Canada: Proposed Regulations For Compulsory Licences

Last Updated: November 10 2004

Edited by Adrienne Blanchard and Jennifer Wilkie


  • Proposed Regulations For Compulsory Licences
  • Court Finds Notice Of Allegation Insufficient
  • Court Finds Cross-Referenced Submission Not Submission For NOC
  • Importing Less Expensive Drugs Not Seen As Cure For U.S. Woes
  • Schwarzenegger Vetoes Bills Seeking Drugs From Canada
  • Health Canada On Look Alike/Sound Alike Product Names
  • Health Canada Guidance On Health Professional Communications
  • Bush And Kerry On Drug Importation

Proposed Regulations For Compulsory Licences

On October 2, 2004, the Canadian Government released three proposed sets of regulations designed to implement the legislation known as the "Jean Chretien Pledge to Africa", which amended the Food and Drugs Act and the Patent Act. The law, once in effect, will permit compulsory licences to be issued for drugs and other pharmaceutical products such as devices, for export to developing and least developed countries. The Bill, given Royal Assent on May 14, 2004, is not yet in force, given that regulations must be in place before the legislation can take effect. The time period for comment is 75 days, and as such, expires on December 16, 2004.

Regulations under the Food and Drugs Act

There are two sets of Regulations proposed under the Food and Drugs Act — one set for drugs, and another for medical devices (although currently there are no medical devices on the list of products eligible for export under the system). These regulations outline the process for applying for regulatory authorization by the Minister of Health, which is required before obtaining a compulsory licence from the Commissioner of Patents to export the drugs or devices in question. The regulations also specify the labelling and marking requirements as well as the record keeping requirements that will be required of manufacturers.

The regulatory provisions include: a prohibition against using the same colour as the version being sold in Canada; a requirement that solid dosage forms must be marked XCL; a requirement for each product to bear a label which states "NOT FOR SALE IN CANADA"; and a requirement for each product label to identify the unique export number which, it is stated in the Regulatory Impact Analysis Statement (RIAS), will be issued on the basis of individual applications for licences filed with the Commissioner of Patents.

Regulations under the Patent Act

The proposed Patent Act regulations, the Use of Patented Products for International Humanitarian Purposes, govern a few substantive issues, as well as operational issues for the Canadian Intellectual Property Office, prescribing forms such as those that will be used to apply for, and to grant, the licences being sought.

The legislation sets out that royalties are required to be paid. The proposed regulations in effect link the royalties payable to the development status of the country importing the product. The royalty payable will be payable in full within 45 days after export notice is given to the patentee, if product is shipped in one shipment, or, if not all product is shipped at once, the payments will be prorated and payable 45 days after each export notice.

The legislation permits regulations to be made concerning information that will be required to be posted on the website operated by the exporter. These requirements include the name of the product, the quantity of product in each shipment, the export tracking number issued by the Minister of Health, and the names of all known parties who will be handling the product while in transit.

The legislation contains a provision permitting a patentee to challenge whether a contract is commercial in nature. In order to bring a count application the price of the generic product for developing countries must exceed 25% of the average price of the patentee's product in Canada. The legislation provides that the publications used to determine the patentee's average price of a product being sold in Canada will be set in the regulations. Those publications are identified in the proposed regulations as: the Ontario Drug Benefit Formulary, the Drug Formulary, as published by the Régie de l'assurance maladie du Québec and the PPS Pharma Publication published by Total Pricing Systems Inc.

It should be noted that other non-regulatory changes are being contemplated. For example, the RIAS sets out that various documents, such as Management of Drug Submissions Guidance, Management of Device Licence Applications Guidance, Changes to Marketed New Drugs, Guidance for Interpretation of Significant Change of a Medical Device will be changed. Guidance documents on fixed dose combination products, the processing of adverse event information and pre-export inspections will also be developed, once the program becomes operational.

For the text of the legislation, please see:

For the text of the proposed regulations in respect of drugs, please see:

For the text of the proposed regulations in respect of medical devices, please see:

For the text of the proposed regulations under the Patent Act, please see:

Court Finds Notice Of Allegation Insufficient

In a recent Federal Court decision in a proceeding brought under the Patented Medicines (Notice of Compliance) Regulations, an innovator was successful in claiming that a generic manufacturer's notice of allegation (NOA) was insufficient. The NOA contained a single paragraph that purported to be the factual basis for non-infringement.

