Small Canadian Companies Welcome IP Protection Verdict

by Glen Shapiro, LawAndTax-News.com, New York

19 March 2003

Small companies with patents registered in Canada have welcomed a Federal Court ruling earlier this month which stated that even if their legal status changes, they will not risk losing their intellectual property assets as a result.

According to a report from the Legal Media Group news service, in the case of Dutch Industries v Barton No-Till Disk, the latter company claimed that because Dutch Industries' legal standing had changed as a result of company growth, but it had not paid the necessary top-up fees to update its status, its patents were invalid.

However, the Federal Court ruled that a move away from small entity status should not invalidate patents applied for by small businesses, even if the organisation in question is late paying the additional fees necessitated by this development.

Speaking to the LMG, Adrian Zahl, part of the legal team representing the victorious Dutch Industries, explained that:

'This judgement is a huge benefit for small inventors. Had the court ruled the other way, there would be a large number of patents in Canada that would just have been ticking time bombs for their owners.'

He continued:

'The Court of Appeal ruled that the right to small entity status runs with the patent and is in essence cast in stone at the outset of the patent process. The only fair interpretation in this case was that the status of an applicant for a patent should be determined only once, at the outset of the patenting process.'

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