Intellectual property rights (IPR) are a key component for most if not all innovative activities.
For biotech companies in particular, one of the pillars for building value is a sound patent strategy and robust patent position for the key assets of the company.
Uncertainty in three areas can negatively impact innovation for IPR-driven sectors: uncertainty in the courts (i.e., litigation); uncertainty in patent office examination (i.e., whether patents will be granted and for what scope); and uncertainty in the laws protecting innovations in the innovators' home country compared with laws in other countries. Although there is little case law to judge in terms of uncertainty in the courts, recent changes in patent office examination policy with respect to medical diagnostics may have negative long term impacts on the innovative diagnostics industry in Canada.
The Canadian Intellectual Property Office (CIPO) released a Patent Notice to Examiners in the summer of 2015 announcing changes to its examination of medical diagnostic methods - guidance that had been highly anticipated since CIPO had suspended its prosecution of diagnostic claims several years earlier.
Diagnostic innovations typically relate to the discovery of a correlation between genetic alterations or level of an analyte and a disease or disorder. The correlation discovery was viewed as able to generate the most valuable IP, and particularly so for companion diagnostics (after claims to the therapeutic composition or use thereof). Such IPRs related thereto have the ability to impact exclusivity for both the drug and the associated diagnostic.
The availability of IPRs directed to such a correlation discovery has been curtailed. Under the current Practice Notice, if the Examiner determines that the innovation is directed to improvements in measuring or detecting an analyte, it is more likely to be considered patentable subject matter whereas if the Examiner determines that the innovation is directed to the discovery of a correlation between an analyte and a diagnosis (without more), it is more likely to be considered unpatentable. CIPO's Practice Notice was introduced without significant consultation and without any clear basis in Canadian law. Although CIPO's interpretation of patentability does not have the force of law and can be challenged, the Notice has effectively cast more than a little doubt on the patent eligibility of some precision medicine claims. Furthermore, CIPO acts as the gate-keeper to get an issued patent and under the current Practice Notice, innovators have no choice but to live within this system.
The changes to examination practice also put Canadian innovators in this sector at a disadvantage in their home country compared to, for example, their European counterparts.
The United States Patent and Trademark office over the last several years has been reducing the extent of protection available for diagnostics innovation. However, such changes have been met with extensive scrutiny.
This shift in the CIPO examination procedure seems to contradict the current Canadian Government focus on innovation, at least in relation to the life sciences industry. On January 20, 2016, Prime Minister Trudeau provided a direct reference to the focus on innovation during his speech at the World Economic Forum in Davos, Switzerland. In his speech, Trudeau said "We need policies that encourage science, innovation and research. ... And we need governments willing to invest in making all that happen, while recognizing the dynamic innovation that happens in the private sector"1. This platform was backed up by the 2016 Canadian Federal Budget, which provided extensive funding commitments to scientific research, including funding for Genome Canada and other life science organizations as well as committing to strengthen innovative networks and clusters2. However, the innovation agenda needs to be promoted in the government agencies that directly impact innovation in Canada, particularly innovation in the private sector. Otherwise, the government's focus on research will not translate innovation into the Canadian market. In other words, products and services stemming from these important correlation discoveries will not be brought to market by Canadian innovators and/or may not be readily available to Canadians.
Interestingly, there has been little objection by the Canadian innovative diagnostics community to the clear diminishment of what is patentable for medical diagnostics. The reason behind this lack of reaction is unclear, but the changes have yet to have significant effect or to be appreciated fully (the second round of examination of diagnostic patent applications under these new guidelines is just emerging). One thing is clear: unless challenged or changed by the legislation, the current patent office practice will dramatically reduce the scope and type of claims and consequently the protection available for medical diagnostic innovations. In an era where precision medicine is positioned to transform the delivery of healthcare, reducing the incentives for innovation may negatively impact the Canadian diagnostics industry and place Canada at a disadvantage vis-à-vis other countries.
1 "The Canadian Opportunity", Davos, Switzerland, January 20, 2016, http://pm.gcca/eng/news/2016/01/20/canadian-opportunity-address-right-honourable-justin-trudeau-prime-minister-canada
2 Canadian Federal Budget 2016: Research & Innovation Investment Summary, Robert Merson, Biotechnology Focus, March 23, 2016, http://biotechnologyfocus.ca/canadian-federal-budget-2016-research-innovation-investment-summary/
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