The Reality Behind Patent Term Adjustment in Canada ‒ How Often Do We See a Blue Moon?

Patent rights holders are unlikely to benefit from adjusting their prosecution strategies in an effort to obtain term extensions under Canada’s new patent term adjustment (PTA) framework, which comes into force on January 1, 2025.

Under the new PTA framework, a patent is eligible for an additional term if it has a filing date on or after December 1, 2020, and was issued after a prescribed date (referred to herein as the “threshold date”), which is the later of: 

• 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 
•  Three years from requesting examination.

PTA is not assessed automatically. A patentee must file a request, 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 the Canadian Intellectual Property Office (CIPO) consider whether the patent is eligible for PTA.

If granted, the additional term would commence immediately after expiry of the patent’s regular 20-year term. The duration of the additional term is equal to the number of days between the threshold date and the issue date, minus a number of days as prescribed in the regulations. 

On November 29, 2024, the Canadian government registered finalized regulations which establish the “days to be subtracted” (excluded periods) from the additional term. The list of excluded periods is extensive and generally encompasses every day during prosecution in which the applicant could have taken an action but did not. For example, the following days are subtracted from the additional term:

• each day that the applicant defers filing a Request for Examination (after the applicable day) – however, the current regulations provide an exception such that any excluded periods occurring before requesting examination are not subtracted if the threshold date is three years from examination request instead of five years from the “applicable day” (i.e., if three years from examination request is later than five years from the applicable date);
• each day that the applicant takes to file a response to an outstanding Office Action; and
• each day that the applicant defers paying the Final Fee (after a Notice of Allowance is received).

Furthermore, 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. 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.

Put another way, there are four periods of time 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 current (2024-2025) performance target for each associated action:

The sum of the above-noted performance targets is just under 40 months. If the threshold date is five years from the “applicable day” (i.e., the entry/filing/presentation date), then a minimum of 5 years (60 months) (from the applicable day to issuance) is required to be eligible for PTA. In this circumstance, CIPO would need to miss its above targets by over 20 months in order for an additional term to be possible (assuming the applicant managed to avoid any delays that could reduce the additional term).

As noted above, if the threshold date is three years from examination request, then any excluded periods occurring before the examination request date are not subtracted from the additional term. In this circumstance, CIPO may have as little as 36 months to complete the foregoing actions before PTA begins to accrue. However, it will not always be possible to defer requesting examination long enough to trigger this exception.

In view of the foregoing, exceptionally few patents are expected to qualify for term extensions under the current PTA framework, regardless of any efforts made by applicants to expedite prosecution. Over the next ten years, CIPO expects there to be 1,100 applications for additional term.

For pharmaceutical patents, it is further noted that the PTA term (if any) will run concurrently with any additional term obtained in the form of a certificate of supplementary protection (CSP), which accounts for delays in regulatory approval of medicines. 

Given the low likelihood that a patent will be eligible for PTA, adopting prosecution strategies intended solely to obtain term extensions may prove fruitless or not outweigh the benefits of deferred examination (e.g., reliance on foreign prosecution or taking time to consider strategy).  

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.

Please see our further article at the following link for additional details regarding Canada’s PTA framework: https://www.marks-clerk.com/insights/articles/canada-s-new-patent-term-adjustment-framework-six-things-patentees-need-to-know/