The latest of international trade deals, the TPP, signed October 5^th, 2015, produced about seven pages of patent provisions that, under Canadian law, leave little impact. The Federal government’s is that Canadian law is already in compliance with these provisions. While this might be true, a more objective analysis of the text could support the argument that the TPP does in fact require some legal reform. However, legal reform would not create new legal obligations, as Canada has already committed to that reform under the newly minted Comprehensive Economic and Trade Agreement ()

Of all the TPP’s patent provisions, three concerning pharmaceutical drug patents are most notable. The first is patent term restoration, which extends patent terms in response to administrative delays. And the third is extended data protection specifically for biologics, a new form of prescription drug.

The first of the TPP’s notable provisions, concerning patent term restoration, can be found in articles and . Both provisions offer patent extensions in response to administrative delays. Article 18.46 grants extensions for patent office delays, and extends pharmaceutical patent terms by a time equal to any “unreasonable” delay in a drug's regulatory approval. Article 18.48 is not currently found in Canadian law, nor under .

The purpose of the provision is to recognize that patent enabled drug monopolies are of little value when drugs cannot be legally sold. This is welcome news for those who believe current patent terms successfully , as lost monopoly time would hinder pharmaceutical development. Also, everyone can appreciate how the provision detaches patent terms from flexible regulatory approval processes, adding certainty to IP investments and assurances against regulatory favouritism. Yet some argue term restoration is a tool for IP owners, used to extend an already sufficient monopoly.

The second notable provision is article , patent linkage. of patent linkage argue that tying marketing approval to previous patents creates space for tactical litigation, which can be used to delay generic competition and, in effect, extend patent terms. Although this was a debated topic during and after TPP negotiations, Canada has already employed for some time, and has also committed to linkage rules similar to the TPP since signing CETA.

The last of the TPP’s notable provisions can be found in articles and , which offer . This type of research is necessary for marketing approval and is an expensive cost of drug development. Supporters of data protection argue these provisions shield drug developers from free-riders, thus incentivizing invention. Though opponents might take issue with adding protecting of information on top of invention.

However, these provisions do not create monopolies on information, the way patents create monopolies on invention. Generic companies are free to rely on the same safety and efficacy data as the patent owners, so long as it is reproduced at their own expense.

The TPP grants a five-year protection on drug efficacy and safety data, and an additional three-year protection on research concerning biologic drugs, so-called large molecule drugs. Biologics are an emerging field of pharmaceuticals, and the extended protection is meant to recognize the often high risk and cost associated with exploratory research.

However, some suggests that a longer term of twelve years would be ideal, even considering this advantage. The TPP's compromise is eight years, which reflects Canada's current .

It is difficult to determine whether the provisions presented in the TPP’s patent chapter will help or harm Canadian interests. This determination will depend in no small part on which perspective the analysis is based. The TPP’s patent provisions are likely not immediately useful for consumers of patented drugs. Patent term restoration, patent linkage, and data protection all serve to strengthen patents.

However, these are welcome provisions from the perspective of drug developers, as they increase the value of existing and new patents. In this sense, perhaps the rules are also good for Canada. For example, biologics were given special protection to encourage investment. Canada’s pharmaceutical research and development sector, one of its largest, would likely benefit from this improvement in market conditions, especially since investment in that sector has recently suffered steady .

Matt Wallace is an IPilogue Editor, JD Candidate at University of New Brunswick, and writes on technology law.

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�ճ���� IP chapter includes several rules that indirectly extend patent terms for pharmaceutical drugs, such as ,��, and . However, the actual benefit these provisions provide is 

Take patent term restoration for example, which extends patent terms by a time equal to any “unreasonable” delay in a drug's regulatory approval. This provision's purpose recognizes that patent enabled drug monopolies are of little value when drugs cannot be sold legally. And the TPP considers any five-year delay unreasonable.

Patent restoration is welcome news for those who believe current patent terms successfully ,��because lost monopoly time would hinder pharmaceutical development. This provision also detaches patent terms from flexible regulatory approval processes, adding certainty to IP investments. And it adds assurances against regulatory favouritism. However, some critics argue term restoration is a tool for IP owners used to extend an already sufficient monopoly.

Another debated policy found in the TPP is patent linkage. This rule requires generic drug companies to prove their products do not infringe any existing patents before they can be granted marketing approval.  of patent linkage believe tying marketing approval to previous patents creates space for tactical litigation that can be used to delay generic competition and in effect extend patent terms. However, Canada already employs patent linkage, and has already committed to linkage rules similar to the TPP by signing .

In addition to patent restoration and patent linkage, the TPP includes two controversial pro-patent provisions that provide data protection to pharmaceutical efficacy and safety research. This research is necessary for marketing approval and is an expensive cost of drug development. Supporters of the data provisions argue that these protections incentivize invention by shielding drug developers from free-riders.

Opponents of these provisions might take issue with protecting information on top of invention. However,��this is not a monopoly on information, and generic companies are free to use the same data so long as it is reproduce at their own expense.

The TTP grants five year's protection on drug efficacy and safety data, and an additional three year's protection to research concerning biologic drugs, so called large molecule drugs. Biologics are an emerging field of pharmaceuticals, and the extended protection is meant to recognize how exploratory research is often more risky and thus more expensive.

One compelling  against special protection concerns the nature of biologic drugs. Whereas traditional small molecule drugs are chemically synthesized and easily reproduced, biologics often have genetic and cellular components that are not as simple, or cheap, to replicate. Critics think this creates a natural barrier to entry, giving biologic developers a first-mover advantage that sufficiently returns the risky cost of research, eliminating any need for data protection.

However,��some  suggests, even considering this advantage,��that a longer term of twelve years would be ideal. The TPP's compromise is eight years, which reflects Canada's current .

As is usually the case with trade deals, the TPP’s patent provisions fall short of both advocates' highest hopes and critics' worst fears. For Canadian law, the TPP will have little effect. But this is not necessarily a good thing. Current patent rules may not be best for incentivizing drug development, as the  over patent policy suggests. Meaning,��this failure to change might successfully impede innovation.

All that can be said with certainty is the TPP will not reduce the price of today's life-saving drugs. Whether innovation properly compensates this cost is for posterity to judge.

Matt Wallace is an IPilogue Editor, JD Candidate at University of New Brunswick, and writes on technology law.

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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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