Federal Court of Appeal Confirms a Strict Due Care Standard Applies Beyond the Patentee

A missed maintenance fee rarely stops with one person; it typically passes through a patent agent, and often foreign counsel or a service provider, before an application is deemed abandoned.  Canada (Attorney General) v. Matco Tools Corporation, 2025 FCA 156, sets out precisely which failure the Commissioner of Patents is required to examine when a reinstatement request under subsection 73(3) of the Patent Act is assessed for due care, and confirms that the obligation is not the applicant's alone.

How the Application Came to Be Abandoned

Matco's Canadian patent application entered the national phase in June 2020, with a maintenance fee due January 10, 2022.  That fee went unpaid; Matco attributed the miss to a data migration error that occurred when it switched maintenance fee payment service providers in 2021, during which a notice from its new provider about the problem went unnoticed by Matco.  On February 21, 2022, the Commissioner issued a statutory notice under paragraph 27.1(2)(b) of the Patent Act, addressed to Matco's patent agent of record, Ridout & Maybee LLP, warning that the application would be deemed abandoned if the maintenance fee and late fee were not paid by July 11, 2022.  Ridout forwarded the notice the next day to Matco's US counsel, from whom it received all instructions on the file; US counsel did not pass it on to Matco, citing Matco's standing instruction to take no further action on maintenance fee payments.  The application was deemed abandoned when the July 11 deadline passed unmet.

The Question Is What Caused the Abandonment, Not What Caused the Original Missed Fee

The Commissioner refused reinstatement, reasoning that the relevant "failure" under paragraph 73(3)(b) was the failure to pay by the July 11 deadline set out in the notice, not the earlier data migration error that caused the original missed payment; on that footing, the abandonment could have been avoided simply by forwarding the notice to Matco, and no adequate explanation had been given for why that did not happen.  The Federal Court disagreed on judicial review, holding that the data migration error was the "proximate cause" of the abandonment and that the Commissioner ought to have assessed due care against that root cause instead.  The Federal Court of Appeal sided with the Commissioner: the statute asks what action should have been taken to avoid the abandonment, and the abandonment occurred on July 11, 2022, after the notice issued, so the Commissioner was entitled, and indeed correct, to focus the due care analysis on the period between the notice and that deadline rather than on the earlier root cause.

Due Care Extends to Whoever Receives the Notice

The Court of Appeal also rejected Matco's argument that only Matco itself, not its agent or its foreign counsel, could be held to a due care standard.  Because the Commissioner's statutory notice goes to the patent agent of record, not the applicant directly, the Court held that the notice requirement would be pointless unless the recipient of that notice is also expected to exercise due care in acting on it.  On the facts, either Matco's Canadian agent failed to exercise due care by forwarding the notice to foreign counsel without assurance it would reach Matco, or foreign counsel failed to exercise due care by not forwarding it; either way, a standing instruction to "take no further action" on fee payments does not extend to a duty to ignore a notice warning of imminent abandonment, and does not shield an applicant from the consequences.

The Appeal Succeeded, and the Refusal Stands

The Federal Court of Appeal allowed the Attorney General's appeal, set aside the Federal Court's decision, and restored the Commissioner's refusal of reinstatement, with costs of $2,000 awarded to the Crown.

What This Means for Managing a Patent Portfolio

For any business relying on a Canadian patent agent, foreign counsel, or a fee payment service to track maintenance deadlines, the operative lesson is that once the Commissioner issues a statutory notice, due care is measured against what happens next, and a standing "no action" instruction given to one link in that chain will not excuse a failure to escalate a genuine notice of impending abandonment.

We build and monitor Canadian deadline and correspondence workflows for clients and their foreign counsel specifically to withstand this standard, and we handle reinstatement applications where a due care record needs to be assembled and argued.