Therapeutic use of biologics has increased considerably in recent years.[5]�� Unfortunately, due to the complexity of these molecules, development and commercial production have proven very costly.[6]�� Indeed, it is estimated that most biologics must enjoy market exclusivity for, on average, 12.9 to 16.2 years before initial research and development costs can be recovered.[7]�� Adequate IP safeguards are then vital for continued research and investment in this area.

It is axiomatic that patents play a key role in the pharmaceutical industry, but their practical value is questionable when applied to biologics in Canada. On account of the fundamental nature of biologics, it is often said that the “product is the process.”[8]�� Process patents are, therefore, of central importance. Nevertheless, pure process patents are not permitted for listing in the Patent Register for the purposes of proceedings under the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations).[9]�� The result is a significant gap in patent protection. There remains, of course, the option to pursue an action for patent infringement against manufacturers of SEBs, but this avenue is fraught with practical difficulties. Chief among these issues are the typical length of time for a case to come to trial and be tried and how rarely preliminary injunctions are granted in Canada.[10]

Due to this gap in patent protection, data exclusivity serves as important insurance to safeguard innovator investment.[11]�� Data protection garnered considerable debate among stakeholders during CETA negotiations as innovators pressed unsuccessfully for the US standard of 12 years.[12]�� Under the current Canadian regulatory scheme, SEBs are barred from relying on reference biologic data for 8 years and will remain so should CETA be ratified.[13]�� This falls well short of the estimated market exclusivity that a biologic typically requires to be profitable. Without adequate insurance, investment in these medicines is discouraged.

Under these circumstances, reliance on trade secrets may represent a reasonable supplement or alternative to data protection and patents.[14]�� For reasons already discussed, innovators may see trade secret protection as a more attractive mechanism than process patents. Indeed, in light of patent law’s disclosure requirements, it may be worthwhile to forego patenting entirely.[15]�� Alternatively, innovators may seek to obtain substance patents that do not disclose the best mode of manufacture, although there is debate as to whether this is permissible.[16]�� As a practical consideration, innovators that opt for trade secrets over patents would also find themselves outside the jurisdiction of the Patented Medicines Price Review Board (PMPRB).[17]

For the public, the costs of a trade secret strategy are significant. Besides the obvious detriment to the pool of collective knowledge, this strategy will force prospective SEB manufacturers to reverse engineer reference biologics in order to identify the necessary manufacturing processes – an expensive and time-consuming procedure.[18] In turn, the time and cost incurred by the SEB manufacturer will delay the arrival of more affordable therapies and increase the market price of these medicines.[19]

How then can the Canadian IP regime better protect biologics? With CETA negotiations over, the opportunity to increase data protection in the near future has likely passed. Another possibility is to develop a patent-based framework specific to biologics. In Canada, such a framework could be established with a second patent register that would allow for process patents to be listed for biologics. The pharmaceutical industry`s familiarity with the PM(NOC) framework may make this an appealing option with real potential for improved enforcement of biologic-related patents. Whatever the solution, Canada must not be shortsighted in its approach to emerging medical therapies and should design balanced protections that are alive to the realities of the industry.

Stephen J. Dalby is a JD Candidate at Osgoode Hall Law School.�� Stephen is currently enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

[1] Health Canada, “Guidance For Sponsors: Information and Submission Requirements for Subsequent Entry Biologics (SEBs)”, (Ottawa: Health Canada, 2010), online: .

[2] Ibid.

[3] Ibid.

[4] Kristina Lybecker, “The Biologics Revolution in the Production of Drugs” in Steven Globerman, ed, Intellectual Property Rights and the Promotion of Biologics, Medical Devices, and Trade in Pharmaceuticals. (Vancouver: Fraser Institute, 2016) 9 at 12.

[5] Ibid at 16 – 20.

[6] Supra note 4 at 30.

[7] Henry Grabowski, Genia Long, and Richard Mortimer, “Data Exclusivity for Biologics” (2011) 10 Nature Reviews: Drug Discover 15 at 15.

