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Jasmine Yu is anĚýIPilogueĚýWriter and aĚý1L JD Candidate at the University of Toronto.

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After numerous delays over two years, amendments to the Patented Medicines Regulations, which governs Canada’s Patented Medicine Prices Review Board (), is finally set to come into force this year, on — at least for now.

Who is the Patented Medicine Prices Review Board?

The PMPRB is a Canadian that regulates the prices of patented pharmaceuticals to avoid excessive pharmaceutical prices. The board’s objective is to balance encouraging pharmaceutical research and development (R&D) investment with the public health interest of reducing pharmaceutical prices for consumers.

The PMPRB derives its legal authority partly from the , which specifies the information and documents patentees must provide to the Board, price requirements for drugs sold in Canada, and more.

Why Amend?

The PMPRB saw it fit to introduce changes to its legal framework because it was under the current scheme — Canadian patented drug prices were the third highest globally, while pharmaceutical R&D investment has declined.

The Amendments

The PMPRB first published the amendments on . The first substantive revision to the Regulations since the Board’s establishment in 1987, it will bring major changes to the PMPRB’s current legal framework.

There are :

First, the amendments added three new price regulatory factors to consider whether a patented drug’s price is excessive.

Second, the amendments updated the list of comparator countries, whose drug prices serve as a “benchmark” to establish the range of prices that the pharmaceutical companies find acceptable for their patented medicines. According to the PMPRB, the updated countries have similar consumer protection policies, economic wealth, and marketed medications as Canada. The United States, for example, was removed for having vastly different consumer protection priorities — its drug prices are 247% higher than Canada’s.

Third, there were changes in patentees’ pricing and sales reporting requirements. For instance, the reporting requirement was reduced for medicines at a low risk of excessive pricing, such as veterinary drugs and generics.Ěý

The amendments, once in effect, will apply to all drugs issued a drug identification number (DIN) on or after the amendments’ publication — August 21, 2019. Those that received a DIN before this date must still comply with certain other provisions.

A double-edged sword?

The PMPRB views that these amendments will have a and decrease total spending on patented medicines by 5.8% over the next 10 years. These changes are perhaps much needed, as Canada is the only developed country in the world with universal healthcare that . Meanwhile, Canadians pay the highest price for generic drugs in the world and the second-highest prices per capita for prescription drugs — after the US. en Canadians cannot afford their prescription drugs.Ěý

However, there are also opposing voices. Lobby groups, such as , argue that these amendments will have significant negative impacts R&D investment in Canada and on the number of new drugs available to Canadians and on R&D investment in Canada.

IMC and several Canadian pharmaceutical companies brought a judicial review application to challenge numerous provisions. The Federal Court of Canada, in Innovative Medicines Canada v Canada, , struck down subsection 3(4) of the amendments as it was ultra vires the . In a separate case, the Quebec Superior Court declared section 4(4) invalid and unconstitutional.[1]

A group of physicians also voiced their opposition in an . Their arguments mirror that of IMC: the proposed regulations will make Canada an unattractive market for companies launching new drugs, resulting in medications that could alleviate suffering being denied access to Canadians.

Conclusion

Much like how the original intentions of the PMPRB did not actualize into tangible results, and hindsight revealed flaws in its original policy, the actual consequences of these new amendments may not surface immediately. Canadian Pharmacare policy certainly seems to require an iterative process, as numerous stakeholders and market factors are at play. We perhaps need to examine the faults in Canada’s current patchwork system of private and public insurance plans for potential solutions — to strike a balance between affordable medicine and a vibrant R&D environment.

[1] Merck et al, c Le Procureur GĂ©nĂ©ral du Canada,ĚýQuĂ©bec Superior Court File No. 500-17-109270-192.

The post The Final Countdown? The Upcoming Changes to the Patented Medicines Regulations appeared first on IPOsgoode.

