Canada: CETA Text Released: Patent Term Restoration For Pharmaceutical/Biologic Patents Coming To Canada

Last Updated: October 3 2014
Article by Daphne Lainson and Nancy Pei

As reported in the IP Update, Text of CETA released the text of CETA was released on September 26, 2014. As reported in that article, CETA, Chapter 22 in particular, includes provisions specifically impacting pharmaceuticals/biologics in three areas: (i) patent term restoration (PTR); (ii) innovator right of appeal under the Patented Medicines (Notice of Compliance) Regulations; and (iii) data protection. See also our November 14, 2013 article: Comprehensive Economic and Trade Agreement between Canada and Europe to result in greater protection for pharmaceutical patentees.

This article provides more details regarding the patent term restoration provision, Article 9.2, entitled Sui Generis [Latin for "unique"] protection for Pharmaceuticals. Broadly, this form of protection effectively extends patent term to account for marketing delays resulting from the time required to obtain regulatory approval. While the EU has had patent term restoration - granted by way of supplementary protection certificates ("SPCs") — for a number of years, this form of protection, once enacted in Canada, will be entirely new.

The text outlines the Parties' obligations regarding PTR as follows:

Nature of product/patent (section 1) — The Protection will apply to a product defined as "the active ingredient or combination of active ingredients of a pharmaceutical product", defined in Article 1.2 as:

"a product including a chemical drug, biologic drug, vaccine or radiopharmaceutical, which is manufactured, sold or represented for use in:
  1. making a medical diagnosis, treating, mitigating or preventing disease, disorder, or abnormal physical state, or its symptoms, or
  2. restoring, correcting or modifying physiological functions"

that is protected by a basic patent defined as "a patent which protects a product as such, a process to obtain a product or an application of a product in force".

Application /conditions of approval (sections 2, 3) — The Protection will be granted upon request by the "holder of the patent or his successor in title" provided:

  1. marketing approval for the product has been granted;
  2. the product has not already been the subject of Protection; and
  3. the marketing approval is the first such approval as a pharmaceutical product.

The Protection will only apply if the first regulatory submission for marketing approval is submitted within a reasonable prescribed time limit.

Further, the Parties may prescribe a time limit for submitting the application for Protection. The time limit may be no less than 60 days after marketing approval or, if the patent is not granted by that date, at least 60 days from patent grant.

One term per product (section 4) — There may be only one term of Protection per product, and if the product is protected by more than one patent, the single applicable patent will be selected as follows:

  1. where all the patents are owned by the same person, selected by the person requesting the protection; and
  2. where the patents are not owned by the same person and this gives rise to conflicting requests, selected by agreement between the "patent holders".

Term (section 4) — The period of protection will commence at the end of the lawful term of the relevant patent.

The term will be for "a period equal to the period which elapsed between the date on which the application for a patent was filed and the date of the first authorisation to place the product on the market of that Party as a pharmaceutical product reduced by a period of five years", which "may not exceed a period of two to five years, to be established by each Party". However, the two to five-year cap will be without prejudice to a possible extension to incentivise or reward research in certain target populations, such as children.

The period of protection may lapse if surrendered or prescribed administrative fees are not paid.

The period of protection may be reduced "commensurate with any unjustified delays resulting from the inactions of the applicant after applying for the market authorisation".

Nature of Protection (section 5) — The Protection will extend only to the pharmaceutical product covered by the marketing approval and any use of that product as a pharmaceutical product approved before the expiry of the Protection. The Protection will confer the same rights as conferred by the patent and will be subject to the same limitations and obligations.

Exceptions for export (section 5) — Exceptions may be provided for making, using, offering for sale, selling or importing of products for the purpose of export.

Lapse/revocation (section 6) — The Protection may be revoked if the patent is invalidated, the claims of the patent no longer cover the product, marketing approval is withdrawn, or if the Protection had been granted contrary to the section 2 requirements.

Canada's agreement to implement PTR will, once the terms are enacted into domestic legislation, address a long-standing deficiency in Canada's regime relative to not only that of the EU but of Canada's other major trading partners, including the US and Japan.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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Daphne Lainson
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