[8] Walter Jeske et al, “Update on the safety and bioequivalence of biosimilars – focus on enoxaparin” (2013) 5 Drug, Healthcare and Patient Safety 133 at 135.

[9] Health Canada, “Guidance Document: Patented Medicines (Notice of Compliance) Regulations”, (Ottawa: Health Canada, 2015), online: .

[10] Aleksandar Nikolic, "A Comparative Study of Patent Infringement Remedies Related to Non-Practicing Entities in the Courts of Canada, the United Kingdom, and the United States" (2014). LLM Theses. Paper 4 at 73.

[11] Henry Grabowski, “Data Exclusivity for Biologics: What is the Appropriate Period of Protection?” (2009) 10 American Enterprise Institute for Public Policy Research 1 at 5; Biotechnology Industry Organization, “The Trans-Pacific Partnership and Innovation in the Bioeconomy: The Need for 12 Years of Data Protection for Biologics” (2013) at 4, online: .

[12] Biologics Price Competition and Innovation Act, 42 USC §262 (2009) s 351(k)(7)(A), online: .

[13] Canada CRC, c 870, C.08.004.1(3)(b); Comprehensive Economic and Trade Agreement, Canada and European Union, art 20.29 at s 2(b).

[14] Paul A Calvo, “Choosing Between Patent And Trade Secret Protection In A Biosimilar World” (13 January 2016), Biosimilar Development (blog), online: .

[15] Patent Act, RSC, 1985, c P-4, s 27(3).

[16] Teva Canada Ltd. v Novartis AG, 2013 FC 141 at para 376; David Vaver, "Best Mode Disclosure in Canadian Patents" (2013).��Comparative Research in Law & Political Economy.��Research Paper No. 30/2013, online: .

[17] Supra note 14 at s 80(1).

[18] W. Nicholson Price II and Arti K. Rai, “Manufacturing Barriers to Biologics Competition and Innovation” (2016) 101:3 Iowa L Rev 1023 at 1029.

[19] Ibid.

The post Bringing Biologics in from the Cold: Does Canada’s IP Regime Need a Booster? appeared first on IPOsgoode.

In September of 2014 the consolidated text of the Comprehensive Economic and Trade Agreement (“CETA”) was released to the public. [1]�� CETA is a landmark free trade agreement between Canada and the European Union that has been in negotiations since 2009. [2]�� CETA has been touted by the Canadian Government as its “most ambitious trade agreement to date” and the agreement looks to have far-reaching effects on the economy through provisions covering everything from dairy tariffs to investor-state disputes. [3]�� However, the issue that has attracted the most commentary and fierce debate throughout the CETA negotiations is the agreement’s potential impact on Canada’s pharmaceutical industry. This controversy was primarily due to the fact that the European Union had been putting pressure on the Canadian government during the CETA negotiations to allow for provisions that would strengthen its patent protection for pharmaceuticals,[4] despite the fact that according to some commentators, Canada already provides for some of the strongest amount of protection for pharmaceuticals in the world.[5]�� Irrespective of this debate, the official consolidated CETA text contains two provisions that increase patent protection for pharmaceuticals in Canada through (1) the availability of patent term restoration for time lost in pharmaceutical regulatory processes,[6] and (2) the implementation of “equivalent and effective right of appeal” for all litigants that engage in a “linkage” mechanism where the granting of market authorization for pharmaceuticals is linked with patent protection.[7]

