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PAGE 12 FOCUS augusT 24/31, 2009 • Law Times Patent applications must not languish in limbo: Federal Court H BY I. JOHN HARVEY For Law Times ow long is long enough for the patent commis- sioner to examine an application and make a decision? In patent cases, it's not just a question of civil service sloth and annoying delays; it's a ques- tion of time because patents ex- pire 20 years from the date of application — not the date of issuance. Since applications can take a couple of years to be pro- cessed, holders would then have 17 to 18 years to exclusively monetize their invention. In the event of extraordinary delays, time is money, big mon- ey. Sidney Belzberg's patent ap- plication for an electronic stock trading system seemed to drag on forever, and in the end only a stern rebuke from the Federal Court prevented it from being delayed even further. His 1994 patent applica- tion dragged on and apparently would have continued even af- ter the commissioner's Jan. 25, 2007 decision sent it back for "further prosecution." In effect, the court was told, about 15 years of the patent would have lapsed by the time Justice Michel Shore would make his decision in Belzberg v. Canada (Commissioner of Patent). Belzberg Technologies Inc.'s computerized stock exchange trading system is a spreadsheet- based program for electronic trading. The company holds sev- eral patents for it in the United States. It was developed in 1993 by Sid and Alicia Belzberg and was first to market as a real-time, desktop trading system that was nimble, faster, and simpler than the mainframe system common at brokerages up to that point. However, the company strug- gled with its Canadian applica- tion. Still, confident it would win a patent, it also engaged Don Stout — co-founder of NTP, a company famous for squeezing more than US$600 million from Waterloo, Ont.'s Research In Motion Ltd. over patent infringements — with a view to enforcing its intellec- tual property claim. Belzberg asserts systems and processes used by most of the world's financial securities traders infringe on its patent. The commissioner had a report from the Patent Appeal Board in hand before making the 2007 de- cision, court was told. In it, the board held the previous rejection of Belzberg's patent should be re- versed: "In summary, the board finds that the invention is disclosed in sufficient detail and is claimed sufficiently clearly to allow an ordinary worker who is skilled in the art to implement the inven- tion. The claimed invention is not obvious in view of the prior art, and the application is directed to was a problem that was not part of the final action report and not part of the appeal board consid- erations and two more reports followed. By the fall of 2007, the applicants' frustration boiled over when the Patent Office raised ob- jections around the area of obvi- ousness, an issue that had already been considered and cleared by the January 2007 report. The result was an application Fraser Rowand says it is unusu- al for the courts to order the government to pay costs in these types of cases. subject matter which falls under the definition of invention." Further, it said: "This board therefore recommends that the examiner's rejection of the ap- plication be reversed and that the application be returned to the examiner for further pros- ecution consistent with these recommendations." And, as Shore noted, the com- missioner simply adopted the last paragraph as the ultimate deci- sion: "I concur with the recom- mendation of the board that the examiner's rejection of the ap- plication be reversed and return the application to the examiner for further prosecution consistent with the board's recommenda- tion." Indeed, the application was referred back because there to the Federal Court for judicial review under s. 18.1 of the Fed- eral Courts Act of the failure, re- fusal and/or neglect of the com- missioner of patents to grant a patent. The case also asked the court to rule where the com- missioner may restart an exami- nation of a patent application after disposing of all the defects alleged in an examiner's rejection labelled "final action" under s. 30 of the Patent Rules. The answer from Shore was a strongly worded rebuke. In al- lowing the review, he set aside the commissioner's Jan. 25, 2007 decision as well as the en- suing reports, ordered the pat- ent application actively reinstat- ed, and threw out any demands for outstanding fees or sugges- tions that the application was deemed to be abandoned. Further, he ordered the appli- cation to be granted with costs to the applicant despite arguments from the Department of Justice that as a federal agency it is im- mune from such orders. "That's pretty unusual," says Fraser Rowand, a partner with Ridout & Maybee LLP and counsel to Belzberg. The courts rarely award costs in these cases, he says. "That's a sign." "My first impression is that it's a curious case that took a lot longer than usual — even though it's not unusual for appli- cations to take an extremely long time in examination," says Jung- Kay Chiu a partner at Ogilvy Renault LLP who focuses on patents. "Still, in the high-tech field, these applications can be very difficult to assess." Canada is generally slower than most countries with its pat- ent process, he adds, calling the pace "glacial at times." "It's not unusual for applica- tions to take five years," he says. Moving forward, he says, the case should be good news for applicants because it sets out a process that can't be looped back into further examination or bring up issues that have al- ready been dealt with. The net effect should be to get a decision faster and, even if the decision is unfavourable, move on to appeal. The question, he says, will be whether in rejecting applications the board will be willing to take on the extra work of preparing for the inevitable appeals. solve issues earlier rather than go through that," he says. "They might be willing to re- LT Summer Subscription Special! 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