CETA Draft Regulations Published on Patent Linkage and Term Restoration – 15 Day Public Comment Period
July 14, 2017

by: Sheldon HamiltonLynn Ing and Daphne C. Lainson

The government has published the long anticipated draft regulations regarding:

  1. changes to the Patented Medicines (Notice of Compliance) Regulations [“PMNOC Regulations”], and
  2. proposed Regulations to implement Certificates of Supplementary Protection (CSPs) [“CSP Regulations”] to compensate innovators for lost patent term due to regulatory delays. 

There is a short 15-day period for public comment ending on July 30, 2017.

A summary of the amendments made to the Patent Act can be found here

PMNOC Regulations

The proposed amendments to the Regulations are accompanied by a twenty page regulatory impact analysis statement (“RIAS”) outlining the background and objectives and describing the proposed changes.

The Government believes that the proposed amendments will achieve a number of objectives including:

  • replacing summary proceedings with a full right of action;
  • providing equivalent and effective rights of appeal to all litigants; and
  • ending dual litigation.

The proposed changes would comprehensively alter the regime that has governed pharmaceutical patent litigation in Canada for nearly 25 years.  At a high level, the summary proceedings now in place will be replaced by a full right of action, with accompanying procedural guarantees and discovery obligations.  

Specific proposed amendments include the following:

Right of action:

  • first person right of action against second person for a declaration of infringement; second person can counterclaim to impeach;
  • remedies:  if a declaration of infringement is made prior to NOC issuance, NOC issuance is barred until patent expiry; if NOC issues prior to declaration of infringement Court may order any other remedy available under the Patent Act such as injunctive relief; 
  • relevant claims: proceedings may now address any claim in a patent listed on the Patent Register, not only claims for the medicinal ingredient, formulation, dosage form, or use of the medicinal ingredient;
  • a first person who does not commence proceedings under the Regulations would be prohibited from bringing a subsequent action, unless the first person did not have a reasonable basis for bringing the proceedings. 

Patent listing:

  • eligibility requirements are unchanged.

Second person statements and allegations:

  • second person must address each claim in a listed patent;
  • new statements and allegations are proposed, e.g. patent ineligibility;
  • new requirements for allegations
  • invalidity:  second person must include supporting documents with NOA; second person may request inventor contact information, laboratory notebooks “to establish the existence of a particular property, advantage, or use asserted by the second person to form part of the invention as of the filing date”. An innovator will be required to provide such documents or otherwise explain the reason for not providing them at the time it serves the statement of claim
  • non-infringement:  relevant portions of submission or supplement must be served, even if no allegation of non-infringement; motion may be brought for production of further portions.

Court process:

  • case management requirements 
  • appeals from interlocutory orders to the Federal Court of Appeal, only with leave
  • express duty to act diligently and reasonably cooperate
  • specific provision for second person motion to dismiss.

Prohibition on NOC issuance:

  • proposed Regulations would bar NOC issuance until the expiry of all patents in respect of which the Court has made a declaration of infringement
  • exceptions:  provision for first person consent to the second person for any requirement under section 7 that prohibits the Minister of Health (“Minister”)
  • first person can renounce application of the 24-month bar on commencement of an action under the Regulations
  • provision that 24-month bar does not apply “in respect of a patent” if a finding of patent ineligibility is made or if a patent has deleted from the patent register; action will not be dismissed.

Involvement of Minister:

  • Minister would no longer be a party; 
  • provisions for providing the Minister with documentary access.

Section 8 damages:

  • who is liable:  all plaintiffs in the infringement action would be liable; unless plaintiff renounces application of 24-mponth bar at the time they bring the action;
  • start date for liability:  later of (i) date of service of NOA, and (ii) date NOC would have issued;
  • end date for liability:  no longer limited to “loss suffered during the period”; now any loss as a result of delayed market entry.

Related rights of action in relation to unlisted patents:

  • generic right of action:  second person is deemed an “interested person,” and can therefore bring an impeachment action;
  • innovator right of action:  first person can, upon receiving NOA, bring an infringement action for a patent that is not the subject of the NOA that could arise from the second person’s activities in accordance with the submission. 

Transitional provisions: 

  • the current Regulations would continue to apply to any matter that relates to a NOA served on a first person before the day that the Regulations come into force.

CSPs

As noted in our earlier newsletter, the CSP will be calculated by subtracting five years from the period beginning on the filing date of the application for the patent and ending on the day on which the authorization for sale is issued, for a maximum of two years. However, many of the details regarding the CSP were left to regulation, and which have been addressed in the draft Regulations.  Highlights of the draft regulations are:

Prior Approvals and excluded variations:  a CSP is only available where no other CSP has been issued with respect to the medicinal ingredient or the combination of medicinal ingredients, which is defined to exclude prescribed variations.  According to the draft Regulations, these prescribed variations are:

  1. a variation in any appendage within the molecular structure of a medicinal ingredient that causes it to be an ester, salt, complex, chelate, clathrate or any non-covalent derivative;
  2. a variation that is an enantiomer, or a mixture of enantiomers, of a medicinal ingredient;
  3. a variation that is a solvate or polymorph of a medicinal ingredient;
  4. an in vivo or in vitro post-translational modification of a medicinal ingredient; and
  5. any combination of the variations set out in paragraphs (a) to (d).

Eligible patents: the patent must be in force, and as summarized in the RIAS, to “pertain to the same medicinal ingredient, the patent must include at least one claim that is directed at the same medicinal ingredient; any use of the same medicinal ingredient; or the same medicinal ingredient as produced by a defined process (product-by-process)”, and where the authorization is for a drug that contains a combination of medicinal ingredients, the eligible patent “must include at least one claim directed at the same combination of the same medicinal ingredients; any use of the same combination of the same medicinal ingredients; and the same combination of the same medicinal ingredients as produced by a defined process (product-by-process)”. 

Thus, pure process patents and patents claiming formulations are excluded.

Filing of CSP Application: the CSP application can only be filed if there are more than two years remaining in the patent term, and must be filed within 120 days of grant of the NOC (for an earlier granted patent) or the patent (for an earlier granted NOC).  The patent owner can consent to the NOC holder to file the CSP application.

In order for a CSP to be available, the application for the authorization for sale must be filed within a deadline to be prescribed relative to the first corresponding foreign application for marketing approval. According to the draft Regulations, the prescribed countries are the European Union and any country that is a member of the European Union; the United States of America; Australia; Switzerland; and Japan; and the prescribed period for filing the application for the authorization for sale is

  • 18 months, if the application for a CSP was filed no later than the first anniversary of the day on which the CSP provisions come into force, and

  • 12 months, in any other case.

Cost: $9,011, and beginning on April 1, 2018, the fee will increase annually by an amount equal to 2% of the fee payable in the previous year, rounded up to the nearest dollar.

Conflicting CSPs: The Act requires that only one CSP will be granted for a given medicinal ingredient or combination.  The proposed Regulations prescribe the various time periods that must be respected when considering conflicting applications.

Register: The Minister will maintain a CSP Register.

Concluding Remarks

The proposed changes to the PMNOC Regulations and the new CSP Regulations will herald a new environment for pharmaceutical companies, with long lasting impact.

Companies should immediately consider the proposed changes, and submit comments within the time frame.  

For any questions, please contact a member of our Life Sciences Practice Group.

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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