Beyond the standard patent term: Canada’s new patent term adjustment framework

Beginning January 1, 2025, patent term adjustment (“PTA”) is available to protect patent owners from diminished patent terms in Canada. PTA aims to compensate for unreasonable delays by the Canadian Intellectual Property Office (“CIPO”) in issuing patents.

The goal of PTA is to help ensure patent owners enjoy the full 20-year patent term.

Background

Under the Canada-United States-Mexico Agreement (“CUSMA” or “NAFTA 2.0”), which came into force on July 1, 2020, Canada agreed to provide a PTA framework to compensate patent owners for unreasonable or unnecessary prosecution delays by January 1, 2025.

In this regard, Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023 (the enabling legislation implementing the PTA framework, wherein the PTA framework is set out in the new Section 46.1 of the Patent Act), received royal assent on June 22, 2023, and was scheduled to come into force on January 1, 2025, unless an earlier date was fixed.

To fill in the details, draft regulations implementing the PTA framework were published in Part I of the Canada Gazette on May 18, 2024, with a public comment period open for 45 days. Final regulations were published in Part II of the Canada Gazette on November 29, 2024. 

Canada’s PTA framework, as set out in the amended Patent Act and Patent Regulations, became effective on January 1, 2025.

An overview of Canada’s PTA framework

1. PTA eligibility
   
   

   To be eligible, a patent owner must meet the following requirements[i]:

   • The filing date of the patent must be on or after December 1, 2020.
   • The patent must be issued after the later of (i) three years from the date on which examination was requested or (ii) five years after the national phase entry date for a PCT application, the divisional presentation date for a divisional application, or the filing date in any other case.
   • The patent owner must prepare and file a PTA application, along with the applicable government fee, within three months after the patent is issued. For 2025, the applicable government fee is $2,500 for standard entities or $1,000 for small entities.
     
     
2. PTA calculation
   

   
   The duration of the additional term equals the number of days between the later of the anniversaries and the day on which the patent is issued, minus the number of days determined under the regulations.

   PTA Additional Term = [the later of (Filing/National Phase Entry Date/Divisional Presentation Date + 5 years) or (Examination Request Date + 3 years)] - [Issue Date]) - [Days Determined Under the Regulations][ii]

   Section 117.03 of the Patent Regulations sets out 38 applicable periods where days could be subtracted when calculating the additional term. These periods are essentially “the 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.”[iii] The days to be subtracted include those:

   • Days of extension.[iv]
   • Days of abandonment.[v]
   • Taken to respond to CIPO notices, such as examiner reports[vi], notices of non-compliance,[vii] notices requesting translation,[viii] and late fee notices, notices of allowance,[ix] and conditional notices of allowance.[x]
   • Between the filing of a first request for continued examination and payment of the final fee.[xi]
   • Between the date of an examiner-initiated interview, during which the applicant agrees to consider making an amendment to correct defects identified by the examiner, and the date of the written submission.[xii]
   • Taken to request examination (when the additional term is calculated starting from five years after the national phase entry date for a PCT application, the divisional presentation date for a divisional application, or the filing date in any other case).[xiii]
   • Situations beyond the control of CIPO.[xiv]

   If a day is included in more than one period, that day will only be subtracted once when calculating the duration of the additional term.[xv]

   If the duration of the additional term is zero or less, no additional patent term will be granted.[xvi]
   
   

3. PTA application process
   

   
   Only one PTA application may be submitted for a given patent.[xvii]

   After receiving a PTA application along with the applicable government fee, CIPO will assess PTA eligibility. If ineligible, the PTA application will be dismissed.[xviii] If eligible, CIPO will determine the duration of the additional term and send a notice to the patent owner indicating a preliminary determination of the duration of the additional term.[xix] The patent owner may make observations on the preliminary determination within two months from the notice of the preliminary determination.

   After the end of the two-month period for making observations, CIPO will either issue a certificate of additional term or dismiss the PTA application. CIPO must provide reasons for the determination of the duration of the additional term or the dismissal of the application, as the case may be.

   Maintenance fees are payable during the granted additional term and will be due on the 20th anniversary of the patent’s filing date and each subsequent anniversary until the additional term expires.
   
   

4. Reconsideration of granted PTA
   

   
   CIPO may reconsider the duration of a granted additional term on CIPO’s own initiative or on application by “any person.”[xx] An application for reconsideration will need to set out: (i) information that demonstrates that the granted additional term is too long and (ii) an opinion regarding the determination of the duration of the additional term that should have been made.[xxi] The applicable government fee is $2,500 (standard) or $1,000 (small entity).

   In addition, a person may bring an action in the Federal Court for an order to shorten the granted additional term.[xxii]

   For an order to lengthen the granted additional term, a patent owner may need to apply for judicial review.
   
   

5. PTA and PTE

In addition to PTA, patent term extension (“PTE”) of up to two years, in the form of a Certificate of Supplementary Protection (“CSP”), may be available for patents pertaining to new medicinal ingredients or new combinations of medicinal ingredients for human and veterinary use. PTE aims to compensate a patent owner for delays caused by the regulatory review process before a pharmaceutical product can be commercially marketed.

Despite their different goals, the term of a CSP runs concurrently with any PTA.[xxiii] This contrasts with the USA approach, where a Hatch-Waxman extension is available for a patent term adjusted for USPTO delays.[xxiv]

Practical considerations

CIPO estimates that from 2025 to 2034, there will be about 1,129 PTA applications, averaging about 126 PTA applications per year.[xxv] Using the 2023-2024 patent data, where 25,711 patents were granted, less than 1% of patents would be granted PTA, suggesting that PTA would only rarely become available.

Nonetheless, PTA is a valuable tool to protect patent owners from diminished patent terms, especially when the relevant patented inventions become more valuable near the end of the patent term. Here are some practical considerations:

• Be proactive in the patent prosecution process and avoid actions during prosecution that would result in reductions in PTA, thereby maximizing the patent term.
• Be cautious when requesting continued examination, as the days between filing the request and paying the final fee are subtracted. Be complete and thorough when responding to the first Examiner’s Report to facilitate compact prosecution. If the Patent Appeal Board’s review process is available, consider it, especially if a successful review of at least one meaningful claim is likely.
• Conduct a preliminary PTA assessment and, if PTA is likely available, consider filing an application for it.