2004-02-13|CIPO Fee Review - New fees coming into force January 1, 2004
To the Commissioner of Patents
First of all, I would like to emphasise that the CIPO's client service is excellent throughout the organisation.
I believe that Canadian independent inventors are included in statement: "Industry Canada aims to help Canadians contribute to the knowledge economy and improve productivity and innovation performance." Thus, I am expected to provide a full description of the invention so that all Canadians can benefit from this advance in technology and knowledge.
I was not one of "all stakeholders (who) were invited to submit comments" in the REGULATORY IMPACT ANALYSIS STATEMENT because I do not belong to any of the groups mentioned in: "Letters were sent to all Canadian IP professional associations and to other relevant business associations informing them of the proposed fee changes and inviting them to information sessions to discuss the changes and any impacts therefrom." Moreover, I was not lucky enough to be included in "a random, representative sample of approximately 2,600 applicants and registrant" who received letters to be in the formal consultation process. I did receive notification for Maintenance fee increase, attached to a few Maintenance fee reminders in late 2003, way past the consultation process. Even then, I did not realise the impact of the increases on me because I had difficulty understanding the 2 kinds of Examination fees in Tariff of Fees, i.e., "once CIPO begins to offer ISA/IPEA services." I mistakenly assumed that the Examination fee will decrease from $200 CAD to $100 CAD in order to compensate for the increases in other fees. I may have been naive, but the original CIPO proposal did include a Grant fee reduction from $150 CAD to $100 CAD for a Small Entity.
The REGULATORY IMPACT ANALYSIS STATEMENT states: "The proposed increases in fees are expected to have a very minor impact on Canadian business and economic activity.", "1.7% per annum", etc. As a Canadian independent inventor, I used to pay $150 CAD (Application) + $200 CAD (Examination) = $350 CAD on webpage "Filing/Completing a Canadian Application for Patent". As of 2004-01-01, however, the fees have increased to $200 CAD (Application) + $400 CAD (Examination) = $600 CAD, which represents an increase of 71%. For requesting examination alone, the increase is 100%. Although I recognise the need for the CIPO to increase revenue, such doubling of upfront fees is definitely not "a very minor impact" or "reasonable increases in fees" for a poor Canadian independent inventor.
Upfront Canadian fees are no longer competitive with those of other jurisdictions due to the significant appreciation of the Canadian dollar since the REGULATORY IMPACT ANALYSIS STATEMENT was written. Here is my analysis of the upfront fees at the time of filing for a formal patent (Application + Examination) by a Small Entity. Bank of Canada Monthly Average was used for the currency exchange rate.
Although the USPTO Issue fees are quite high ($665 USD), the first Maintenance fee is due at 3 1/2 years instead of the CIPO's 2 years. Some prominent Canadian inventors are already ignoring Canadian patents. I hope that many Canadian inventors will not forfeit Canadian Patents in favour of filing U.S. Patents only, as some prominent Canadian inventors already do.
The bottom line is that the USPTO offers low upfront fees for simple patents (up to 20 claims including not more than 3 independent claims) by a Small Entity. Since patents may not issue due to many defects that CIPO's patent examiners never fail to find, lower upfront fees and higher later fees make more sense.
Now that the U.S. President's proposed budget ends USPTO fee diversion in FY 2005, the U.S. Patent fee increase may not be steep in the future.
Here are my comments regarding the CIPO Fee Review.
Preference to Canadians
Canada Revenue Agency (CRA) applies preferential tax rules for Canadian-Controlled Private Corporations (CCPC). Universities charge much higher tuition fees for international students. Why not the CIPO which is a part of Industry Canada, one of whose mandates is "to improve Canada's innovation performance"?
On the CIPO website, E-services forms like "Filing/Completing a Canadian Application for Patent" and "General Correspondence" could list "Canada" first, followed by other NAFTA countries ("U.S.A." and "Mexico"), rather than purely alphabetical order starting with "Afghanistan" (no offence intended).
Introduce Canadian Micro-Entity fees
"A Small Entity is defined as an entity that employs 50 or fewer employees or that is a university." The CIPO's reduced patent fees for Small Entities are very much appreciated. However, I do not find it fair that independent inventors with little or no revenue yet and small companies that are well-funded by venture capitals to the tune of millions of dollars are treated exactly the same way.
Canadian independent inventors could benefit if there were Micro-Entity fees, i.e., 1/4 of the Large Entity fees, at least until they become financially successful.
The public transit offers 3-level fares. Such a flexible fee schedule can be modelled for patents, too.
Cash price ....... Large Entity
Ticket price ..... Small Entity (1/2)
Monthly pass ..... Canadian Micro-Entity (1/4)
Alternatively, the fees could have a sliding scale in proportion to the income of the individual/corporation, just like the progressive system of the Canadian income tax.
By the way, Canadian universities are not exactly in dire straits short of cash these days. Their research activities, which generate patent applications, are flush with grants from agencies such as Natural Sciences and Engineering Research Council of Canada (NSERC) and Innovation Canada, as well as from private donations. For example, one benefactor donated $60M CAD to McGill University in 2000, and another benefactor donated $105M CAD to McMaster University in 2003, while I am starving. Therefore, universities, especially the rich U.S. universities, may not deserve to be treated as Small Entities.
