EXTRA Vol. 151, No. 1

Canada Gazette

Part Ⅱ

OTTAWA, THURSDAY, SEPTEMBER 7, 2017

Registration

SOR/2017-166 September 1, 2017

PATENT ACT

Regulations Amending the Patented Medicines (Notice of Compliance) Regulations, 2017

P.C. 2017-1115 August 31, 2017

His Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to subsections 55.2(4) (see footnote a) and 124(2) (see footnote b) of the Patent Act (see footnote c), makes the annexed Regulations Amending the Patented Medicines (Notice of Compliance) Regulations, 2017.

Regulations Amending the Patented Medicines (Notice of Compliance) Regulations, 2017

Amendments

1 (1) The definition court in subsection 2(1) of the Patented Medicines (Notice of Compliance) Regulations (see footnote 1) is repealed.

(2) The definitions expire and register in subsection 2(1) of the Regulations are replaced by the following:

expire means

  • (a) in relation to a patent, expire, lapse or terminate by operation of law; and
  • (b) in relation to a certificate of supplementary protection, expire or terminate by operation of law. (expiré)

register means the register maintained by the Minister in accordance with subsection 3(2). (registre)

(3) Section 2 of the Regulations is amended by adding the following after subsection (2):

(3) In these Regulations, a reference to the owner of a patent includes the owner of a patent set out in a certificate of supplementary protection.

2 (1) Subsection 3(2) of the Regulations is replaced by the following:

(2) The Minister shall maintain a register of patents that have been submitted for addition to the register and certificates of supplementary protection in which any of those patents are set out

  • (a) by adding any patent on a patent list or certificate of supplementary protection that meets the requirements for addition to the register;
  • (b) by refusing to add any patent or certificate of supplementary protection that does not meet the requirements for addition to the register;
  • (c) by deleting any patent or certificate of supplementary protection
    • (i) that was added to the register due to an administrative error,
    • (ii) that has, under subsection 60(1) or 125(1) of the Patent Act, been declared to be invalid or void,
    • (iii) that has, under subsection 6.07(1), been declared to be ineligible for inclusion on the register, or
    • (iv) the deletion of which was requested by the first person in respect of the patent list that includes that patent;
  • (d) by deleting, in respect of a new drug submission or a supplement to a new drug submission, any patent that has expired, unless a certificate of supplementary protection in which the patent is set out is included on the register in respect of that submission or supplement; and
  • (e) by deleting any certificate of supplementary protection that has expired.

(2.1) The Minister is not permitted to make a deletion referred to in subparagraph (2)(c)(iii) based on a decision by the Federal Court before the later of the day on which the period for appealing that decision to the Federal Court of Appeal ends and the day on which any appeal of that decision to the Federal Court of Appeal is discontinued or dismissed.

(2.2) The Minister shall add any patent or certificate of supplementary protection to the register that has been deleted under subparagraph (2)(c)(ii) or (iii) based on a decision that subsequently is reversed or set aside on appeal.

(2.3) The Minister may review the register to determine whether any patents or certificates of supplementary protection do not meet the requirements for inclusion on the register and, if the Minister conducts that review, shall delete any patent or certificate of supplementary protection that is determined not to meet those requirements.

(2) Subsections 3(7) and (8) of the Regulations are replaced by the following:

(7) No patent on a patent list or certificate of supplementary protection shall be added to the register until after the Minister has issued a notice of compliance in respect of the new drug submission or the supplement to a new drug submission, as the case may be, to which the patent or certificate of supplementary protection relates.

(8) For the purpose of determining whether a patent or certificate of supplementary protection is to be added to or deleted from the register, the Minister may consult with officers or employees of the Patent Office.

3 Paragraph 3.1(1)(d) of the Regulations is replaced by the following:

  • (d) the first person in respect of that patent list requests the Minister to delete the patent.

4 Section 3.2 of the Regulations is repealed.

5 (1) Section 4 of the Regulations is amended by adding the following after subsection (1):

(1.1) The patent list may include a patent whose term under section 44 of the Patent Act, without taking into account section 46 of that Act, has expired and that is set out in a certificate of supplementary protection that has taken effect.

(2) Section 4 of the Regulations is amended by adding the following after subsection (3):

(3.1) A certificate of supplementary protection is eligible to be added to the register in respect of a new drug submission or a supplement to a new drug submission if

  • (a) the patent that is set out in the certificate of supplementary protection is included on the register in respect of that submission or supplement; and
  • (b) the submission or supplement relates to a drug with respect to which the certificate of supplementary protection grants rights, privileges and liberties referred to in section 115 of the Patent Act.

(3) Paragraph 4(4)(d) of the Regulations is replaced by the following:

  • (d) for each patent on the list, a statement that the first person who filed the new drug submission or the supplement to a new drug submission to which the list relates
    • (i) is the owner of the patent,
    • (ii) has an exclusive licence to the patent or to a certificate of supplementary protection in which that patent is set out, or
    • (iii) has obtained the consent of the owner of the patent to its inclusion on the list;

6 (1) Subsections 5(1) and (2) of the Regulations are replaced by the following:

(1) If a second person files a submission for a notice of compliance in respect of a drug and the submission directly or indirectly compares the drug with, or makes reference to, another drug marketed in Canada under a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the second person shall include in the submission the required statements or allegations set out in subsection (2.1).

(2) If a second person files a supplement to a submission referred to in subsection (1) seeking a notice of compliance for a change in formulation, a change in dosage form or a change in use of the medicinal ingredient and the supplement directly or indirectly compares the drug for which the supplement is filed with, or makes reference to, another drug that has been marketed in Canada under a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the second person shall include in the supplement the required statements or allegations set out in subsection (2.1).

(2.1) The statements or allegations required for the submission or the supplement, as the case may be, are — with respect to each patent included on the register in respect of the other drug and with respect to each certificate of supplementary protection in which the patent is set out and that is included on the register in respect of the other drug — the following:

  • (a) a statement that the owner of that patent has consented to the making, constructing, using or selling in Canada of the drug for which the submission or supplement is filed by the second person;
  • (b) a statement that the second person accepts that the notice of compliance will not issue until that patent or certificate of supplementary protection, as the case may be, expires; or
  • (c) an allegation that
    • (i) the statement made by the first person under paragraph 4(4)(d) is false,
    • (ii) that patent or certificate of supplementary protection is invalid or void,
    • (iii) that patent or certificate of supplementary protection is ineligible for inclusion on the register,
    • (iv) that patent or certificate of supplementary protection would not be infringed by the second person making, constructing, using or selling the drug for which the submission or the supplement is filed,
    • (v) that patent or certificate of supplementary protection has expired, or
    • (vi) in the case of a certificate of supplementary protection, that certificate of supplementary protection cannot take effect.

(2) The portion of subsection 5(3) of the Regulations before paragraph (a) is replaced by the following:

(3) A second person who makes an allegation referred to in paragraph (2.1)(c) shall

(3) Subparagraph 5(3)(b)(ii) of the Regulations is replaced by the following:

  • (ii) a statement of the legal and factual basis for the allegation, which statement must be detailed in the case of an allegation that the patent or certificate of supplementary protection is invalid or void;

(4) Paragraphs 5(3)(c) and (d) of the Regulations are replaced by the following:

  • (c) serve the following documents with the notice:
    • (i) a certification by the Minister of the date of filing of the submission or supplement,
    • (ii) a document setting out the second person’s address for service for the purpose of any action that may be brought against them under subsection 6(1), along with the names of and contact information for their anticipated solicitors of record if that action is brought,
    • (iii) a searchable electronic copy of the portions of the submission or supplement that are under the control of the second person and relevant to determine if any patent or certificate of supplementary protection referred to in the allegation would be infringed, and
    • (iv) if the second person is alleging that the patent or certificate of supplementary protection is invalid or void, an electronic copy of any document — along with an electronic copy of it in English or French if available — on which the person is relying in support of the allegation;
  • (d) provide, without delay, to the first person any portion of a submission or supplement referred to in subparagraph (c)(iii) that is changed on or before the later of the 45th day after the day on which the notice of allegation is served and the day of the disposition of any action that has been brought under subsection 6(1); and
  • (e) provide to the Minister proof of service of the documents referred to in paragraphs (a) and (b), along with a copy of the notice of allegation.

