Canada’s new patent term adjustment system takes effect

On January 1, 2025, the Patent Term Adjustment (PTA) system established by the Canadian Intellectual Property Office (CIPO) under the Canada-United States-Mexico Agreement (CUSMA) officially came into effect. The purpose of the PTA system is to compensate patent holders for unreasonable delays in the processing and authorization process of the Canadian Intellectual Property Office (CIPO).

To obtain a PTA, a patent application must meet the following requirements:

• Application date on or after December 1, 2020
• Authorization date is on or after December 2, 2025
• 5 years after filing the application or 3 years after requesting examination, whichever is later
• The grant fee must be paid within 3 months of patent grant (currently CAD$2,500)

Any PTA will be added to the base patent term of 20 years from the filing date, and maintenance fees will also be payable for any additional patent term extended by a PTA.

PTA Calculation - "5/3 Threshold" (5 out of 3): The starting point for the PTA calculation is any additional days beyond the patent grant date, beyond the later of:

• 5 years from the date of entry into the Canadian national phase for a PCT-based case, 5 years from the Canadian filing date for a non-PCT case, or 5 years from the filing date of a divisional application (i.e. the date on which the actual divisional documents are filed)
• Or 3 years from the date of request for examination

The next step would be to deduct from the above additional days any days the applicant spent in processing the application (any overlapping days in this regard are counted only once), such as delays in paying fees or processing filings, response times, extensions of time, abandonment periods, time after filing the first Request for Continued Examination (RCE), etc. The PTA is only concerned with any delays attributable to CIPO.

To obtain the optimal strategy for PTA, we can consider:

• Request substantive examination close to the deadline, which is 4 years from the PCT filing date for Canadian national phase cases or 4 years from the Canadian filing date for non-PCT cases. The basis for this strategy is to focus on applying point (2) above to the PTA calculation. Therefore, any delays incurred by the applicant before requesting examination will not be relevant to the PTA. This strategy is less applicable to divisional applications, for which the deadline for requesting substantive examination is usually only 3 months after the filing of the divisional documents.
• Another strategy is to consider the third office opinion or submit an RCE request. Submitting an RCE is applicable to the following situations:
  • In cases where a request for substantive examination was filed on or after October 3, 2022, a third office opinion has been issued, or for all cases, a new case review has been opened after authorization.
  • Since the issuance of the third office action (even if the examination is requested before October 3, 2022) or the submission of an RCE will have a significant negative impact on the PTA calculation, applicants should try to simplify the examination process and submit proactive amendments as early as possible to avoid the issuance of the third office action and/or the submission of an RCE. Similarly, even if the examination is requested before October 3, 2022, applicants should try to avoid reopening the examination after the grant to avoid submitting an RCE request.