Although the implementation of patent term restoration is a relatively straightforward exercise, the addition of an “equivalent and effective right of appeal” for all litigants under Canada’s pharmaceutical linkage mechanism is a more contentious point. These changes were sought by the European Union due to the unique nature of Canada’s pharmaceutical patent linkage mechanism, the Patented Medicines (Notice of Compliance) Regulations (“PM(NOC) Regulations”),[8] which does not currently grant a brand manufacturer an effective right of appeal for adverse rulings. In addition, proceedings under the PM(NOC) Regulations are not a final determination of the issues of patent infringement or validity and therefore often lead to the dual litigation of these same issues under the Patent Act. The need to remedy this situation has also been recognized by the CETA agreement and it has been agreed that changes to Canada’s linkage mechanisms through the CETA agreement will “give scope for Canada to end the practice of dual litigation [of pharmaceutical patents]”.[9]�� Although Parliament has signaled that Canada’s linkage mechanism are here to stay,[10] there is no indication of how amendments to Canada’s PM(NOC) Regulations can lead to equivalent and effective rights of appeal being available to all litigants and an end to dual pharmaceutical litigation (“the CETA goals”). The complex nature of Canada’s pharmaceutical regulatory and patent framework makes changes to the system difficult, and it is apparent that there are no simple amendments that will be able to easily accomplish the CETA goals.

This paper suggests that Canada’s pharmaceutical linkage mechanism that is provided by the current PM(NOC) Regulations is in need of major reform, and the implementation of the CETA goals offers the perfect opportunity to enact changes that will allow the system to better achieve that balance between enforcing patent rights and ensuring that generic drug products enter the market as soon as possible that Parliament intended when enacting the PM(NOC) Regulations.[11]�� Two major changes to the PM(NOC) Regulations will be proposed in order to accomplish these objectives: (1) Changing the nature of proceedings under the PM(NOC) Regulations to a full adjudication of rights between the parties, and (2) Amending provisions that allow for generic manufacturers to be more fairly compensated for damages caused by being wrongly kept off the market due to the PM(NOC) Regulations. These amendments will remove some of the numerous inefficiencies and imbalances present in the current PM(NOC) Regulations and will allow for provisions that both disincentivize the abuse of the proceedings and provide rewards for the successful challenge of invalid or non-infringing patents which leads to the early market entry of generic drugs.

The purpose of this paper is two-fold. I will first present a critical analysis of Canada’s current pharmaceutical linkage mechanism in order to illustrate the necessity of its reform. I will then propose changes to the PM(NOC) Regulations that accomplish the CETA goals and at the same time lead to a more optimal pharmaceutical linkage system. In an effort to achieve these purposes, I will proceed in the following way: (i) first, I will provide a brief overview of Canada’s pharmaceutical regulatory and patent regime; (ii) second, I will set out the goals of a pharmaceutical linkage system and present a critical analysis Canada’s current system; (iii), finally, I will propose amendments which I believe incorporate the CETA goals and produce a more optimal patent linkage system in Canada.

Adam Falconi is a graduate of Osgoode Hall Law School.�� This paper was submitted by Adam as his major research paper assignment for Osgoode's Intellectual Property Law & Technology Intensive Program ("IP Intensive").���� Adam received the Barry D. Tomo Memorial Prize for his research paper.�� The prize was established in 1986 in memory of the late Barry D. Torno, who for many years was a leading practitioner in the field of entertainment law. The annual income from a fund contributed by his friends and associates is awarded to the student who submits the best research paper each year on a subject related to Industrial or Intellectual Property Law.

[1] Government of Canada, “Canada-European Union: Comprehensive Economic and Trade Agreement (CETA) Consolidated Text”, online: Foreign Affairs, Trade and Development Canada <> [CETA Text].

[2] Stephen Harper, Prime Minister of Canada, “Declaration by the Prime Minister of Canada and the Presidents of the European Council and European Commission – a new era in Canada/EU relations”, Office of the Prime Minister online: <> .

[3] Government of Canada, “Canada-European Union: Comprehensive Economic and Trade Agreement (CETA)”, online: Foreign Affairs, Trade and Development Canada < >.

[4] Paul Grootendorst & Aidan Hollis, “The Canada-European Union Comprehensive Economic & Trade Agreement, An Economic Impact Assessment of Proposed Pharmaceutical Intellectual Property Provisions” (February 7, 2011) online: Canadian Generics < >.

