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Court Orders Redetermination of Reinstatement Request in “Data Migration Error” Case

In Matco Tools Corporation v. Canada (Attorney General), 2025 FC 118, the Federal Court set aside a decision by the Commissioner of Patents that refused to reinstate Matco’s Patent Application No. 3,086,194 (the “194 Application”). The 194 Application had been deemed abandoned due to a failure to pay maintenance fees.

The Canadian patent agent retained for the 194 Application received instructions solely from Matco’s U.S. counsel and had no direct contact with Matco. Matco’s U.S. counsel operated under explicit instructions “to take no further action in these matters with regard to payment of annuities and maintenance fees”. Matco used third-party service providers for managing payment of maintenance fees.

Prior to 2021, Matco retained Computer Packages Inc. (CPI) to manage maintenance fee payments. In June of 2021, Matco switched from CPI to Dennemeyer. An error occurred during the data migration from CPI to Dennemeyer regarding the 194 Application, resulting in the 194 Application not being properly imported into Dennemeyer’s systems. Matco did not notice the data migration error in Dennemeyer’s report on the data migration, and consequently, the maintenance fee for the 194 Application was not paid. The Canadian patent agent later sent a notice regarding non-payment of the maintenance fee to Matco’s U.S. counsel; however, the notice was not forwarded to Matco because of U.S. counsel’s instructions to take no action regarding maintenance fees.

Upon later learning of the deemed abandonment of the 194 Application, Matco requested reinstatement and said that the failure to pay the maintenance fee resulted from the unforeseen data migration error. The Commissioner refused reinstatement, finding that Matco failed to meet the required “due care” standard. In particular, the Commissioner found that the data migration error was not relevant to the due care analysis and that no satisfactory explanation has been provided as to why the notice regarding non-payment of the maintenance fee was not forwarded to Matco.

The Court took issue with the Commissioner’s due care analysis. The Court was of the view that the data migration error was the proximate cause of the events that led to the deemed abandonment of the 194 Application. As such, the Commissioner was required to examine whether due care was taken to avoid the proximate cause of the error. Furthermore, the Court agreed with Matco that the Commissioner was overly focused on U.S. counsel’s failure to forward the notice to Matco regarding non-payment of the maintenance fee, despite the fact that U.S. counsel was specifically instructed to take no action on maintenance fees.

As a result, the Court set aside the Commissioner’s decision and ordered a redetermination of the reinstatement request.

The full decision can be found here.

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