Much ado about nothing?

Much ado about nothing?

On Oct. 5, 2015, 12 countries, including Canada, signed the final draft of the Trans-Pacific Partnership Agreement. Ratification must occur within two years. Intellectual property was a contentious issue during negotiations, in particular aspects relating to pharmaceuticals, such as patent term extensions, data protection, and patent/drug approval “linkage” mechanisms.

However, most of these aspects are already enshrined in Canadian law, while others, such as patent term extensions for pharmaceuticals, are part of the recent Canada-European Union Comprehensive Economic and Trade Agreement, which is awaiting ratification by the Canadian and European governments. As a result, most TPP provisions relevant to pharmaceuticals are largely redundant with existing or pending laws, with one important exception.

Patent pre-approval
The TPP requires parties to provide a “pre-approval” procedure for patented pharmaceuticals, with two options: 1) provide notice to a patent holder if a competitor applies to market an identical or similar drug during the patent term, along with an opportunity to seek a legal remedy such as a preliminary injunction before the generic drug is marketed; or 2) preclude marketing approval for a drug that is subject to another person’s patent, unless the patent holder or original drug manufacturer consents. Canada’s existing Patented Medicines (Notice of Compliance) Regulations currently establish a system similar to the Hatch-Waxman system in the United States, under which a drug manufacturer may list patents relevant to a drug on a patent list. A generic version of the drug will not be approved until the listed patents expire or a judicial procedure is concluded. This mechanism likely satisfies the TPP’s first option, without requiring amendments to existing regulations.

Data protection
The TPP mandates a minimum of five years of data protection for newly approved drugs, commencing on the date a drug is first approved for marketing. During this period, generic competitors are not entitled to rely on drug safety or efficacy data submitted to the government by the originator. This is a non-patent form of market exclusivity that effectively prevents generic competition during the data protection period.
Canada already complies with this provision, since it already provides eight years of data protection.

The TPP also mandates an additional three years of data protection for new formulations and new methods of administration of previously approved pharmaceuticals, as well as five years of data protection for combination drugs if at least one of the ingredients was previously subject to data protection. However, these requirements are waived for countries, like Canada, that provide eight years of data protection. Under Canada’s existing Food and Drug Regulations, innovative drugs receive eight years of data protection. This protection also extends to biologics, although it does not provide additional data protection to new indications, dosage forms, or variants of previously approved drugs. No action appears to be required on Canada’s part to comply with the TPP data protection requirements. The TPP also requires 10 years of data protection for agricultural products. This will provide additional protection in this area, which is currently protected by a weaker form of data protection.

Patent term extensions — benefits of TPP
The TPP requires countries to provide patent term extensions (sometimes referred to as “patent term restoration”) to compensate for delays arising in two scenarios: unreasonable delays in the marketing approval process and unreasonable delays in patent prosecution amounting to more than five years from the application date or three years from the request for examination, whichever is later, subject to certain exclusions. The TPP does not specify a maximum patent term extension.

Under CETA, Canada has already agreed to a two-year patent term extension due to delays caused by the marketing approval process. This applies only to pharmaceuticals. As a result, Canada may need to provide an additional term extension for delays arising during patent prosecution. The impact of these provisions will take some time to determine, since in most cases prosecution proceeds reasonably quickly in Canada.

Neither CETA nor the TPP has been ratified and the government hasn’t issued any formal proposals for changes to the Patent Act or Rules to implement patent term extensions.

Adrian Zahl is a partner and Andrew Kaikai a student-at-law at Ridout & Maybee LLP.

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