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07 August 2017
The government has published the long-anticipated draft regulations regarding:
There was a short 15-day period for public comment, which ended on July 30 2017.(1)
The proposed amendments to the regulations are accompanied by a 20-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:
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 existing summary proceedings 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
A first person has a right of action against the second person for a declaration of infringement. The second person can counterclaim to impeach.
If a declaration of infringement is made before Notice of Compliance (NOC) issuance, NOC issuance is barred until patent expiry. If NOC issuance occurs before the declaration of infringement, the court may order any other remedy available under the Patent Act, such as injunctive relief.
Proceedings may now address any claim in a patent listed on the Patent Register and not only claims for the medicinal ingredient, formulation, dosage form or use of the medicinal ingredient.
A first person that does not commence proceedings under the regulations would be prohibited from bringing a subsequent action, unless it had no reasonable basis for bringing the proceedings.
The eligibility requirements are unchanged.
Second person statements and allegations
A second person must address each claim in a listed patent.
New statements and allegations are proposed (eg, patent ineligibility). Further, new requirements for allegations have been introduced.
A second person must include supporting documents with a Notice of Allegation (NOA). It may request inventor contact information and 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 when it serves the statement of claim.
Relevant portions of submission or supplement must be served, even if there is no allegation of non-infringement. A motion may be brought for production of further portions.
With regard to the court process:
Prohibition on NOC issuance
The proposed regulations would bar NOC issuance until the expiry of all patents in respect of which the court has made a declaration of infringement.
A first person must consent to the second person for any requirement under Section 7 that prohibits the minister of health.
A first person can renounce application of the 24-month bar on commencement of an action under the regulations. The 24-month bar does not apply "in respect of a patent" if a finding of patent ineligibility is made or if a patent has been deleted from the Patent Register; such action will not be dismissed.
Under the regulations, the minister would no longer be a party.
Provisions also exist which provide the minister with documentary access.
Section 8 damages
Who is liable?
All plaintiffs in the infringement action would be liable, unless the plaintiff renounces the application of the 24-month bar when it brings the action.
Dates for liability
The start date for liability is the later of:
The end date for liability is no longer limited to "loss suffered during the period", but now includes any loss as a result of delayed market entry.
Related rights of action for unlisted patents
Generic right of action
A second person is deemed an interested person and can therefore bring an impeachment action.
Innovator right of action
A first person can, on receiving an NOA, bring an infringement action for a patent that is not the subject of the NOA which could arise from the second person's activities in accordance with the submission.
The existing regulations would continue to apply to any matter that relates to an NOA served on a first person before the day on which the regulations come into force.
CSPs 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 authorisation for sale is issued, for a maximum of two years (for further details please see "Bill C-30 to implement CETA: implications for pharmaceuticals"). However, many of the details regarding CSPs were left to regulation and have been addressed in the draft regulations.
Highlights of the draft regulations are as follows.
Prior approvals and excluded variations
A CSP is available only 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:
The patent must be in force. As summarised 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)."
Where the authorisation 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
A CSP application can be filed only if more than two years remain in the patent term and must be filed within 120 days of grant of:
The patent owner can consent to the NOC holder filing the CSP application.
In order for a CSP to be available, the application for the authorisation 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 prescribed period for filing the application for the authorisation for sale is:
The fee is C$9,011. Beginning on April 1 2018, this will increase annually by an amount equal to 2% of the fee payable in the previous year, rounded up to the nearest dollar.
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.
The minister will maintain a CSP register.
The proposed changes to the PMNOC Regulations and the new CSP Regulations will herald a new environment for pharmaceutical companies, with long-lasting impact.
Canada and the European Union have agreed on September 21 2017 as the start date for the provisional application of the Comprehensive Economic and Trade Agreement. The final amendments are therefore expected to be released before September 21 2017.
For further information on this topic please contact Sheldon Hamilton or Lynn Ing at Smart & Biggar/Fetherstonhaugh's Toronto office by telephone (+1 416 593 5514) or email (email@example.com or firstname.lastname@example.org). Alternatively, please contact Daphne Lainson at Smart & Biggar/Fetherstonhaugh's Ottawa office by telephone (+1 613 232 2486) or email (email@example.com). The Smart & Biggar/Fetherstonhaugh website can be accessed at www.smart-biggar.ca.
(1) A summary of the amendments to the Patent Act is available here.
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