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jeudi 10 janvier 2019

BILL C-86 Proposed Amendments to IP Legislation


By Erin Schachter, LawyerTherrien Couture

December 6 2018
On the 29th of October 2018, the Government of Canada introduced a bill entitled, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018, and other measures (Bill C-86). Bill C-86 is a voluminous bill, which contains a division devoted to intellectual property strategy. This division proposes amendments to a vast number of laws including: the Patent Act, the Trade-marks Act, the Copyright Act, the Bankruptcy and Insolvency Act, the Companies Creditors Arrangement Act, and the Access to Information Act and Privacy Act, among others.

In this article, we provide a non-exhaustive overview of the proposed changes contained in each of the subdivisions of the IP section of Bill C-86 along with some general context of how these changes fit into the government’s overall goal of reforming IP in Canada.

Subdivision A – The 
Patent Act
There are several proposed changes to the Patent Act, which seek to ensure Canada’s compliance with its international obligations as well as codifying certain rights established by case law in Canadian courts.

Standard-essential Patents
Standard-essential patents (SEP) are patents that protect an invention that is essential for a given technology (ex: WiFi or Bluetooth).  Definitions of SEP’s are known to vary across jurisdictions, and Bill C-86 does not propose a definition. Bill C-86 does establish that the Governor in Council is granted powers to regulate SEP’s and establish definitions and licensing commitments. Under the bill, licensing commitments made by a patentee, in reference to an SEP, will bind any subsequent patentee.

Prior User Rights
If the proposal is accepted, prior use rights contained in the Patent Act would be broadened to include acts, in good faith, that would otherwise constitute an infringement, or serious and effective preparations to commit the act, if the use was before the earliest filing and the third party did not commit the act only because they obtained information about the restriction from the patent applicant. Third parties, who commit this same act on or after the claim date, would benefit from an exemption.

An exemption from infringement would be introduced if the alleged act was committed for the purpose of experimentation. The Bill grants the Governor in Council the authority to regulate what would constitute an experiment and criteria for establishing whether the act was committed for this purpose or not.
Written Demands
Written demand letters in reference to any patent infringement sent to alleged infringers in Canada would be subject to minimum requirements, to be determined by the Governor in Council. This framework would apply whether the demand letter is issued in relation to a Canadian patent or elsewhere. Bill C-86 also provides that the violation of this provision would entitle the Federal court to grant any relief it considers appropriate including an injunction and punitive damages.
Patent Prosecution History
Bill C-86 proposes an amendment to the communications that may be admitted into evidence to counter claims made by a patent applicant during prosecution of a patent application. This amendment would allow any prior statements made by a patent applicant, including patent prosecution history, to be admitted into evidence for certain purposes.

B- Trade-marks
Modifications to the Trade-marks Act would address concerns both domestically and abroad in relation to trade-mark trolls. This subdivision of the Bill provides additional powers to the registrar and also includes many provisions that would modernize the overall conduct of proceedings. The Bill also proposes amendments to clean up inconsistencies in the Combating Counterfeit Products Act as well as the Economic Action Plan 2014 Act.

Bad Faith Opposition and Use
The Bill proposes a “Bad Faith” opposition that could be invoked to oppose or invalidate a registration. Also, in the first three years following the registration of the trade-mark, the owner thereof, must prove that they use the trade-mark or justify the absence of use to obtain relief for infringement. This proposal reacts to the concern over trade-mark trolls who register a trade-mark and hold the mark hostage, without a legitimate purpose to obtain a settlement from the true user of the trade-mark.

Public authority prohibition
The Bill would eliminate the prohibition that prevented a person from using a mark that is identical or similar to that of a public authority, if the public authority has ceased to exist, or is not a public authority.

Evidence during an Appeal
In the event that a registrant appeals the decision of the registrar, Bill C-86 provides that new evidence to support the application for a trade-mark can only be filed with permission from the Federal Court. This new requirement may substantially alter how registrants will approach initial applications before the registrar, knowing that additional evidence may not be accepted subsequently.  

