Patent term adjustment regime to be introduced for first time in Canadian history

On April 20, 2023, the federal government proposed amendments to the Patent Act in Bill C-47, which if enacted will introduce a patent term adjustment (PTA) regime in Canada for the first time ever.

What you need to know

• These proposed amendments to Canada’s Patent Act are not yet law and are subject to change.
• The PTA regime is intended to compensate patentees that have been subjected to unreasonable processing delay by the Canadian Intellectual Property Office (CIPO), and to allow Canada to comply with its obligations under the Canada-United States-Mexico Agreement (CUSMA).
• Only patents with a filing date on or after December 1, 2020 will be eligible for PTA.
• A patent may be eligible for PTA if it is issued after the later of:
  • five years from a “prescribed day” (which will be defined in future regulations) in the case of a Patent Cooperation Treaty (PCT) national phase application or a divisional application, and the filing date of the patent application in any other case; and
  • three years from the day that examination is requested.
• PTA will not be automatically granted by CIPO. Rather, a patentee will be required to apply for PTA and pay a prescribed fee within three months after the patent has issued.

Duration

The duration of the PTA term will be determined by first calculating the number of days between the day the patent was issued, and the later of:

1. five years from the filing date of the patent application (or from a “prescribed day” in the case of a PCT national phase application or a divisional application); and
2. three years from the day that examination was requested.

The “prescribed day” will be established in future regulations. Presumably it will not necessarily be the filing date of the patent application. Possibilities of dates include the date on which national phase entry is requested or the date on which a divisional application is submitted to CIPO.

The PTA term will be equal to the number of days of delay in the issuance of the patent, as calculated above, minus the “number of days that is determined under the regulations”. Draft regulations have not yet been published, but presumably the days that will be subtracted in calculating the PTA term will account for prosecution delays that are attributable to the patent applicant rather than CIPO. If the calculation of the PTA term produces a result of zero or a negative value, PTA will not be granted.

The PTA term will start once the ordinary term of the patent expires—namely, 20 years from the filing date of the patent. PTA will only apply if the patent remains valid until the expiry of the ordinary term of the patent.

Patentees will be required to pay maintenance fees during the additional term. The amount of the maintenance fees and the dates they must be paid will be established in future regulations.

Reconsideration of PTA term

The proposed amendments to the Patent Act additionally allow CIPO to reconsider the duration of a PTA term that has been granted. This reconsideration can occur on CIPO’s own initiative or on application by “any person”. Notably, on reconsideration, CIPO will only have the authority to shorten the duration of the additional term, but not to lengthen the PTA term.

Additionally, “a person” will be able to bring an action in the Federal Court against a patentee for an order to shorten the duration of a PTA term that has been granted. Again, the proposed amendments make no mention of a patentee being able to bring an action to lengthen a PTA term.

Concurrent term with Certificates of Supplementary Protection

PTAs granted for unreasonable prosecution delays will be distinct from previously existing extensions available in the form of Certificates of Supplementary Protection (CSP). Since September 2017, Canada has provided 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, protected by an eligible patent. Unlike PTA for unreasonable prosecution delays, CSPs are intended to compensate for delays in obtaining regulatory approval for new drugs. Notably, pursuant to the proposed amendments to the Patent Act, any PTA term that is granted will run concurrently with any CSP term (rather than consecutively).

What’s next

The proposed amendments to the Patent Act are still in draft form and are subject to change. Additionally, many important details relating to Canada’s new PTA regime will be established in future regulations, which remain to be seen.

It is currently unclear when the proposed amendments to the Patent Act will become law. However, in order to comply with CUSMA, Canada’s new PTA regime must come into force no later than January 1, 2025.