New CETA regulations impacting pharmaceuticals published but not yet in force

The Canadian government has published the proposed patent term restoration / Certificate of Supplementary Protection (CSP) and Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations) under Bill C-30.  A 15-day consultation is open for interested parties to make submissions.

Since their first enactment, the PM(NOC) Regulations were intended to strike a “delicate balance” between the rights of patent holders and timely access to generic medicines. With the enactment of Bill C-30 that balance has been upended. Ironically, this sea-change in how patented medicines will be treated in Canada comes at the same time as the government has announced its intention to develop a new intellectual property strategy over the coming year purportedly “in recognition of the importance of a well-functioning intellectual property regime.”

Background

Canadian and European Union leaders signed the Comprehensive Economic and Trade Agreement (CETA) on October 30, 2016. CETA and Bill C-30 provide key reforms to the Patent Act affecting the pharmaceutical industry, including a so-called “single track” pharmaceutical patent litigation regime and up to two years of supplementary protection for patented pharmaceuticals.

Today, the government has provided additional details about the new regime affecting pharmaceuticals under Bill C-30.

Single Track Patent Litigation

The government has stated that replacing the current summary proceedings under the PM(NOC) Regulations with full actions (resulting in final determinations of patent infringement and validity) will provide all litigants with “equivalent and effective” rights of appeal and allow “for more robust scrutiny of issues and greater overall efficiency”  and “greater legal and market certainty.”

Key aspects of the new PM(NOC) Regulations include:

  • Patent Register. Patent list eligibility criteria are unchanged. The Minister of Health (Minister), however, is required to add and delete patents from the register, in certain circumstances. Discretionary reviews of the register to assess eligibility are also permitted, upon notice to patentees.
  • Generic Notice of Allegation. The NOA must address each claim of the listed patent. Patent list ineligibility may be addressed in the NOA, but can no longer result in dismissal of the proceeding. The NOA is still required to be a detailed legal and factual basis of the invalidity allegation, but the generic/second person is no longer bound by it since the action will be governed by pleadings.
  • New Production Obligations. Generics are now required to serve relevant ANDS information and prior art with the NOA. Generics may also request in the NOA that innovators provide: (i) inventor contact information; and (ii) “any laboratory notebook, research report or other document that may be relevant to determine whether a particular property, advantage, or use asserted by the second person to be part of the invention was established as of the filing date of the application for the patent” (i.e., invention information). The generic must make specific allegations on the latter, including by identifying the relevant portions of the patent. Innovators must either serve the requested information upon commencing the action or advise of steps taken to respond.  Litigants may each impose reasonable confidentiality terms on their respective production obligations, subject to review by motion or the Federal Court.
  • The Proceeding. A first person still has 45 days to start what will now be an action seeking a declaration of infringement in response to an NOA. However, the first person can now assert all claims of any listed patent and the court may order any remedy at law or equity. Like any other action, the proceeding will include full pleadings, discovery and viva voce evidence at trial. The Minister is no longer a party to the proceeding. Parties have a duty to act diligently and reasonably cooperate.
  • Where a first person/patentee, having received an NOA, does not start a proceeding within 45 days, they are thereafter prohibited from bringing a subsequent infringement action against the second person, unless they can later establish they lacked a “reasonable basis” for bringing the action at the time.
  • The statutory stay prohibiting generic market entry remains capped at 24 months, despite the adoption of more procedural complexity by way of action. Key differences between the current and new regimes are: (i) the first person now has the ability to renounce the stay at the outset (thereby opting out of s. 8 liability); (ii) the stay will be lifted for ineligible patents, but the action itself will not be dismissed on this basis; and (iii) the stay may no longer be shortened or extended on the consent of the parties.
  • Motions. Motion rights are provided: (i) for litigants to compel ANDS/ “invention information”; (ii) for litigants on confidentiality of ANDS/“invention information”; (iii) for generics to challenge patent/CSP eligibility for listing on the Patent Register (whereby the Minister will have automatic rights to intervene); (iv) for generics to seek to dismiss action in whole/part for abuse of process (however parties also retain access to Rule 221 motions to strike). Leave to appeal interlocutory orders may be sought with leave to the Federal Court of Appeal in accordance with the Federal Courts Rules.
  • Section 8. Generics maintain a right of action under section 8, but under new parameters. The innovator’s liability start date is now stated as the later of (i) date of NOA service; or (ii) date of generic approvability (i.e., “patent hold” date). Start date also remains subject to the court’s discretion. The innovator’s liability end date is no longer stated as “any loss suffered during the period”, but to “any loss suffered after” the start date.  The Regulatory Impact Analysis Statement (RIAS) states that generics may “seek compensation for any loss suffered as a result of delayed market entry after the date specified in the proposed Regulations. It would be left to the Court to determine whether the loss is properly recoverable.” Joint and several liability of defendants is also provided for.
  • Related rights of action. Innovators also have a new right of action to assert unlisted patents based on NOA service (i.e., quia timet). However, such an action cannot be joined to a listed patent proceeding under the PM(NOC) Regulations until the 24-month stay expires. Generics, having filed an ANDS, are also deemed an “interested person” for purposes of a related patent invalidity action.
  • Once in force, the new PM(NOC) Regulations will apply immediately to any matters for which an NOA is served after the coming into force date. The current summary regime will continue to apply to any matter that relates to an NOA served before the coming into force date.

