Office is closed.

Priority Claims

If the priority claim requirements are not complied with, the priority claim will merely be disregarded rather than being deemed abandoned.

Priority documents now must be certified copies.

Certified copies of each priority document must be submitted or made available through an acceptable digital library. This requirement will not apply when the priority document is an earlier Canadian application or a national phase application that already satisfied its PCT priority document requirement.

Restoration of Priority Claim

The Office will now provide a two-month extension beyond the twelve-month period for claiming priority. Applicants may now file an application up to fourteen months from the earlier filed application and restore priority.

The two-month extension is available only if the delay was unintentional.

Streamlined Process for Amending an Application After Allowance

Applicants are no longer required to withhold paying the final fee to let an application go abandoned to re-enter examination. The new Rules allow for requesting a Notice of Allowance to be withdrawn, after which the Application re-enters Examination and the Application may be amended.

Timelines for responding to an Office Action or Notice of Allowance have been shortened to four months (from six), and the deadline for requesting examination has been shortened to four years (from five).

Notice Required from Patent Office Prior to Abandonment

Under the new Rules, an Application will not go abandoned for failure to pay maintenance fees or to request examination without prior notification of a deadline. A notice letter will be sent establishing a deadline of the later of six months from the missed deadline or two months from the notice date.

If a maintenance fee deadline is missed, the new deadline may not be known until the late notice has been issued by the Office.

42 Month Deadline for National Phase Entries is No Longer “As of Right”

The twelve-month deadline extension for entering national phase in Canada after the thirty-month deadline is not available “as of right”.

Late entries now require a statement that the failure to enter by the thirty-month deadline was unintentional.

While these changes are a step in the right direction for patent practice, Patent Applicants should be aware of the tightened timelines and additional requirements coming into force within the year.

If you have any questions regarding the new Rules, please do not hesitate to contact us at [email protected].