Due Care in Action: Critical Factors in Canadian Patent Reinstatement and Expiry Cases

The Due Care Standard

In October 2019, amendments to the Patent Act (R.S.C., 1985, c. P-4) were made introducing the Due Care standard in order to satisfy Canada’s obligations under the Patent Law Treaty to simplify and harmonize the administrative practices of the national intellectual property offices, including the Canadian Intellectual Property Office (“CIPO”).

Under the Patent Act, the Due Care standard comes into play when:

1. An applicant requests reinstatement of a deemed abandoned application when a maintenance fee and a late fee were not paid within the prescribed period;
2. An applicant requests reinstatement of a deemed abandoned application when a request for examination was not made and a late fee was not paid within the prescribed period; or
3. A patentee requests reversal of deemed expiry of a patent when a maintenance fee and a late fee were not paid within the prescribed period.

When an applicant or patentee fails to take one of the first actions noted above within the required time, the CIPO will send a notice. Following this notice, the applicant or patentee must take the required action before the prescribed due date to avoid deemed abandonment of the application or deemed expiry of the patent.

Upon receipt of a deemed abandonment or deemed expiry, an applicant or patentee may request reinstatement or reversal from the Commissioner of Patents (“Commissioner”). A deemed abandoned application may be reinstated or a deemed expired patent may be reversed if the Commissioner determines that the failure occurred in spite of the Due Care required. CIPO’s interpretation of the Due Care standard is contained in sections 9.04.03 and 27.03.03 of the Manual of Patent Office Practice. 

Responding to a Deemed Abandonment or Deemed Expiry

A decision of the Commissioner may be reviewed by the Federal Court. The presumptive standard of review of the merits of the Commissioner’s decision is reasonableness as set out in Canada (Minister of Citizenship and Immigration) v. Vavilov (2019 SCC 65). This is a deferential standard that reflects the legislature’s intent for the reviewing court to not conduct a de novo review of an administrative decision or to determine whether they would have arrived at the same outcome (Vavilov at paras 23-25, 75, 83). The review is focused on whether the Commissioner’s decision is internally coherent, based on a rational analysis, and is justified by the facts and law that constrain the decision-maker (Vavilov at para 85). Vavilov directs that the decision will be reasonable if, when read as a whole and taking into account the administrative setting, it bears the hallmarks of justification, transparency and intelligibility. With this standard of review in mind, it is important to ensure that the Commissioner is provided with all the necessary information in a request for reinstatement or reversal.

Should you face a deemed abandonment or deemed expiry in your practice, CIPO has offered the following guidance for requests for reinstatement or reversal of deemed expiry:

1. Timing: The Patent Act requires that the applicant or patentee state the reasons for failure to take the action that should have been taken to avoid the abandonment or deemed expiry, not reasons why the maintenance fee or request for examination was not paid by the original deadline. Despite this guidance and in light of the decision of Justice Zinn in Matco (discussed below), a robust Due Care inquiry should cover the entire chain of events, from the earliest root cause to the final opportunity for correction.
2. Standard: The standard for assessment by the Commissioner is Due Care, not the lower standard of “unintentional.”
3. Who: The applicant or patentee must demonstrate that all authorized persons took Due Care to avoid the abandonment or deemed expiry. This may include the applicant/patentee, a patent agent, an annuity firm, foreign associate, etc.
4. Information: Full descriptions of the actions taken to avoid the failure, not just a reason, must be provided.

The Statistics

As of January 31, 2025, the Commissioner has made 323 determinations related to Due Care on requests to reverse a deemed expiry or to reinstate a deemed abandoned application. The dominant outcome was “Due care not taken,” which accounted for 87.62% of all requests, and the primary issues were “Lack of Information,” “Applicant Error” and “Agent Error.” The Commissioner made a final determination that Due Care was in fact taken in only 12.38% of the requests, and the success factors involved isolated human errors and isolated technical problems despite having proper systems in place.

Following a final determination that Due Care was not taken, the applicant or patentee may seek judicial review of that decision by the Federal Court. To date, the Federal Court has conducted judicial review on two determinations of the Commissioner that Due Care was not taken. As discussed below in more detail, in one case the application was dismissed, and in the other the application was allowed and the request for reinstatement was sent back to the Commissioner for redetermination.

Judicial Review of Due Care Cases

1. Taillefer v. Canada (Attorney General)

In Taillefer v. Canada (Attorney General) (2024 FC 259), the patentee brought a judicial review of the decision of the Commissioner to deny reinstatement of their patent.

For the patent at issue, the patentee began paying the annual maintenance fees in 2012. The patentee and their agent consistently communicated by email up until 2019. In accordance with their regular practice, the agent sought instructions from the patentee to pay the 2020 maintenance fee ahead of the deadline. The patentee did not respond, and the agent sent numerous reminder emails to the patentee. By the deadline to pay the maintenance, the agent had still not received any instructions, and therefore the fee was not paid. Later that year, the agent received notice from CIPO that the patent was deemed expired and forwarded the correspondence to the patentee by email. The patentee found the correspondence in their junk mail folder and instructed the agent to seek reinstatement of the patent. The Commissioner refused the patentee’s request to reverse the deemed expiry. While the Commissioner found that there was an unexpected breakdown in communication, they did not find that the patentee had taken all measures that a reasonably prudent patent holder would have taken, given the set of circumstances, to avoid the failure.

