Bill C-47: "An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023"

On June 22, 2023, the federal government approved amendments to the Patent Act which will introduce patent term adjustments (PTAs) for the first time in Canada. While not yet in force, these amendments will fulfill Canada's international obligations under the Canada-United States-Mexico Agreement (CUSMA).

Canada-United States-Mexico Agreement

Before CUSMA came into force on July 1, 2020 to replace the North American Free Trade Agreement (NAFTA), patent law in Canada did not provide compensation to patent owners for delays in the processing of a patent application. However, Article 20.44 of CUSMA requires Parties to provide patent term adjustments to compensate patent holders for unreasonable delays in the issuance of their patent.

An "unreasonable delay" is defined by CUSMA as "a delay in the issuance of a patent of more than five years from the date of filing, or three years from the request for examination", whichever is later. Periods of time that may be excluded from this calculation include any delays that are attributable to the patentee themselves.

Bill C-47: Introducing Patent Term Adjustment

Patent term adjustments will come into force no later than January 1, 2025 and will apply to all Canadian patent applications filed on or after December 1, 2020. A patent will be eligible for an extended patent term if it was issued after the later of:

  • 3 years from the date an examination was requested; or
  • 5 years from the filing date of the application. In the case of a divisional application, or a PCT national phase application, instead of the filing date it will be a "prescribed day" to be established in a future regulation.

The PTA will be calculated as the number of days between the later of these two anniversaries and the day on which the patent is issued, minus the "number of days to be determined under these regulations." The number of days to be subtracted will presumably be any prosecution delays attributable to the patentee rather than the patent office. If this calculation yields a result of zero, no patent term adjustment will be granted.

The patent term adjustment will also not be automatic—a patentee will have to apply for the adjustment and pay a prescribed fee within 3 months after the day the patent is issued. Specifics regarding the application procedure and fee will be set at a later date through further regulations.

The adjusted term will start once the ordinary 20 years of patent protection expires and will only apply if the patent remains valid until then. A "certificate of additional term" will be issued to the patent owner setting out the number of the patent, the duration of the additional adjustment, and any other prescribed information. Patent owners will also have to pay a maintenance fee to maintain the patent during the adjusted patent term

The legislative amendments in Bill C-47 will also allow the Canadian Intellectual Property Office to reconsider the duration of a PTA term that has already been granted, but only to shorten it. Reconsideration may be initiated directly by the Commissioner of Patents, or by application from any person. The Federal Court will also have the power to reconsider the duration of a PTA term, if a person brings an action against a patent holder for an order to shorten the duration of the term. However, an action may not be brought to lengthen the term.

Certificates of Supplementary Protection

Currently, a Certificate of Supplementary Protection (CSP) is the only form of patent extension available in Canada. A CSP extends patent protection for a drug containing a new medicinal ingredient, or a new combination of medicinal ingredients, for up to two years. It is intended to compensate patent owners for the time they've spent on research and obtaining regulatory approval for new drugs.

The patent term adjustment is distinct from the CSP regime; whereas CSPs are intended to compensate for any delays in obtaining regulatory approval, PTAs will compensate for unreasonable prosecution delays. Any PTA term granted to a patent owner will run concurrently with any CSP extensions, rather than one after the other.

Commentary

While these proposed amendments to the Patent Act are not yet law and still subject to change before they come into force, patent owners should keep their eyes peeled for any further developments and future regulations. For the first time, patent owners will be able to obtain recourse for delays in the patent application approval process in the form of extended protection. However, it's important to note the interplay between PTAs and CSPs and remember that they will run at the same time rather than consecutively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.