What are Patents?
Patent rights are territorial, meaning that an application for a patent must be filed, granted, and enforced in each country that an applicant seeks protection of their invention and in accordance with that country’s laws. A patent granted in one country has no effect and cannot be infringed in other countries. Luckily, there are Conventions that assist applicants in filing internationally. Canada is a signatory of the Paris Convention and has also ratified several other multilateral treaties such as the Patent Cooperation Treaty and the Patent Law Treaty. As a result, there likely are many similarities in the Patent laws of other countries and Canada. The Paris Convention provides for the “Right to Priority,” which means that the applicant can apply for protection in any of the other contracting states within 12 months. Some of the benefits of being a signatory to the Paris Convention include: the Patent having the broadest protection of rights, a Patent cannot be refused on the ground that it has been terminated or refused in another country, it allows one to achieve everything in a single filing, and it does not seek to bring national laws into force. The Patent Cooperation Treaty (PCT) helps applicants seeking international protection for their inventions through a single international Patent application. A Patent filed under the PCT is called an “International Application.”
About Patents in Canada
A Canadian Patent is awarded to an inventor who has undertaken the effort and expense of preparing a patent application, formally submitting the application to the Canadian Intellectual Property Office (“CIPO”) and paying CIPO to review of the application. If the application, upon review, is assessed to appropriately define a new and inventive technology and to otherwise satisfy the requirements of Canadian Patent Law, CIPO will grant the owner of the invention a Canadian Patent. A granted Patent gives the owner the right to stop others from making, importing, using and selling the invention. The owner thereby enjoys the exclusive right to profit from these activities.
To benefit from these exclusive rights, the owner must maintain the Patent in force by paying an annual maintenance fee.
This exclusive right can be exercised on the day the Patent is granted, for the duration over which the Patent is maintained, to a maximum of 20 years from the day on which the Patent application was filed.
A Patent can be used to protect processes, machines, methods of manufacturing and composition. Everyday examples of compositions include drugs, cosmetics, toiletries, cleaning and other chemical products (for example those that may commonly used in a home or particular business), or any useful improvement to any of the above. Significantly, for a Patent to be awarded, there must be at least one new and unobvious element of the invention or improvement. Although Canadian Patents cannot be granted to protect ideas, scientific principles or theorems, in the abstract (without being defined in a particular practical form), they can be used to protect business methods as a category that are uniquely implemented.
Patent Due Deligence
Our Patent Due Diligence team understands nearly every area of technology and the intersection of technology with our client’s business goals. We use advanced software tools to conduct a thorough search and assess the Patent landscape. When business’s reputations and money are at stake, Patent due diligence is essential to determining the value of the IP and whether the transaction will serve the client’s long-term interests. Patent due diligence often involves several phases, such as identifying the relevant assets, determining inventorship, reviewing underlying agreements and licences, assessing litigation risks, evaluating the patentability, Loss of Exclusivity analysis, and Freedom to Operate analysis. Thorough and efficient due diligence is critical for risk management in Patent transactions, acquisitions, and applications.
Search
A Patent search is the process by which other inventions are searched for a client before they embark on investing in a Patent, acquiring a Patent, or Patenting their invention. It reviews issued and published Patent applications for inventions that may be considered “prior art”—anything in the public domain, patented or not, that may determine whether an invention is novel. Patent searches make the client aware of the kinds of difficulties they might face in protecting or enforcing their rights. It is important that the Patent search reflect the uniqueness of every transaction and every client’s needs. Patent searches have uncovered hidden risks that can limit a company’s freedom to operate, can help a company obtain a better price for a Patent, or can even save a deal by discovering a “design-around” solution. Notably, such design-around solutions can greatly increase a company’s valuation.
New and Innovative
According to the Patent Act, the subject matter of the patent must be “subject-matter that would not have been obvious on the claim date to a person skilled in the art or science to which it pertains.” An invention is a new and unobvious device, process, method or composition of matter (material) which does something considered useful. It can also be a new or unobvious improvement to an existing device, process, method or composition of matter. Common examples of inventions include a new or improved machine or an industrial chemical or procedure. To qualify as an invention, it must not have been publicly disclosed by the inventor or someone else, which is elaborated below. An “unobvious” invention contains at least a spur of creative effort. In other words, for something to be sufficiently “inventive,” it must be non-obvious. It inquires whether the invention is adequately far from the “state of the art.”
New - Disclosure before filing including disclosures by the inventor
A Patent application for an invention should be filed at the Patent Office before the invention has been made publicly disclosed. Otherwise, disclosure of the Patent could be seen as “prior art” to the application and might be taken into account when considering whether the Patent meets the requisite criteria for being new and inventive. In Canada, there is a one year “grace period” for Patent filing, whereby if an applicant discloses their invention within a year of filing their application, it is not considered to be “prior art” to the application. Thus, it is not taken into account as prior art when assessing novelty or inventiveness of the application. Grace periods can protect an application from indirect public disclosure. For instance, public disclosure by a third party who gained knowledge from the applicant is not considered “prior art.” However, this grace period does not protect a Patent application from independent, third-party disclosures.
Breadth of protection
The Patent Breadth refers to the extent to which the Patent covers the field that it pertains to. It defines the “technological territory” claimed and protected by the Patent. A technological territory is explicitly chosen by the inventor and is the space within which competitors cannot offer competing invention without infringement of the Patent. While it may seem beneficial to claim a maximum Patent Breadth, broader Patents are more routinely challenged. Therefore, choosing maximum Breadth is not always the wisest choice for an inventor, and the Breadth should be carefully thought out and discussed with a Patent professional. Patent Breadth can also be thought of in terms of Improvements: Patent Breadth means the minimum size of an improvement that another inventor can make in order to obtain a valid, non-infringing patent.
Confidentiality Agreements
When valuable and protectable information is at stake, it is critical that businesses protect their ideas in the safest and most efficient manner possible. Confidentiality agreements can give effect to such concerns. A Patent Non-Disclosure Agreement (NDA) is an agreement used to protect an invention, arising from its confidential nature. They can be essential for inventors when sharing information about their invention to third parties and are particularly useful before a Patent has been granted to prevent information about the Patent from being revealed to the public or stolen.
Infringement of third party rights – “freedom to operate”
“Freedom to Operate” (FTO) refers to whether an inventor can produce, sell, or offer something in which an existing Patent would be infringed. While there is no legal requirement to do so, an FTO analysis is frequently performed before an undertaking to determine if infringement is likely. A company may wish to pursue an FTO analysis before launching its products in a crowded, competitive, or litigious market, before raising a financial round where investors will put up notable sums, or if the company would suffer financial harm if litigation ensued because of an injunction. At HermanIP, our experienced Team evaluates risks arising from infringement letters, competitor Patents, and other products in the marketplace. When appropriate, we perform Freedom to Operate studies, scaling our review as appropriate to the size of the investment. Beyond this, we also provide practical recommendations to minimize risks, such as treble damages, design changes, and licences.
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