Patent Changes on the Horizon in Canada with Introduction of Patent Term Adjustment

Continuing with the recent key transformations made to the Canadian patent application examination and procedure, Bill C-47, which includes a patent term adjustment regime, was passed by the parliament and received royal assent. Marking an inaugural introduction of patent term adjustment in Canada, the new terms are set to come into force by January 1, 2025. The policy change is in response to Canada’s commitments under Article 20.44 of the Canada-United-States-Mexico Agreement (CUSMA), the multilateral free trade agreement effective since 2020. Article 20.44 requires signatories to “process patent applications in an efficient and timely manner… to avoid unreasonable or unnecessary delays” and “provide the means to… adjust the term of the patent to compensate for those delays.” An “unreasonable delay” per CUSMA means a gap of five years between the patent application filing date and the date of the patent grant, or three years between the date of request for examination and the date of patent grant, whichever is earlier.

Adjusted Patent Terms

The new legislation has amended the Canadian Patent Act R.S.C., 1985, c. P-4 and once in force, will implement new measures for assessing and granting additional patent terms.

Section 44 of the Canadian Patent Act sets the patent term for applications filed on or after October 1, 1989, at 20 years from the application’s filing date. With the amendment, a new section 46.1 is added, allowing the grant of additional term in certain conditions.

Conditions for Grant of an Additional Term

The Commissioner of Patents is given the authority to determine applications for additional term. The additional patent term shall be granted if:

(1)?the patent was issued after the later of

(i)?the fifth anniversary of the filing date or the date of Canadian national phase entry for a Patent Cooperation Treaty (PCT) application, and

(ii)?the third anniversary of the date on which a request for examination (RFE) is made and the RFE fee is paid; and

(2)? the patent application was filed on or after December 1, 2020; and

(3)?the patentee files an application for the additional term, and pays the prescribed fee, within three months of the patent grant.

Duration of the Additional Term

On patent grant, the patent certificate shall include the additional term granted. The additional term of a patent shall begin on the expiry 20-year term from the filing date, and shall be equal to the days between the later of the following dates:

(i)?the fifth anniversary of the filing date or the date of Canadian national phase entry for a PCT application, and

(ii)?the third anniversary of the date on which a request for examination (RFE) is made and the prescribed RFE fee is paid;
and the date of patent grant.

A number of days may be deducted from the additional term as determined under the regulations, yet to be promulgated. The additional terms are also applicable to the reissued patents and amended patents.

Maintenance Fee for the Additional Term

Amendments include payment of maintenance fee and late fee, if applicable, for the additional term and the additional term is deemed to expire on nonpayment of the fee.

The expiry of the additional term may be rescinded on an application by the patentee to the Commissioner by stating the reasons for failure to pay the maintenance fee and the late fee within the prescribed period. Further, the patentee is required to pay the maintenance fee, the late fee, and an additional prescribed fee with the request. The Commissioner may then determine on rescinding the expiry of the additional term, based on whether the failure to pay the fee within the prescribed occurred in spite of the due care by the patentee in the applicable circumstances. The Commissioner’s decision of rescinding the expiry of the additional term may be overturned by the Federal Court if the court determines any material allegation in the patentee’s request was untrue or due care was not exercised by the patentee.

Reconsideration of the Additional Term

Any time after the grant of the additional term, the Commissioner may reconsider the duration of the additional term granted on the Commissioner’s own initiative or on application by any person. An application for reconsideration may be filed by any person in accordance with the regulations and payment of the prescribed fee. The Commissioner shall shorten the additional term on the satisfaction that the duration is longer than is authorized by the law. A notice of reconsideration shall be provided to the patentee, with an amended patent certificate indicating the shortened additional term.

Further, any person may bring an action in the Federal Court against a patentee for an order to shorten the duration of an additional term granted. The Court may shorten the additional term if it finds that the duration is longer than authorized.

Analysis and Impact

Details, including the form, contents, and processing of the applications requesting additional patent term, are yet to be determined. The complete patent term adjustment system may undergo changes through regulations or additional amendments before coming into force by January 1, 2025. Further, the amendments are silent on whether the patentee may participate in the process of reconsideration of the additional term by the Commissioner or at the Federal Court. There is also no mention of extending the granted additional term if the term is shorter than authorized. The United States, having implemented patent term adjustment in 1999, has witnessed various high-stakes litigations on the U.S. Patent and Trademark Office’s interpretation of the term adjustment provisions. Therefore, effecting a clear and comprehensive patent term adjustment regime in Canada is vital for its efficient implementation.

A 2023-2025 Forward Regulatory Plan published by Innovation, Science and Economic Development Canada (ISED), the parent department to Canadian Intellectual Property Office (CIPO), notes the lack of patent term adjustment in the Canadian patent system to address “unreasonable” delays in granting of patents. For the year 2021-2022, 39,709 patent applications were filed at CIPO and 29,737 requests for examination were made. As of May 2023, 46,620 patent applications with requests for examination filed at CIPO are awaiting a first action. On average, the turnaround time for granting a patent after filing a request for examination (RFE) was over two and a half years from RFE filing date. While the statistics indicate that most applications examined by CIPO may currently not require a term adjustment, setting a regime that compensates for potential delays in the future shall encourage applicants seeking patent protection.

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