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While the Data Protection Regulations appear to provide a more
"dependable" period of exclusivity than patents, in that
they circumvent the complex and somewhat unpredictable legal
battles surrounding patent enforcement, this is not necessarily the
case. Data protection is better seen as complementary to, rather
than a replacement for, patent protection. In this regard, there
are three particular areas of note when comparing patents and data
protection: (1) the subject matter of the protection; (2) the
susceptibility of that protection to legal challenges; and (3) the
scope of the protection.
Subject Matter Being Protected
There are key differences in scope between data protection and
patent protection. Data protection applies only to an
"innovative drug," one that has not previously been
approved. As such, data protection related to new uses is generally
not available, although there may be exceptions in rare
circumstances (e.g., Celgene case). Moreover, data
protection is not available for "variations" of
previously approved medicinal ingredients (e.g., enantiomers,
salts, esters, solvates and polymorphs) as confirmed by the
decision of the Federal Court in Takeda v. Canada and by
the Minister's decision involving f uticasone furoate in
CGPA v. Canada. Data protection does not extend to
combinations of old compounds, methods or processes. In contrast,
patents can protect inventions related, not only to new compounds,
but also new uses and variations thereof, combinations of old
compounds and methods or processes for their manufacture.
As such, patents offer a more multifaceted approach for
protecting investments in a drug products, recognizing that there
is often more than one aspect of a drug that is inventive.
Susceptibility to Legal Challenges
While data protection is subject to a smaller range of legal
challenges than patents, it is not immune to litigation. A
challenge may be brought by an innovator seeking to list a drug or
by a generic company seeking to de-list it. The Federal Court of
Appeal recently affirmed that: (1) a generic has standing to seek
to de-list a drug where they have had a rejection of a drug
submission because of the presence of a drug on the Innovative Drug
Register; and (2) the Minister of Health may make a fresh decision
about the listing of a drug at any time (e.g., at the request of a
generic). The stakes are high in the case of challenges to data
protection, especially in the absence of patents covering the
product. Patents offer a second, very important layer of
protection.
Scope of Protection
Data protection does not provide against activities that do not
require regulatory submission and approval (NOC). Examples include
the importation of a pharmaceutical compound (without sale in
Canada), manufacture of a pharmaceutical compound, and export of a
compound. The only way to protect against these activities is by
asserting a patent right either under the Patented Medicines
(Notice of Compliance) Regulations, if the patent is listed; or by
a patent infringement action. In addition, there are often
instances where key aspects of the product (e.g., formulation) are
developed as the product is maturing (e.g., at the end of the data
protection period) which, as such, can only be protected by
patents. A further consideration is that patents may offer
additional protection and value: they provide an incentive for
investment in R&D, licensing opportunities and a basis of
negotiation in litigation beyond what data protection offers.
Finally, it should be noted that interpretation and application
of the Data Protection Regulations are in their early days and are
therefore unpredictable. Indeed, five relevant decisions issued in
2011 and 2012 were all appealed (two appeals are pending) at this
writing. This is not dissimilar to the early days of the Patented
Medicines (Notice of Compliance) Regulations, when, 19 years ago,
what began as a trickle of cases turned into an avalanche of
jurisprudence now comprising hundreds of decisions including a
substantial number of patent listing decisions.
In view of the above, the best strategy continues to be
concurrent use of both patents and the Data Protection Regulations
to ensure the greatest scope and likelihood of protection for
innovators.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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