The due care standard is mandated in the Patent Act. However, the decisions of the Federal Courts interpreting and applying the due care standard are worthy of consideration by both patent agents and trademark agents because these decisions enunciate a number of relevant practice standards for both professions.
The purpose of this article is to provide some general guidance to licensees about the current status of the due care standard, together with some relevant factors to consider, as articulated by the Federal Court of Appeal and in the CPATA Code of Professional Conduct for Patent Agents and Trademark Agents. This guidance does not replace licensees’ own obligations to exercise sound professional judgement at all times in each matter in your clients’ best interests.
The Due Care Standard in the Patent Act
Under the Patent Act, failure to pay a patent or patent application maintenance fee or failure to request examination by its prescribed due date triggers the sending of a Commissioner’s Notice establishing a due date for taking missed action(s), together with payment of a late fee. The patentee or applicant must meet the due date set by the Notice to avoid deemed expiry of the patent or deemed abandonment of the application. A patent that is deemed expired or an application deemed abandoned resulting from a failure to meet the Notice due date may have its deemed expiry reversed or be reinstated on request, if the Commissioner determines that the failure occurred in spite of the required due care having been taken. In the case of deemed abandonment resulting from a failure to request examination, the due care requirement only applies if the request for reinstatement is submitted more than 6 months after the original prescribed due date.
CIPO has adopted a high standard when evaluating whether due care has been taken in each case. Fewer than 15% of over 300 CIPO final determinations since 2019 have concluded with a finding that due care was, in fact, taken. According to CIPO’s published observations about the various reasons the due care standard was not found to have been met in many cases, these include:
- Relevant point in time – Many requests for reinstatement or reversal of expiry fail to provide an explanation of what was done after the Commissioner’s Notice was received. If the request for reinstatement or reversal of deemed expiry focuses on the reasons why the original due date was missed, the Commissioner will not be able to make a determination that the failure occurred in spite of the due care required by the circumstances having been taken.
- Unintentionality – It is mistakenly assumed by some applicants and patentees that it is sufficient to explain that the due date set by a Commissioner’s Notice was missed unintentionally. The “unintentional” requirement only applies to restoration of the right of priority, late national phase entry, and certain extensions of time.
- All authorized persons must take due care – as we will see from the jurisprudence, all persons that were authorized by the applicant or patentee must take due care to ensure that the relevant action and payment of the late fee are completed before the Commissioner’s Notice due date. For example, if a foreign patentee instructs their local agent to retain a Canadian patent agent to represent them before CIPO, but hires an annuity firm to pay the maintenance fees, the patentee, patent agents (both local and Canadian), and annuity firm must all demonstrate that the required due care was taken. The Canadian agent may be operating under a limited scope retainer since they are not responsible for monitoring maintenance fee deadlines or paying the fees, but when a Notice is received, they agent may still need to forward the Notice to the appropriate party.
The Federal Court of Appeal has now issued two key decisions relating to the standard of care: Taillefer v. Canada (Attorney General), 2025 FCA 28, and Canada (Attorney General) v. Matco Tools Corporation, 2025 FCA 156. The decisions demonstrate how the Commissioner and courts are continuing to work through the rationale and parameters of what due care is required, and that the courts are setting a high bar for those seeking to rely on the due care standard.
The Taillefer Decision (Taillefer v. Canada (Attorney General), 2025 FCA 28)
A patent agent had established a routine of communicating with his client, the patentee, by email to obtain instructions respecting payment of annual maintenance fees. At some point, the patentee’s email filter started routing the agent’s maintenance fee emails to the patentee’s junk mail folder, where they were discovered some time after the patent was deemed expired. The Commissioner refused to reverse the deemed expiry, finding that the agent and the client had failed to exercise due care by ensuring they had an effective means for communicating in place.
On application for judicial review by the applicant, the Federal Court upheld the Commissioner’s determination and concluded that it was reasonable for Commissioner to have expected the patentee to ensure that the communication system between themselves and their agent was working so that reporting could be made and instructions given, and that both the patentee and agent should have considered steps that could have avoided the communication failure. The Court agreed with the Commissioner that agents should have appropriate communication mechanisms in place to ensure they are always able to communicate effectively with their clients. With the Federal Court of Appeal’s dismissal of the patentee’s appeal, the Taillefer decision stands and confirms that those relying on the due care provisions of the Patent Act must maintain reliable principal and backup communication channels to avoid, in the Federal Court of Appeal’s words, “an accident waiting to happen”. The bottom line is that if you get radio silence in response to your primary communication method with your client, you MUST try another way.
