USMCA: Canadian patent applications to be eligible for patent term adjustment for unreasonable prosecution delays

This article was originally published in AIPLA’s Chemical Practice Chronicles

Canada currently has only one form of patent term extension, known as Certificates of Supplementary Protection (CSPs). The Certificate of Supplementary Protection Regulations (CSP Regulations) came into force in Canada on September 21, 20171. The CSP Regulations were part of the Government of Canada's effort to fulfil its obligations under the Comprehensive Economic and Trade Agreement (CETA). Canada’s CSPs are sui generis, meaning “of their own kind”, and provide up to two additional years of patent-like protection for eligible claims of Canadian patents directed to pharmaceutical products. Eligible claims are claims to medicinal ingredients, combinations of medicinal ingredients, or uses of the medicinal ingredients. There are eligibility and timing requirements associated with CSPs2.

The CSP Regulations promulgated in 2017 were intended to compensate patentees for delays associated with obtaining marketing authorizations for medicinal ingredients. As a result, the sui generis protection offered by a CSP is equal to the lesser of (i) the period between the filing date of the patent and the date on which the marketing authorization (in Canada, known as the notice of compliance/NOC) is issued, less five years, and (ii) two years. "Unjustified" delays attributed to a patentee's failure to act in moving a regulatory submission forward to marketing authorization may result in the period of protection being reduced.

Of note is that the CSP Regulations promulgated in 2017 did not help patentees in relation to delays in patent prosecution.

Canada’s obligations under the United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020, impose new obligations on Canada in relation to patent term adjustment for prosecution delays3. According to the USMCA, Canadian patent applications filed on or after December 1, 20204, may be eligible for patent term adjustment (PTA) if they have been subjected to unreasonable prosecution delay by the Canadian Intellectual Property Office (CIPO)5.

Specifically, Article 20.44 of the USMCA requires the respective granting authorities of each signing country (i.e., CIPO for applicants in Canada) to process applications “in an efficient and timely manner, with a view to avoiding unreasonable and unnecessary delays”6. If an “unreasonable delay” occurs, a patentee may request a PTA to compensate for prosecution delays7.

USMCA defines an “unreasonable delay” as a delay in issuance of more than five years from the date of filing or more than three years from the request for examination, whichever is later. Certain delays may be excluded from this calculation, including delays attributable to the patent applicant and delays that are not directly attributable to the granting authority (i.e., CIPO)8.

While Canada has not yet amended its patent statute to provide for PTA for unreasonable prosecution delays, it is required to do so within 4.5 years of the USMCA entering into force (i.e., no later than January 1, 2025)9. We would expect that the proposed changes to Canada’s patent laws will be published so that stakeholders can comment in advance of promulgation. Until the patent statute is amended, the precise details of PTA for unreasonable prosecution delays in Canada remain unknown.

Therefore, assuming Canada amends its patent statute to introduce PTA for unreasonable prosecution delays in compliance with its obligations under the USMCA, there will be two distinct forms of patent term extension in Canada.

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Eileen McMahon, Edward Fan, and Melanie Rowand are with the law firm TORYS LLP (www.torys.com) in Toronto, Ontario, Canada. We would like to thank Sebastian Gorlewski, an articling student with our firm, for his invaluable assistance in preparing this article.

This article is a general discussion of legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues raised here in the context of your particular circumstances.

1http://www.gazette.gc.ca/rp-pr/p2/2017/2017-09-07-x1/html/sor-dors165-eng.php

2See Torys’ bulletins: “Finalizing Patent Term Extension in Canada” for additional information on patent term extensions in the form of CSPs. Also see Torys’ bulletins: “Federal Court instructs Health Canada to reconsider “medicinal ingredient” in the context of CSP”  and “Health Canada instructed to reconsider scope of CSP protection for drug containing multiple active ingredients” for two examples of where the refusal to grant a CSP was sent back for redetermination upon judicial review.

3United States-Mexico-Canada Agreement (USMCA), Nov. 30 2018, https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between (revised Dec.10 2019, entered into force Jul. 1 2020).  Known as the Canada-United States-Mexico Agreement (CUSMA) in Canada.

4 Ibid, art. 20.44.

5 Ibid. Note that article 20.46 of the USMCA requires its signatories also to provide PTA for pharmaceutical products subject to a patent and that have experienced “unreasonable curtailment of the effective patent term as a result of the marketing approval process.” However, Canada already meets the USMCA obligation by way of its existing CSP regime.

6 Ibid, art. 20.44.

7 Ibid.

8 Ibid.

9 Ibid, art. 20.89.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

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