The generic manufacturer sought regulatory approval for one process that makes the medicine, however, according to its Abbreviated New Drug Submission, the manufacturer was using two different processes to make the medicine. The innovator commenced a proceeding under the Regulations, to prevent issuance of marketing approval on the basis that its patents would be infringed. The innovator took the position that the NOA was insufficient for the purposes of the Regulations. The court agreed, following earlier case law that held that a bald assertion of non-infringement is insufficient, but that an NOA may be adequate if further disclosure elaborates on the basis for which the allegation of non-infringement was made, and in doing so, reveals sufficient evidence upon which to evaluate the allegation.

As the only further evidence of non-infringement consisted of emails between the generic manufacturer and its supplier indicating that only the purported non-infringing process would be used, the court held that this was insufficient.

For the full text of the decision, please see:

Court Finds Cross-Referenced Submission Not Submission For NOC

In a proceeding brought under the Patented Medicines (Notice of Compliance) Regulations, an innovator sought to quash a notice of compliance (NOC) issued by the Minister of Health to a generic manufacturer, on the basis that the Minister should have required the generic manufacturer serve a notice of allegation on the innovator pursuant to section 5(1.1) of the Regulations.

The Court accepted the Minister's position that the generic company's cross-referenced submission was not a "submission for a NOC" within the meaning of the words found in sections 5(1) or 5(1.1) of the Regulations, notwithstanding the position of the innovator that it is a submission for a NOC, and therefore the submission fell outside the Regulations. As such, the Court found no notice of allegation was required because the Regulations were not triggered.

The Court further determined that, in the event that a cross-referenced submission was in fact a submission for a NOC under the Regulations, section 5(1) applied in the circumstances and section 5(1.1) therefore did not, notwithstanding the innovator's position that a NOA must be sent to a first person with patent lists even where the generic did not rely upon the innovator's product to demonstrate bioequivalence of its product, and in particular, when a generic's submission is a cross-referenced submission to another party's submission.

For the full text of the decision, please see:

Importing Less Expensive Drugs Not Seen As Cure For U.S. Woes

Drug importation from Canada has been a political target in the U.S. presidential campaigns of both Senator John Kerry and President Bush. While many analysts have advanced the idea that it may make political sense to point to Canada as a solution to higher prescription drug prices in the United States, many economists and health-care experts say that importing drugs from countries that control their prices, like Canada, would do little to solve the problem.

For more information, please see:

Schwarzenegger Vetoes Bills Seeking Drugs From Canada

California Governor Arnold Schwarzenegger vetoed two bills that would have made California the middleman in large-scale consumer purchases of Canadian prescription drugs. Governor Schwarzenegger stated that the bills, which would have set up a state-run Web site to help consumers acquire discount drugs in Canada, were illegal under federal law and did not have adequate provisions to ensure the safety of imported medicine. The Republican governor told the Democratic-controlled legislature that such measures "oversimplify the complex safety, trade, supply and pricing issues involved in the marketplace."

For more information, please see:

Health Canada On Look Alike/Sound Alike Product Names

Health Canada recently released a Draft Guidance Document that deals with the implementation of a framework for the review of proposed drug names with the aim of reducing medication/dispensing errors due to name confusion. Submissions and comments on this document can be made up until November 15, 2004.

For the draft document, please see the following:

Health Canada Guidance On Health Professional Communications

The deadline to provide comments in respect of the draft guidance document on Health Canada's expectations concerning the issuance of Health Professional Communications (HPCs) and Health Product consumer updates will expire on October 25, 2004. HPCs include, for example, Dear Health Care Professional Letters (DHCPLs) and Notices to Hospitals (NtoHs). The guidance is intended to address issues such as: roles and responsibilities, issuance process, content development, and timelines.

For more information, please see:

Bush And Kerry On Drug Importation

Over the course of the U.S. Presidential debates, President Bush and Senator Kerry made drug importation a key issue, particularly, the safety of importing prescription drugs from Canada. Asked at their town hall-style debate about Canadian drug imports, Democratic presidential candidate Senator Kerry has said that under his health care proposal, "all Americans will be able to buy less expensive prescription drugs from countries like Canada." President Bush, however, said he just wanted to make sure Canadian drugs are safe: "When a drug comes in from Canada, I want to make sure it cures you and doesn't kill you … And what my worry is that, you know, it looks like it's from Canada, and it might be from a third world."

For more information, please see:

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.