Enable Registrar to grant orders
The proposed amendment imbues the registrar with the authority to award costs, to grant confidentiality orders, case management in certain proceedings.

C- Copyright Act
Bill C-86 proposes a modification to the Copyright Act that addresses concerns from the public in relation to aggressive demand letters sent through the notice and notice system. Negative public feedback has highlighted the risk of Internet Service Providers (ISP) forwarding letters from right holders to alleged infringers. In some cases, these letters invoke fear and use bullying tactics to extract payment from the accused infringers.  In other cases, the letters contained demands for personal information, settlement demands, threats of lawsuits, and threats that the amount requested would increase if not paid.

To rectify this situation, Bill C-86 proposes prohibiting the inclusion of settlement offers, payment demands, or request for personal information in the letter, or hyperlinks requesting same. Moreover, ISP’s duties under the Copyright Act would only be engaged for an infringement notice that respects these restrictions. This would provide ISP’s with some discretion in forwarding letters that do not respect the prescribed form.

Other Sections
The following subdivisions provide for the creation of new legislation and the modification of several Acts that lead to greater clarity, cohesion and an overall modernization of IP rights and obligations in Canada.

D- College of Patent Agents and Trade-mark Agents Act
Bill C-86 proposes a new Act that would establish a regulatory body to create standards for patent and trade-mark agents, including standards for granting licences to govern practices.

E - Amendments relating to the preservation of usage rightsThe proposed amendments to the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act would protect IP users when these rights are sold in the context of insolvency proceedings. The agreement granting the user rights must be in effect and the user must continue to comply with the agreement. If so, then the rights of the IP user will be protected even when the IP rights are sold, or the rights are disposed of.

F-Privileged Information
Access to Information Act and Privacy Act would be amended by permitting the head of a government institution to refuse to disclose information provided the information is subject to privilege under the Trade-marks Act or in the Patent Act.

G- National Research Council Act
The National Research Council Act would be amended to clarify that this entity has the authority to dispose of all the intellection property rights that it holds, including receiving royalties, fees and payment for, any IP right and future rights. This section also clarifies that any invention made by a public servant and patents that may follow, are vested in the Council, in relation to the Public Servants Inventions Act.

H- Copyright Act (Copyright Board Reform)
The last subdivision of the IP chapter of Bill C-86 amends the Copyright Act in reference to the framework in place that governs the Copyright Board. These provisions clean up and replace much of the outdated language and restructure the previous legislation.

The aim of this section is to improve the timeliness and clarity of proceedings and the overall decision-making process by the Board. This includes establishing decision-making criteria, creating new timelines to minimize delays, implementing case management proceedings similar to civil courts that would allow the case manager to make any order.

Finally, the Board is imbued with the right to fix royalty and levy rights that are fair taking into consideration: “what would have been agreed upon between a willing buyer and a willing seller acting in a competitive market […]”. The Board may take into consideration any criteria it considers to be relevant.
Bill C-86 contains numerous proposed amendments dealing with rights and the overall structure of IP in Canada. Many of the amendments align Canadian IP more closely with its international obligations and seek to clarify and modernize elements of Canadian IP legislation. As Bill C-86 makes its way through the twist and turns of becoming law, we will continue to write on the proposed modifications and their possible impact.   

If you want to know more about technologies, we invite you to attend to the 13th edition of Legal.IT, the largest conference in Canada that focuses on the impact of IT and its potential in the field of law. This event, organized by the IT Committee of the Young Bar of Montreal, will take place on March 22nd at Marché Bonsecours and will be preceded with an opening cocktail: Cocktail Branché, March 21st, at 6pm.

Since 2009, every session of the Legal.IT Conference has been an approved activity of the Barreau du Québec’s Mandatory Continuing Education Program.

To register at the Legal.IT Conference, click here. 

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