Canada and CETA: Changes to Patent Term Restoration, PM(NOC) Decisions Appeals and Dual Litigation

On October 30, Canada signed the Comprehensive Economic and Trade Agreement (CETA) at the European Union-Canada Leaders’ Summit. The following day, Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures, was introduced in the House of Commons.1  

Bill C-30 proposes amendments to a number of Canadian statutes to bring them into conformity with Canada’s obligations under CETA. This bulletin highlights the amendments relating to patent law that deal with patent term restoration for pharmaceuticals, appeals under the Patented Medicines (Notice of Compliance) (PM(NOC)) Regulations and dual litigation.

What You Need to Know

  • Patent Term Restoration

    • Issuance of a certificate of supplementary protection will grant the same rights as a patent, but only as they relate to a drug that contains the medicinal ingredient or combination of medicinal ingredients set out in the certificate
    • The term of "restored" protection provided by the certificate will be up to a maximum of 2 years, which will take effect on expiry of the original term of the patent set out in the certificate
  • Appeals under the PM(NOC) Regulations and dual litigation

    • It is anticipated that the PM(NOC) Regulations will be amended to:

      • ensure innovative pharmaceutical companies gain the ability to appeal decisions under the PM(NOC) Regulations; and
      • end dual litigation                    

    • Details on the implementation of this scheme will become clearer once the new regulations are published

Patent Term Restoration for Pharmaceuticals

Under CETA, Canada agreed to provide a period of patent term restoration (also known as sui generis protection), for pharmaceutical products. Bill C-30 provides sui generis protection via issuance of certificates of supplementary protection.

Scope of Rights

A certificate extends the exclusive right granted under a patent in respect of the making, constructing, using and selling of a drug that contains the medicinal ingredient or combination of medicinal ingredients set out in the certificate. There is, however, an exception to allow any person to make, construct, use or sell the medicinal ingredient or combination of medicinal ingredients for the purpose of export from Canada without infringing the certificate.

Term of Rights

A certificate will take effect on expiry of the original term of the patent set out in the certificate. The "restored" term of protection offered by the certificate will equal the lesser of (i) the period between the filing date of the patent and the date on which the authorization for sale is issued, less 5 years, or (ii) 2 years. "Unjustified" delays attributed to a patentee’s failure to act may result in the period of protection being reduced. 

Requirements to Obtain a Certificate

Only one certificate will be issued with respect to a medicinal ingredient or combination of medicinal ingredients contained in a drug. The certificate may only list a single patent that pertains to the medicinal ingredient or combination of medicinal ingredients.  Bill C-30 does not define what it means for a patent to "pertain to" a medicinal ingredient or combination of medicinal ingredients; this will be prescribed in new regulations. Additionally, the certificate can only be issued for the first authorization for sale issued with respect to the medicinal ingredient or combination of medicinal ingredients.  

Where there are multiple applications for certificates in respect of the same authorization for sale, a certificate will issue for the application setting out the earliest "priority," which according to Bill C-30 will be based on the relative grant dates of the patents specified in each application.

Actions for Infringement and Impeachment

An action for infringement based on a certificate may be brought in the same manner as an action for the infringement of a patent. Furthermore, a certificate of supplementary protection, or any claim in the patent referred to in such a certificate, may be declared invalid or void by the Federal Court.

Appeals Under the PM(NOC) Regulations and Dual Litigation

Bill C-30 provides regulation-making authority to the Governor in Council to replace the summary proceedings procedures under the current PM(NOC) Regulations with full actions that will result in final determinations of patent infringement and validity. While the specific regulations in this respect have not yet been published, the "Technical Summary of Final Negotiated Outcomes, Canada-European Union Comprehensive Economic and Trade Agreement, Agreement-in-Principle" suggests that the PM(NOC) Regulations will be amended to (i) ensure innovative pharmaceutical companies gain the ability to appeal judicial decisions under the PM(NOC) Regulations and (ii) end dual litigation (i.e., pursuing litigation under the Patent Act for patent infringement after a decision has already been issued under the PM(NOC) Regulations.2  The published regulations will include specific details on implementation.

What’s Next?

Bill C-30 has received first reading, but still requires additional readings and passage in the House of Commons and the Senate before becoming law. There are opportunities to provide input on Bill C-30 during this process.

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1 Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures, online: Parliament of Canada: http://www.parl.gc.ca/content/hoc/Bills/421/Government/C-30/C-30_1/C-30_1.PDF.

2 Online: http://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/technical-technique.aspx?lang=eng.

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This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

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