CETA Amendments to Canada’s PM(NOC) Regulations and New CSP Regulations Coming into Force: What to Watch out for26/10/2017
On October 30, 2016, Canada signed the Comprehensive Economic and Trade Agreement with the European Union and shortly after, tabled Bill C-30 to implement CETA. The Draft regulations regarding changes to the Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”), Canada’s equivalent to the U.S. Hatch-Waxman Act, and proposed new regulations to implement Certificates of Supplementary Protection (CSPs) (“CSP Regulations”) were tabled on July 15, 2017.
The PM(NOC) Regulations and CSP Regulations contain substantive and procedural changes to Canada’s existing regime under the Patent Act (the “Act“) with the objectives of replacing summary proceedings with full actions, affording all litigants with a full right appeal, and eliminating dual litigation. The CSP Regulations aim to provide procedural certainty about the scope and manner of CSP protection. After a 15 day public comment period, the Regulations were proclaimed in force on September 21, 2017. The most important substantive changes to the PM(NOC) Regulations and new CSP Regulations are summarized below.
Right of Action and Remedies
The summary prohibition proceedings are replaced under the new PM(NOC) Regulations by allowing a first person and/or patent owner to bring an action for a declaration of infringement of a listed patent. The second person can subsequently counterclaim for impeachment. This broadens issues in a proceeding beyond simply whether the Minister should be prohibited from issuing a NOC.
The amendments will also increase the number of remedies available to both parties. If the first person is successful prior to the NOC issuance, a prohibition order will be granted. If the NOC is issued before a declaration of infringement, any remedy available under the Act, at law or in equity, may be ordered by the Court including injunctive relief.
The amendments will also broaden the scope of proceedings to any claims in a patent listed on the patent register.
Failure by a first person to commence proceedings under the Regulations will prevent them from bringing a subsequent action unless the first person can show it did not have a reasonable basis for bringing the proceedings.
CSPs and Patent Listing
Eligibility requirements to list a patent on the patent register will remain the same. However, relevant CSPs will now be included in proceedings and a second person will now need to address both listed patents and CSPs.
Statements and Allegations
New statements and allegations by the second person under the amended Regulations include that the second person:
- must address each claim in a listed patent;
- can claim that the patent owner consented to the making, constructing, using, or selling of a drug in Canada; and/or
- may allege that a patent is ineligible to be included in the register.
When making an allegation of invalidity, the second person must provide a detailed legal and factual basis including supporting documents where appropriate. The second person may request inventor contact information, laboratory notebooks, research reports, or other documents relevant to establishing a particular property, advantage, or use asserted by the second person as of the filing date.
Allegations of non-infringement need not be as detailed as invalidity allegations. However, relevant portions of the submission or supplement to non-infringement must be served even if no allegation of non-infringement is made.
A NOC cannot be issued where a second person makes an allegation until they: (1) comply with all the requirements for a submission for an NOC under the PM(NOC) Regulations; and (2) provide proof of service and a copy of the allegation to the Minister. The Minister will no longer be a party to proceedings.
The issuance of a NOC will also be barred until all patents, in respect of which the Court has declared infringement, have expired.
Where the first person consents to the second person making, constructing, using, or selling its drug in Canada, there will be no prohibition on NOC issuance. Issuance of a NOC will also be barred for up to 24 months after an infringement claim is brought unless the first person or patent owner renounces the provision at the time they bring the action.
The prohibition on a NOC issuance can also be lifted. The 24-month bar does not apply where a patent is declared ineligible for inclusion on the patent register in a proceeding, but the proceeding itself would not be dismissed on that basis. A first person or patent owner therefore no longer has to commence a separate proceeding to seek a determination of whether a generic product infringes the patent. The prohibition is also lifted “in respect of a patent” if that patent is deleted from the patent register.
All plaintiffs in an infringement claim may be liable for the second person’s losses unless the plaintiffs renounce the application of the 24-month bar on NOC issuance. The start date for liability will be the later of (a) the date of service of the NOA that commenced the action, and (b) the date the NOC would have been issued in the absence of the Regulations.
Several other consequential amendments were made to the PM(NOC) Regulations including granting second persons standing to bring an impeachment action for unlisted patents and giving first persons standing to bring an infringement action for patents that are not subject to a NOA. Procedural changes will also give courts more flexibility in proceedings.
The CSP Regulations address the details of how CSPs will be implemented. The term of the CSP will be calculated by subtracting five years from the period beginning on the filing date of the patent application and ending on the day on which the NOC is issued up to a maximum of two years.
Only one CSP may be issued in respect of a medicinal ingredient or combination of medicinal ingredients. Certain prescribed variations including enantiomers, solvates, or polymorphs are excluded from this determination.
Only eligible patents directed to medicinal ingredients, the use of the medicinal ingredients, or the medicinal ingredient produced by a specific process. Patents directed specifically to processes or formulations are not eligible for CSP protection.
The Minister will maintain a CSP register and the steps for filing an application for a CSP, and procedures for considering conflicting CSP applications are prescribed.
With the coming into force on September 21, 2017, the impact of these Regulations will likely soon be felt and pharmaceutical companies will now have to carefully consider these new changes when deciding how to proceed under the Act.
If you would like to know more about how these changes will impact your pharmaceutical patent portfolio, please feel free to contact one of our professionals.
This article is for information purposes only and does not constitute legal or professional advice.
Authors: Andrew Kai Kai (former associate), Meika Ellis