Sunday, April 03, 2016

Do Patents Filed by Retired Canadian Forces Veterans Belong to the Government?

         By Chuck Black

There are a lot of retired military personnel in Canada and quite a number of them work in the space sector creating innovative new applications for space derived technology.

But a recent legal ruling, which classifies most Canadian Armed Forces (CAF) veterans, reservists and retirees as "public servants" who need permission from the Federal government to apply for a patent, has at least one Canadian advocacy group up in arms.

Louis Brown, currently the president of  North Bay Ontario based NOR Environmental. Up until February 2016, Brown and his firm thought that they held a patent for proprietary technology. Photo c/o CBC

The ruling revolves around retired military veteran Louis Brown, who is currently the president of North Bay Ontario based NOR Environmental. As outlined in the March 7th, 2016 CBC News post, "Military vet battles government over intellectual property," Brown, who retired from the CAF in 1993, brought suit against the Federal government over a patent issued in the US and Canada which he claimed had been violated when the Federal government issued a contract to a US based firm for similar technology in 2009. 

The Canadian government moved to dismiss the case by citing the Public Service Invention Act and arguing that it already owned the patent since Brown was formally a public servant on the supplementary reserve (a listing of inactive or CAF members who are willing and available for active service when requested). In February 2016, a Federal court of Appeals ruling sided with the government.

Since no one previously knew about the appropriate steps needed for retired CAF veterans to retain control over intellectual property, the possibility exists that the Federal government now has a legal right to other patents filed by perfectly law abiding retirees. 

John Reid. Photo c/o CBC.
As outlined by Canadian Advance Technology Alliance (CATA) CEO, John Reid in the March 31st, 2016 CATA press release "Patent Infringement Advocacy Alert: Canadian Patent ruling locks out retired Canadian Armed Forces (CAF) Veterans from advancing Canada's innovation nation," the new ruling effects private companies which have:
...employed veterans and reservists working full time in the private sector (and) must now seek permission from the federal government before applying for a patent for their inventions if an inventor is on a supplementary reserve list. 
That means any patent that has been issued and currently thought to be owned by a Canadian corporation where a named inventor is retired CAF on a supplementary reserve list may in fact be owned by the government.
In order to mitigate the ownership risk in future patent applications, companies will have to disclose their invention to an appropriate Minister and await the government's decision to either claim ownership or give approval to allow the application to proceed without the government's ownership claim. According to Reid:
This is totally impractical. I can't imagine that companies would be willing to disclose their confidential and time sensitive invention to the government and wait months for a decision when the United States Patent and Trademark Office (USPTO), in contrast has adopted a first to file system. 
Many times applications are rushed because an invention is about to be disclosed at an industry conference. Any delay in this process will potentially harm the competitive position of Canadian companies in their respective markets.

As outlined in the May 6th, 2015 Edison Nation post, "Patents 101: The Basics of Priority Claims," there are substantial differences between the first to file (FTF) and the first to invent (FTI) systems of registering patent claims. First to file is currently the option of choice in all countries, including the United States, which switched after the enactment of the 2011 Leahy-Smith America Invents Act. Any Canadian requirement for "public servants" to receive permission from the Federal government before applying for a patent would act as a barrier to entry for Canadian's looking to protect their intellectual property in the US. Graphic c/o Edison Nation.

As outlined in the March 31st, 2016 CBC News post, "Advocates call for action on veteran's patent case," CATA has launched a campaign for action and a survey for feedback from members.

Reid believes the problem should be easy to fix.

"I'd be very surprised if we can't get somebody to look at this and fix it. It seems fixable to me," said Reid who added he's already been in touch with the federal minister in charge of innovation, Navdeep Bains.

According to Michael Cannata, a partner and co-founder at Patent Monetization Inc. and member of the CATA Innovation Leadership Council, the unintended consequences of this ruling impacts the IP holdings of many Canadian enterprises. In essence, any veteran with an employment contract containing intellectual property clauses could now be compromised.

The fear is that tech companies will simply mitigate the patent ownership risk by not hiring well qualified ex CAF or those with military connections for R&D jobs. This would create a far different situation than that which exists in other countries, especially the US, where highly educated and knowledgeable veterans are far more easily integrated into important civilian positions.

Chuck Black.
It will be interesting to see how this gets reconciled.

Chuck Black is the editor of the Commercial Space blog.

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