(5) Subsection 5(4) of the Regulations is replaced by the following:

(3.1) A second person who makes an allegation that the patent or certificate of supplementary protection is invalid or void may, when the notice of allegation is served, request

  • (a) the name of and contact information for any inventor who might have information relevant to the allegation, along with an indication as to whether that inventor is an employee of the first person or of the patent owner; and
  • (b) 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, if the second person identifies the specific allegation in the notice of allegation that is relevant to the request and the portion of the patent in which that property, advantage or use is set out.

(3.2) A document referred to in paragraph (3.1)(b) must be provided in a searchable electronic format but, if it is not available in that format, in an electronic format. In addition, if the document provided is not already in English or French, it must also be provided, if available, in English or French and be in a searchable electronic format but, if it is not available in that format, in an electronic format.

(3.3) Within five days after the day on which the first person is served with any notice or document under subsection (3), they shall forward a copy of it, along with any request made under subsection (3.1) when the notice was served and an indication of the date of the service,

  • (a) to the owner of each patent in respect of which an allegation is made in that notice; and
  • (b) to the owner of a patent that is set out in each certificate of supplementary protection in respect of which an allegation is made in that notice.

(3.4) The first person shall, without delay, notify the second person that they forwarded the copy under subsection (3.3) and, if they are owner of any patent referred to in that subsection, that they are its owner.

(3.5) The second person may impose on the first person referred to in paragraph (3)(a) and any owner of a patent to whom a document is forwarded under subsection (3.3) any reasonable rules for maintaining the confidentiality of any portion of a submission or supplement referred to in subparagraph (3)(c)(iii).

(3.6) Those confidentiality rules are binding and enforceable by the Federal Court, which may award any remedy that it considers just if they are not respected.

(3.7) On motion of the first person or of the owner of the patent — or on its own initiative after giving an opportunity to be heard to that first person, that owner and the second person — the Federal Court may set aside or vary any or all of those confidentiality rules in any manner that it considers just.

(3.8) A second person who is, under subparagraph (3)(c)(iii) or paragraph (3)(d), required to serve or provide a document may — if there is reason to believe that the intended recipient of the document is not in Canada — refuse to do so unless that recipient attorns to the jurisdiction of the Federal Court with respect to the confidentiality of the information set out in the document.

(3.9) A second person who is, under subparagraph (3)(c)(iii) or paragraph (3)(d), required to serve or provide a document to a first person referred to in paragraph (3)(a) may — if there is reason to believe that the first person is required to forward the document to the owner of a patent who is not in Canada — require that the first person forward it only if that owner attorns to the jurisdiction of the Federal Court with respect to the confidentiality of the information set out in the document.

(4) A second person is not required to comply with

  • (a) subsection (1) in respect of a patent, or a certificate of supplementary protection that sets out the patent, that is added to the register in respect of the other drug on or after the date of filing of the submission referred to in that subsection, including one added under subsection 3(2.2) or (5); and
  • (b) subsection (2) in respect of a patent, or a certificate of supplementary protection that sets out the patent, that is added to the register in respect of the other drug on or after the date of filing of the supplement referred to in that subsection, including one added under subsection 3(2.2) or (5).

(6) Subsection 5(7) of the Regulations is replaced by the following:

(6.1) Within five days after the day on which the first person is served under subsection (6), they shall, if they are not the owner of any patent to which the notice of allegation relates, forward to the owner of that patent a copy of the notice of retraction.

(7) A person who brings an action under subsection 6(1) in response to a notice of allegation shall, if the notice is retracted in accordance with subsection (6), file without delay a notice of discontinuance.

7 Section 6 of the Regulations is replaced by the following:

6 (1) The first person or an owner of a patent who receives a notice of allegation referred to in paragraph 5(3)(a) may, within 45 days after the day on which the first person is served with the notice, bring an action against the second person in the Federal Court for a declaration that the making, constructing, using or selling of a drug in accordance with the submission or supplement referred to in subsection 5(1) or (2) would infringe any patent or certificate of supplementary protection that is the subject of an allegation set out in that notice.

(2) If the person who brings an action under subsection (1) is not the owner of each patent — or of a patent that is set out in each certificate of supplementary protection — that is the subject of the action, the owner of each of those patents shall be or be made a party to the action.

(3) The second person may bring a counterclaim for a declaration

  • (a) under subsection 60(1) or (2) of the Patent Act in respect of any patent claim asserted in the action brought under subsection (1); or
  • (b) under 125(1) or (2) of that Act in respect of any claim, asserted in the action brought under subsection (1), in the patent set out in the certificate of supplementary protection in question in that action.

(4) If the Federal Court makes a declaration referred to in subsection (1), it may order any other remedy that is available under the Patent Act, or at law or in equity, in respect of infringement of a patent or a certificate of supplementary protection.

6.01 No action, other than one brought under subsection 6(1), may be brought against the second person for infringement of a patent or a certificate of supplementary protection that is the subject of a notice of allegation served under paragraph 5(3)(a) in relation to the making, constructing, using or selling of a drug in accordance with the submission or supplement referred to in subsection 5(1) or (2) unless the first person or the owner of the patent did not, within the 45-day period referred to in subsection 6(1), have a reasonable basis for bringing an action under that subsection.

6.02 No action may be joined to a given action brought under subsection 6(1) during any period during which the Minister shall not issue a notice of compliance because of paragraph 7(1)(d) other than

  • (a) another action brought under that subsection in relation to the submission or supplement in that given action; and
  • (b) an action brought in relation to a certificate of supplementary protection that is added to the register after the filing of the submission or supplement in that given action, if the patent that is set out in that certificate of supplementary protection is at issue in that given action.

6.03 (1) If a second person makes a request under subsection 5(3.1), the person who brings the action must serve on the second person at the same time as their statement of claim,

  • (a) a document setting out the information referred to in paragraph (3.1)(a) and the documents referred to in paragraph (3.1)(b);
  • (b) a document setting out an explanation of the steps that have been and are being taken to locate that information or those documents, along with a statement that they will be provided as soon as feasible; or
  • (c) a document setting out the reasons for not providing them, if applicable.

(2) The person bringing the action may impose on the second person any reasonable rules for maintaining the confidentiality of the information set out in any document provided under paragraph (1)(a).

(3) Those confidentiality rules are binding and enforceable by the Federal Court, which may award any remedy that it considers just if they are not respected.

(4) On motion of the second person or on its own initiative, after giving an opportunity to be heard to the parties to the action, the Federal Court may set aside or vary any or all of those confidentiality rules in any manner that it considers just.

(5) Any person who is, under paragraph (1)(a), required to provide a document may — if there is reason to believe that the intended recipient of the document is not in Canada — refuse to provide it unless the recipient attorns to the jurisdiction of the Federal Court with respect to the confidentiality of the information set out in the document.