[5] Edward M Iacobucci, “Innovation for a Better Tomorrow: A Critique,” May 30, 2011, online: Canadian Generics
<-%20A%20Critique_FINAL.pdf> [Iacobucci].

[6] CETA Text, supra note 1 at Chapter 22 Article 9.2.

[7] Ibid at Chapter 22 Article 9 bis.

[8]�� SOR/93-133 [PM(NOC) Regulations].

[9] Government of Canada, "Technical Summary of Final Negotiated Outcomes, Canada-European Union Comprehensive Economic and Trade Agreement, Agreement-in-Principle", Canada Action Plan online: �� at page 19. [Agreement in Principle].

[10] Due to the fact that provisions addressing a pharmaceutical linkage system are contained in the CETA text and Canada is the only party to the agreement that currently has a pharmaceutical linkage system, it seems very unlikely that Parliament would dissolve its linkage system and make these extensively negotiated provisions moot.

[11] Regulatory Impact Analysis Statement, (1998) 132 C Gaz 7 II 923 at pg 1058 [RIAS 1998].

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The Pharmaceutical Patent Regime

Several changes to Canada’s pharmaceutical patent regime were desired by Europe, and . Canada has agreed to allow a patent term extension (PTE) of up to two years. Additionally, the dual proceedings for patents – prohibition applications under the Patented Medicine (Notice Of Compliance) Regulations 1993 (as amended) for regulatory matters, followed by a court determination of patent validity or infringement – will likely be reformed. This second change is coupled with the newly acquired ability of brand companies to appeal an adverse PM(NOC) decision. However, the Canadian data and marketing exclusivity periods will , respectively, rather than move to the European period of 10 years. (To see past IPilogue coverage on this topic, click .)

These changes have predictably elicited polarized viewpoints. The Canadian Generic Pharmaceutical Association (CGPA) commended , but voiced their disappointment of others, including the PTE. The CGPA is pleased with the expected discontinuation of the dual litigation practice, the recognition of the generic pharmaceutical industry’s importance in Canada, and the limitations placed on the use of the PTE. Notably, a suggests that the PTE’s annual increased cost, even with the two year maximum, will range from $850 million to $1.65 billion.

By contrast, it was alleged in January 2013 that in Canada. Opinions nonetheless differ on whether brand companies have met previous promises to increase R&D in Canada in exchange for improved patent protection.

Whether these two changes are good for Canadians or not remains to be seen. Can the predicted annual cost of the PTE to Canadians be offset? The federal government’s will not help those paying for prescriptions out of their own pocket, and lacked any assurance that reimbursement will continue in the long term. Pharmaceutical companies may perhaps decrease their product costs in response to lower litigation costs, or may conduct more research in Canada – but probably not sufficient to offset the high PTE cost.

Geographical Indications

Protecting Geographical Indications (GIs) was another important aspect of CETA. Until now, the only GI protection in Canada has been for . Otherwise, GIs are protected under or as certification marks under the . These laws have not always protected European GI producers against prior Canadian users, as occurred with the Parma ham GI in . In Europe, GI protection is largely and is potentially available for any foodstuff or beverage, although some countries such as the UK have also long had a scheme like Canada’s and have also protected GIs under the law of unfair competition or false marketing.

Under CETA, Canada has agreed to increase the scope of GI protection to include . Areas that will remain unchanged in Canada include: words commonly used to describe items (Black Forest ham), generic plant names (kalamata olives), and components of longer terms, which can all still be used in association with wares. For other items, such as Asiago cheese, current users can continue to use the term, but future users are prohibited. It has not been indicated whether Canadian GIs can be protected in Europe. However, even if this protection is reciprocal, the limited use of GIs by Canadian producers suggests from the additional protection.

While existing Canadian trade-marks will , it seems that previously blocked European GIs, even if potentially confusing with Canadian trade-marks, may now be used in Canada. Thus, the European Commission has claimed that Prosciutto di Parma can in Canada. The possibility of harm to existing Canadian trade-mark owners and consumer confusion over the source of the two products becomes quite real. Consumer impact can of course be viewed as either a benefit (increased choice) or a detriment (confusion) but the potential harm to Canadian producers with valid trade-marks, coupled with the limited GI use by Canadian producers, suggests a clear victory for Europe in this sector.

