CETA update – our previously reported “good news” is maintained

The Pharmaceutical and Healthcare Newsletter of Baker & McKenzie’s North American Intellectual Property Practice Group
CETA Update – Our Previously
Reported “Good News” is
Maintained
Kamleh Nicola
On September 26, 2014, the Government of Canada released the consolidated text
for the Canada EU Comprehensive Economic and Trade Agreement (CETA). After
much delay (negotiations commenced in 2009), which included a large portion
of the text leaked to the public this past August, the full text as it presently
exists is finally available for review. As we previously reported, there were a few
nuggets that were the topic of negotiation for the pharmaceutical and life science
industries. We are now in a position to assess whether those nuggets have been
maintained in whole or in part.
Will Innovators Finally Have a Meaningful Right of Appeal
Under PMNOC?
The short answer is: "We think so". The current regime under the Patented
Medicines (Notice of Compliance) Regulations (PMNOC Regulations), provides
generic manufacturers with an effective right of appeal where the court rules
in favour of the innovator. There is no corresponding right of appeal for the
innovator. Once a court rules in favour of the generic, the Notice of Compliance
(marketing authorization) issues to the generic very quickly (often within days),
thereby rendering any possible appeal by the innovator as moot. However, the
CETA text is vague and simply directs that each of Canada and the EU "shall
ensure that all [patent linkage] litigants are afforded equivalent and effective
rights of appeal". No further clarity is provided as to how an innovator's right of
appeal shall be implemented under the PMNOC Regulations, or its impact on
the 24-month statutory stay mechanism. Whether the current regime of dual
litigation will be eliminated, is also unclear.
Will Patent Term Extension Finally Arrive to Canadian Shores?
"Yes" is the short answer to this question. A single period of patent term
extension (referred to as sui generis protection in the CETA text) may be obtained
regardless of the number of patents that protects the drug product. This will
provide an innovator with the opportunity to seek additional protection for the
period that elapses from the date upon which a patent application was filed and
RxAnalysis is the Pharmaceutical and Healthcare Newsletter of Baker & McKenzie’s North American Intellectual Property Practice Group
The Pharmaceutical and Healthcare Newsletter of Baker & McKenzie’s North American Intellectual Property Practice Group
the date of issuance of the first market authorization, minus 5 years. This
effectively restores lost patent term due to the length of time necessary to
obtain regulatory approval. However, this protection will not apply retroactively
to drug products already approved and on the market.
While the CETA text provides the length of this patent term extension shall not
be less than 2 years or greater than 5 years, Canada has announced that it will
provide up to 2 years. This additional period of protection will commence upon
expiry of the patent. Where more than one patent covers the drug product, then
the patent holder will have the opportunity to select the date upon which the
patent term extension commences. Where multiple patent holders exist, the
term will be established upon agreement.
An exception has been negotiated to enable the export of generic drug products
during the period of additional protection. Canada has said that this "will
temper the impact on the generic industry and its competitiveness in the
important United States market".
Will Data Protection Be Extended By 2 Years?
The answer here is a categorical "no". Canada rejected the EU's request that
the term of data protection be extended to 10 years. However, Canada did affirm
its commitment to the current regime of data protection, which provides a "no
filing" period for generic drug regulatory applications of 6 years and a 2 year "no
marketing" period during which a generic cannot sell its drug product.
Conclusion
Overall, the commitments summarized above should benefit the innovative
industry and finally provide alignment with other G7 nations in key areas such
as providing innovators with a meaningful right of appeal and patent term
restoration. Canada is assuming that CETA will be ratified in 2015. Regulatory
amendment to implement these changes will follow. We will continue to
monitor this situation and report on further CETA happenings.
Kamleh Nicola is a lawyer
practising in the Toronto
office of Baker & McKenzie in
pharmaceutical litigation and
related areas.