Certificates of Supplementary Protection (“CSP”)

As stated in the RIAS, the protection given under a CSP is intended to “partly compensate for time spent in research and obtaining marketing authorization.” A CSP provides “patent-like rights” that take effect after patent expiry, and is subject to the “same limitations and exceptions” as the patent. Like a patent, a CSP is subject to the jurisdiction of the Patented Medicine Prices Review Board and can be listed on the Patent Register.

As we reported, many CSP regime details have been available in Bill C-30, including the following:

  • Applicability. Only new drugs issued Notices of Compliance (NOC) after Bill C-30 is in force can be CSP-eligible.
  • Term. The term of the CSP will be calculated as the difference between the filing date of the patent application and the date of NOC issuance, minus five years, capped at a maximum of two years.
  • Different Medicinal Ingredients. Medicinal ingredients for human use will be treated as “different” medicinal ingredients eligible for CSP than when approved for veterinary uses. A first approval of a combination of medicinal ingredients will be treated as a “different” medicinal ingredient eligible for CSP.
  • Actions for infringement and impeachment of a CSP: Actions may be brought in the same manner as an action for the infringement or impeachment of a patent.
  • Export exemption: It is not an infringement of a CSP to make, construct, use or sell for the purpose of export from Canada.

Additional details relating to CSP eligibility are provided in the new CSP Regulations.

  • Timing of CSP application. CSP applications must be filed before the end of 120 days, which begins on (a) the day the NOC is issued, if the patent is granted on or before that day; or (b) if the patent is granted after the day on which the NOC is issued, the day on which the patent is granted. No CSP application can be filed within two years preceding patent expiry. CSP applications are subject to a fee of $9,011.00 CAD.
  • Same Medicinal Ingredients. Esters, salts, complexes, chelates, clathrates or any non-covalent derivative, enantiomers or mixture of enantiomers, solvates or polymorphs and in vivo or in vitro post-translational modification of a medicinal ingredient will be treated as the “same” medicinal ingredient. Combinations of medicinal ingredients that only differ with respect to the ratio between those ingredients will be treated as the “same” combination.
  • “Timely submission requirement”. To be CSP-eligible, the Canadian NDS for the drug in question must be filed within 18 months of any first international drug submission filing for the same drug in the European Union, United States, Australia, Switzerland or Japan. This period decreases to one year at the one-year anniversary of CETA being in force. According to the RIAS, this requirement is intended “to incentivize the early introduction of innovative drugs into the Canadian market”.
  • Eligible patents: To be eligible, a patent claim must pertain to the “same” medicinal ingredient or a combination of “same” medicinal ingredients, which requires at least one claim for: (i) the “same” medicinal ingredient or combination; (ii) use of the “same” medicinal ingredient; or (iii) a product-by process claim for the “same” medicinal ingredient.

Our team has in-depth innovator pharmaceutical industry expertise at all stages of product life cycle, including patent prosecution, regulatory advice and litigation services. Our litigation group focusses on pharmaceutical patent infringement/validity, damages and section 8 actions. Most significantly for CETA purposes – Norton Rose Fulbright is experienced in expedited trial procedure, having been successful counsel on one of the very few pharmaceutical patent actions taken to trial and decided within 24-months.

Are you CETA ready? Contact Norton Rose Fulbright with all your CETA questions.