On December 9, 2010 the Federal Court of Appeal dismissed the
appeals brought by Apotex Inc. and the Canadian Generic
Pharmaceutical Association challenging the validity of the Data
Protection Regulations (referred to as DPR in the decision).
These regulations implement Canada's obligations under the
North American Free Trade Agreement (NAFTA) and the World Trade
Organization's Agreement on Trade-related Aspects of
Intellectual Property (TRIPS). Eli Lilly Canada Inc., and
Canada's Research-Based Pharmaceutical Companies had intervened
in the proceedings at the Federal Court, and were respondents in
The appellants, in two separate proceedings, heard together at
the Federal Court level, had challenged the Data Protection
Regulations on a number of grounds, shortly after they came
into force in 2006. The Federal Court decision, released on July
17, 2009, held that the regulations were valid as being within the
regulatory authority under which they were created. The Federal
Court also found that the regulations were within the
constitutional authority of the federal government, as they fell
within the federal Government's federal trade and commerce
power. However, the Federal Court did not find that the regulations
fell under the federal criminal law power.
In writing for the Federal Court of Appeal, Mr. Justice Nadon
held that the Data Protection Regulations were properly
within the authority of the Governor in Council, and were in clear
accord with the enabling provision of the Food and Drugs
Act. The Court held that "It is clear that the data which
article 1711 of NAFTA and paragraph 3 of article 39 of TRIPS seek
to protect is precisely the type of data in regard to which the DPR
offers market protection, i.e. the data found in an innovator's
NDS for an innovative drug." The regulations were held to be
properly delegated by Parliament to the Governor in Council and
held to be intra vires the Governor in Council.
In considering the constitutional issues, the Court of Appeal
considered the purpose of the Data Protection Regulations,
stating, at paragraph 114, that, "The true purpose of the DPR
is not to balance the commercial interests of innovators and
generic drug manufacturers, but rather to ensure that Canadians
have reasonable access, at reasonable prices, to new safe and
effective drugs. In other words, the Regulations as a whole
encourage the research and development of new medicines that save
lives, prevent diseases, heal and cure, and improve the health of
Canadians, who can only benefit from the discovery and development
of new medicines after the information and data generated in
extensive pre-clinical and clinical trials demonstrate the
"innovative drug's" safety and efficacy to the
satisfaction of the Minister."
In commenting on the purpose further, at paragraph 117, the
Court held that, "The pith and substance of the DPR is to
implement article 1711 of NAFTA and paragraph 3 of article 39 of
TRIPS so as to encourage the development of new drugs, a valid
public health and safety purpose." In considering the
constitutionality of the regulations, the Court held that their
enactment was a valid exercise of the federal criminal law power
contained in subsection 91(27) of the Constitution Act.
Having found the regulations valid under the criminal law power the
court held that it need not consider whether the regulations may
also be upheld under another head of federal power such as trade
and commerce. The Court also commented that the Data Protection
Regulations do not encroach on matters of provincial
jurisdiction, since the provinces have no role whatsoever to play
with respect to the approval of the safety and effectiveness of new
Richard Dearden and Wendy Wagner of Gowlings appeared for the
respondent Eli Lilly Canada Inc. and Martin Mason and Graham Ragan,
also of Gowlings, appeared for the respondent Canada's
Research-Based Pharmaceutical Companies.
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