Comprehensive Economic and Trade Agreement between Canada and Europe: a new age of IP reform?
October 30, 2013

The Canadian government tabled a report yesterday with further details concerning the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union (EU). An agreement in principle was reached on October 18, 2013, concluding more than four years of negotiation.

CETA is being touted as Canada’s most ambitious trade agreement to date, with far reaching provisions, including relating to intellectual property (IP).

Although the final agreement has not yet been made public, the government is reporting the following outcomes with respect to IP protection:

Pharmaceuticals

CETA is expected to affect pharmaceutical IP protection in the following three areas:

Innovator Right of Appeal

Canada has committed to providing an effective right of appeal to all litigants. Further, the government has indicated that it will “end the practice of dual litigation.”

Currently, an innovative pharmaceutical company may be unable to pursue an appeal of a negative decision in a proceeding under the Patented Medicines (Notice of Compliance) Regulations (the NOC Regulations). The NOC Regulations link subsequent entry drug regulatory approval to innovator patent status.

There is also the possibility for “dual litigation” under the current system. The NOC Regulations provide a summary proceeding in which allegations of patent infringement and patent invalidity are found justified or unjustified. Irrespective of the final result in such proceedings, the same patent can be asserted or challenged as between the same parties and based upon the same drug in a separate (“dual”) proceeding under the Patent Act.

There are no details on how these changes in the law will be implemented: amendments to both the Patent Act and the NOC Regulations may be required.

Contact: J. Sheldon Hamilton

Patent Term Restoration (PTR)

Canada has committed to provide additional protection to pharmaceutical products protected by eligible patents.

A fixed cap of two years is being reported for this supplementary protection, with no retroactive effect for drugs previously approved. Reference points for the calculation are said to include the filing date of the patent application and the first marketing authorization (NOC) for the drug. An export exception for Canadian-made generic medicines during this period of additional protection is expected.

The Patent Act will likely need to be amended to include term extension.

Contact: Daphne C. Lainson

Data Protection

Canada rejected the EU request to provide 10 years of data protection for pharmaceutical innovation. But, it has agreed to “lock in” the current term of eight years of market exclusivity.

The Food and Drug Regulations presently provide a six-year “no file” period in which a subsequent entry manufacturer cannot seek regulatory approval relying upon an innovator’s approval for an innovative drug. There is a further two years of market exclusivity (2.5 years if the pediatric extension applies).

The Food and Drugs Act will likely need amendment to “lock in” the term, entrenching this right.

Contact: Nancy P. Pei

Copyright

Based on the information provided, it appears that CETA reflects Canada’s recently updated copyright regime (for more details see our November 20, 2012 article) such that Canada’s copyright legislation should not require revision. However, provisions dealing with Internet intermediary / service provider liability in the newly revised Copyright Act still need to be proclaimed in force.

Contact: Brian P. Isaac

Trademarks, Designs and Geographical Indications

While Canada did not take on any specific commitments with respect to trademarks and designs, there is a “best endeavours” commitment to make “all reasonable efforts” to comply with international agreements including the Singapore Treaty and the Madrid Protocol relating to trademarks and the Hague Agreement relating to Industrial Designs.

Numerous provisions regarding geographical indications are included, designed to address EU concerns relating to foods and beer. Many geographical indications will be protected, with exceptions including maintaining existing rights for Canadians to use common English and French words for food products, protecting existing Canadian trademark registrations, permitting the continued use of commonly used terms such as Black Forest ham and allowing for the continued use by users of certain geographical indications such as Asiago as well as components of certain terms such as Gouda while protecting Gouda Holland.

Contact: Keltie Sim Luft

Plants and Plant Protection Products

The report states that CETA “reflects the Canadian regime” and provides certainty for data protection for plant protection products. The Pest Control Product Regulations currently provide for, among other things, the protection of certain data submitted for the registration of pesticides (including herbicides, fungicides, and insecticides).

The report indicates that both Canada and the EU are committed to co-operating to promote and reinforce the protection of plant varieties based on the International Union for the Protection of New Varieties of Plants (UPOV). There is no indication whether Canada will become a party to the 1991 Act of the UPOV Convention. Canada is presently a party only to the 1978 Act.

The report notes that CETA will not change the “farmers’ privilege” to save and replant seeds of a protected variety under Canada’s Plant Breeders’ Rights Act (PBRA). The PBRA does not presently explicitly provide for a farmers’ privilege, although one is implied by the limited rights of the breeder specified in the legislation. A farmers’ privilege is explicitly defined in the 1991 Act of the UPOV Convention.

Contact: David E. Schwartz

Enforcement

Based on the information provided, it appears that Canada will be CETA compliant in respect to commitments regarding IP enforcement provisions, including civil and border remedies, if the regime presented under Bill C-56 is enacted into law. Bill C-56 was re-introduced as Bill C-8 on October 28, 2013 and has now been referred to committee for further consideration and possible amendment. (For more details on Bill C-8, see our IP Update of October 29, 2013). However, there is a caveat that commitments regarding “the handling of geographical indications at the border” are to be confirmed.

Contact: Brian P. Isaac

Concluding Remarks

The CETA agreement has not yet been published nor finalized, leaving the possibility that the commitments noted above may be subject to further comment and analysis.

Once finalized, there will remain the requirement to ratify the agreement, which may not occur until 2015. The long process of statutory reform (which will require Parliamentary approval for any changes to the various Acts noted above) and regulatory reform (which will only require approval through designated agencies) will likely not begin until the agreement is ratified. It may therefore be a number of years before specific changes to Canadian law are implemented.

Should you have any questions regarding any aspect of this Update, please contact us.


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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