Canada’s New Patent Term Adjustment Framework: Six Things Patentees Need to Know

Canada’s new patent term adjustment (PTA) framework came into force on January 1, 2025.

The PTA framework, which was introduced to satisfy commitments set out in the Canada-United States-Mexico Agreement, is intended to compensate for “unreasonable delays” in patent issuance by providing patentees with an additional term of protection following expiry of the patent’s regular 20-year term.

As previously reported, few patents are expected to qualify for term extensions under the current PTA framework.

In this article, we outline six key points that patentees need to know about Canada’s PTA framework.

1.    What are the eligibility requirements for PTA?

Under the new framework, a patent must satisfy the following three requirements to be eligible for a term extension.

First, the patent must have a filing date on or after December 1, 2020.

Second, the patent must issue after a prescribed date (referred to herein as the “threshold date”), which is the later of:

1. five years from the “applicable day” that the Canadian patent system was engaged (i.e., the national phase entry date for PCT national phase applications, the filing date for regular applications, or the “presentation date” for divisional applications); and
2. three years from requesting examination.

Third, the patentee must file an Application for an Additional Term with the Canadian Intellectual Property Office (CIPO), together with an official fee, within three months of the patent’s issue date. The application process is discussed further in section 3 of this article.

In view of the first and second requirements noted above, no patents that issue on or before December 1, 2025, will be eligible for PTA.

2.    How is the additional term calculated?

The duration of the additional term is determined by calculating the number of days for the patent to issue beyond the threshold date, and then subtracting a number of days as prescribed in the regulations (referred to herein as “excluded periods”). In other words:

Additional Term (Days) = Issue Date – “Threshold Date” – “Excluded Periods”

A list of 38 different excluded periods is defined in the regulations. The excluded periods generally encompass every day during prosecution in which the applicant could have taken an action but did not. For example, each day that the applicant takes to file a response to an outstanding Office Action is subtracted from the additional term. Likewise, each day that the applicant defers paying the Final Fee (after a Notice of Allowance is received) is subtracted. Each day that falls within an excluded period is only subtracted once, even if it falls within multiple excluded periods.

The period of time between the entry/filing/presentation date and the date on which a Request for Examination is filed is also an excluded period. However, the current regulations provide an exception whereby this period is not subtracted from the additional term if the threshold date is three years from requesting examination (instead of five years from the entry/filing/presentation date). As discussed further below, this exception is somewhat counterintuitive as an applicant may be able to improve their chance of obtaining a term extension by deferring the filing of a Request for Examination.

Notably, the excluded periods encompass all days starting from the date the applicant files a first Request for Continued Examination (RCE) and ending on the date that the Final Fee is paid. Under Canadian practice, an RCE must be filed in order to continue prosecution after a third Office Action is received or when re-opening prosecution after allowance. This means that the entire period between issuance of a third Office Action and payment of the Final Fee is subtracted from the additional term. Any delays in patent issuance originating from CIPO during this period will not contribute to the calculation of additional term.

Put another way, there are four periods of time where CIPO is required to act that are not subtracted from the additional term. These periods are summarized in the following table according to their start and end dates, together with CIPO’s performance target in 2024-2025 for each associated action:

The sum of the above-noted performance targets is just under 40 months. (At the time of writing, the turnaround time from payment of final fee to patent issue may be longer due to operational issues.)

If the threshold date is five years from the entry/filing/presentation date, then CIPO would have at least 60 months to complete the four above actions (i.e., from the entry/filing/presentation date to issuance). This would require CIPO to miss the above targets by over 20 months for an additional term to be possible.
However, if the threshold date is three years from the date of the Request for Examination such that the period of time between the entry/filing/presentation date and the examination request date is not subtracted, then CIPO may have as little as 36 months to complete the foregoing actions before PTA begins to accrue.

3.    What is the application process (and what fees are payable)?

CIPO will not assess PTA automatically. A patentee must file an Application for an Additional Term, together with an official fee of $2,500 CAD ($1,000 for small entities), within three months of the issue date in order to have CIPO consider whether the patent is eligible.

Upon receiving a compliant application, CIPO will send the patentee a notice outlining its preliminary determination of the duration of the additional term. The patentee may submit observations regarding the preliminary determination within two months after the date of the notice.

CIPO will subsequently issue a Certificate of Additional Term or dismiss the application. CIPO must also provide reasons for the determination of the duration of the additional term set out in the certificate or for dismissing the application, as the case may be.

If PTA is granted, the additional term would commence immediately after expiry of the patent’s regular 20-year term, assuming the patent does not expire earlier.

Annual maintenance fees must be paid during the additional term to keep the patent in force. Specifically, a fee of $1,000 CAD ($400 for small entities) is payable on each anniversary of the filing date during the additional term.

4.    Can a Certificate of Additional Term be challenged or appealed?

Following issuance of a Certificate of Additional Term, any person may file an application for reconsideration with CIPO. CIPO may also reconsider the duration of the additional term on its own initiative. The patentee will receive a notice of any reconsideration that occurs.

On reconsideration, CIPO may shorten the duration of the additional term if it is satisfied that the duration is longer than was authorized. However, the additional term cannot be increased on reconsideration.
Any person may also commence an action before the Federal Court to shorten the duration of the additional term.

5.    Are there any additional considerations relevant to patented medicines?

For certain pharmaceutical patents, term extensions have been available in Canada since 2017 in the form of Certificates of Supplementary Protection (CSP). CSPs are intended to account for delays in regulatory approval of medicines and can provide up to two years of additional protection for most infringing acts.

Any additional term that is granted under the PTA framework will run concurrently with any additional term granted by a CSP. This represents a significant difference from United States patent practice, where the corresponding additional terms run consecutively.

If a Certificate of Additional Term is granted for a patent that is listed on the Health Canada Patent Register, then Health Canada must be notified of the additional term within 30 days of the additional term being granted. Likewise, the Patented Medicines Prices Review Board must be notified of any additional terms granted to patents within its jurisdiction.

6.    Practice considerations

A strategy for maximizing PTA is to defer filing a Request for Examination, closer to the deadline for requesting examination.  As noted above, the current regulations provide that the excluded periods before requesting examination are not subtracted if three years from examination request is later than five years from the entry/filing/presentation date. If this exception is triggered, then CIPO may have less time to examine the application and grant the patent before the patent is eligible for PTA.

The above strategy has some limitations. First, it will not always be possible to defer a Request for Examination long enough to trigger the exception. For example, this strategy will not be available for most divisional applications since examination must be requested within the later of four years of the original application’s filing date and three months from the divisional’s presentation date. Second, this strategy could potentially be prevented if a third party chooses to file a Request for Examination earlier than planned. Anyone (not just the applicant) can file a Request for Examination in respect of a Canadian application, provided they pay the necessary government fee.

Applicants seeking to maximize the likelihood of obtaining PTA may also wish to take steps to respond promptly to requisitions and official correspondence in order to limit the number of days to be subtracted from the additional term. However, this may not be an effective strategy. For most actions, acting promptly will also expedite prosecution and result in an earlier issue date that may offset any subtracted days that were avoided. Stated differently, most applicant delay is not expected to significantly impact PTA – this is consistent with the overall purpose of the PTA framework, which is to compensate for delays originating from CIPO.

Of course, applicants should contact their Canadian patent agent prior to submitting an Application for an Additional Term to CIPO, particularly in view of the significant application fee (and annual maintenance fees).

For further information, or to discuss strategies that are relevant to your patent portfolio, reach out to a member of the Marks & Clerk patent practice group in Canada.