A recent decision of the Federal Court serves as a reminder of the importance of promptly registering, in the Canadian Intellectual Property Office (“CIPO”), assignments and other forms of change in ownership of Canadian patents and patent applications.

In this case, SALT Canada Inc. applied to the Federal Court for an order that CIPO’s records be varied to change the recorded owner of a patent from John W. Baker to SALT Canada Inc. Section 52 of the Patent Act grants the Federal Court jurisdiction to vary or expunge entries in CIPO’s records relating to the title of patents.

Multiple assignments relating to the patent in issue had been signed but not all of the assignments had been registered at CIPO.  Of particular note, the underlying agreements relating to ownership of the patent included assignments of the patent to different assignees yet only the subsequent assignment had been recorded with CIPO.  Section 51 of the Patent Act renders an unregistered assignment void against subsequent assignees.

The Federal Court has jurisdiction to determine ownership of a patent if the application relates primarily to patents and not primarily to contracts. In this case, the Court held that the primary issue for determination related to contract law, namely the ownership of the patent in view of the multiple assignment agreements, and the Court therefore did not have jurisdiction to decide the matter.  It dismissed the application and declined to order that CIPO’s records be varied until the ownership of the patent was resolved.

The Court noted that the secondary issue of the proper forum and choice of law applicable to a determination the contractual issues regarding ownership of the patent was moot in view of its decision on the lack of jurisdiction of the Federal Court in the proceedings.  Some of the underlying agreements relevant to the ownership of the patent provided that they were governed by different U.S. state or Canadian provincial jurisdictions while others were silent on the governing law.  Notably, the Court commented in obiter dictum that the governing law for the assignments did not affect any statutory rights in the patent itself as those rights are governed by the laws of the jurisdiction in which the patent exists and are strictly territorial.

Because no assignment or transfer can take place except in accordance with the laws of the jurisdiction of the grant of patent, Section 51 prevails regardless of the governing law of the relevant assignment agreements and nothing in the assignment agreements could have the effect of exempting them from the operation of Section 51.

Therefore, it is important that if assignments are executed relating to Canadian patent rights, whether in Canada or abroad, they be registered at CIPO to have effect in Canada.

For more information, please contact William Murphy at william.murphy@hicksip.com.