As a part of Actavis’ in-house legal team, I gained a deeper understanding of intellectual property (IP) law and its intersection with the pharmaceutical industry. I developed the skills necessary to construe claims of pharmaceutical patents in order to draft clearance opinions, attended a hearing in the Federal Court involving the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations) and learned more about the impact government policy has on the development of generic drugs in Canada. Most importantly, this experience allowed me to combine my prior summer experience at an IP law firm with insight gleaned from a client’s perspective.

My internship began with a brief overview of the global structure of the company and discussing some of the unique challenges being faced by the company as a result of its global structure. For example, in addition to providing clearance opinions for products to be marketed in Canada, Canadian legal counsel must consider IP laws in other jurisdictions where drugs intended for the Canadian market may be manufactured. I drafted clearance opinions by reviewing foreign jurisdictions’ patent databases for products that are being manufactured there before being exported to Canada. I also drafted clearance opinions for products Actavis intends to market in emerging markets such as Brazil. These exercises required me to combine my scientific and legal background to understand the synthetic process, formulation and use of specific products to comment on whether they fall within the claims of relevant patents.

I had an opportunity to attend a hearing in a proceeding under the PM(NOC) Regulations, where a brand company sought to prohibit Health Canada from issuing a Notice of Compliance to Actavis for a drug product. Actavis alleged that the patent at issue was invalid and therefore could not be infringed. While preparing for this hearing, I engaged in discussions about the merit of the case with the in-house counsel as well as the external counsel representing Actavis and observed the strategic progression of the case upon hearing the submission from the brand manufacturer.

An opportunity to observe a PM(NOC) Regulations proceeding helped me realize the risks involved for a generic manufacturer in deciding which drugs to include in their portfolio. Despite being successful in a proceeding under the PM(NOC) Regulations and obtaining an NOC, generic manufacturers may face the risk of damages for infringement in a subsequent infringement action under the Patent Act and may incur additional costs of re-litigating issues concerning the same patent. Hands-on experience through this internship enabled me to reflect on the role of patent linkage regulations in Canada.

Entry of generic competition for a particular product depends upon the willingness of a company to challenge the brand manufacturer’s patents. I also gained more insight on the decision-making process for product pipeline development through discussions with the Business Development team. Through these discussions, I learned about the effects of government policies on the growth of global companies such as Actavis. For example, the Ontario government capped the maximum price of generic drugs permitted under the Ontario Drug Benefit (ODB) program to be no more than 25% of the branded product’s price. As a result, the damages a generic manufacturer may be entitled to under section 8 of the PM(NOC) Regulations for being unfairly held off the market have reduced drastically, while the exposure to damages for infringement (based on lost profits of the brand) has remained the same. As a result, the risk of bringing a product to market has increased due to the increase in the difference in potential damages. Such an increase in risk may impact the resources to be allocated to a Canadian subsidiary of a global generic pharmaceutical company. Moreover, higher risk and lower profit may push numerous manufacturers to leave the market with a limited number of manufacturers dominating each type of drug, running the risk of shortages in drug supply for Canadian consumers.

In sum, my experience at Actavis was highly educational. It fostered the ability in me to critically reflect on complex government policies that regulate the pharmaceutical industry and to assess the adequacy of these regulations from a global perspective. I am grateful to Professor Vaver, Michael Migus (in-house counsel at Actavis) and IP Osgoode for their guidance throughout this journey.

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Patents granted under the Australian innovation patent system deviate from standard patents in a number of significant ways. For example, the invention to have an “innovative step”, a lower threshold than the “inventive step” required for standard patents. In other words, an innovation patent is not required to be non-obvious, but rather must simply differ from the prior art base in a way that makes a “substantial contribution” to the working of the invention.

Other features unique to innovation patents : (i) it is usually granted within 1 to 3 months; (ii) it may be obtained for almost all the same subject matter as standard patents, except for inventions related to plants, animals and the biological processes for their generation; (iii) preparation and application costs are usually lower than for standard patents; (iv) the grant process does not involve pre-grant opposition; (v) both filing and patentability requirements are less stringent; (vi) examination and certification for meeting all requirements of the Patent Act are optional before grant but are required for enforcement purposes and attracting the same rights and remedies as standard patents.

Lastly, innovation patents can be converted to standard patent applications or can be filed as divisional of standard patent applications, thereby providing inventors with strategic advantages in enforcement or litigation. Innovation patents may however include only up to 5 claims and provide eight years of protection, compared to 20 years for standard patents.

Despite these strategic advantages, one wonders whether an innovation patent system would play a significant role in driving innovation and growth for SMEs in Canada. that second-tier or utility model patents “stimulate innovation and growth in developing countries and in industries that are technologically lagging”. Developed countries such as Australia if they are large net importers of new technology.

Thus, one would therefore first have to identify whether Canada fits those criteria or not. Even if it does, of over 500 innovation patent holders in Australia showed that 40% of the inventions protected by innovation patents failed to be commercialized due to the time required to find applications of new technologies and lack of finance. Patent protection by itself clearly does not guarantee commercialization and economic growth for SMEs. Further, given that these patents are not examined before grant, their value may be undermined. confirms that “there is only minor use of innovation patents for strategic uses such as building a patent thicket”.

An innovation patent system might also be abused by certain industries or larger corporations. For example, the pharmaceutical industry might use the system to protect higher-level innovation for tactical or evergreening purposes, e.g., by extending the monopoly by applying for secondary patents over related products. The system’s less stringent requirements may lead to many weak patents and invalidating them would involve costly litigation, thus sometimes hindering SME growth.

Such concerns have led the Australian government to conduct a to reassess the effectiveness of the system. The Advisory Council on Intellectual Property (ACIP) reforms, such as raising the threshold of the innovation requirement, reducing the remedies available, changing the grant process, and limiting the monopoly and scope of, and access to, the system. If Canada were to consider adopting an innovation patent system to promote SMEs, it should first consider ACIP’s proposals, and further ensure that the system would not be capable of abuse and that its transaction costs did not have the reverse effect of stunting innovation for SMEs.

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