When asked about the most significant changes the new regulations implemented, Gill highlighted that the ability to register without having first used a mark is one of the most significant changes, in addition to joining the Madrid Protocol. There are also a number of challenges that practitioners must deal with when reconsidering filing strategies with their clients.

Challenges with the New Regulations

a) Monitoring and Opposing Trademark Applications

The way that trademark lawyers monitor and oppose applications has changed. Previously, it was easier to oppose applications when it was plainly recorded whether a company used a mark and what the date of first use of the mark was. Now, with no requirement to declare if and when a mark has been used, there are extra steps that practitioners must take when researching existing trademark applications and registrations. This research may not be very accurate, and these additional steps make it difficult to advise clients on whether they should be opposing a trademark application. It would be inefficient and potentially detrimental and costly to clients if their lawyers sent out demand letters to ask other parties to cease their use of a mark, only to have them respond that they have been using the mark before the client.

b) Examiners’ Discretion

Gill also noted that examiners can now refuse applications based on a lack of “”—the ability of a mark to distinguish the source of goods and services with which they are associated. He raised this as an issue as he sees it being used inconsistently, and at times inappropriately. This creates another layer that is slowing applications down and driving costs up. At this stage, there is little jurisprudence or guidance as to how this objection will be used and what will be required in a response where it is raised.

c) Accessibility

Another change to the trademark system is that the is now based on classes of goods and services, as set out in the Nice Classification system. Therefore, the more classes an applicant would like to include in their application, the higher the cost. While this could have resulted in a barrier to accessing trademark protection, Gill explains that not many applicants use a mark in enough classes to make this change prohibitive. Based on his experiences, this change has not impacted people’s willingness to apply for trademark protection.

The Use Requirement

The use requirement previously required applicants to sign a , confirming that they have used the mark.

In anticipation of the new regulations, which eliminates this requirement, speculated that Canada has moved from a first-to-use to a first-to-file system. On the contrary, Gill argues that all that has changed is the basis for registration. Canada still has a use-based system and all rights continue to flow from use. The only difference currently is that you may secure trademark protection before actually using the mark. After this, use is the basis on which you oppose other marks and assert trademark rights, which is illustrated in the example of the demand letter above.

One implication of removing the use requirement for registration is that it is much easier for trademark trolls to register marks they do not intend to use and sell them back to interested parties. While Gill noted that these trolls are an issue under the new regulations, he noted that there are an easily-identifiable group of trolls that have filed hundreds of applications across several goods and services. Thus, the increase of trolls in the trademark database is not a huge concern at this point and Gill has not yet seen any particular negative impact.

Some lawyers have also noted that there are changes that can . For example, includes the following amendments to the :Ěý a) registered trademark owners may not obtain relief for trademark infringement in the first three years after registration and b) registration may be opposed or invalidated based on a new ground of “bad faith”. Gill confirmed that these provisions make it hard for trolls to enforce their trademark protections if they are not using the marks.

What’s Next?

Gill proposed one simple resolution: applicants should be required to disclose if and when a mark has been used. He does not propose use as the basis for registration, but rather explains that this mandatory disclosure could ease the research process for practitioners, clarify any disputes regarding use, and easily isolate trademark trolls. This solution could also help clear the now crowded register and reduce the cost of clearing out marks for use-based reasons. The challenges lawyers currently face with the new regulations are not debilitating. The challenges, however, illustrate inefficiencies and room for improvement in reducing the costs associated with monitoring the trademarks Register and opposing applications.

Written by Summer Lewis, a second year JD Candidate at Osgoode Hall Law School. Summer is also the Content Editor of the IPilogue.

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A partner at Gowling WLG since 1999, is best known for his intellectual property litigation practice, particularly in the areas of trademarks and unfair competition. Kelly is past leader of the firm's Trademarks, Brands & Designs and IP Litigation & Strategy groups.

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The post From the Practitioner’s Perspective: Are the New Trademark Regulations an Improvement or Hindrance? appeared first on IPOsgoode.