Conclusion

In light of CETA’s impact on patent law and GIs, Canada appears to have lost the IP game to Europe. Whether this preliminary assessment holds true once the full text of CETA is released, and is applied in Canada, remains to be seen.

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The Ramifications of CETA on Pharmaceutical IP Laws: The Expected and The Unexpected

CETA has been in the making for many years, and the EU has made clear its desire for Canada to for pharmaceuticals - seen by many as . However, it was unknown how much Canada would end up changing��its intellectual property rights (IPR) regime in the��face of��intense pressure from both and resistant to strengthening IPR through CETA and other international trade deals.

In the end, although the full-text will not be available until it has been translated into all of the European languages, it has been widely accepted that the final agreement will have on pharmaceutical intellectual property laws in Canada:

1. Patent term restoration will provide innovative pharmaceutical companies the ability to restore up to two years of patent protection that have been lost by regulatory processes;
2. Innovative pharmaceutical companies will gain a “right of appeal” for decisions made under the -��a right��that is currently only available for patent challenges from a generic pharmaceutical company.

On its face, these changes are a boon to the innovative pharmaceutical industry in Canada and represent . These anticipated changes could be interpreted as Canada's unwillingness to fully compromise, as the EU ��up to 5 years of patent term restoration in addition to more extensive data protection provisions. Interestingly, the Canadian Generic Pharmaceutical Association (CGPA) has claimed to have from the Government of Canada that��the implementation of the “right of appeal” will serve to curb duplicative litigation from innovative pharmaceutical companies. Canada is currently the only country in which an innovative company can sue a generic producer more than once on the same patent.

Varied Reactions to the Report from Various Stakeholders

As expected, the reactions to the proposed changes to Canadian pharmaceutical intellectual property law have been mixed, with various organizations and stakeholders speaking for and against the CETA agreement.�� Canada's Research-Based Pharmaceutical Companies (Rx&D) applauding the agreement and��opining that��the agreement��will serve to increase pharmaceutical innovation and support the discovery of new medications. Interestingly enough, a Canadian patient group, The Mood Disorders Society of Canada, after the agreement was announced, which echoed the sentiments of Rx&D. The statement also��expressed the group’s belief that CETA will encourage more pharmaceutical research in Canada and��help develop effective interventions to improve the mental health of Canadians.

The CGPA also��, which��cites��its disappointment of the CETA agreement��and claims��the agreement's��potential to increase health care costs for provinces, health plans, and patients. The statement also outlined the CGPA's��concern that CETA will cause generic medications to be delayed on their way to the marketplace.���� The statement was not completely critical however, as the CGPA��commended the Canadian government’s efforts to limit the term of patent restoration to 2 years and allow for the potential for the new “right of appeal” regulations to curb litigation costs.�� The CGPA was also��appreciated that CETA will not impose any changes to the domestic data protection regime.

In my opinion, the biggest stakeholder that is likely to be affected by these proposed changes to��Canada's pharmaceutical IP law are the provinces, which bear most of Canada's health care costs. In anticipation of the agreement, many provinces, including Ontario (the largest medication provider in the country) cautioned the Canadian government that concessions to the EU on these points could greatly increase health care costs. ��that CETA could increase��its prescription drug expenses by $1.2 billion dollars annually. After the release of the agreement, however, provincial since the extent of the changes��is less drastic than predicted. In addition, the Federal Government has already announced that��it will , although no further details on this point have been released. The Ontario government responded to this statement quickly, and was the first province to make it known that��it�� for sectors that will be adversely affected by CETA. As provincial governments and the federal legislative branch����the changes CETA will bring, there are undoubtedly going to be further developments on this issue, and the ultimate acceptance and implementation of CETA will likely depend upon the details of the final agreement.

