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On 10 December 2019 the United States, Mexico and Canada signed the Protocol of Amendment to the Agreement between the United States of America, the United Mexican States and Canada (commonly referred to as the USMCA). The parties originally signed the USMCA on 30 November 2018, but the United States reopened negotiations after the Democrats gained control of the US House of Representatives in the 2018 midterm elections.
If ratified, the amended USMCA will replace the North American Free Trade Agreement (NAFTA) and require a number of changes to Canada's IP laws (for further details please see "USMCA versus NAFTA: what's changed and what it means for intellectual property in Canada"). Many requirements of the original USMCA have already been met by recent changes in Canadian IP legislation, but more amendments will be required to implement the USMCA.
Patents and undisclosed test or other data
International agreements The USMCA requires the three parties to either:
- give due consideration to ratifying or acceding to the Patent Law Treaty (PLT); or
- adopt or maintain procedural standards consistent with the objectives of the PLT.
Canada ratified the PLT on 30 July 2019. Amendments made to the Patent Act and the Patent Rules to implement the PLT came into force on 30 October 2019, such that Canadian law is now compliant with this aspect of the USMCA.
Patent term adjustment for unreasonable granting authority delays The USMCA specifies that the parties must adjust the term of a patent to compensate for patent office delays in issuing patents. Patent term adjustment may accrue if a patent issues more than five years from the date the application is filed or three years after examination is requested, whichever is later.
The United States has had such provisions in its patent laws for approximately 20 years, but patent term adjustment to compensate for patent office delays will be entirely new to Canadian patent law.
Canada must implement its obligations under this provision within four-and-a-half years of the date on which the USMCA enters into force.
Biologics Current Canadian data protection law provides an eight-year data protection term (with a possible six-month paediatric extension) for both biologics and small molecule drugs.
The original USMCA required the parties to provide a data protection term for biologics of at least 10 years from the date of first marketing approval and would have required changes to Canadian law. But the amendments to the USMCA have removed this requirement and Canada will not be required to amend its domestic data protection regime.
One of the most significant changes under the USMCA will be to increase the basic term of copyright protection in a work by 20 years. Currently, the basic term of copyright protection in Canada is the life of the author plus 50 years. Under the USMCA, that term will increase to no less than the life of the author plus 70 years. This will align the term of protection in Canada with the United States and the European Union.
Canada must comply with this requirement within two-and-a-half years of the date on which the USMCA enters into force.
In addition, the USMCA contemplates providing "safe harbours" for internet service providers (ISPs). Such safe harbours will shield ISPs from liability for copyright infringements that they do not control, initiate or direct, which take place through their networks. To be eligible for safe harbour protection, ISPs will need to expeditiously remove or disable access to infringing content and implement a policy of terminating the accounts of repeat infringers. Notably, however, ISPs will not be required to monitor their networks for infringing activity.
Treaties Canada is already in compliance with the trademark provisions of the USMCA, having acceded to the Madrid Protocol, the Singapore Treaty and the Nice Agreement on 17 March 2019. Amendments to the Trademarks Act and the Trademarks Rules came into force on 17 June 2019, implementing those agreements.
Collective and certification marks The USMCA requires each party to provide that trademarks include collective marks (ie, marks used by members of an association or collective) and certification marks. As Canadian trademark law does not presently allow for the registration of collective marks, it appears that legislative amendments will be required for compliance with this aspect of the USMCA.
Domain names Canada is already in compliance with the USMCA's domain name provisions, which include a domain name dispute mechanism modelled on the principles of the Uniform Domain-Name Dispute-Resolution Policy for its '.ca' domain registry and online public access to a reliable database of contact information for domain name registrants.
The USMCA provides a number of provisions relating to the protection of geographical indications, similar to provisions in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Canada is already in compliance with these provisions, which notably relate to the administrative procedures for the protection or recognition of geographical indications, grounds of denial, opposition and cancellation, as well as guidelines for determining whether a term is deemed generic. The USMCA will prevent Canada from automatically protecting geographical indications relating to agricultural products or food through the mechanism of bilateral or multilateral agreements without first providing the possibility of opposing and removing these from the list of protected geographical indications. However, geographical indications for wines and spirits may continue to be automatically protected through bilateral or multilateral agreements, such as was the case with the Canada-European Union Comprehensive Economic and Trade Agreement.
The provisions contained in the USMCA largely reflect amendments to Canada's Industrial Design Act and Regulations that came into force on 5 November 2018. These amendments included accession to the Hague Agreement. With these changes, Canada is in compliance with the industrial design provisions contained in the USMCA.
Border measures Under the USMCA, customs officials will be given the authority to "initiate border measures ex officio against suspected counterfeit trademark goods or pirated copyright goods" that are imported, destined for export, in transit and admitted into or exiting from a free trade zone or bonded warehouse. Currently, 'in transit' goods are off limits and may not be detained.
Customs officials will also be permitted to inspect, detain and destroy "suspected counterfeit trademark goods or pirated copyright goods" following a determination that the goods are infringing. Notably, these provisions do not necessarily require a court to make a finding of infringement. Rather, they permit 'competent authorities', which may include law enforcement authorities such as customs officials, to determine whether the suspect goods infringe an IP right. If they do, then the goods will be destroyed or "disposed of outside the channels of commerce in such a manner as to avoid any harm to the right holder". Amendments to the Customs Act will be required to implement these provisions.
The amended USMCA must be ratified by all parties before it can come into force. Each party must notify the others in writing once it has ratified the amended agreement. The amended USMCA will enter into force and supersede NAFTA on the first day of the third month following the final notification of ratification.
Mexico was the only party to ratify the original USMCA. The Mexican Senate ratified the amended USMCA on 12 December 2019.
President Trump submitted a bill implementing the amended USMCA to both chambers of the United States Congress on 13 December 2019. The House of Representatives voted to approve the bill on 19 December 2019. The Senate will be able to consider and vote on the same bill once the Senate Finance Committee refers it back to the Senate floor, or in any case after 45 session days have elapsed from 13 December 2019. Majority Leader Mitch McConnell has stated that a vote on the USMCA may be delayed by the anticipated impeachment trial.
Bill C-100, implementing the original USMCA, died on the Order Paper when the Canadian Parliament was dissolved before the 2019 federal election. A bill to implement the amended agreement must be tabled in the new Parliament, where it can be debated in both the House of Commons and the Senate, before ratification is possible. As such, the timeline to ratification is uncertain.
Walter Chan, student at law, assisted in the preparation of this article.
