Bill C-30 Amendments to the Patent Act and Trademarks Act to implement CETA: What Pharmaceutical Companies and Brand Owners Should Know

Nov 30 2016

On October 30, 2016, the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States (CETA) was signed in Brussels. The very next day, Bill C-30 was tabled in Canada and received its first reading. This will implement the changes required by CETA into numerous statutes, including the Patent and Trademarks Acts. The changes to the Patent Act are particularly relevant to pharmaceutical companies. The changes to the Trademarks Act are relevant to brand owners in the food and agricultural sectors.


Certificates of Supplementary Protection

The most important change proposed to the Patent Act is the addition of sections 104-134 to the Act, which introduces the concept of a Certificate of Supplementary Protection for medicines. This will effectively extend patent protection beyond the normal 20 year term of the patent, although the protection is not identical to a patent. Its purpose is to partially recognize the lengthy process of researching a new drug and obtaining marketing approval, which can last for much of the normal term of a patent. This form of protection has existed in the European Union since 1992 (where it is known as an “SPC”), but is new to Canada.

The Certificate of Supplementary Protection gives a “rights holder” similar protection as a patent with respect to “the making, constructing, using and selling of any drug that contains the medicinal ingredient, or combination of medicinal ingredients … by itself or in addition to any other medicinal ingredient”. However, it differs from a patent in several respects. For example, it takes effect only after the patent expires, and may not apply to all claims of a patent. Furthermore, only one Certificate of Supplementary Protection is permitted per drug, unlike patents.

A Certificate of Supplementary Protection can last for up to two years, thereby providing significant additional protection to pharmaceutical manufacturers. The term is calculated by subtracting five years from the period between the filing date of the patent application and the marketing approval date for the drug, up to a maximum of two years. The details of the process for obtaining a Certificate of Supplementary Protection will be described in regulations that are not yet tabled.

Certificates of Supplementary Protection primarily impact makers of generic drugs sold into the domestic Canadian market. They will not normally affect generic drugs that are made in Canada for export to other countries.

IP strategies for pharmaceutical companies may have to be re-evaluated in light of this new form of protection. The landscape for pharmaceuticals is complex: it includes data exclusivity, patent protection, the Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”) and now Certificates of Supplementary Protection.

Regulations Regarding Infringement in Regulatory Approval Processes

Bill C-30 also proposes amendments to S. 55.2(4) of the Patent Act, which provides a “safe harbor” against infringement when a patented invention is used to obtain regulatory approval of a product in Canada or elsewhere. This section of the Patent Act is the basis for Canada’s PM(NOC) Regulations, which provide detailed procedures that govern the introduction of generic drugs into the Canadian market. Previous judicial decisions have resulted in the anomaly whereby when a generic drug manufacturer succeeds in obtaining marketing approval for its product, an innovative drug company is unable to appeal the decision to issue the marketing approval. Bill C-30 does not directly address this, but it authorizes future regulations respecting “any appeals from … decisions and orders” under s. 55.2 of the Patent Act. This could provide clearer rights of appeal in the context of proceedings under the PM(NOC) Regulations.

Other Amendments

Other changes to the Patent Act include eliminating the requirement for a foreign patent applicant to appoint a legal representative in Canada. As well, there is a repeal of Section 62, which provides a mechanism for filing a certificate of a judgment voiding a patent with the Patent Office. In addition, subsection 66(3) is repealed and subsection 68(2) is amended, which may affect how a patentee can be served in proceedings with respect to an abuse of rights under patents.


Geographical Indications

The primary change to the Trademarks Act is an extension of protection for “Geographical Indications” (GIs). A GI is an indication that a product originates from a particular location. For example, “Bordeaux” is a protected GI. At present, protection of GIs in Canada is limited to wines and spirits that originate from the territory of a member of the World Trade Organization, or a region or locality of that territory, where a quality, reputation or other characteristic of the wine or spirit is essentially attributable to its geographical origin and is protected by the laws of that territory.

Under Bill C-30, the definition of GIs will expand to cover other agricultural products and foods. This could cover many products such as cheese, milk, olives, beer, rice and spices.

The Registrar of trademarks will be responsible for maintaining a list of protected GIs. Any person may request to have an indication entered on the list of protected GIs, provided the indication meets the definition of a GI. A third party can object to the application on various grounds which include:

  • the proposed indication does not function as a GI;
  • the proposed indication is not protected under the law of the country of origin;
  • the proposed indication is identical to a common name for the goods, and
  • for indications related to agricultural products and foods, the proposed indication is confusing with a registered trademark, a previously used trademark or an earlier and co-pending trademark application.

Bill C-30 introduces a new test for assessing confusion between a GI and a trademark. A trademark and a GI would be deemed confusing if use of a GI in the same area as a trademark would be likely to lead to the inference that the GI originates from the same source as the goods or services associated with the trademark.

Under Bill C-30, commercial adoption or use of a word that is a protected GI, either as a trademark or otherwise, will be prohibited if the associated goods are not produced under the rules of the territory of the GI or if the goods do not originate from that territory.

The present Customs Request for Assistance Regime will also become available to owners of protected GIs. This will allow the owner of a GI to request Canadian customs authorities to detain goods at the border that improperly include a protected GI on the product, its label or packaging. In addition, it will be unlawful to improperly export or import products covered by a GI.

Bill C-30 includes numerous exceptions meant to protect existing Canadian trademark rights. These exceptions would allow:

  • use of a personal name except where the name is used in a manner meant to mislead the public;
  • use of a GI in comparative advertising, except on labels and packaging, and
  • use of wine or spirit names that have been in continuous use by a Canadian prior to April 1994.

Further, Canadian producers will still be able to use the common names for certain products or foods such as black forest ham, parmesan cheese and valencia oranges.

Finally, Bill C-30 provides a mechanism for an interested party to apply to the Federal Court to remove a GI from the protected list. The grounds for which a GI may be removed are similar to the grounds for which a GI may be objected to. However, certain well-known GIs such as “Prosciutto di Parma”, “Parmigiano Reggiano”, “Brie de Meaux”, “Korean Red Ginseng” and “Icheon Rice” will be immune from challenge.

Bill C-30 is currently on its second reading, so further changes may still occur. The IP provisions will not come into effect until the implementing regulations are passed. We will be reporting on further developments.

Authors: Adrian Zahl, Lei Gao, Andrew Kai Kai (former professionals)

For more information, contact one of our professionals.

This article is for information purposes only and does not constitute legal or professional advice.

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Tags: Bill C-30, CETA, PM(NOC), Trademarks Act