6.04 (1) On the motion of a first person or owner of a patent who is a party to an action brought under subsection 6(1) or a counterclaim brought under subsection 6(3), the Federal Court may, at any time during the proceeding, order that the second person produce any portion of the submission or supplement that is relevant to determine if any patent or certificate of supplementary protection at issue would be infringed and any such portion that is changed.

(2) On the motion of a second person who is party to an action brought under subsection 6(1) or a counterclaim brought under subsection 6(3), the Federal Court may, at any time during the proceeding, order that the first person or owner of a patent produce a document setting out any information referred to in paragraph 5(3.1)(a) or 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.

(3) The information set out in any document produced under subsection (1) or (2) shall be treated confidentially by the Federal Court subject to any conditions that it considers just.

6.05 The Minister shall, on the request of any party, verify that any portion of a submission or supplement that is referred to in subparagraph 5(3)(c)(iii) or paragraph 5(3)(d) or produced as a result of an order made under subsection 6.04(1) corresponds to the submission or supplement filed.

6.06 On the request, made by way of a motion, of a person who imposed rules referred to in subsection 5(3.5) or 6.03(2) for maintaining the confidentiality of the information set out in any document, the Federal Court shall treat that information confidentially subject to any conditions that it considers just.

6.07 (1) In an action brought under subsection 6(1), the Federal Court may, on the motion of the second person, declare that a patent or certificate of supplementary protection is ineligible for inclusion on the register.

(2) The Minister may intervene as of right in the motion and make representations and call evidence that are relevant to any issue in the motion or to the factors that the Federal Court is entitled to take into consideration in determining the issue. The Minister may intervene as of right in any appeal arising from the decision made on the motion, whether the Minister intervened at the Federal Court or not.

(3) The Federal Court shall not, in whole or in part, dismiss the action solely on the basis that a patent or certificate of supplementary protection is ineligible for inclusion on the register.

(4) Subsection (1) does not apply in respect of a patent on a patent list that was submitted before June 17, 2006.

6.08 An action brought under subsection 6(1) may, on the motion of a second person, be dismissed, in whole or in part, on the ground that it is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process in respect of one or more patents or certificates of supplementary protection.

6.09 Every first person, second person and owner of a patent shall act diligently in carrying out their obligations under these Regulations and shall reasonably cooperate in expediting any action brought under subsection 6(1) or a counterclaim brought under subsection 6(3) to which they are a party.

6.1 (1) An action brought under subsection 6(1) shall be a specially managed proceeding in accordance with the Federal Courts Rules.

(2) The case management judge who is assigned the specially managed proceeding shall conduct a case management conference as soon as feasible after the 10th day after proof of service of the statement of claim in the action is filed.

6.11 (1) Any interlocutory order made in an action brought under subsection 6(1) or a counterclaim brought under subsection 6(3), including one that, in whole or in part, disposes of the action or counterclaim, may be appealed to the Federal Court of Appeal, with leave of that Court, and not to the Federal Court.

(2) The motion for leave to appeal shall be filed no later than 10 days after the day on which that interlocutory order is made.

6.12 (1) In an action brought under subsection 6(1) or a counterclaim brought under subsection 6(3), the Federal Court may make any order in respect of costs, including on a solicitor-and-client basis, in accordance with the Federal Courts Rules.

(2) In addition to any other factor that the Federal Court may take into account in making an order in respect of costs, it may consider

  • (a) the diligence with which the parties have pursued the action;
  • (b) the extent to which they have reasonably cooperated in expediting the action;
  • (c) the certification of a patent list that includes a patent that should not have been included under section 4; and
  • (d) the failure of the first person to keep a patent list up to date in accordance with subsection 4(7).

6.13 The person who brings an action under subsection 6(1) shall provide to the Minister, as soon as feasible, a copy of the following documents in relation to the action:

  • (a) the statement of claim, including any amendments to it;
  • (b) any order made under subsection 6.04(1) or 7(8);
  • (c) any declaration referred to in subsection 6(1) or (3) or 6.07(1);
  • (d) the notice of motion and the motion record in respect of any motion referred to in subsection 6.07(1);
  • (e) any document discontinuing or dismissing the action, in whole or in part;
  • (f) any notice of appeal, including a motion or application for leave to appeal, in relation to any document referred to in paragraph (b), (c) or (e); and
  • (g) any judgment or order in an appeal, or a motion or application for leave to appeal, in relation to any document referred to in paragraph (b), (c) or (e).

8 Sections 7 and 8 of the Regulations are replaced by the following:

7 (1) The Minister shall not issue a notice of compliance to a second person before the latest of

  • (a) the day after the expiry of all of the patents and certificates of supplementary protection in respect of which the second person is required to make a statement or allegation under subsection 5(1) or (2) and that are not the subject of an allegation;
  • (b) the day on which the second person complies with paragraph 5(3)(e);
  • (c) the 46th day after the day on which a notice of allegation under paragraph 5(3)(a) is served;
  • (d) the day after the expiry of the 24-month period that begins on the day on which an action is brought under subsection 6(1);
  • (e) the day after the expiry of all of the patents and certificates of supplementary protection in respect of which a declaration of infringement has been made in an action brought under subsection 6(1); and
  • (f) the day after the expiry of all of the certificates of supplementary protection, other than any that were held not to be infringed in an action referred to in paragraph (e), that
    • (i) set out a patent referred to in paragraph (a) or (e),
    • (ii) are not the subject of a statement or allegation made under subsection 5(1) or (2), and
    • (iii) are included on the register in respect of the same submission or supplement as the patent.

(2) Subsection (1) does not apply in respect of a patent or a certificate of supplementary protection if the Minister has been provided with evidence from the owner of the patent of their consent to the making, constructing, using or selling of the drug in Canada by the second person.

(3) Paragraphs (1)(a) to (d) do not apply in respect of a patent or certificate of supplementary protection if it is deleted from the register under any of paragraphs 3(2)(c) to (e) or subsection 3(2.3) or (3).

(4) Paragraph (1)(d) does not apply in respect of a patent or a certificate of supplementary protection that has been declared in the action referred to in that paragraph by the Federal Court to be ineligible for inclusion on the register.

(5) Paragraph (1)(d) does not apply if

  • (a) the action referred to in that paragraph is discontinued or dismissed; or
  • (b) each of the parties who brings an action referred to in subsection 6(1) in relation to a given notice of allegation provides, when they bring the action, a notice to the second person and the Minister that they renounce the application of that paragraph.

(6) A party may make the renouncement referred to in paragraph (5)(b) without prejudice to their right to proceed with the action or any other action for patent infringement or their entitlement to any remedy from the Federal Court or another court.

(7) A second person, or a first person or owner of a patent who receives a notice of allegation, shall, on request of the Minister, provide to the Minister without delay any information or document that the Minister requires to maintain the register in accordance with subsection 3(2), to determine the latest of the days referred to in subsection (1) and to determine whether any of subsections (2) to (5) apply.

(8) As long as the Federal Court has not made a declaration referred to in subsection 6(1), it may shorten or extend the 24-month period referred to in paragraph (1)(d) if it finds that a party has not acted diligently in carrying out their obligations under these Regulations or has not reasonably cooperated in expediting the action.

8 (1) A second person may apply to the Federal Court or another superior court of competent jurisdiction for an order requiring all plaintiffs in an action brought under subsection 6(1) to compensate the second person for the loss referred to in subsection (2).

(2) Subject to subsection (3), if an action brought under subsection 6(1) is discontinued or dismissed or if a declaration referred to in subsection 6(1) is reversed on appeal, all plaintiffs in the action are jointly and severally, or solidarily, liable to the second person for any loss suffered after the later of the day on which the notice of allegation was served, the service of which allowed that action to be brought, and of the day, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations.

