On October 31, 2016, the day following the signing of CETA (see our article here), the Canadian Minister of International Trade, the Honourable Chrystia Freeland, tabled Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States and to provide for certain other measures. The following provides an overview of the main provisions specifically relevant to pharmaceuticals.

Innovator Right of Appeal; End to Dual Litigation

Background regarding these two issues arising from the current patent litigation scheme for pharmaceuticals was provided in our earlier article. The summary accompanying the Bill indicates that it would amend the Patent Act to, among other things “provide further regulation-making authority in subsection 55.‍2(4) to permit the replacement of the current summary proceedings in patent litigation arising under regulations made under that subsection with full actions that will result in final determinations of patent infringement and validity;…”

New subsection 55.2(4)(j) would read as follows:

(4) The Governor in Council may make regulations respecting the infringement of any patent that, directly or indirectly, could result or results from the making, construction, use or sale of a patented invention in accordance with subsection (1), including regulations

(j) respecting such proceedings, including the procedure of the court in the matter, the defences that may be pleaded, the remedies that may be sought, the joinder of parties and of rights of action and the consolidation of other proceedings, the decisions and orders the court may make and any appeals from those decisions and orders; and

The specific proposed new scheme will not be known until the proposed regulations are published for comment. A scheme more closely aligned to the US Hatch Waxman scheme is possible.

Certificates of Supplementary Protection

The CETA text included a requirement to provide for restoration of patent term to account for marketing delays resulting from the time required to obtain regulatory approval. While the EU has such a system in place, supplementary protection certificates (“SPCs”), Canada has never had any such protection. Section 59 would amend the Patent Act by adding the core certificate of supplementary protection (“CSP”) provisions, sections 104-134 which in general terms provide as follows.

Application/conditions of approval (section 106) - The requirements for an application to the Minister of Health include:

  • The patent meets “any prescribed requirements”;
  • The patent pertains “in the prescribed manner” to a medicinal ingredient, or combination of medicinal ingredients, contained in a drug for which an authorization for sale was issued;
  • The application relates to the first authorization for sale for the medicinal ingredient/combination;
  • No other CSP has been issued with respect to the medicinal ingredient/combination; and
  • The application for authorization for sale is filed within a deadline to be prescribed relative to the first corresponding foreign application for marketing approval.

There will be a prescribed deadline for filing the application. Only one patent can be named in each application.

Order of priority (sections 108-111) – Priority of applications for CSPs relating to the same authorization for sale will be granted first to a patent granted on or before the day the authorization for sale was granted and for later-issued patents, to the patent having the earlier issuance date. If two or more pending applications set out the same authorization for sale and have the same priority, the Minister will advise each applicant of the name and contact information of all the applicants. Each such applicant can seek to have the other pending application(s) declared invalid/void for non-compliance with the filing requirements.

Scope of protection (subsection 115(1)) — The CSP will grant the certificate’s holder and their legal representatives the same rights as the patent but “only with respect to the making, constructing, using and selling of any drug that contains the medicinal ingredient, or combination of medicinal ingredients, set out in the certificate, by itself or in addition to any other medicinal ingredient”.

Exceptions for export (subsection 115(2)) — It is not an infringement of the CSP to make, use, or sell the medicinal ingredient for the purpose of export.

Term (section 116), revocation (section 117) - The protection takes effect at the end of the term of the relevant patent for a term calculated by subtracting five years from the period beginning on the filing date of the application for the patent and ending on the day on which the authorization for sale is issued, for a maximum of two years. The Minister may reduce the term if he or she is of the opinion that the holder of the CSP’s failure to act resulted in a period of unjustified delay in obtaining the authorization for sale. The Minister shall revoke a CSP in prescribed circumstances.

Transfer (section 118) – A CSP or application is not transferable other than by the transfer of the patent or part of the patent that is set out in the certificate or application.

Infringement and Impeachment (sections 124-126) – An action for infringement of a CSP may be brought in the same manner as an action for infringement of a patent and a CSP may be declared invalid/void including for non-compliance with the section 106 application requirements. The Governor in Council may make regulations regarding CSPs including regulations described in subsection 55.2(4) of the Patent Act.

Regulations (section 134) – The Governor in Council may make regulations regarding the carrying into effect of the above, including the form and contents of applications and prescribing fees.

Further amendments – Other Patent Act provisions will be amended to extend to CSPs including the Patented Medicine Prices Review Board provisions (sections 46-58).

Timing for Implementation

CETA still requires a positive vote in the European Parliament on ratification before it can be provisionally applied. The Bill could become law as quickly as the end of this year, with regulatory amendments to follow.