Changes in CETA bill seek to streamline litigation in pharma industry

In the wake of the Comprehensive Economic and Trade Agreement signing, the federal government has introduced an amendment bill into Parliament that will provide for a two-year drug patent term extension and drug litigation proceedings will be turned into full actions.

Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States, was introduced on Oct. 31. It will implement portions of CETA and provide authority to replace the current summary Notice of Compliance proceedings with full patent infringement and validity actions.

It will mean final determinations on infringement and validity issues, which Noel Courage, partner at Bereskin & Parr LLP in Toronto, says will reduce the multiplicity of litigation and improving brand-name companies’ rights to appeal trial decisions.

“They are turning the NOC proceedings from an application into actions, saying instead of being an application procedure or a prohibition order, we’re just going to turn it into a patent infringement action and it will be decided with finality,” Courage says. “We don’t know what that system is going to look like, but they’ve empowered the government to pass regulations to overhaul the NOC proceedings.”

There are two reasons for this move: to reduce multiplicity of litigation and to improve the ability of brand-name companies to appeal these cases.

“With patent infringement you are often suing someone after they are on the market and chasing the horse after the barn door is open,” says Courage. “It can dismantle the brand-name company’s marketplace fairly quickly.”

The new rules are also giving pharmaceutical companies two more years of patent room.

“In the pharmaceutical business, the last couple of years in a patent life are usually the most valuable because it takes so long to get through the regulatory system and get approval by Health Canada, get on the market and get awareness amongst physicians,” he says.

Eligible drugs will include human and veterinary drugs. A maximum two years of additional patent rights for an approved drug will be available by a Supplementary Protection Certificate. The Canadian SPC system is based on the European SPC system.

“It’s fairly narrow what they’re doing for the pharmaceutical industry, but it’s something that’s been done in the U.S. for years and in Europe for years so it’s part of the give and take in the CETA negotiations,” says Courage.

“It definitely makes a difference to pharmaceutical companies being able to have another couple of years of maximum profit,” he says.

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