(3) The Federal Court or the other superior court may specify another day for the purpose of subsection (2) if it concludes that the other day is more appropriate, including being more appropriate because the certified day was, by the operation of An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), chapter 23 of the Statutes of Canada, 2004, earlier than it would otherwise have been.

(4) Subsections (1) to (3) do not apply if paragraph 7(1)(d) has no application because its application has been renounced under paragraph 7(5)(b).

(5) If the Federal Court or the other superior court orders a second person to be compensated for a loss referred to in subsection (2), the court may, in respect of that loss, make any order for relief by way of damages that the circumstances require.

(6) In assessing the amount of compensation — including any apportionment of that amount between the plaintiffs who are liable under subsection (2) — the court shall take into account all matters that it considers relevant to the assessment of the amount or the apportionment, including any conduct of the parties that contributed to delay the disposition of the action.

(7) No action or proceeding lies against Her Majesty in right of Canada in respect of any loss referred to in subsection (2).

8.1 A person who files a submission for a notice of compliance or a supplement to a submission for a notice of compliance in respect of a drug and who has reasonable grounds to believe that the making, constructing, using or selling of the drug might be alleged to infringe a patent or a certificate of supplementary protection is, if the submission or supplement directly or indirectly compares the drug with, or makes reference to, another drug marketed in Canada, an interested person

  • (a) for the purpose of subsection 60(1) of the Patent Act with respect to bringing an action for a declaration that the patent or any claim in the patent is invalid or void; or
  • (b) for the purpose of subsection 125(1) of that Act with respect to bringing an action for a declaration that the certificate of supplementary protection or any claim in the patent set out in it is invalid or void.

8.2 On receipt of a notice of allegation relating to a submission or supplement, a first person or owner of a patent may, under subsection 54(1) or 124(1) of the Patent Act, bring an action for infringement of a patent or certificate of supplementary protection — other than one that is the subject of an allegation set out in that notice — that could result from the making, constructing, using or selling of the drug in accordance with the submission or supplement.

Transitional Provisions

9 (1) The Patented Medicines (Notice of Compliance) Regulations, as they read immediately before the day on which these Regulations come into force, continue to apply in respect of any matter that relates to a notice of allegation served on a first person before that day.

(2) For greater certainty, sections 6 to 8 of the Regulations Amending the Patented Medicines (Notice of Compliance) Regulations, SOR/2006-242, continue to apply in respect of the provisions set out in those sections.

Related Amendments

10 Section 9 of the Regulations Amending the Patented Medicines (Notice of Compliance) Regulations (see footnote 2) is repealed.

11 Section 4 of the Regulations Amending the Patented Medicines (Notice of Compliance) Regulations (see footnote 3) is repealed.

12 Section 5 of the Regulations Amending the Patented Medicines (Notice of Compliance) Regulations (see footnote 4) is repealed.

Coming into Force

13 These Regulations come into force on the day on which section 59 of the Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act, chapter 6 of the Statutes of Canada, 2017, comes into force but, if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Patented Medicines (Notice of Compliance) Regulations (the Regulations) create a patent linkage regime, which ties regulatory approval of “generic” medicines (i.e. medicines for which regulatory approval is sought on the basis of a comparison with, or reference to, a drug approved by the Minister of Health) to the protection of patent rights. Under the previous version of the Regulations, innovative drug companies could commence legal proceedings for an order prohibiting the Minister of Health (the Minister) from granting regulatory approval — in the form of a Notice of Compliance (NOC) — for a generic version of a patented medicine. If legal proceedings were dismissed and the innovator failed to obtain a prohibition order, the Minister was free to issue the NOC, provided the regulatory requirements of the Food and Drug Regulations were met. Innovators could appeal a court decision refusing to grant a prohibition order. However, such appeals could be dismissed as moot if the NOC had already issued. This raised concern that innovators lacked effective appeal rights under the regime.

The issue of appeals under the Regulations was raised in negotiations leading to the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). In agreeing to CETA, Canada committed to affording all litigants equivalent and effective rights of appeal under the linkage regime. Consistent with its right under CETA to determine the appropriate method of implementing the provisions of the Agreement, Canada is affording all parties equivalent and effective appeal rights under the Regulations by replacing summary prohibition applications with full actions resulting in final determinations of patent infringement and validity. This approach resolves the problem of mootness that previously arose in appeals. At the same time, it allows for more robust scrutiny of issues and greater overall efficiency.

Background

The Government’s pharmaceutical patent policy seeks to balance effective patent enforcement over new and innovative drugs with the timely market entry of their lower-priced generic competitors. The Regulations were intended to reflect this balance by enabling summary legal proceedings that would address patent concerns without unduly delaying access to generic medicines. Over time, the Regulations became less effective, in part because litigants commenced further litigation under the Patent Act (the Act) when unsatisfied with summary proceeding rulings.

Aside from concerns about appeal rights, complaints were raised that applications under the Regulations could not provide desired legal certainty prior to generic market entry. Because applications under the Regulations focused only on whether patent considerations should prohibit the Minister from issuing an NOC, underlying questions of patent infringement and validity were not conclusively determined. As a result, parties sometimes chose to litigate these issues under the Act separately, after summary proceedings under the Regulations had concluded (a practice referred to as “dual litigation”). Until these later proceedings were resolved, innovators and generics had to live with an extended period of legal uncertainty.

Furthermore, it was suggested that the summary procedure employed in applications under the Regulations, particularly the lack of discovery and the reliance on a written record, hindered full consideration of some patent issues. It was further suggested that this impacted both patent protection and access to medicine. At the same time, proceedings under the Regulations became complex and time-consuming, raising questions about the usefulness of these procedural compromises.

In the face of these criticisms and to meet Canada’s obligations under CETA, the Government concluded that Canada’s patent linkage regime needed updating in order to better serve its purpose.

Objectives

These amendments seek to balance a range of competing concerns. In so far as possible, the Regulations seek to strike this balance by mirroring the approach to patent litigation under the Act. In some cases, unique features have been introduced to account for time pressures arising from the 24-month bar on NOC issuance and the possibility of damages being awarded for delayed generic market entry. The amendments also seek to provide impacted parties with some flexibility and choice.

More specifically, the Government believes these amendments achieve a number of objectives.

  • Firstly, the amendments resolve a number of problems by replacing summary prohibition proceedings with full actions to determine patent validity and infringement. In particular
    • Appeals brought after an NOC has issued will no longer face the same problem of mootness. All litigants are now afforded equivalent and effective rights of appeal, as required under CETA.
    • The costly and inefficient practice of dual litigation is eliminated, leading to greater legal and market certainty.
    • Constraints on obtaining and introducing evidence are lifted, making discovery and live witness testimony available. This will assist both innovators and generics in making their case and help ensure the Federal Court (the Court) has the best available evidence upon which to base its decision.
  • Secondly, the amendments expand the scope of the Regulations to cover relevant certificates of supplementary protection (CSPs). CSPs implement Canada’s commitment under CETA to provide an additional period of protection for new patented pharmaceutical products. Unless otherwise specified, reference to a patent in this document should be read as also including a CSP.
  • Thirdly, the amendments help expedite proceedings by introducing a limited number of procedural rules, while still leaving the Court broad discretion to manage proceedings.
  • Fourthly, the amendments address concerns about how damages arising from delayed generic market entry are currently assessed.
  • Fifthly, the amendments remove barriers that may prevent innovators and generics from litigating certain patents outside the Regulations prior to generic market entry.