"The increasing complexity of IP applications provides a significant challenge to CIPO."
For the Final fee, there is an extra fee "for each page of specification and drawings in excess of 100 pages". Similarly, the basic Examination fee should be lowered, and it should scale in proportion to the number of claims in order to reflect the complexity in examination.
I do not find it fair that for the same entity size, both simple applications (mechanical or electrical) with only 10 claims and 10 pages in total and biotechnology applications with hundreds of claims and thousands of pages long pay exactly the same Application fee and Examination fee.
The USPTO charges extra fees for "Independent claims in excess of three", "Claims in excess of twenty", etc., reflecting the complexity of each patent application.
Reduced fees for electronic filing of patent applications via E-commerce
The CIPO should give discount to E-commerce submission (eventually) as it theoretically streamlines the process and potentially reduces paperwork. Digital signature on a PDF file should be used instead of printing and re-imaging the date-stamped paper.
The PDF file preserves text in ASCII bytes. Once the text is imaged into TIFF, however, the ASCII information is lost, and optical character recognition (OCR) software must be used to reproduce the HTML files in Claims webpage. If the text were taken directly from the HTML/XML files that I submit, both CPU load and data storage will be greatly diminished, leading to significantly reduced patent processing cost.
The CIPO already offers reduced fees for electronic filing of trade-mark applications and copyright applications. Banks have reduced fees for on-line and ATM transactions compared to human tellers.
Please keep the CIPO's attitude of not discriminating against Apple Macintosh computer users.
Introduce new concept of "Dormant patents"
Some inventions appear to be worth protecting now, but it turns out after the patent issued that an economic situation makes it not ready to commercialise or to license for a few years. In these situations, patents could be temporarily abandoned but reinstated when the economic prospect turns around. Thus, there should be a longer grace period for reinstatement of an abandoned patent application. Where there is no IP rights claimed yet, Maintenance fees to maintain the IP rights should be waived.
Such a mechanism already exists, as in "Applications which are abandoned can be reinstated by making a request within the prescribed time limit, taking the necessary action and paying a reinstatement fee of $200." In order to address cases where benefits of patents are not immediate, the "prescribed time limit" should be increased from the present "12 months" to "anytime during the entire 20-year lifetime" (with the requirement of a lump-sum payment of applicable accumulated Maintenance fees, of course).
Significant increases in fees on requesting the advance of an application for examination and on requesting reinstatement of an abandoned application are well justified.
Introduce new services for "Certificates"
The CIPO could introduce an entirely new set of fees for a high-quality colour printout of "Filing Certificate" and a copy of the "Issued Patent", ready to be framed (cheap) or already framed (expensive). They are precious for institutions that put prestige value of patents to hang on their walls. As a Canadian independent inventor, I would be happy to have a PDF version of these certificates which can be placed on-line at no cost. When I become financially successful in the future, I would be ordering "official" colour printouts of these patent certificates from the CIPO, which in turn will derive extra revenue from me.
US Patent Certificate, Inc. has been in business since 1983 printing out U.S. Patent Certificates and selling plaques, so they are obviously profitable. The CIPO could be in this lucrative business.
Confirmation of Examination request
There is a long turnaround time for patent applications to be examined. During this period, a fledging startup company initially flush with venture capitals may fold, as in the case of Telecom and Optical industries lately. By the time the request for examination reaches the patent examiner's desk, the company may not have the means or desire to pay expensive patent agents/attorneys to have the patent applications executed. Therefore, it may make sense, just before the examination, for the CIPO to check if there is a desire for patent execution, or if the company is still in business at all. A simple E-mail question: "Do you still want Patent Application X XXX XXX to be examined?" may save time and energy for the scarce patent examiners. Since the fees are non-refundable, the CIPO can legally keep the money.
Respect for Canadian independent inventors
Multinational corporations benefit from the Technology Partnerships Canada (TPC). Colleges and Universities benefit from Natural Sciences and Engineering Research Council of Canada (NSERC) and from Innovation Canada. For small Canadian companies, the National Research Council Canada (NRC) Industrial Research Assistance Programme (IRAP) and Canada Revenue Agency (CRA) Scientific Research and Experimental Development Programme (SR&ED) specifically exclude assistance for patent fees.
Business Development Bank of Canada (BDC) says that there must be a federal government branch somewhere to give assistance to pay patent fees. As a part of Industry Canada, the CIPO could lobby for a programme to address patent fees for Canadian independent inventors.
The USPTO has an Office of Independent Inventor Programs. There is even National Inventors Hall of Fame in the U.S.A.
As a pro se Canadian independent inventor who is determined to succeed but has not reached the goal yet, I am not one of "the vast majority of patent applicants (who) utilize the services of private sector patent agents to prepare their applications" cited in the REGULATORY IMPACT ANALYSIS STATEMENT. I hope that the CIPO will consider my concrete proposals and make adjustments that accommodate my suggestions in order to become the best IP agency in the world.
