Canadian Lawyer InHouse

11 CANADIANLAWYERMAG.COM/INHOUSE MAY 2017 By Andrew Montague and Kenneth Ma Intellectual Property O n Oct. 30, 2016, Canada signed the Com- prehensive Economic and Trade Agree- ment with the European Union. Just one day later, 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. Among other changes, Bill C-30 introduces sig- nifi cant amendments to the existing regulatory scheme by which generic drugs are granted market authorization and new provisions for extending the term of certain pharmaceutical patents. The following provides a brief overview of the upcoming changes for pharmaceutical patents. In Canada, patent protection and regulatory approval for pharmaceuticals are linked by the Patented Medi- cines (Notice of Compliance) Regulations. Under the current PMNOC Regulations, generic drug manufac- turers must fi rst address a list of patent(s) that cover the pharmaceutical before receiving a regulatory autho- rization from Health Canada. Using a summary pro- ceeding, the holders of these patents (known as "inno- vators") can apply to the Federal Court for an order to prevent the generic from obtaining this regulatory au- thorization (known as a Notice of Compliance) if doing so would result in the infringement of a listed patent(s). Innovators and generics have not been content with the current scheme. Whereas a generic manufacturer can appeal if it is unsuccessful at fi rst instance, the in- novator cannot. Instead, an innovator that is unsuc- cessful under the PMNOC Regulations must initiate a second, more formal proceeding for patent infringe- ment. Innovators have long decried this as unfair. Decisions issued under the PMNOC regulations are also not considered to be a fi nal ruling on the infringe- ment and validity of the patent. Even if the generic is granted an NOC, the innovator is not prevented from starting a formal action for patent infringement. Ge- nerics have long decried such dual litigation as abusive. The amendments introduced by Bill C-30 would pro- vide a right of appeal to unsuccessful innovators. The summary accompanying Bill C-30 also indicates that revised PMNOC Regulations will be created "with full actions that will result in fi nal determinations of pat- ent infringement and validity," foreshadowing an end to the existing system of dual litigation. Additional reforms to the PMNOC Regulations are suggested in Bill C-30, including consolidating pro- ceedings between different generic manufacturers that involve the same pharmaceutical and patent. Further de- tails will be revealed after Bill C-30 becomes law and re- vised PMNOC regulations are published for comment. Bill C-30 introduces a form of patent term exten- sion for pharmaceutical patents, called a Certifi cate of Supplemental Protection. A CSP is a separate right that provides up to two years of additional protection after expiry of a patent, but it will only take effect if the pat- ent reaches its full 20-year term without being declared invalid or otherwise being revoked. The purpose of a CSP is to compensate the patentee for administrative delays in obtaining an NOC, and such delays form the basis for calculating the CSP term. To be eligible for a CSP, the patent must "pertain in the prescribed manner" to the medicinal ingredient. Details are not provided, but they are expected to be similar to the listing criteria under the PMNOC Regu- lations. A CSP can also only be issued in connection with the fi rst NOC for a particular medicinal ingredi- ent. This is similar to existing criteria for data protec- tion. A CSP can be challenged on several grounds, in- cluding failure to meet the numerous eligibility criteria. Only one CSP can be issued per NOC, which is par- ticularly important where multiple patent holders are eligible for a CSP. Close co-operation and careful plan- ning may be required to ensure that a CSP issues for the best available patent and the longest possible CSP term. Otherwise, a sub-optimal or ineffectual CSP may issue to the exclusion of other possible patents. The rights afforded to a CSP holder are similar to a patent right, but they are enforceable only against one particular medicinal ingredient and cannot be used to block exports of drugs from Canada. Subject to the bill's implementing regulations, a CSP can also form the basis for proceedings under the PMNOC Regula- tions, in the same manner as a patent, thereby provid- ing up to two additional years of protection against generic competition. Bill C-30 is required for implementing CETA. Im- plementation is expected this year. IH CETA bringing changes to pharma patents in Canada Expect streamlining of court proceedings and extended patent protections. Andrew Montague and Kenneth Ma are associates at Ridout & Maybee LLP in the fi rm's Ottawa offi ce.

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