Proposed Amendments to the PM(NOC) Regulations under CETA

Comment period for proposed regulations only 15 days

Proposed regulations to implement Bill C-30 were published on July 14, including proposed amendments to the Patented Medicines (Notice of Compliance) (PM(NOC)) Regulations.1 While the regulations are not in force, the comment period is an unusually short 15 days. This bulletin provides an overview of the proposed amendments.

What You Need To Know

  • The purpose of the proposed amendments is to replace the existing summary proceedings with full actions resulting in final determinations of patent infringement and validity.
  • Within 45 days of receiving a generic manufacturer's (a second person's) notice of allegation (NOA), an innovative manufacturer (a first person) or patent owner must decide whether to bring an action against the second person. This action would be for a declaration of infringement of a listed patent or certificate of supplementary protection (CSP), an extension of the patent term being brought into force with coordinating regulations published at the same time.2 A patent owner or first person cannot sue for infringement later except in very limited circumstances.
  • For any claim in a listed patent or patent set out in a listed CSP, a second person may bring a counterclaim for a declaration that the claim be declared invalid or void, or for a declaration of non-infringement.
  • The Minister of Health is barred from issuing marketing approval (a notice of compliance or NOC) to a second person for 24 months after the patent owner or first person who receives a NOA brings an action for a declaration of infringement. Orders suspending, revoking, or otherwise impacting an issued NOC would no longer be available. However, if a NOC is issued prior to a declaration of infringement, injunctive relief is available to provide an alternate means of preventing infringement.

Patent Listing

Eligibility requirements for listing a patent on the patent register will not change under the new Regulations. However, a CSP can also be added to the register for a new drug submission (NDS) or a supplement to a new drug submission (SNDS). Second persons will be required to address these CSPs in addition to patents included on the register.

NOA and Document Production

A second person who serves a NOA on a first person must now serve the NOA with (i) a copy of the portions of the related submission for a NOC or a supplement to a submission for a NOC that are relevant to determine if any patent or CSP referred to in the NOA would be infringed, and (ii) if the second person is alleging the patent or CSP is invalid or void, a copy of any document on which the second person is relying in support of the allegation.

Rules for maintaining the confidentiality of any portion of a submission for a NOC or a supplement to a submission for a NOC are provided.

Additionally, a second person may request (i) the name and contact information of any inventor who might have information relevant to the allegation in the NOA, and (ii) any laboratory notebook, research report or other document relevant to determine whether a particular property, advantage, or use asserted by the second person to be part of the invention was established as of the filing date of the patent application. Rules for maintaining the confidentiality of the information above are also provided.

Timeframe for Bringing an Action for Infringement

The first person or a patent owner who receives a NOA may, within 45 days of service, bring an action against the second person for a declaration that the manufacture, construction, use or sale of its drug would infringe a listed patent or CSP that is the subject of an allegation in the NOA. Significantly, an action for infringement of a listed patent must be brought under this section of the proposed PM(NOC) Regulations.

If it chooses not to do so, it cannot bring an action later unless the first person or patent owner did not have a reasonable basis for bringing an action, such as where the information provided by the second person was false, materially misleading, or materially incomplete (including as a result of a subsequent change in the second person's product). As a result, if a patentee takes advantage of the PM(NOC) Regulations and lists a patent, it must decide whether to sue for infringement of that patent within 45 days of receipt of a NOA. As a result, the decision to list will take on additional significance.

Types of Actions Available

While applications under the current PM(NOC) Regulations used to be limited to only listed patents, the proposed regulations permit both first and second persons to bring actions on additional patents. A first person or patent owner who receives a NOA may bring an action for infringement of a patent or CSP other than one subject to a NOA related to the second person’s submission. This allows a patentee to bring all its claims at the same time, rather than piecemeal.

Once a first person brings a claim on a listed patent, a second person may bring a counterclaim for a declaration that an asserted claim (or CSP) be declared invalid or void, or would not be infringed.

Additionally, a second person who files a submission for a NOC or a supplement to a submission for a NOC and who has reasonable grounds to believe the manufacture, construction, use or sale of the drug might be alleged to infringe a patent or a CSP may bring an action for a declaration that the patent, claim or CSP is invalid or void.

Two-Year Bar from NOC Issuance to a Second Person

The Minister of Health is barred from issuing a NOC to a second person for 24 months after a patent owner or a first person who receives a NOA brings an action against the second person for a declaration of infringement. The Federal Court may shorten or extend that period if it finds a party has not acted diligently in carrying out its obligations under the PM(NOC) Regulations or has not reasonably cooperated in expediting the action. The Regulatory Impact Analysis Statement accompanying the proposed PM(NOC) Regulations indicates orders that suspend, revoke or otherwise impact an issued NOC would no longer be available. However, if a proceeding runs longer than 24 months, injunctive relief is available to provide an alternate means of preventing infringement.

Remedies

Under the proposed PM(NOC) Regulations, in addition to making a declaration that the manufacture, construction, use or sale of the second person's drug would infringe a patent or CSP, the Federal Court may also order any other remedy normally available in respect of infringement of a patent or CSP.

A second person may apply to the Federal Court or another superior court for an order requiring all plaintiffs in an action for infringement brought under the proposed PM(NOC) Regulations to compensate the second person for any loss suffered if the action is discontinued or dismissed or if a declaration of infringement is reversed on appeal.

Application of New PM(NOC) Regulations

The current version of the PM(NOC) Regulations will continue to apply in any matter that relates to a NOA served on a first person before the day the proposed PM(NOC) Regulations come into force. As such, the proposed new version of the PM(NOC) Regulations will only apply in matters where a NOA is served on or after the day the proposed PM(NOC) Regulations come into force.

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1 See: https://canadagazette.gc.ca/rp-pr/p1/2017/2017-07-15/html/reg18-eng.php

2 See: https://www.torys.com/insights/publications/2017/07/canada-edges-toward-patent-term-extension

To discuss these issues, please contact the author(s).

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.

For permission to republish this or any other publication, contact Janelle Weed.

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