CETA: A Changing of the Guard?

Although CETA has only been agreed to “in principle” for now, it is clear that its ratification and implementation will have far-reaching consequences. It will undoubtedly have a significant impact��on Canada's health care and pharmaceutical sectors, and may change how Canada is . It seems clear to me that, at least in the intellectual property context, Canada is making the statement that it will not be left behind by its industrialized trading partners in the new knowledge-based economy.

Adam Falconi is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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Impending Free Trade Agreements Present an Immense Economic Opportunity

In , analysts at the Fraser Institute claim that enhanced pharmaceutical intellectual property (IP) protections can serve to strengthen the domestic innovative pharmaceutical industry while facilitating Canada’s ability to enter and negotiate free trade agreements. The report focused on the economic benefits of two prominent international agreements that are currently in the midst of negotiations, the (CETA) with the European Union, and the (TPP) which involves many nations across the globe.

The report also explains that a key unresolved issue in these discussions has been the status of Canada’s pharmaceutical IP protection, which is currently much lower than its and . By aligning their pharmaceutical policies with the EU and the USA in an effort to complete the CETA and TPP trade agreements, the report estimates that these two trade deals alone can create an annual economic benefit of nearly $22 billion, which would easily offset an estimated $367 - $903 million annual increase in domestic pharmaceutical expenditures.

Another Source of Pressure on Canada to Strengthen its Pharmaceutical IP Laws

In addition to the Fraser Institute report, there has been an abundance of pressure put on Canada to strengthen its pharmaceutical IP policy by its , the United States. A recent report by the United States Trade Representative (USTR) expressed serious concerns about Canada’s pharmaceutical IP laws, and US based organizations such as the Pharmaceutical Research and Manufacturers of America (PhRMA) have as posing a threat to the American innovative pharmaceutical industry and .


Another intriguing component of this issue is that the US itself recently over a free trade agreement similar to the CETA. This has led to that the CETA negotiations may be lost in the shuffle or negatively affected as the EU concentrates on the US agreement, in a situation similar to in 2007. Although the CETA is still expected to be completed eventually, this development has undoubtedly created some urgency in the ongoing negotiations and has increased the pressure to get a deal done promptly.

Concerns

Although there has been large support for the strengthening of Canadian pharmaceutical IP policy among many industry and diplomatic representatives, this view is not universally shared. One concern about the move is the disagreement regarding the resulting cost increases on domestic pharmaceutical expenditures, with . In addition, the distribution of the costs and the potential income from the agreements could be a , as they primarily administer the health care system in Canada and many of the benefits of the agreement may be realized primarily on a federal level.

There is, however, a more subtle issue beyond economics and one that is undoubtedly a consideration in this debate - Canada’s role in the global access to medications regime and as a global health care provider. A move towards stronger IP and the subsequent increased drug costs can be seen as a move away from these types of initiatives, which may not be compatible with Canada’s commitment to and its historical role as the first and only nation to utilize flexibilities under the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement to export generics under a compulsory license to developing countries (). Associations like MSF (Doctors Without Borders) have come out and to speak out against a strengthening of pharmaceutical IP policy in the ongoing TPP negotiations. In an to Prime Minister Stephen Harper, they explained that this development they may have a deleterious effect on the available of cheap generic medications for millions of their patients around the Asia-Pacific region.

So What Should Canada do?

With Canada moving forward in the CETA and TPP negotiations and a recent cabinet shuffle instituting a new industry minister that is , all indications point towards an enhancement of pharmaceutical IP protection in these free trade agreements. Also, as , strengthening pharmaceutical IP will only bring Canada to the global norms among industrialized nations, which seems like a fair concession in an international free trade partnership of this sort.


On the other hand, as illustrated by the calls for Canada to act against these changes by associations like MSF, it is clear that Canada is distinctively seen as a nation at the forefront of supporting access to affordable medications for developing countries. A momentous policy change of this sort will undoubtedly alter the image that Canada retains in the global healthcare front. The question now remains: will Canada sacrifice an apparent illustrious economic benefit or continue with its seemingly Robin Hood-esque stance to pharmaceutical IP policy?

