New patent term adjustment rules are coming into force

Since 1989, patents in Canada have had a fixed term of 20 years from the filing date of the application. This 20-year-term includes time that an application remains pending, meaning that if the Canadian Intellectual Property Office (CIPO) delays the issuance of the patent, the period during which the issued patent can be enforce is reduced. In order to comply with Canada’s obligations under international agreements, including the Canada-United States-Mexico Agreement (CUSMA), new rules published on November 29, 2024 establish a patent term adjustment (PTA) system, which will address unreasonable delays by CIPO in issuing patents. Below is a comprehensive summary of the key details, procedures, and implications of the new system set to come into effect January 1.

Not all patent applications are eligible for PTA. In order to obtain a PTA, three requirements must be met in accordance with the Patent Act:

• a patent must be issued after three years from the date on which examination was requested or five years after the prescribed date, which is the date on which the application for a patent is made to CIPO (e.g. national phase entry date, divisional presentation date, or filing date), whichever is later;
• the filing date of the patent must be on or after December 1, 2020; and
• the patentee must apply for a PTA within three months of issuance (i.e. a PTA is not automatically granted).

Based on the above requirements, the first patents which could possibly be considered for PTA must be issued after December 1, 2025. Due to the manner by which the PTA is calculated (discussed in greater detail below) and the current service standards of CIPO, it is unlikely that many (if any) patents would be eligible for PTA on this date. In addition, the cost to applicants for requesting a PTA is significant at $2,500 (standard fee) or $1,000 (small entity fee).

By design, the PTA accounts only for delays caused by CIPO, and not those within the control of the applicant. The PTA is subject to reduction based on applicant delays. The rules are complicated and provide for 38 different types of applicant delay, which all relate to specific periods of time which the applicant controls, including failure to respond promptly to CIPO requirements or filing Requests for Continued Examination (RCE). These delays are subtracted from the PTA calculation.

Accordingly, these delays would push the issuance date by which CIPO must issue the patent to avoid a PTA past the three years from request for examination or five years from the prescribed date target. Therefore, in most cases, the normal course of prosecution will push the actual date where a patentee would be entitled to an extension well past the minimum date, unless the applicant responds to all office actions immediately upon receipt. Furthermore, applications requiring multiple rounds of review or RCE filings are unlikely to qualify for significant (if any) PTA, as all days after the issuance of the third office action (whether waiting for a subsequent office action, or an applicant delay) would be subtracted from any patent term adjustment.

For patents that are eligible for a PTA, the additional term starts immediately after the patent’s standard 20-year term expires. Additional annual maintenance fees beyond the 20-year term are required during the additional term at $1,000 (standard fee) or $400 (small entity fee). Given that no patents will be eligible for PTA until at least 2040, these fees are likely to change.

The likelihood of any patent receiving a PTA appears quite low if the performance targets published by CIPO are followed. In particular, CIPO sets a target of 17 months from a request for examination to a first office action, up to ten months for each subsequent office action upon receipt of an applicant response, and up to two months for issuing a patent upon payment of the final fee. Assuming a patent received three office actions (as an RCE effectively stops the accrual of PTA), followed by a notice of allowance, CIPO should be able to issue a patent within 39 months. Recalling that the minimum time for a patent to be eligible for PTA is three years after a request for examination (or five years from the prescribed date), very few applications would qualify as any time used to respond to the office actions is subtracted from the PTA.

Given the substantial application fee and the likelihood that few patents qualify for PTA, it is not expected that many patentees will opt to apply for PTA. Furthermore, Certificates of Supplementary Protection (CSP) run concurrently, which would reduce any benefit for pharmaceutical patents.