Comprehensive Economic and Trade Agreement between Canada and Europe to result in greater protection for pharmaceutical patentees
November 14, 2013

by Nancy P. Pei and Daphne C. Lainson

As reported in our October 30, 2013 IP Update, the Canadian government tabled a Technical Summary report on October 29, 2013 which contained 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.

The Technical Summary contains the following outcomes with respect to pharmaceuticals and intellectual property protection. The EU had requested (i) an innovator right of appeal under the Patented Medicines (Notice of Compliance) Regulations (the NOC Regulations), (ii) patent term restoration, and (iii) an extended data protection term. Canada agreed to (i) and (ii). The future amendments are welcome, as they will bring Canada’s regime not only closer to that of the EU, but the U.S. as well.

Innovator Right of Appeal

“Canada agreed to a general commitment to ensure that litigants are afforded effective rights of appeal, which gives scope for Canada to end the practice of dual litigation.”

Currently, if an innovator’s application for a prohibition Order under the NOC Regulations is dismissed and the generic manufacturer receives its marketing approval, any appeal by the innovator may be rendered moot. To date, the Court of Appeal has never exercised its discretion to permit such an appeal to proceed. Accordingly, innovators do not have an effective right of appeal under the NOC Regulations. Conversely, a generic manufacturer may pursue an appeal from a prohibition Order, even if the patent has expired.

“Dual litigation” under the current system refers to two proceedings between the same parties relating to the same drug and patent: (i) a proceeding under the NOC Regulations and (ii) a patent infringement or impeachment action.

The present scheme permits both types of proceedings since a decision under the NOC Regulations is not considered a final decision. As indicated in the Summary, “Generic manufacturers note that a successful result under patent-linkage litigation is no guarantee of success in the case of subsequent litigation under the Patent Act.” Thus, a generic manufacturer may overcome a patent under the NOC Regulations and be later found liable for infringement. In at least one case, generic manufacturers have challenged a patent under both the NOC Regulations as well as in an impeachment action (See: Teva Canada Limited v Novartis AG, 2013 FC 141 and Novartis Pharmaceuticals Canada Inc v Apotex Inc, 2013 FC 142 relating to GLEEVEC).

Amendments to at least the NOC Regulations will be required to effect these changes.

Patent Term Restoration (PTR)

“Canada agreed to provide additional (sui generis) protection for pharmaceutical products protected by eligible patents in Canada.”

Currently, the Patent Act does not provide for any measures to restore patent term for loss of effective term caused by the time required for regulatory approval. However, in the EU, a patentee may apply for a supplementary protection certificate (SPC) to compensate patentees for regulatory delays. An SPC can extend the patent term from 20 to up to 25 years. The extension is the time between the filing date of the patent application and the date of the first marketing authorization in the EU, less five years.

The Summary indicates that the period of protection will be calculated using reference points including the filing of the patent application and the first Canadian marketing approval and therefore appears similar to the EU SPC system. However, there will be a lower fixed cap of two years (in the EU, the cap is five years), with the potential for extending the patent term to up to 22 years from filing.

There is no information as to the types of patents that will be included.

The Summary also indicates that “exceptions have been negotiated to allow for Canadian-made generic medicines to be exported during the period of additional protection,” which “will temper the impact on the generic industry and its competitiveness in the important United States market.”

There will be no retroactivity for pharmaceutical products already approved.

Data Protection

“Canada rejected the EU request to provide 10 years of data protection.”

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 EU provides for 8 years of data exclusivity plus two years of market exclusivity plus an additional year of market exclusivity for new indications.

While rejecting the EU’s request for a longer term, Canada agreed to lock in the current Canadian practice of providing eight years of market exclusivity. Presently, the eight years of market exclusivity is prescribed by the Food and Drug Regulations; it appears that Canada has agreed to amend the Food and Drugs Act to explicitly provide for the eight-year term.


As noted in the earlier IP Update, CETA has not yet been published nor finalized, leaving the possibility that the commitments noted above may be subject to change. Further, ratification is not expected until 2015 and further statutory and regulatory amendments will then be required to implement the CETA commitments into domestic law. While specific changes to Canadian law are still several years away, pharmaceutical patentees should be mindful of the future enhanced protection for patents in Canada.

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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