Patent Law and Data Protection under the Canada-European Union: Comprehensive Economic and Trade Agreement (CETA)

On September 26, 2014, the official text of the Canada-European Union: Comprehensive Economic and Trade Agreement (CETA) was published.¹ CETA has yet to be ratified; however, the published text provides important guidance on upcoming changes to the law. CETA covers many fields; this bulletin highlights the CETA provisions relating to patent law and data protection.

Patent Term Restoration for Pharmaceuticals

Patent Term Restoration

Under CETA, Canada has agreed to provide a period of sui generis protection, commonly referred to as patent term restoration, for pharmaceutical products. A pharmaceutical product can include a single active ingredient or combination of active ingredients. Both chemical and biologic pharmaceutical products are eligible. The restoration will confer the same rights as the patent, but will apply only to the pharmaceutical product and its uses covered by the market authorization. For example, if there are claims in the patent to other pharmaceutical products or other uses not covered by the market authorization, the term of those claims will not be restored.

The Period of Patent Term Restoration

The period of the restoration will be equal to the period between the filing date of a patent and the date of the first market authorization, less five years, up to a set maximum period. For example, if a patent is filed in 2014 and the first market authorization is issued in 2020, the patent term restoration would be six years less five years, or one year. CETA provides a range for the maximum period of restoration between 2-5 years and also provides that a further restoration beyond 2-5 years is possible, to incentivize or reward research in certain target populations, such as children. Though CETA provides for a range for the maximum period of restoration, restoration, the Technical Summary of Final Negotiated Outcomes, Canada-European Union Comprehensive Economic and Trade Agreement (CETA), Agreement-in-Principle (the Agreement-in-Principle),² released in 2013, indicated that the maximum period will be only two years.

Because the period of the patent term restoration is based on the lapse in time between the patent filing date and the later market authorization date, by slowing down the market authorization process, an applicant could deliberately increase the lapse between the two dates. To prevent applicants from intentionally delaying market authorization to obtain a longer term of restoration, CETA allows the government to reduce the patent term restoration where there are "unjustified delays" in the market authorization process.

CETA does not describe or define circumstances that could be considered to constitute unjustified delays. Nor does it address whether the delay in obtaining a market authorization will be benchmarked against averages (e.g., average delay for other pharmaceutical products in obtaining market authorization) or if delays will be addressed on a case-by-case basis.  

Other Restoration Criteria

While CETA is vague regarding retroactivity, the Agreement-in-Principle outlines that pharmaceutical products already approved and on the Canadian market will not be eligible for retroactive patent term restorations.

CETA provides that patent term restorations will apply to patents claiming (i) the active ingredient or combination of active ingredients of the pharmaceutical product, (ii) the process to obtain the pharmaceutical product, or (iii) the application of the pharmaceutical product. Patent term restorations may not be available for patents claiming a formulation or dosage form, unless such claims are regarded as the "application" of the pharmaceutical product. There is no requirement to list a patent on Canada’s patent register (Canada’s version of the US Orange Book) in order to benefit from patent term restoration.

Only one patent term restoration will be available per pharmaceutical product: if a product is protected by more than one patent, only one patent may be selected for the restoration. If a product is protected by patents owned by more than one person, the owners must select a single patent for the restoration. Furthermore, a patent term restoration will only be available if the first application for market authorization is submitted "within a reasonable time limit," a timeframe which will be prescribed by law. A person will have at least 60 days from the date of first marketing authorization or the date of issue of the patent, whichever comes later, to apply for the restoration.

Takeaways

Brand name drug manufacturers will want: to (i) ensure, in drafting, filing and prosecuting patent applications, that at least one patent includes a claim which makes a patent eligible for restoration; (ii) consider which patent to target for the patent term restoration; (iii) once the patent targeted for the restoration is identified, seek to include within that patent multiple claims that would be eligible for restoration; (iv) ensure that the first application for market authorization of the pharmaceutical product is made within the time limit that will be prescribed by law; (v) avoid any "unjustified delay" when pursuing market authorization so as not to compromise the eligible period of a patent term restoration; and (vi) strategically assess timing of patent filing and regulatory submissions in view of the lack of retroactivity of CETA.

Appeals Under the Patented Medicines (Notice of Compliance) Regulations and Dual Litigation

CETA provides that Canada shall ensure that all litigants are afforded "equivalent and effective rights of appeal" for judicial decisions under the Patented Medicines (Notice of Compliance) Regulations. No information is provided on how this will be achieved.

The Agreement-in-Principle suggested that the new right of appeal under CETA "gives scope for Canada to end the practice of dual litigation."³ However, CETA does not comment on dual litigation. Once CETA is signed and ratified, these proposed amendments to Canada’s law are likely to be contentious.

Data Protection

Pharma Products

CETA provides that data—the origination of which involves considerable effort—submitted for marketing approval of a pharmaceutical product that utilizes new chemical entities (including biologics), will receive protection for a total period of at least eight years. During that period, no generic drug manufacturer will receive marketing approval for a product relying on an innovator company’s data. Canada’s current data protection regime already provides for data protection of eight years.⁴

Plant Protection Products

CETA also requires Canada to provide a data protection period of at least 10 years for a test or study report to achieve, subject to certain conditions, a marketing authorization for a plant protection product. Protection may be extended beyond 10 years to encourage the authorization of low-risk plant protection products and minor uses. During this period, another person cannot rely on the protected data to obtain a marketing authorization for the product.

What Next?

There is still much to be done before Canadian legislation is amended to implement CETA. Canada’s treaty-making process involves negotiation, signature, ratification and implementation; although CETA negotiations concluded on September 26, 2014, signature and ratification must still take place—and amendments to Canadian law will be required to make CETA enforceable. The government has estimated that CETA will be ratified in 2015 and that the impact of patent term restoration will not be felt until 2023.⁵

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¹ "Canada-European Union: Comprehensive Economic and Trade Agreement (CETA)," online: Government of Canada.

² "Technical Summary of Final Negotiated Outcomes, Canada-European Union Comprehensive Economic and Trade Agreement, Agreement-in-Principle," [Agreement-in-Principle] online: Government of Canada.

³ Ibid.

⁴ See our bulletin on data protection:

• FDR2009-1.pdf

⁵ Ibid.