Description

A number of substantive and consequential amendments to the Regulations are being made. Individual provisions must be read in context to understand their intent and import. Different aspects of the new regime may be embodied in one or more discreet regulatory provisions.

As a general statement, the amendments seek to facilitate the just and expeditious resolution of patent infringement and validity disputes under the Regulations. The switch to full actions will further the interests of justice by providing means for the parties and the Court to access the best available evidence. To mitigate the risk that the additional procedural steps in an action could delay resolution of proceedings, efforts have been made to make dispute resolution under the Regulations more efficient.

To increase efficiency, a limited number of procedural rules are introduced. As detailed below, these rules are intended to facilitate the early exchange of key information and to allow for timely resolution of interlocutory issues. Consideration was given to including additional procedural rules addressing other areas of concern. Having considered input received in consultations with the pharmaceutical industry and others with legal expertise in this area, a decision was made to leave such matters to be dealt with by the Court on a case-by-case basis, according to established practices and procedures. If it becomes apparent that additional procedural rules are needed to improve efficiency, the Regulations may be amended to provide such rules at a later date.

More broadly, replacing the current summary proceedings with full actions will result in greater overall efficiency. As a result of this change, the Court will provide final determinations of patent infringement and validity. The following begins by explaining this change and then proceeds to address notable changes to other features of the regime.

Right of action

The Regulations remain focused on preventing patent infringement without unduly delaying access to generic medicines. However, the right of action under the new regime differs from the previous regime in a number of respects.

Focus on infringement and validity

A “first person” and/or the owner of a patent included on the patent register may bring an action against a “second person” seeking a declaration that making, constructing, using or selling a drug in accordance with the second person’s regulatory submission or supplement would infringe a listed patent. In addition to defending such an action, a second person may commence a counterclaim seeking to invalidate the patent. Because proceedings will focus on underlying questions of patent validity and infringement (not whether the Minister should be prohibited from issuing an NOC), appeals commenced after NOC issuance will not face the same problem of mootness. This meets Canada’s CETA obligation. The new approach also has the further benefit of better aligning litigation under the Regulations with litigation under the Act, including with respect to the burden of proof on questions of patent validity and infringement.

Available remedies

In addition to a declaration of infringement, the Court may order any other remedy that is available under the Act, or at law or in equity, in respect of infringement of a patent. If a declaration of infringement is made prior to an NOC having issued, the Regulations bar NOC issuance until expiry of the relevant patent. This provides the same level of patent protection as a prohibition order under the previous regime. If an NOC issues prior to a declaration of infringement being made, the availability of injunctive relief against the second person provides alternate means of preventing infringement. This is the same type of protection available to patentees under the Act, aligning litigation under the Regulations and the Act. The availability of such remedies further ensures that NOC issuance does not give rise to problems of mootness.

Orders prohibiting NOC issuance or suspending, revoking, or otherwise impacting an issued NOC are no longer available. Such relief is no longer necessary to prevent infringement under the new regime and could undermine the NOC’s purpose under the Food and Drug Regulations.

As no order may be made against the Minister, the Minister is no longer a party to proceedings under the Regulations.

Claims at issue

Proceedings under the Regulations may now address any claim in a patent included on the patent register, not simply claims for the medicinal ingredient, the formulation, the dosage form, or the use of the medicinal ingredient (though, as noted below, a patent must still contain such a claim to be eligible for listing on the patent register). This eliminates the need for separate proceedings to address all claims in a single patent.

Limitations on joinder

During the 24-month period in which the Minister is prohibited from issuing an NOC, the Regulations prohibit joinder of any action, other than an action in relation to an allegation of the second person included in a submission or supplement in the main action or an action in respect of a CSP that sets out a patent at issue in the main action. This, in appropriate circumstances, allows for joinder of (i) separate actions brought by a first person and a patent owner in response to the same Notice of Allegation (NOA), and (ii) separate actions brought in response to multiple NOAs that address different patents but are served in respect of the same submission. Other actions, such as an action alleging infringement of a patent that cannot be litigated under the Regulations, may not be joined. The limit on joinder is necessary to restrict the number of issues in dispute to facilitate resolution within 24 months. It is also necessary to avoid further complicating the assessment of damages arising from delayed market entry. If the 24-month period has expired or otherwise does not apply by operation of the Regulations, the Court is free to order joinder where appropriate.

Subsequent actions for infringement

If a first person or patent owner chooses not to commence a proceeding under the Regulations in respect of a patent listed on the patent register and addressed in an NOA, the Regulations prohibit subsequent actions from being brought against the second person for infringement of that patent, unless the first person or owner of the patent did not have a reasonable basis for bringing an action under the Regulations within the prescribed period. Possible situations where the first person or owner of the patent could be found not to have had a reasonable basis for commencing litigation include situations where the information provided by the second person was false, materially misleading, or materially incomplete (including as a result of a subsequent change in the generic product).

The provision promotes legal certainty by preventing strategic delay in litigating a patent listed on the patent register. At the same time, the provision incentivizes considerable disclosure on the part of a second person seeking to benefit from the provision. It is expected that the question of whether a reasonable basis for commencing litigation existed at the relevant time will be addressed in a subsequent proceeding, not in the proceeding brought under the Regulations.

Patent listing requirements

Eligibility requirements for listing a patent on the patent register remain unchanged. As before, a patent must contain a claim for (i) the medicinal ingredient, (ii) a formulation containing the medicinal ingredient, (iii) a dosage form, or (iv) the use of the medicinal ingredient to be eligible for inclusion on the register. This is so notwithstanding that all claims in a listed patent may be litigated in an action brought under the Regulations.

With respect to CSPs, they will be added to the register if the patent set out in the CSP is already included on the register in respect of a submission or supplement and the submission or supplement relates to a drug with respect to which the CSP grants the rights, privileges and liberties referred to in section 115 of the Act. No further application is necessary. To facilitate listing of a CSP, an expired patent that is set out in a CSP may be listed on the patent register.

Maintaining the patent register

The Minister of Health will be responsible for maintaining a register of patents that have been submitted for addition to the register. However, provisions in the Regulations establishing this responsibility have been amended to address concerns previously raised by the Standing Joint Committee for the Scrutiny of Regulations. The Regulations now specify that the Minister is required to add and delete patents from the patent register based on specific eligibility requirements in the Regulations.

In the context of a proceeding brought under the Regulations, a second person may bring a motion for a declaration that a patent is not eligible for inclusion on the patent register. Such a declaration will not lead to dismissal of the proceeding but could have a bearing on whether the Minister will be barred from issuing an NOC (discussed in further detail below). A patent declared ineligible for inclusion on the register will be deleted from it. However, this deletion will not occur until the conclusion of any appeal to the Federal Court of Appeal. This approach allows a greater level of certainty before a patent is deleted without unduly delaying the period during which other second persons would be required to address the patent. The same delay will not apply to deletions based on patent invalidation, which will be deleted after an initial finding of invalidity. A patent deleted for ineligibility or invalidity will be added back to the register if that holding is subsequently reversed or set aside on appeal.

The Regulations expressly require the Minister to delete a patent from the register at the request of the first person. This power previously existed but has been reaffirmed in light of other amendments to the Regulations. Amongst other things, this provision allows a first person to request deletion if it objects to new conditions arising from patent listing (e.g. the above-noted limitation on subsequent actions for infringement) or if the patent owner no longer consents to its inclusion on the register.

