Proposed regulations provide important details on Canada’s new patent term adjustment regime

The Canadian government has published proposed amendments to the Patent Rules (proposed PTA regulations) that provide important details relating to Canada’s new patent term adjustment (PTA) regime (see our previous bulletin on corresponding changes to Canada’s Patent Act, which have received royal assent). Canada’s PTA regime is intended to compensate patentees for unreasonable process delays they experience by the Canadian Intellectual Property Office (CIPO), in order to comply with Canada’s obligations under the Canada-United States-Mexico Agreement (CUSMA).

What you need to know

• These proposed PTA regulations are not yet law and are subject to change. The government is inviting comments on the proposed PTA regulations until July 2, 2024.
• Patents are eligible for PTA consideration if they are issued after the later of:
  • five years from (1) the national phase entry date for Patent Cooperation Treaty applications, (2) the presentation date for divisional applications, or (3) the filing date for all other patent applications; and
  • three years from the date that examination is requested.
• The proposed PTA regulations list 38 categories of exclusion periods that will be subtracted from the PTA term calculation. These subtractions are deemed delays attributed to the applicant rather than to CIPO, which cumulatively will likely reduce the extension of term to nil in many cases.
• The PTA regime must come into force by January 1, 2025, to comply with CUSMA obligations.

PTA eligibility

PTA consideration will only be available for patents that are issued after the later of:

• five years from (1) the national phase entry date for Patent Cooperation Treaty applications, (2) the presentation date for divisional applications, or (3) the filing date for all other patent applications; and
• three years from the date that examination is requested.

The number of days from the later date as determined above to the issue date is the “included period” of PTA for a patent.

The proposed PTA regulations stipulate that a prescribed fee of $2,500 (or $1,000 for a small entity) must be submitted to CIPO with the request for PTA determination. Only one request for PTA consideration is permitted per patent.

Duration of PTA

After receiving a PTA request, CIPO will make a preliminary determination on the duration of the PTA, which is equal to the number of days of delay in the “included period” of the patent, minus the sum of the days in “excluded periods”. The proposed PTA regulations list 38 categories of “excluded periods”: these subtractions account for delays that CIPO attributes to the applicant rather than to CIPO. Overlapping days that fall into multiple categories will only be counted once.

Some of the excluded period categories include:

• the period when an applicant makes a request for continued examination and ending on the day the final fee is paid;
• any days taken by an applicant to respond to an examiner’s report;
• the period when an applicant agrees to amend an application on the day of an examiner interview and ending on the day the applicant submits the amendments;
• the days taken by an applicant to pay prescribed fees; and
• the time taken by an applicant to appeal a patent refusal or challenge a determination of CIPO at the Patent Appeal Board or in court (even if the applicant is successful in the appeal or on judicial review).

CIPO will notify the patentee of its preliminary determination of the PTA duration. The patentee and any other interested third parties will have a two-month period to make observations regarding the preliminary determination. CIPO will then either issue a certificate setting out the PTA duration or dismiss the PTA request without refunding the prescribed request fee.

Any person can challenge the PTA duration granted by CIPO by filing an application for reconsideration and paying the prescribed fee of $2,500 (or $1,000 for small entities). After receiving an application for reconsideration, CIPO will notify the patentee of its preliminary determination as to whether the PTA term will be shortened or remain the same (the PTA term cannot be lengthened). A two-month observation period will be available again to the patentee and interested third parties before a final determination is made by CIPO.

Additional considerations

Given the breadth of excluded period categories and CIPO’s current performance targets, it is likely that a PTA term will not be granted in most cases.

Canada’s approach to implementing its PTA obligations under CUSMA differs from the framework in other jurisdictions. For example, the PTA framework in the United States allows applicants to take a reasonable amount of time (generally three months) to respond to notices from the U.S. Patent and Trademark Office without impacting the potential additional patent term. The categories of excluded periods currently within the proposed PTA regulations include time ‘delays’ that are outside of an applicant’s reasonable control, such as delays associated with appeals to the Patent Appeal Board or Federal Court, even when the applicant is successful in those proceedings.

Should the proposed PTA regulations become law, there may be little incentive for patent applicants to adjust their domestic or international prosecution strategy (such as to accelerate actions in Canada) to pursue the unlikely event that PTA is attainable.

Finally, recall that the new PTA regime is distinct from previously existing extensions available in the form of Certificates of Supplementary Protection (CSP), which can provide up to two years of sui generis patent-like protection for pharmaceutical products containing a new medicinal ingredient or a new combination of medicinal ingredients. Any such CSP term would run concurrently with any available PTA term (rather than consecutively).

What’s next?

The government has invited comments on the proposed PTA regulations until July 2, 2024. Under CUSMA, the PTA regime must come into force by January 1, 2025.