Law deems patent application abandoned after non-payment of maintenance and late fees
The Federal Court of Appeal has restored a decision refusing to reinstate a Canadian patent application deemed abandoned under s. 73(1)(c) of the Patent Act, 1985, following the non-payment of a periodic maintenance fee and associated late fee.
In Canada (Attorney General) v. Matco Tools Corporation, 2025 FCA 156, Matco Tools Corporation filed its patent application as a Patent Cooperation Treaty application in January 2019.
In January 2022, Ridout & Maybee LLP, Matco’s patent agent, notified Hahn Loeser & Parks LLP, Matco’s US counsel, of the upcoming deadline to pay the annual maintenance fee.
On Feb. 21, 2022, the commissioner of patents sent Ridout a notice informing Matco that it failed to timely pay the maintenance fee for its patent application, which he would deem abandoned if it did not pay the maintenance fee and the late fee by July 2022, six months from the original due date.
The next day, Ridout forwarded the notice to Hahn, which sent Matco neither Ridout’s January 2022 notice nor the commissioner’s February 2022 notice, apparently due to Matco’s instructions that Hahn “take no further action” regarding paying maintenance fees.
Matco later requested the reinstatement of its patent application, which the commissioner had deemed abandoned. The commissioner denied Matco’s request.
Matco applied for judicial review. The Federal Court granted the application, set aside the commissioner’s decision for being unreasonable, and remitted the matter to the commissioner for a redetermination.
On appeal, the federal attorney general sought to set aside the Federal Court’s decision and restore the commissioner’s decision.
Commissioner’s ruling upheld
The Federal Court of Appeal allowed the appeal, restored the commissioner’s decision, set aside the Federal Court’s decision, and dismissed Matco’s judicial review application.
First, the Federal Court decided that the commissioner should have considered the limited responsibilities and knowledge of Matco’s agents and other authorized representatives.
The appeal court disagreed and determined that the obligation to exercise due care extended to Matco’s agents and other authorized representatives.
The appeal court ruled that the commissioner clearly stated that he was unsatisfied with Ridout’s explanation to Hahn of the importance of responding to the notice and Hahn’s explanation for failing to forward the notice to Matco.
The appeal court noted that Hahn’s failure to forward the notice appeared to have arisen from its interpretation of Matco’s instructions that it take no further action concerning paying 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,” wrote Justice George R. Locke for the appeal court. “Patent applicants should not be encouraged to limit the scope of their instructions for this purpose.”
Second, Matco alleged that, after it switched maintenance fee payment service providers in June 2021, an administrative error occurred when transferring data about the patent application to the new service provider, which prevented Matco from timely paying the maintenance fee.
The Federal Court found it unreasonable for the commissioner to treat this data migration error as irrelevant. The appeal court disagreed and found the commissioner’s treatment of this error reasonable.
The appeal court noted that the commissioner was primarily concerned with Hahn’s failure to forward the notice to Matco and the efforts to evade the deemed abandonment after the passage of the deadline for paying the maintenance fee.
The appeal court held that the Federal Court inappropriately failed to defer to the commissioner’s reasoning when it focused on the data migration error.
Third, the Federal Court found it unreasonable for the commissioner to note the lack of an explanation for the failure by Matco’s agents or representatives to forward the notice.
The appeal court determined that the commissioner reasonably found that Matco’s allegation that Hahn was unaware of the data migration error did not align with Hahn’s knowledge that Matco had not timely paid the maintenance fee.
The appeal court said Hahn had a reason to be concerned about an issue with the maintenance fee’s payment. The appeal court added that Matco’s instructions not to pay maintenance fees did not constitute instructions for Hahn to refrain from forwarding the notice or otherwise apprising it of the missing maintenance fee payment.