Beyond deleting an individual patent declared ineligible for listing on the patent register, the Minister also has discretion to review the register to determine whether any patents do not meet eligibility requirements. This allows the Minister to reconsider earlier listing decisions in light of any subsequent judicial decision that interprets eligibility requirements differently than the Minister did at the time of listing. Such reviews are discretionary to allow the Minister to assess whether a given decision warrants undertaking a broader review of the register. If the Minister conducts such a review and identifies patents that do not meet the requirement for inclusion on the register, she will delete those patents from the register. Unlike mandatory deletions under section 3(2) which are meant to flow automatically upon the occurrence of some event, the person who submitted the patent for listing will be provided with notice and an opportunity to respond before any deletion takes place following such a review.

Statements and allegations included in submissions and supplements

In their submission or supplement to a submission for an NOC, a second person must address patents listed on the patent register by making statements or allegations prescribed in the Regulations. Each claim in the listed patent must be addressed. In addition to the statements and allegations prescribed under past versions of the Regulations, new statements and allegations are possible:

  • The second person may state that the owner of the patent has consented to the making, constructing, using or selling in Canada of the drug for which the second person filed the submission or supplement. This provision reflects pre-existing practice at Health Canada. Such statements must be supported by evidence of consent from the patent owner before NOC issuance is possible.
  • The second person may allege that a patent is ineligible for inclusion on the register. As discussed further below, a finding of ineligibility does not dispose of a proceeding brought under the Regulations. However, such a finding would have a bearing on whether the Minister is prohibited from issuing an NOC. It is for this reason that the Regulations permit such an allegation to be made.
  • The second person may allege that a CSP cannot take effect. Such an allegation addresses circumstances where a CSP has been issued and listed on the register but the patent set out in the CSP has lapsed or otherwise terminated by operation of law prior to expiry of the 20-year patent term set out in the Act. Where this occurs, the CSP cannot take effect and no longer prevents issuance of an NOC.
Notices of allegation and accompanying documents

Under the amended Regulations, a second person is still required to serve an NOA on a first person. The first person must now forward the NOA and accompanying documents (discussed further below) to the owner of any patent addressed in the NOA.

The NOA must provide the legal and factual basis for any allegation made in the submission or supplement. This will facilitate early consideration of issues likely to be raised in litigation. This requirement does not circumscribe or otherwise limit the issues and arguments that may be raised in a proceeding brought under the Regulations. The scope of proceedings will be defined by the pleadings in accordance with prevailing rules and practices. This will further align litigation under the Regulations with litigation under the Act.

The amount of detail that must be provided in the NOA has changed in some ways. Under the amended Regulations, invalidity and non-infringement allegations are treated differently.

Invalidity allegations

The NOA must provide a detailed legal and factual basis for any allegation of invalidity. The second person must also include electronic copies of any document relied upon in support of the allegation. The requirement to provide detailed invalidity allegations and supporting documents is intended to allow first persons and patent owners who choose to bring a proceeding under the Regulations to begin reviewing and assessing these documents without having to await service of the second person’s pleadings. This will help expedite proceedings and facilitate resolution within 24 months. It is expected that case management judges will assess whether early consideration of validity issues was possible and undertaken when scheduling proceedings and making other case management decisions.

Where the second person has alleged invalidity, it may request contact information for any inventor who might have information relevant to the allegation and information as to whether the inventor is employed by the first person or the owner of the patent. Where the inventor is currently employed by the first person or the owner of the patent, this obligation could be met by stating that the inventor can be contacted through counsel to the employer. The requirement to provide contact information is intended to facilitate and expedite access to relevant evidence.

The second person may also request laboratory notebooks, research reports, or other documents that may be relevant to establishing the existence of a particular property, advantage, or use asserted by the second person to form part of invention as of the filing date of the application for the patent. A simple request for any document relevant to a ground of invalidity is insufficient. Instead, requests must reference the specific portion of the patent in which the property, advantage, or use is mentioned and the specific allegation in the NOA to which the request is relevant.

Non-infringement allegations

Non-infringement allegations need not be as detailed as invalidity allegations; a second person will be free to choose how detailed a non-infringement allegation may be. However, the second person is required to serve, along with its NOA, any portions of its submission or supplement that could be relevant for determining whether a listed patent would be infringed. The second person must comply with this requirement even if it makes no allegation of non-infringement. By reviewing relevant portions of the submission or supplement, first persons and patent owners will be able to assess whether they believe a listed patent will be infringed. By providing first persons and patent owners with needed information and leaving it to them to assess infringement, this approach better reflects the burden of proof applied when patent infringement is litigated under the Act.

Where a first person or patent owner believes further portions of the submission or supplement are required to establish infringement, it may bring a motion for production after a proceeding has been commenced. Moreover, the requirement to include relevant portions of the submission or supplement with the NOA is meant to provide early access to key documents; it is not intended to displace normal discovery obligations and production may still be required in that context.

The Regulations do not require mandatory production of samples of the generic product. Such samples may be sought under the relevant provision of the Federal Courts Rules.

Confidentiality of mandatorily produced documents

The Regulations require certain documents (i.e. portions of the second person’s submission and documents relevant to 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) to be produced at an early date, rather than waiting for the discovery process to unfold. As these documents often contain commercially sensitive confidential information, the Regulations allow the party producing the documents to impose reasonable rules for maintaining their confidentiality, as between the parties. These rules are enforceable by the Court against persons who receive the documents pursuant to requirements in the Regulations. The Court may order any relief or remedy necessary for the purpose of enforcing the rules. If the recipient believes the rules are too restrictive and an agreement to broaden the rules cannot be reached between the parties, it can bring a motion in Court to vary the imposed rules.

The Court, on its own initiative, may also set aside or vary any rules. This will ensure that parties do not impose rules unrelated to the confidential treatment of the documents by parties to whom they have been disclosed. For example, the Regulations do not permit parties to impose rules governing confidential treatment of the information by the Court. If a party were to impose such a rule, the Court could set it aside.

The Regulations further stipulate that the Court shall, upon request, treat confidentially any document subject to such confidential rules, subject to such conditions as it considers just. The provision allows confidential treatment of documents by the Court, while granting the Court some discretion to ensure that requests for confidential treatment are no broader than necessary and do not cover information that must be disclosed to ensure the integrity of the Court process.

Court process for infringement actions under the Regulations
Case management

Early and active case management will help contribute to the timely resolution of proceedings. To this end, case management is required for proceedings brought under the Regulations.

The Regulations specifically require that a case management conference be convened shortly after a proceeding is commenced. While the Court is free to address any issue it wishes in the case conference, it is expected that the following types of issues will be addressed: a possible schedule for the proceeding; the extent to which the parties have complied with their obligation to provide documents and information under the Regulations; whether a party seeks to vary or set aside any imposed confidentiality rules; whether the plaintiffs intend to seek a sample of the generic product and conduct testing on it; how claims charts can best be used to expedite resolution; the timing for service of any expert evidence; and, the most efficient and effective means of educating the Court about any scientific or technological matters raised in a given case.

The Regulations also stipulate that orders made on interlocutory motions may only be appealed to the Federal Court of Appeal and will require the leave of that Court. Other than stipulating the deadline for seeking leave to appeal, the Regulations do not address the procedure for seeking leave. The intention is that this will be governed by the Federal Courts Rules. Similarly, the Regulations do not dictate when leave should or should not be granted. Whether leave should be granted in any given case is something for the Court of Appeal to consider in accordance with established law and overarching principles of justice.