Adam Falconi is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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To read the report’s section on Canada, click .

Results of the Report: A Commendation with Qualification

In the report, the USTR commends Canada for its recent legislative reform. The two initiatives cited in the report were Canada’s passage of the in June 2012 - legislation that represents Canada’s implementation of the WIPO Internet Treaties - and the introduction of the in March 2013 - which attempts to target commercial-scale trafficking of counterfeit products. Both of these initiatives were endorsed by the USTR, ��who went on to suggest in the report a further expansion of this type of legislation in order to give more power to border officials to seize goods in-transit.

The report was not universally complimentary, however, with the USTR expressing serious concerns regarding Canada’s pharmaceutical industry. One concern that was mentioned was the absence of a right of appeal in the administrative process of Canadian regulatory pharmaceutical approval. In addition, the USTR expressed apprehension regarding the impact of the heightened utility requirements for Canadian pharmaceutical patents. This statement likely refers to the that has taken place over the last decade regarding what constitutes the “utility” required for pharmaceutical patents in Canada; originating from the landmark SCC case .

Reaction to the Report

The movement of Canada from the “Priority Watch List’” to the ‘”Watch List” has been met with some criticism; with some American entities publicly voicing their displeasure with Canada’s new position. The most scathing reaction to the report comes from the Pharmaceutical Research and Manufacturers of America (PhRMA), who stating that they were very “disappointed” with Canada’s changing designation. In the report, PhRMA claims that “Canadian policies and judicial opinions continue to harm international innovators to the benefit of domestic industries” and that the “heightened standard for patentable utility for pharmaceutical patents is inconsistent with Canada’s trade treaty obligations.” The PhRMA statement also contains a critique of India’s pharmaceutical IPR regime - a country that is notorious for their pharmaceutical IP protection. Including these statements side-by-side might reflect the view that the American biopharmaceutical industry has of Canada's pharmaceutical intellectual property laws and policy.

A Precarious Political Climate

Although there have been concerns raised about the legitimacy of the USTR “Special 301 Report” from both and , an evaluation of Canada’s IP regime by its is undoubtedly an important diplomatic and economic concern. Indeed, Canada’s actions over the last few years seem to indicate their intention to conform to the wishes of their American counterparts, with the recent legislative reform that is responsible for Canada’s improvement on the watch list seemingly being a direct response to .

What makes the most recent report particularly interesting is the fact that it has been released at a complex political time period for Canada. The pharmaceutical company Eli Lilly recently launched a , and the (CETA), a free trade agreement between the Canada and the European Union (EU), is bound to be completed in the next few months. The recent legislative changes made by Canada could be viewed as political posturing for the impending CETA, which purportedly has the EU calling for increased . This agreement also allegedly includes an increase in patent protection for innovative pharmaceuticals in Canada at the request of the EU, which for its potential to greatly increase drug costs. However, with drug and health care costs being a sensitive political topic and being significantly in Canada over the next few decades, that the strengthening of IP pharmaceutical protection may not ultimately make it into the final draft of the CETA despite the EU's wishes.

It could be the case that the recent Canadian legislative reform is an effort by Canada to please its biggest trading partners without making drastic changes to its domestic pharmaceutical industry. The issue of rising health care costs is undoubtedly an important domestic political issue, and perhaps the seemingly “Jekyll and Hyde” approach to pharmaceutical and non-pharmaceutical IPR�� is a necessary compromise that Canada has to make in order to function diplomatically with its trading partners while maintaining what it views as a healthy domestic state. It would be hard to name many things that are more complex than trying to adequately fit domestic IP policies within international free trade agreements, but Canada must continue to strive to achieve that seemingly impossible balance. At the end of the day, like in most matters in life (and politics), you certainly can’t please everyone.

Adam Falconi is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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