IP monitor: Canada’s new patent term adjustment system: CIPO sets the terms

On May 18, the Canadian Intellectual Property Office (CIPO) proposed amendments to the Patent Rules that fill in key details of Canada’s new patent term adjustment (PTA) system. Of note, the proposed amendments describe how the additional term will be calculated, set out application and maintenance fees, and confirm that the PTA system will come into effect on January 1, 2025. CIPO is seeking feedback on the proposed amendments.

Background on Canada’s new PTA system

Since October 1, 1989, Canadian patents have had a term of 20 years from their filing date. Currently, extending that term is only possible for certain pharmaceutical patents via a Certificate of Supplementary Protection. However, on January 1, 2025, an additional term will become available for all eligible Canadian patents under a new system of general PTA. The PTA system stems from the Canada-United States-Mexico Agreement and is intended to compensate patentees for “unreasonable delays” by CIPO in issuing a patent.  

On June 22, 2023, the Patent Act was amended to create a framework for the new PTA system.  In brief: 

• For a patent with a filing date on or after December 1, 2020, a patentee can apply for an additional term within three months of the patent issuing.  
• A patent is eligible for PTA if it issued after the later of: (i) the fifth anniversary of the “applicable day” (see definition below), and (ii) the third anniversary of the day that examination was requested. 
• The duration of the additional term is the number of days between the later of the anniversaries in (i) and (ii) above and the patent’s issue date minus “the number of days that is determined under the regulations.”

The Patent Act amendments left many gaps to be filled in by regulations. Now, CIPO has revealed how it proposes to fill those gaps with its proposed amendments to the Patent Rules.    

Proposed PTA amendments to the Patent Rules

The application process.  After receiving an application for PTA and the application fee, the Commissioner of Patents (Commissioner) will make an initial assessment of the patent’s eligibility for PTA.  If the patent is found ineligible, the application will be dismissed. Otherwise, the Commissioner will make a preliminary determination of the duration of the additional term and notify the patentee. The patentee and interested third parties will then have two months to make observations on the preliminary determination. Finally, the Commissioner will either issue a certificate of additional term (that sets out the duration of the additional term) or dismiss the application (e.g., because the duration of the additional term is calculated as zero or less). The Commissioner must provide reasons for the determination of the duration of the additional term or the dismissal of the application, as the case may be.

The “applicable day.”  Under the proposed amendments, the “applicable day” for PCT national phase applications will be the national phase entry date, which is the earliest date that CIPO can begin processing such  applications. Similarly, for divisional applications, the proposed “applicable day” will be the presentation date, (i.e., the date on which the documents for such divisional application are presented at CIPO). In any other case (i.e., applications regularly filed in Canada), the “applicable day” will be the filing date. 

Calculating the additional term.  The proposed amendments provide a list of time periods to be subtracted when calculating the duration of an additional term. As stated in the Regulatory Impact Analysis Statement (RIAS), the subtracted periods include “days in periods that do not occur during the processing of, or the examination of, the patent application by CIPO, periods that are not directly attributable to CIPO as well as periods that are attributable to the patent applicant.”  The subtracted periods include the number of days:

• Taken to meet certain formality requirements;
• Taken to request examination (i.e.,  between the “applicable day” and the day the request for examination is filed and the prescribed fees are paid);
• Taken to respond to notices from the Commissioner, such as examiner reports, even days within the statutory deadline for responding;
• Required to complete examination up to allowance following a request for continued examination (or following a third examiner report if examination was requested prior to October 3, 2022); 
• Taken to pay required fees, including maintenance fees, if not paid on time;
• During which the application is deemed abandoned;
• During extensions of time requested by the applicant and granted by the Commissioner;
• Taken to respond to a notice of allowance or conditional notice of allowance;
• During an appeal of the Commissioner’s refusal to grant a patent (even though the appeal is allowed); and
• Beyond the control of CIPO, such as in force majeure situations.

For overlapping periods, each day will only be subtracted once when calculating the additional term.

Fees.  The proposed amendments set the PTA application fee at $2,500 (standard) or $1,000 (small entity).  If an additional term is granted, maintenance fees will be due on the 20th anniversary of the patent’s filing date and each subsequent anniversary until the additional term expires. The proposed amendments set the maintenance fee at $1,000 (standard) or $400 (small entity) for any maintenance fee due on or after the 20th anniversary.

Reconsideration procedure.  The proposed amendments further detail the procedure by which the Commissioner can, on application by any person, shorten the duration of an additional term. 

Expect relatively few PTA applications

According to the RIAS, CIPO estimates there will be approximately 140 PTA applications filed each year until 2034.¹ If so, that would be well under 1% of the patents granted in Canada each year.²

Indeed, if the proposed PTA regulations are enacted as is, the authors believe there will be few PTA applications filed.  First, given the many days that can be subtracted when calculating the additional term,  few patentees are likely to qualify for an additional term ‒ even if they meet the threshold eligibility requirements and were reasonably diligent in prosecuting their patent applications. Second, the PTA application and PTA maintenance fees are much higher than most other fees paid during prosecution, which may discourage PTA applications even where the patentee is entitled to additional term.

Proposed PTA amendments to other regulations

CIPO has proposed amendments to a number of other regulations under the Patent Act to make them consistent with the new PTA system, including the Patented Medicines (Notice of Compliance) Regulations, the Patented Medicines Regulations, and the Certificate of Supplementary Protection Regulations.

Proposed housekeeping amendments to the Patent Rules

CIPO has also proposed various housekeeping amendments to the Patent Rules that are not directly related to PTA, including not advancing examination out of routine order after continued examination is requested, requesting priority on the same day that early publication is requested, suspending examination until overdue maintenance fees are paid, and avoiding excess claim fees in certain circumstances when amendments are made in error.

Consultation

CIPO is accepting written comments on the proposed amendments to the Patent Rules and other regulations until July 2, 2024.  An online commenting feature is available on the Canada Gazette website.

The authors would like to thank John Varriano for his contribution in preparing this IP monitor.