Nonpayment of Large Entity Fee Not Sufficient to Hold an Issued Patent Invalid

On February 4, 2016, in Apotex Inc v Pfizer Inc, 2016 FC 136, the Federal Court refused to grant Apotex summary judgment motion to declare Pfizer’s 1,339,132 (the ‘132 Patent) patent invalid. The issue raised in this motion was whether the failure to submit proper patent application fees invalidates a granted patent. The Court that held that a patent that is issued because of an administrative error is not invalidated by that administrative error.

Pfizer’s predecessor had paid a small entity final fee prior to the issue of the ‘132 Patent when it should have paid the large entity fee. Further, no top up payment was made during the grace period. Relying on Dutch Industries Ltd v Canada (Commissioner of Patents), 2003 FCA 121, Apotex argued that Pfizer’s failure to pay fees due to the Commissioner of Patents rendered the ‘132 Patent invalid since the final fee is a prerequisite for the valid issuance of the patent. Apotex argued that, without full payment, the patent application was forfeited under subsections 73(1) and (2) of the pre-1996 Patent Act. On the other hand, Pfizer relied on Corlac Inc v Weatherford Canada Inc, 2011 FCA 228, and argued that payment errors made during the application process do not invalidate a subsequently issued patent.

The Court followed Weatherford and said that subsection 73(1) of the pre-1996 Patent Act, which is equivalent to subsection 73(1)(f) of the current Patent Act, does not apply to issued patents as it would ignore the “clear dichotomy” between patent applications and the issued patents established under the statutory regime. The Court stated that “Patents are invalidated by the Court when the inventor has not created something new and useful or taught the world how to make it.”