Duty to act diligently and reasonably cooperate

Those subject to the Regulations are expressly required to act diligently in carrying out their obligations under the Regulations and to reasonably cooperate in expediting any infringement action brought under the Regulations. Where a person fails to comply with these requirements, the Court may shorten or extend the 24-month period during which the Minister is prohibited from issuing an NOC and may also consider such a failure when awarding costs. The express mention of these consequences does not prevent the Court from ordering any other remedy within its power upon finding that a party has not acted diligently or has failed to reasonably cooperate in expediting proceedings.

Motions to dismiss

Under the Regulations, a second person may bring a motion to dismiss a proceeding on the ground that it is redundant, scandalous, frivolous, vexatious, or otherwise an abuse of process. This provision supplements, but does not displace, Rule 221 of the Federal Courts Rules (which governs motions to strike pleadings). Parties remain free to bring motions under that rule if they choose. Inclusion of this provision will, if appropriate, permit development of a body of case law that can account for the unique features of the Regulations.

Prohibition on NOC issuance

As before, the Regulations prevent the Minister from issuing an NOC until particular conditions are satisfied. These conditions are similar to those that existed under the previous Regulations but some differences do exist.

Compliance with section 5

In circumstances where a second person made an allegation under the previous Regulations, the Minister was barred from issuing an NOC until the second person complied with section 5 of the Regulations. Under the amended Regulations, the Minister is barred from issuing a NOC, in such circumstances, until the second person complies with the more limited requirement to provide the Minister with proof of service of the NOA and a copy of the NOA. Given the new requirements placed on second persons under section 5 and the fact that the Minister is no longer a party to proceedings under the Regulations, it is not practical to require the Minister to assess compliance with other requirements of that section (e.g. the adequacy of required documentary production). Upon being served with an NOA and accompanying documents, the first person and patent owner will be in a position to bring a proceeding under the Regulations. Whether the second person has failed to comply with broader requirements in section 5 is something that can, if appropriate, be addressed in Court (e.g. in the context of the proceeding or in a subsequent action for infringement).

Expiration of patents declared infringed

Whereas the previous Regulations barred NOC issuance until the expiration of any patent that is the subject of a prohibition order, the amended Regulations bar NOC issuance until the expiry of all patents in respect of which the Court has made a declaration of infringement. This provision prevents NOC issuance without the need for orders of prohibition against the Minister (which are no longer available).

CSPs not the subject of an allegation

The Regulations also address the possible situation where a CSP is added to the patent register after the second person has filed its submission or supplement (and, as a result, the second person was not able to address the CSP at the time it filed its submission or supplement). If this occurs, the Regulations bar issuance of an NOC until expiry of that CSP, provided certain conditions are met. Firstly, the CSP must set out a patent in respect of which either (i) the second person was required to make a statement or allegation but did not make an allegation, or (ii) in respect of which the Court has made a declaration of infringement. Secondly, the CSP must be included on the patent register in respect of the same submission or supplement as the patent. In these limited circumstances, the prohibition on NOC issuance that arises as a result of the patent will be extended until expiry of the related CSP, unless the Court otherwise specifically addresses the CSP in the proceeding. This reflects the fact that a CSP which is eligible to be added to the register in respect of a submission or supplement grants similar rights to those granted under the patent in respect of the drug and, as a result, actions in respect of the drug that infringe the patent will likely infringe the CSP.

Exceptions to the prohibition on NOC issuance

The Regulations contain a number of exceptions to the prohibition on NOC issuance. Many of these exceptions are similar to those that existed under the previous Regulations, with some modification. In addition, some new exceptions have been added.

Consent

The Regulations provide that the prohibition on NOC issuance does not apply if the owner of the patent consented to the making, constructing, using, or selling of the drug in Canada by the second person. This provision is similar to a provision in the previous Regulations but now applies to any requirement under section 7 of the Regulations that may prohibit the Minister from issuing an NOC. As previously noted, the Regulations require that the Minister be provided with evidence of consent from the patent owner.

Renouncing the 24-month bar on NOC issuance

As before, the Regulations bar issuance of an NOC for a period of up to 24 months from the bringing of an infringement action under the Regulations. However, first persons and patent owners can renounce the application of this provision at the time they bring an action under the Regulations. If each party that brings an action in response to the NOA renounces application of the 24-month bar on NOC issuance, the bar does not apply and the Minister is free to issue an NOC once all requirements under the Food and Drug Regulations are met.

A first person or patent owner can renounce the application of the 24-month bar on NOC issuance without prejudice to their right to sue for infringement or to obtain any remedy from a court.

Lifting the prohibition on NOC issuance
Patents found ineligible for inclusion on the patent register

As noted above, a second person may bring a motion for a declaration that a patent is ineligible for inclusion on the patent register. Previously, a finding of ineligibility led to the dismissal of a proceeding in respect of that patent; this is no longer the case under the amended Regulations. Instead, the Regulations specify that the 24-month bar on NOC issuance does not apply “in respect of a patent” that is declared in that proceeding to be ineligible for inclusion on the Register. The action itself, however, will no longer be dismissed on this basis. This prevents a first person or patent owner from having to commence a separate proceeding seeking a determination of the same issue (i.e. whether the generic product would infringe the patent).

By stating that the 24-month bar does not apply “in respect of a patent,” the Regulations address both situations where the only patent in issue is found to be ineligible for inclusion on the register and situations where multiple patents are in issue but only one or some are found ineligible for inclusion on the register. With respect to an action for the infringement of a single patent, the 24-month bar on NOC issuance will be lifted upon the finding of ineligibility (though NOC issuance may still be barred for other reasons, such as where the second person has stated that they will await expiry of another patent). With respect to an action for the infringement of two or more patents, the 24-month bar on NOC issuance will continue to apply but only in respect of the other listed patents. This means that, if litigation in respect of those patents were to conclude for any reason (e.g. discontinuance, invalidation in another proceeding, expiry of the patent), the 24-month stay on NOC issuance will be lifted. Nevertheless, the infringement action can continue for the ineligible patent.

Unless and until a patent found ineligible for inclusion on the patent register is deleted from it (as explained above), it must still be addressed in any other submission and any litigation under the Regulations in respect of that submission.

Patents deleted from the patent register

The Regulations similarly state that specific bars on NOC issuance cease to apply “in respect of a patent” if that patent has been deleted from the patent register. Notably, deletion can occur for a variety of reasons, including patent expiry. As in the case of patents found to be ineligible for inclusion on the register, these bars will only be lifted if all relevant listed patents have been deleted from the register. If some relevant patents remain on the register, the bars still apply but only in respect of those patents.

Documents provided to the Minister

As the Minister is no longer a party to proceedings brought under the Regulations, they will no longer be served, as of right, with documents filed with the Court. Nevertheless, the Minister must have access to relevant information to determine whether there are any barriers under the Regulations that would prohibit issuance of an NOC. To this end, the Regulations require a person who brings an infringement action under the Regulations to provide the Minister with certain documents as soon as feasible.

The Regulations also allow the Minister to request any information or document she requires to maintain the patent register or to assess whether there are any other bars to NOC issuance under the Regulations. This will provide the Minister with necessary information to discharge her responsibilities under the Regulations and will ensure that the Minister does not issue an NOC when prohibited from doing so.

Damages arising from delayed generic market entry

As before, the Regulations allow a second person to seek compensation for losses suffered during the period they were kept off the market as a result of an unsuccessful or discontinued proceeding having been brought against them under the Regulations. Some changes have been made to the relevant provisions to ensure they better achieve their purpose.

Liability

All plaintiffs in an infringement action brought under the Regulations will be made jointly and severally, or, in Quebec, solidarily, liable for losses suffered by the second person after a specified date if the action is discontinued or dismissed, or if a declaration of infringement made in the action is reversed on appeal. Plaintiffs will be made jointly and severally, or, in Quebec, solidarily, liable to ensure the second person is made whole. Nevertheless, the Court will be free to apportion liability as appropriate.

