Canada: Canada's Patent Linkage Regulations Get Long-Awaited Makeover

On July 15, 2017, the Government of Canada proposed major amendments to the Patented Medicines (Notice of Compliance) Regulations (Regulations), the patent linkage scheme that forms the cornerstone of pharmaceutical and biologics patent litigation in Canada. The proposed amendments include the following key changes:

  • proceedings under the Regulations will now be by way of action, not application
  • actions under the Regulations will now finally determine whether asserted patent claims are invalid or non-infringed by a pending drug submission
  • in certain circumstances, first persons will be allowed to assert patents and patent claims not listed on the Patent Register
  • first persons will now be able to renounce the 24-month regulatory stay, allowing earlier competitive market entry in order to avoid liability for section 8 damages
  • section 8 damages, if any, can now include compensation to a second person for permanent loss of market share

These proposed amendments are subject to a short 15-day consultation period and are expected to be adopted in September 2017.   

Background and summary of proposed changes

Since 1993, the Regulations, Canada's equivalent to the U.S. Hatch-Waxman Act, have sought to balance the rights of patentees with the rights of generic companies to seek abbreviated drug approval from the Minister of Health. Over the years, however, the Regulations showed their limitations, most notably because they required patentees to proceed by way of applications for an order to prohibit the Minister of Health from approving a generic drug. This scheme had undesirable consequences for litigants – for example, patentees often could not appeal the dismissal of applications for orders of prohibition against the Minister of Health or, because cases under the Regulations did not finally determine the issues between the parties, patents were often re-litigated in follow-on infringement or impeachment actions. This resulted in a lack of certainty for the parties and "at risk" launches for generic companies. The proposed amendments seek to address these, and other, perceived shortcomings.

Although the proposed amendments are extensive, the basic structure of the Regulations will remain the same. The scope of eligible patents for listing will remain the same. The Patent Register will remain frozen, so that generic or biosimilar applicants (so-called "second persons") need only address patents that were listed on the Patent Register at the time of filing their drug submissions. The stay of generic or biosimilar approval will remain 24 months, and section 8 damages will remain available for generic or biosimilar companies kept off the market due to the 24-month stay. However, it is also proposed that the Regulations change in material ways:

  1.  Changes to the Patent Register: The Minister of Health will be given broad powers to actively maintain the Patent Register, which will include not only patents, but also "certificates of supplementary protection" (CSPs), which were introduced into Canadian law in the CETA Implementation Act, adopted after the signature of the Canada-European Union Comprehensive Economic and Trade Agreement.
  2.  New notice of allegation (NOA) requirements: Although proceedings will be by way of action, generic and biosimilar manufacturers (second persons) will still be required to serve an NOA. The NOA will need to be detailed only in respect of invalidity allegations. The Regulations will now give the parties some latitude to provide limited information about non-infringement before a proceeding is commenced. The practical effect of the changes, and what will be considered adequate details in the NOA, will no doubt be the subject of cases to come.
  3.  Documents/information to be provided with NOAs: NOAs will need to include a searchable electronic copy of the relevant portions of the second person's drug submission and copies of all documents relied upon in support of invalidity allegations. The second person will have a continuous disclosure obligation with respect to its drug submission while litigation under the Regulations is pending. The second person may impose reasonable confidentiality obligations on the first person, and the first person can apply to vary these obligations.
  4.  Nature of the action: First persons will no longer seek a prohibition order against the Minister of Health, but rather declarations that making, using, selling or constructing a drug in accordance with the second person's drug submission will infringe the patent or CSP, along with other available remedies. Second persons will be able to bring counterclaims to impeach a patent/CSP or to obtain a declaration of non-infringement. On receipt of an NOA, first persons/patentees may assert unlisted patents or patents not subject to the NOA if infringement of these collateral patents could result from a second person's regulatory submission.
  5.  24-month stay: A first person who brings an action under the Regulations will be able to renounce the 24-month stay, without prejudice to its rights under the Patent Act. This strategy will allow a first person to avoid the risk of section 8 damages and will provide greater flexibility as to the scope of the action.
  6.  Section 8 damages: Following an unsuccessful action for patent infringement brought under the Regulations, a second person will be able to sue all former plaintiffs for section 8 damages. Plaintiffs could include the first person, a patentee or any party claiming under the patent (for example, corporate affiliates of the first person). The section 8 damages period will no longer be limited by the end date of the proceeding brought under the Regulations.

New challenges

The proposed amendments to the Regulations strive to overcome perceived shortcomings in the current Regulations, and achieve the dual objectives of affording patentees full rights of appeal and providing finality for litigants. However, the new Regulations will give rise to new challenges, including the following:

  • New strategic flexibility: New provisions, such as the ability of first persons and patentees to assert previously irrelevant claims or to renounce the 24-month stay, will require both first and second persons to make new and potentially difficult choices to manage their commercial and legal risks.  
  • Applicability of existing case law: For several years, litigants will face uncertainty about the applicability of current case law regarding several issues that are affected by these amendments to the Regulations. These issues will include the sufficiency of NOAs and the standard of review of patent listings.
  • Impact on biologics: The amended Regulations contain no provisions unique to biosimilars or other non-generic products. Unlike the situation in the United States, the Canadian government chose to not craft a regulatory pathway or patent linkage system designed to address the unique patent, regulatory and commercial aspects of biosimilars. It remains to be seen whether the Regulations framework will be well-suited to this new product class.  

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 Mondaq.com.

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

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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