New Hope For Patents Unintentionally Abandoned: Due Care Analysis For Reinstatement Clarified By Federal Court

On January 22, 2025, the Federal Court of Canada (the Court) issued its decision in Matco Tools Corporation v Canada (Attorney General), 2025 FC 118, setting aside a decision of the Commissioner of Patents (the Commissioner) to refuse to reinstate Matco Tools Corporation’s (the Applicant) Patent Application No. 3,086,194 (the 194 Application), which was deemed abandoned for failure to pay maintenance fees.

In order to remain in good standing, Canadian patent applications require the payment of annual maintenance fees, a task which the Applicant utilized a third-party service provider to perform. In 2021, the Applicant switched providers of this service from Computer Packages Inc. to Dennemeyer Group (Dennemeyer). However, an error occurred in migrating the data, and the information pertaining to the 194 Application was not properly imported. Due to this error, and several subsequent errors occurring along the chain of communication involving the Applicant’s Canadian Patent Agent, US Counsel, and Dennemeyer, the 194 Application’s maintenance fees were not paid, and it was ultimately deemed abandoned.

The Commissioner refused the Applicant’s initial request for reinstatement of the 194 Application, finding that the Applicant failed to meet the “due care” standard required for reinstatement under the Patent Act.

Upon judicial review, the Court began by clarifying that the due care analysis is a two-stage inquiry. First, the Commissioner must determine what caused the failure to pay the maintenance fee (known as the “Proximate Cause”) and determine whether due care was taken by the Applicant or its representative to avoid it. If due care was taken, the application should be reinstated. If not, the Commissioner should proceed to the second stage and determine whether due care was taken afterwards to ameliorate the effect of the Proximate Cause before the application was deemed abandoned.

In this case, the Court found that the Commissioner failed to undertake this two-step inquiry and further erred by: (1) failing to consider the Proximate Cause (in this case, the data-migration error) in its due care analysis; and (2) taking an unbalanced approach when assessing the conduct of the parties involved. For these reasons, the Court set aside the Commissioner’s decision and ordered that the Applicant be provided with an opportunity to provide further submissions prior to the redetermination of the Applicant’s request to reinstate the 194 Application.

Summary By: Claire Bettio