The Matco Tools Decision (Canada (Attorney General) v. Matco Tools Corporation, 2025 FCA 156)
As is often the case with Canadian patent applications, the applicant relied on multiple parties to handle different aspects of its patent application, including a Canadian patent agent as the representative before CIPO, local (US) counsel, and an annuity service provider. As the applicant had engaged the annuity service provider, they instructed US counsel to take no further action regarding payment of maintenance fees. US counsel in turn advised the Canadian agent that maintenance fees would be handled by a third party.
However, due to a data migration error when the annuity service provider assumed responsibility for the applicant’s portfolio, this particular application was accidentally omitted, ultimately resulting in a missed maintenance fee payment. A Commissioner’s Notice regarding the non-payment was received by the Canadian agent, who forwarded it to US counsel. Because US counsel had been given instructions to take no further action relating to maintenance fees, they did not send the Notice to the applicant. As the applicant was unaware of the default, the maintenance fee went unpaid, and the application was deemed abandoned.
The Commissioner refused to reinstate the application, finding that (1) the data migration error that gave rise to the missed anniversary due date was irrelevant to the due care analysis, since abandonment could have been avoided by proper handling of the Commissioner’s Notice; (2) no satisfactory explanation was given for US counsel’s failure to forward the Notice; and (3) there was insufficient evidence that the applicant had implemented sufficient safeguards such as adequate staff training, effective monitoring systems, or verification and quality control methods.
The Federal Court granted judicial review to the applicant, but this was overturned on appeal because the Court had failed to defer to the Commissioner’s reasoning, and the Commissioner’s due care analysis was reasonable. In allowing the Commissioner’s appeal, the Federal Court of Appeal provided useful interpretive guidance to agents and clients:
- The Patent Act requires an applicant to provide the reasons for the failure to take the action that should have been taken to avoid abandonment; in this case, the action that should have been taken was payment of the maintenance fee and late fee by the due date set by the Commissioner’s Notice. It was therefore appropriate for the Commissioner to disregard the circumstances surrounding the missed anniversary due date and to focus on events occurring after the Notice was sent.
- To have practical effect, the duty to exercise due care must apply to the recipient of a Commissioner’s Notice. A patent agent who is appointed in respect of a patent application is the designated point of contact for CIPO, and therefore the duty to exercise due care applies to them.
The Federal Court of Appeal also provided guidance to patent agents who are instructed by intermediaries and/or operating under a limited scope retainer, such as in the Matco scenario. There may be situations where the appointed Canadian agent must forward Commissioner’s Notices, even if they had been instructed not to do so. At paragraphs 45-48 of the decision, the Federal Court of Appeal discussed the obligations of the Canadian agent and US counsel:
[45] Moreover, the answer to the further question of whether the obligation to exercise due care extended to Matco’s other representatives, such as Hahn [the US counsel], does not assist Matco. If Hahn was not subject to the due care obligation, then the question would become whether Ridout [the Canadian agent] exercised due care in sending the Notice to Hahn only, and not to Matco. As stated in the Commissioner’s Decision, and in MOPOP, Chapter 9.04.03, the question of the exercise of due care turns on whether the applicant (or in this case, its agent) “took all measures that a reasonably prudent applicant would have taken”. It is difficult to imagine that Ridout could meet this requirement by forwarding the Notice to someone who was not Matco (the applicant) and who had no obligation themselves to advise Matco of the Notice. Ridout indicated that it had no direct contact with Matco, and this was the reason that it forwarded the Notice to Hahn. But a prudent agent would do so only if it expected that Hahn would ensure that Matco was made aware of the Notice.
[46] In the end, either Hahn failed to exercise due care by not forwarding the Notice to Matco, or Ridout failed to exercise due care by forwarding the Notice to someone who could not be expected to forward it to Matco.
[48] Though the Commissioner’s Decision does not provide much reasoning for imposing the due care obligation on agents and other representatives, the MOPOP and the WIPO Guidelines do. As alluded to above, Chapter 5.08 of the MOPOP indicates that correspondence to an applicant will be sent to its patent agent when one has been appointed. It stands to reason that that agent is expected, at a minimum, to forward such correspondence to the applicant for their action. It also stands to reason that sending such correspondence to an applicant’s US counsel (instead of to the applicant itself) would constitute due care only if that US counsel had an attendant duty at least to forward it to the applicant.
Key Takeaways from these Decisions
Both Federal Court of Appeal decisions define a basic requirement of the due care standard: an appointed Canadian patent agent is expected to forward a Commissioner’s Notice, or at least report the event to the instructing party. Further, Canadian patent agents must take steps to be assured that the ultimate applicant or patentee gets the message, although the steps that should be taken will depend on the circumstances.
