Canadian Intellectual Property Office implements new “due care” standard

The Federal Court of Canada has implemented a new standard for the restoration of rights executed with “due care” and overturned the unreasonable decision of the Canadian Intellectual Property Office to restore rights after failure to pay maintenance fees. It held that the decision adopted an inappropriate approach to the standard of “due care”, failed to consider all the circumstances that led to the failure to pay maintenance fees on time, and ignored the facts provided by the applicant.

The Federal Court provides applicants with the opportunity to exercise "due care" as required by the circumstances: before the maintenance fee deadline, or after receiving a notice from CIPO that the maintenance fee has not been paid, as long as the patent applicant or patent owner takes "due care" measures within either of these two periods, the patent application or the terminated patent can have its rights restored.

Among the final decisions of CIPO on the request for restoration of rights over the years, only 15% of the decisions allow the restoration of rights. If dissatisfied with the final decision of CIPO, the patent owner or applicant may file a lawsuit with the Federal Court. In the decision made by the Federal Court of Canada on the loss of rights due to failure to pay the annual fee in time, the case in 2024 showed that the Federal Court finally rejected the request for restoration of patent rights. In this case, the patent owner failed to pay the annual fee in time because the reminder notice issued by the intellectual property service provider was filtered by spam.

In the latest case of overdue payment of annual fees in 2025, Matco Tool Company failed to pay the maintenance fee for CA3086194 in time. The intellectual property service providers for Matco included Canadian law firms, American law firms and annual fee companies. When the annual fee data was transferred from one of the parties to the annual fee company, due to data migration errors, the maintenance fee monitoring of the patent application could not be successfully entered into the database of the annual fee company, which directly led to the failure to pay the maintenance fee of the Canadian patent application in time, and ultimately led to the loss of the Canadian patent application rights.

The Federal Court held that it is necessary to first ask what caused the maintenance fees not to be paid within the original deadline, which is the "proximate cause" of the non-payment of the maintenance fees. Once the proximate cause is identified, the investigation will turn to assessing whether "due care" was taken. If the patent owner has taken appropriate measures, then the rights should be restored.

Secondly, if the patent owner fails to take action, it is necessary to assess whether “due care” was taken to mitigate the impact of the proximate cause after the deadline was missed. If the applicant or right holder also took “due care” measures at this stage, the rights should also be restored.

This case addresses the issue of the “due care” standard at CIPO and provides clearer guidance to applicants and patent holders on whether an applicant or patent owner has taken “due care” measures and should ensure that all circumstances related to missed maintenance fee payments are taken into account.

If you have any questions about the loss of rights due to failure to pay the annual fee on time, please call us to obtain more accurate information.