On October 18, 2013, after more than four years of negotiations, Canada and the European Union reached, in principle, a free trade agreement, the Comprehensive Economic and Trade Agreement (CETA). By reaching this agreement, Canada agrees to two important demands of the European Union concerning the intellectual property rights of Canadian innovative pharmaceutical companies, in order to bring its intellectual property system in line with other Western countries. These demands were (1) the adoption of a patent term restoration for pharmaceutical patents and (2) an effective right of appeal under the Patented Medicines (Notice of Compliance) Regulations.
1. Patent Term Restoration
Although the text of the agreement has not yet been released, it is understood that Canada will implement an up to two-year patent term restoration in order to compensate for the administrative procedures (particularly related to the approval of new drug submissions) that take place between the filing of a patent application for a drug and the issuance of the first notice of compliance. This two-year patent term restoration may also have the effect of delaying the entry of generic competition.
2. Right of appeal under the Patented Medicines (Notice of Compliance) Regulations
It is also understood that Canada will provide innovative brand companies with an effective right of appeal under the Patented Medicines (Notice of Compliance) Regulations. This will require amendments to the Regulations and will reverse the jurisprudential trend in Canada to the effect that, when the prohibition application of the innovator is dismissed and the notice of compliance of the generic is subsequently issued as a result, any appeal by the innovator becomes automatically moot unless the Court exercises its discretion to nevertheless hear the appeal. (Pfizer Canada Inc. v. Apotex Inc. (2001), 11 C.P.R. (4th) 245, para. 21 (C.A.F.) (application for leave to appeal dismissed with costs, S.C.C.  S.C.C.A. no. 111); Apotex Inc. v. Merck Frosst Canada Inc.,  J.C.F. 55, paras. 4-6 (C.A.F.).
Finally, it is expected that the future amendments will address duplicative patent litigation sometimes generated by the Regulations.
Members of the innovative pharmaceutical industry have welcomed the new agreement although some would also have hoped for an extended data protection period, increasing the current 8-year period of protection to a 10+1-year period of protection as currently provided by European countries.
No full text of the agreement has been released yet. The ratification is expected to take 18-24 months.
Note: Mélanie Bourassa Forcier is co-author of this bulletin.