On judicial review, Justice Furlanetto found that the Commissioner’s decision was reasonable and dismissed the application. Specifically, the court found that:

• It was reasonable for the Commissioner to have expected that, in circumstances where numerous notices from the agent had gone unanswered and where non-compliance could lead to expiry of patent rights, alternative measures would have been used to ensure that the patentee was aware of the deadline at issue.
• It was reasonable for the Commissioner to expect that a reasonably prudent patentee would have a system in place to make sure that their email was operating effectively if they were relying on this as the primary communication means to pay their maintenance fees.

The patentee appealed this decision to the Federal Court of Appeal (2025 FCA 28). The FCA dismissed the appeal and reiterated “that the Commissioner determined that, in the absence of a backup system, including alternative communications methods, the unfortunate circumstances experienced by the Appellant were an accident waiting to happen.”

2. Matco Tools Corporation v. Canada (Attorney General)

The Federal Court was asked to review a second Due Care decision from the Commissioner in Matco Tools Corporation v. Canada (Attorney General) (2025 FC 118). Matco brought a judicial review of the decision of the Commissioner to refuse reinstatement of a patent application that had been deemed abandoned for failure to pay maintenance fees.

Matco had implemented a structured management system for its patent portfolio. Matco’s system, likely familiar to many Canadian patent agents, assigned specific responsibilities to three entities:

1. Canadian Patent Agent: Received instructions only from U.S. Counsel, was authorized to handle patent prosecution but was explicitly prohibited from managing maintenance fees.
2. U.S. Counsel: Provided IP legal services but was explicitly instructed by the client to take no further action with regard to payment of annuities and maintenance fees.
3. Third-Party Service Provider: Managed maintenance fee payments.

Matco transferred the maintenance fee payment services from one Third-Party Service Provider to another in 2021, and an error occurred when migrating the data between the providers. The data for the application at issue was not imported and the issue was not addressed at the time of import.

The maintenance fee reminder was sent from the Canadian Patent Agent to U.S. Counsel who confirmed that maintenance fees would be handled by the Third-Party Service Provider. The non-payment of maintenance fee notice was sent by the Canadian Patent Agent to U.S. Counsel. U.S. Counsel did not flag the issue, given their instructions to take no actions in these matters. The deemed abandonment notice was sent by the Canadian Patent agent to U.S. Counsel – this was communicated to Matco and instructions were sent to request reinstatement. The Commissioner refused to reinstate the application determining that Matco failed to meet the Due Care standard.

In reviewing this decision, Justice Zinn articulated that, in determining whether the Due Care standard has been met, the core question is whether the applicant took all measures that a reasonably prudent applicant would have taken, given the particular set of circumstances to avoid the failure – and despite taking those measures – the failure nevertheless occurred. With this standard in mind, Justice Zinn determined that there were (at least) two aspects of the Commissioner’s analysis of Due Care that were not reasonable:

1. The Commissioner’s conclusion that the error that prevented the migration of the application’s data into the Third-Party Service Provider’s system was not relevant. Justice Zinn stated that a robust Due Care inquiry should cover the entire chain of events, from the earliest root cause to the final opportunity for correction. 
2. The Commissioner stated that no explanation had been provided as to why the Commissioner’s notice was not forwarded to Matco. Justice Zinn found that this assertion was not supported by the evidence in the record and contradicted the Commissioner’s own statement as to whose actions must be considered in assessing Due Care (i.e., the applicant, patent agents and other parties authorized by the applicant).

Justice Zinn determined that the Commissioner’s reasons did not provide a balanced consideration based on the chain of events in this case. Accordingly, the Commissioner’s decision refusing to reinstate the application was set aside. Matco was given the opportunity to provide further submissions to the Commissioner, and the request to reinstate was sent back to the Commissioner to be determined by a different person in accordance with Justice Zinn’s reasons. A Notice of Appeal was filed on February 3, 2025 (A-42-25).

Prosecution Practice Tips With Due Care in Mind

In this evolving area of law, it is important to consider the direction of the CIPO and the courts in interpreting the Due Care standard. In light of these decisions, consider if your practice may benefit from the any of the following suggestions to prevent a deemed abandonment or deemed expiry, or to improve your Due Care argument:

• Ensure that all Commissioner’s notices are forwarded to the applicant or patentee. This communication should request confirmation of receipt and confirm which party will be paying the fee. The CIPO has noted that sending the Commissioner’s notices with a note indicating a non-response from the recipient will result in no action on the part of the agent will not likely result in a determination of Due Care.
• Use a well-functioning, reliable docketing system with fail-safes.
• Monitor junk mail folders on a regular basis.
• Have backup methods of communication and consider communication protocols when expected correspondence or instructions are not received.
• Ensure proper training and supervision are provided for all employees.
• Maintain detailed records of all patent-related activities, as successful cases often hinge on verifiable evidence.
• Take swift corrective action after a failure, since delays can weaken a Due Care argument.

As noted above, the standard is that the applicant/patentee took all measures that a reasonably prudent applicant would have taken, given the particular set of circumstances to avoid the failure. Accordingly, the facts and the situation matter. All parties involved must be reasonably prudent.

The application of the Due Care standard continues to develop as more requests for reinstatement and reversal are brought before the Commissioner and as more judicial reviews are requested of the Federal Court – including the Federal Court of Appeal’s pending review of the decision in Matco.

The Patents & Industrial Designs Group and Intellectual Property Litigation Group at Aird & Berlis LLP are made up of strategic advocates dedicated to securing IP rights. Please contact the authors or a member of the groups if you have any questions or require assistance.