It is still unclear from the case law what level of explanation needs to be provided to the instructing party, patentee, or applicant, but doing nothing in view of the restrictions of a limited retainer likely will not be enough.
Is there a Trademark Agency Equivalent to the Due Care Standard?
Trademark law does not include a statutory due care provision or rules for missed deadlines or reinstatement in the same way as for patent applications. However, the general principles referenced by the Federal Courts should be considered by trademark agents too. Maintenance fee requirements in patent law are similar in nature to the renewal provisions for trademarks in that when an initial or renewal period expires without payment, the Registrar is required to send a notice establishing a late payment due date. The principles arising from the interpretation of the due care standard therefore provide helpful guidance to trademark renewals. Moreover, the due care requirements are consistent with the general requirements of the CPATA Code of Professional Conduct, as described further in the following section.
The CPATA Code of Professional Conduct for Patent Agents and Trademark Agents
The CPATA Code of Conduct provides helpful guidance to support patent agents and trademark agents in maintaining appropriate practice standards to avoid the circumstances that gave rise to the decisions above.
- Part 1 Competence – this Rule establishes a duty to pay attention to the interests of your clients and implement appropriate records, systems and procedures in order to conduct your professional business (Rule 1(2)(a). Rule 1(4) provides:
“An agent must maintain appropriate office procedures and systems, including systems for meeting the requirements for all deadlines arising from client matters and for handling and maintaining client affairs without prejudicing them.”
- Part 4 Quality of Service – this Rule provides that:
“An agent has a duty to communicate effectively with the client. What is effective will vary depending on the nature of the retainer, the needs and sophistication of the client and the need for the client to make fully informed decisions and provide instructions.”
Commentary 4(6) adds that “An agent must communicate in a timely and effective manner at all stages of a client’s matter or transaction.”
- Part 6 Withdrawal of Services – this Rule addresses the circumstance where an agent withdraws or is discharged from a matter. When an agent is instructed that they are not responsible for maintenance or renewals, they have been effectively discharged from that aspect of the matter, even if they remain the agent of record for other purposes.
Rule 6(5) provides that when an agent withdraws or is discharged from a matter, but receives an official communication to which a response must be filed to avoid abandonment, the agent must still endeavour to report the official communication in a timely manner so as to avoid prejudice to the client, and to permit the client to take appropriate steps to safeguard their rights.
Clearly, there is a close correlation between the due care standard set by CIPO, the Federal Courts, and the CPATA Code of Conduct.
Practice Tips
Managing key deadlines, particularly relating to payment of fees, is essential to a patent or trademark agent’s practice. Here are a few practice tips that may help you in this regard:
- Obtain full contact information including mailing address, email addresses and all phone numbers from clients at the outset of your retainer to ensure effective communications can always be maintained. Make it clear to clients that it is their responsibility to update you if their contact information changes.
- Enter into written retainer agreements with clients that set expectations regarding communications and that emphasize why it is important that you effectively communicate with each other, and what may happen if you don’t.
- Confirm all client instructions in writing, including directions about who will provide you with instructions, to whom you must report, and the methods of communication, and any changes to those directions.
- Similarly, confirm client instructions in writing concerning your role in tracking, reminding about, and paying maintenance and renewal fees. In the case of patents, re-confirm those responses at issuance, as some clients may wish to move responsibility from the agent to an annuity service provider at that stage. State what steps you will and will not take if a client fails to provide instructions and/or makes required payments, and the risk and consequences of abandonment.
- In situations where you are having trouble obtaining instructions from a client through your regular method of communication, try reaching out by alternate means. If the client is unresponsive to email, consider phoning or mailing the client to seek instructions. Don’t assume that silence is intentional!
- When you are the agent of record, you have an important role to play in ensuring that deadlines are met. A good practice is to alert the applicant, patentee, or registrant (directly or through an instructing party) of any due date-setting notice from CIPO.
- Agents acting under a limited scope retainer should recognize that when serving as agents of record, they may be required to take steps that might be beyond the scope of the retainer in certain situations. In cases where agents are not responsible for payment of fees, should the agent of record receive a notice, doing nothing will not suffice. As noted above, while a good practice is to alert the patentee or registrant, the methods for attempting to do so will depend on the situation. Agents of record caught in such situations can consider making an Ethics Inquiry to CPATA. Agents of record might also consider reaching out to their professional liability insurer to determine whether they have specific guidance for your situation.
As always, these guidelines are provided by CPATA solely as an additional resource for licensees to consider and should not be relied upon to replace licensee’s own professional judgment in all relevant circumstances.