As discussed, plaintiffs will be able to avoid liability entirely if they each renounce application of the 24-month bar on NOC issuance at the time they bring their action.

Start date for liability

The Regulations specify that all plaintiffs in an infringement action brought under the Regulations are liable for losses suffered by the second person after the later of (i) the date of service of the NOA that allowed the action to be brought, and (ii) the date when the NOC would have issued in the absence of the Regulations. Despite specific reference to these dates, the Court still has discretion to specify another start date, provided that date is determined to be more appropriate than the date specified in the Regulations.

End date for liability

The Regulations no longer limit liability to losses suffered prior to a specified end date. This will allow a second person to seek compensation for any loss suffered as a result of delayed market entry after the date specified in the Regulations. It will be left to the Court to determine whether the loss is properly recoverable.

Related rights of action

Not all patents are eligible for listing on the patent register (e.g. patents claiming chemical intermediates, patents claiming processes for making a drug) and not all eligible patents are necessarily listed on the register. Such patents can create legal uncertainty if there is risk that they could be infringed by the generic product. To facilitate legal consideration of such patents without expanding the scope of proceedings under the Regulations, related rights of action are enabled.

Generic right of action

The Regulations deem a second person who has filed a submission or supplement to a submission for a notice of compliance based on a comparison with, or reference to, another drug marketed in Canada and who has reasonable grounds to believe that the drug might be alleged to infringe a patent to be an interested person for the purpose of bringing an action under the Act to deem the patent invalid or void. This provision does not establish a standalone patent impeachment process under the Regulations; rather, the provision only deems the second person an “interested person,” as required under subsections 60(1) and 125(1) of the Act. This provision ensures a second person’s ability to proceed under those subsections without engaging in protracted arguments about whether the second person is, in fact, an interested person. The provision also mirrors the grounds for commencing an action for a declaration of non-infringement under subsections 60(2) and 124(2) of the Act.

Innovator right of action

The Regulations enable a first person or owner of a patent, upon receiving an NOA, to bring an action for infringement of a patent that is not the subject of an allegation in the NOA that could arise from making, constructing, using or selling a drug in accordance with the second person’s submission or supplement. This does not establish a standalone patent infringement process under the Regulations. The purpose is effectively to permit a first person or patent owner to bring an action prior to actual infringement occurring (essentially, an action quia timet).

Transitional provisions

The Regulations come into force on the day section 59 of the Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act comes into force and will apply to any matter, other than those that arose or would arise in relation to an NOA that was served before that date. Accordingly, the Regulations as amended will apply immediately upon coming into force to any submission or supplement filed before that date, to the extent that no NOA had yet been served before that date. The Regulations as they read prior to this date will continue to apply to any matter that relates to an NOA served on a first person before that day. If a second person had made a statement agreeing to await patent expiry prior to the coming into force of these Regulations, or had otherwise not served an NOA before that date, these Regulations will continue to bar NOC issuance until the Regulations, as amended, are complied with.

Transitional provisions from prior regulations amending the Regulations are repealed where they are either spent or reiterate general rules for the application of regulatory amendments, including those under the Interpretation Act.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as it does not impose any administrative burden on business.

Small business lens

The small business lens does not apply to this proposal, as it does not impose any costs on small business.

Consultation

Consultation with stakeholders was done on the enabling authority in the Act and the proposed Regulations. Both generic and innovative industry members were involved in these consultations over the past two years. In addition, people with particular legal expertise in this area were also consulted. Input gained in consultations was fully considered by the government.

The Regulations were prepublished in Part I of the Canada Gazette with a 15-day comment period provided in order to facilitate broader engagement on the proposed regulatory measures. In response, the Government received a number of submissions from innovative and generic pharmaceutical manufacturers, their industry associations, international business groups, the European Union, and others. Many of these submissions reiterated concerns that had been previously raised in earlier consultations with stakeholders and that informed the prepublication of the Regulations. A smaller number of new concerns were also raised.

The Government considered all the submissions made following prepublication but has decided against making any further changes to the Regulations. The following addresses some of the main concerns raised in submissions and the Government’s view on those submissions.

Length of the bar on NOC issuance

It was suggested by some that the 24-month bar on NOC issuance was not sufficient and should be extended to at least 30 months. An extension to the 24-month bar on NOC issuance is not warranted. Other jurisdictions have had success in determining patent actions in less than 24 months. The combination of new procedural rules in the Regulations and ongoing efforts by the Court to streamline litigation practices will help facilitate timely resolution of matters. Furthermore, mootness is no longer an issue and a proceeding can continue after the bar on NOC issuance expires. If the 24-month bar on NOC issuance expires before a decision is rendered and infringement occurs, damages for resulting losses (if any) can be sought in court.

Consensual extension of the 24-month bar on NOC issuance

Some expressed concern that the 24-month bar on NOC issuance can no longer be extended on consent. The Government believes consensual extensions of the stay are no longer necessary. The ability to extend the 24-month bar on consent provided a means of ensuring that proceedings would not be rendered moot as a result of NOC issuance. As discussed above, this is no longer a concern under the new regime. Eliminating parties’ ability to extend the 24-month bar on consent incentivizes parties to diligently move a matter towards hearing and fosters a healthier competitive environment.

Effect of appeal on section 8 liability

Some commentators expressed concern that section 8 liability appears to still exist if the trial decision giving rise to the liability is reversed on appeal. This is not the case. Pursuant to subsection 8(2) of the Regulations, liability only arises if an action brought under subsection 6(1) is discontinued or dismissed, or if a declaration referred to in subsection 6(1) is reversed on appeal. Effectively, the occurrence of one of these three things is a condition precedent that must be satisfied before liability will attach. If the order dismissing a proceeding brought under subsection 6(1) of the Regulations is set aside or vacated on appeal (either as a result of a reversal or because the matter has been sent back to the court of first instance for redetermination), there is no longer a dismissal, as a matter of law, and the condition precedent for any liability no longer exists.

Assessment of section 8 liability

Several submissions raised concerns with how liability is assessed under section 8 of the Regulations, in particular with the treatment of possible competitors. Some sub missions claimed that section 8 results in overcompensation; others claimed that section 8 results in undercompensation. The Government believes that the language of section 8 provides litigants with broad flexibility to make submissions on how liability should be assessed. It is for the Court, which has special expertise in these matters, to weigh these submissions and craft an appropriate remedy. The Regulations cannot provide a model that would be appropriate in each and every instance.

Rationale

These amendments allow Canada to meet its obligation under Article 20.28 of CETA to ensure that all litigants under its patent linkage regime are afforded equivalent and effective rights of appeal. This is being done by replacing summary proceedings arising under the Regulations with full actions resulting in final determinations of patent infringement and validity. The more robust legal procedure followed in actions (compared to the summary procedure employed in applications) will facilitate access to better evidence and result in more informed judgments. This change also eliminates the practice of dual litigation, resulting in greater overall efficiency and less legal uncertainty at the time of generic market entry.

Implementation, enforcement and service standards

The courts and the Minister will continue to exercise jurisdiction over issues related to the administration of the Regulations.

Contact

Mark Schaan
Director General
Marketplace Framework Policy Branch, Strategy and Innovation Policy Sector
Innovation, Science and Economic Development Canada
235 Queen Street, East Tower, 10th Floor
Ottawa, Ontario
K1A 0H5
Email: mark.schaan@canada.ca
Telephone: 343-291-3700
Fax: 613-952-1980