IP monitor: Higher fees and bigger “small entities”

CIPO is funded entirely through the revenues it generates from service fees, which have not been substantially increased since 2004. In the 19 years since then, many factors, including increasing inflation, wage settlements, and capital investment requirements, have diminished CIPO's revenue and resulted in a deficit since FY 2017. As a result, CIPO proposed a one-time "25%" increase in fees in October 2022 for public consultation. Subsequently, the amendments to the Trademarks Regulations were published in December 2022, and the amendments to the Patent Rules were published in June 2023. All changes will take effect on January 1, 2024.

Upcoming fee increases

CIPO's general approach to the upcoming fee adjustment is to maintain the current fee structure and increase many fees by 25% starting on January 1, 2024. However, when taking into account the existing annual adjustment of fees based on the Consumer Price Index mandated under the Service Fees Act, the resulting combination could reach well above 25%. In practice, the 25% hike in 2024 could result in an actual surge of up to 36% compared to 2023 levels (e.g., the standard patent examination fee will increase from $816 in 2023 to $1,110 in 2024, i.e. a 36% increase). 

In comparison, some fees might see increases of less than 25%. "Low materiality fees" defined as per the Low-Materiality Fees Regulations will have their amounts after the increases capped at $150, meaning all increases will be equal to or less than 25% with fees originally at $150 receiving no changes at all.

The most notable exceptions to the 25% adjustment are patent fees for "small entities," which will only be subject to the annual adjustment under the Service Fees Act, but not the more substantial increase from the Patent Rules amendments.

The detailed list of patent fee adjustments can be viewed here, and the detailed list of trademark fee adjustments can be viewed here.

Changes to the “small entity” definition for patent applications

The definition of "small entity" will be broadened starting January 1, 2024. The employee count cut-off in all small entity definitions under the Patent Rules will be increased from 50 to fewer than 100, meaning that applicant(s) having between 51 and 99 employees at patent application filing will also be eligible to pay small entity fees starting in 2024 (if they otherwise meet the requirements of the definition) and submit the required "small entity declaration" prior to paying patent office fees at the discounted rate.

Recommendations

Pre-emptive Payment

In light of the upcoming changes, paying patent and trademark fees before January 1, 2024, will be an effective cost-saving measure. Since the amounts payable are calculated based on the actual payment date instead of the prescribed due date, early payment effectively helps applicants avoid paying the increased fee amounts even if the prescribed payment due date is on or after January 1, 2024. Applicants may wish to consider scheduling a call with their patent or trademark agent to discuss proposed next steps and strategies to avoid paying the increased fees.

Assessing “Small Entity” Status

In view of a less restrictive small entity definition for patent applications and potentially greater cost savings as compared to the regular fee rate, applicants may wish to assess or revisit eligibility as a small entity starting on January 1, 2024.

The authors wish to thank Daniel Wang, law student, for his help in preparing this IP monitor.

For more information, please contact your IP professional at Norton Rose Fulbright Canada LLP.

For a complete list of our IP team, click here