Impact On Canadian Intellectual Property Law From The Canada-European Union Comprehensive Economic And Trade Agreement (CETA)

On September 26, 2014, the terms of the Canada-European Union Comprehensive Economic and Trade Agreement (“CETA”) were officially released to the public. The product of over 5 years of negotiation between Canada and the EU (beginning in May 2009), finalization of CETA signals upcoming reform to certain areas of Canadian intellectual property law. Some of the key impacts of CETA on Canadian intellectual property law are discussed below. Trade-marks CETA requires Canada to use “all reasonable efforts” to comply with the Singapore Treaty on the Law of Trademarks (2006) (“Singapore Treaty”) and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (1989) (“Madrid Protocol”). Both documents attempt to standardize and streamline trade-mark applications that are filed internationally. The Singapore Treaty standardizes filing procedures among its signatories, adds protection for non-traditional marks such as holograms and olfactory marks, and requires parties to adopt the Nice Classification system for wares and services. The Madrid Protocol allows applicants in member countries to register their rights in multiple jurisdictions by filing a single international application. In Canada, the current practice requires a separate Canadian filing for foreign applicants seeking protection in Canada, and a separate foreign filing for Canadian applicants seeking protection abroad. Canada has passed but not yet proclaimed in force legislation to implement Madrid and Singapore.CETA also requires Canada to protect an additional 179 geographical indications or “GIs”. These GIs relate to various EU foods and beers, in which a given quality, reputation, or other characteristic of the goods is essentially attributable to its geographical origin. The scope of the protection varies depending on the GI. For example, CETA allows the continued use of common English and French names for food products such as Black Forest ham, Parmesan, Bavarian beer, Munich beer, and Valencia orange, so long as they are not used in a way that misleads the public as to the geographical origin of the goods. CETA prescribes limited protection rights afforded to certain EU cheese products: Asiago, Feta, Fontina, Gorgonzola, and Munster. Companies using these terms after October 18, 2013 will be required to add the qualification of “kind”, “type”, “style”, “imitation”, or similar language to their packaging and other marketing materials. Companies that have used these terms for their cheese product in Canada prior to October 18, 2013 will be allowed continued use without the qualification. Copyright and Industrial Designs The copyright terms in CETA largely reflect Canada’s current copyright law and there does not appear to be any need for amendments in order to comply with CETA. With respect to industrial designs, similar to what was agreed regarding the Singapore Treaty and the Madrid Protocol in the trademark terms, CETA only requires Canada to make “all reasonable efforts” to comply with the Hague Agreement Concerning the International Registration of Industrial Designs (1925) (“Hague Agreement”). The Hague Agreement sets out a system to streamline the registration of industrial designs internationally and allows for a single application to be filed in several countries for a single set of fees. Patents Many of the key intellectual property terms in CETA are focused on patents relating to pharmaceutical products. The key terms relate to patent term restoration (or “sui generis protection”), equivalent and effective appeal rights for litigants under the Patented Medicines (Notice of Compliance) Regulations (“Regulations”) regime, and data protection. Patent Term Restoration/Sui Generis Protection Under the Canadian Patent Act, patents have a term of 20 years from the date the corresponding patent application was filed. Notably, before a pharmaceutical product can be marketed in Canada, it must be granted regulatory approval from the Minister of Health. Since patents are typically filed early on in the drug development process, this means that the marketer of a pharmaceutical product can secure patent protection prior to obtaining the regulatory approval that will allow them to actually market their product. In effect, delays in the regulatory approval process can act to reduce the length of protection a patent owner may practically enjoy. In an attempt to compensate for this, CETA requires that Canada provide a patent term extension, or sui generis protection, for patents relating to certain pharmaceutical products that are delayed through the regulatory approval process. The term extension is equal to the time between the date the patent application was filed and the date of first regulatory approval, minus five years. The term extension cannot exceed a period of two to five years, but this operates without prejudice to any possible extension provided by Canada or the EU to reward research in target populations, such as children. Sui generis protection is granted to a particular patent relating to a particular “product”, which under CETA, refers to an active (medicinal) ingredient, including: a chemical drug, biologic drug, vaccine, radiopharmaceutical, or a combination of active ingredients when included in a pharmaceutical product. Sui generis protection is also limited to pharmaceutical patents that are “basic patents”, which is defined in CETA as “a patent which protects a product as such, a process to obtain a product or an application of a product in force”. The following conditions must be met to obtain sui generis protection: (a) the pharmaceutical product has been granted market approval; (b) the pharmaceutical product has never been provided sui generis protection before; and (c) the market approval in (a) is the first such approval for the pharmaceutical product (together, the “Conditions”). While pharmaceutical products are often protected by multiple patents, sui generis protection can only be provided to one patent per pharmaceutical product. In the case where there are multiple patents protecting a product, and all patents are owned by one person, that person will be able to select the patent to which the protection will apply. Where multiple patents cover the pharmaceutical product, the patents are not co-owned, and the different owners have each requested that a different patent be protected, the protection will apply to the patent agreed-to between the parties. Sui generis protection may be revoked for any of the following reasons: (a) the patent is held to be invalid; (b) the patent has lapsed prior to its expiry date; (c) the claims of the patent are found not to cover the product; (d) marketing approval has been withdrawn; or (e) the sui generis protection was granted without meeting the Conditions. Right of Appeal in “Patent Linkage” In order to obtain market approval for a generic version of an innovator or brand manufacturer’s (“Brand”) pharmaceutical product, a generic manufacturer (“Generic”) must address all patents listed on Canada’s “Patent Register” by a Brand against that product in accordance with the Regulations. If a Generic is seeking regulatory approval of its own product prior to the expiry of any of the listed patents, then it must address each patent in a “Notice of Allegation” to the Brand. In a Notice of Allegation, a Generic will make certain allegations against each listed patent, for example, that the patent will not be infringed and/or that the patent is invalid. Having received a Notice of Allegation, the Brand can apply to the Federal Court of Canada for an order prohibiting the issuance of the regulatory approval by the Minister of Health based on the listed patent(s). The Brand can succeed in this litigation, and secure an order prohibiting the Generic product from the market, if it can prove to the Court that the Generic’s allegations against the listed patents are not justified. If a Generic succeeds in this litigation, the Minister of Health can issue market approval for the Generic’s product. This market approval is issued in the form of a Notice of Compliance. Issuance of a Notice of Compliance by the Minister of Health renders any appeal of the decision by the Brand moot, because the Federal Court of Appeal does not have the power to quash the regulatory approval issued to the Generic after an unsuccessful application under the Regulations. The Brand may still bring an ordinary infringement action against the Generic, of course. However, if a Brand does secure a prohibition order in its application, a Generic can appeal that decision of the Court since the appeal is not moot. Notably, CETA requires that, in the context of patent linkage mechanisms such as the Regulations, “all litigants are afforded equivalent and effective rights of appeal”. At this time it is not clear what amendments Canada may undertake in order to achieve compliance with this obligation under CETA. Data Protection Under Canada’s current pharmaceutical data protection regime, for a period of six years from the date on which a Brand receives regulatory approval for a pharmaceutical product containing an innovative medicinal ingredient, a Generic is prohibited from filing a submission to Health Canada for a generic version of that product relying on the Brand’s safety and efficacy test data, without the Brand’s permission (called a “no file” period). Furthermore, Health Canada cannot provide market approval for the Generic’s product for an additional two year period thereafter, providing an eight year period of market exclusivity in total. The terms in CETA mirror Canada’s current provisions as described above, meaning that no amendments appear to be required to comply with this CETA obligation. However, continued compliance with CETA would require that Canada could not, in any future amendments, decrease the length of time relating to the “no file” or approval periods. While the terms of CETA have been released, the terms are not yet final. Both Canada and the EU are engaged in a final legal review of CETA. The final terms must then be ratified by Parliament before they are to take effect. For more information, see: http://tinyurl.com/mab3od7. Summary by: Thomas Wong