CanadaPatent Protection of Pharmaceutical Products

1
Canada-Patent Protection of Pharmaceutical
Products

• Panel Report
• ??? ??? ???

2
Finding And Recommendations Requested By The
Parties

• Section 55.2(1)?55.2(2)and 55.2(3) of the Patent
  Act together with the Manufacturing and Storage
  of Patented Medicines Regulations

3

• Relevant Provisions of
• Canadian Patent Law

4
Patent Act, Section 55.2(1).

• "It is not an infringement of a patent for any
  person to make, construct, use or sell the
  patented invention solely for uses reasonably
  related to the development and submission of
  information required under any law of Canada, a
  province or a country other than Canada that
  regulates the manufacture, construction, use or
  sale of any product.

5
Patent Act, Section 55.2(2).

• "It is not an infringement of a patent for any
  person who makes, constructs, uses or sells a
  patented invention in accordance with subsection
  (1) to make, construct or use the invention,
  during the applicable period provided for by the
  regulations, for the manufacture and storage of
  articles intended for sale after the date on
  which the term of the patent expires.

6
Patent Act, Section 55.2(3).

• "The Governor in Council may make regulations for
  the purposes of subsection (2), but any period
  provided for by the regulations must terminate
  immediately preceding the date on which the term
  of the patent expires.

7
Manufacturing and Storage of Patented Medicines
Regulations.

• By virtue of these Regulations, "the applicable
  period referred to in subsection 55.2(2) of the
  Patent Act is the six month period immediately
  preceding the date on which the term of the
  patent expires."

8

• Relevant Provisions of TRIPS
• Agreement

9
Article 27.1

• Subject topatents shall be available and patent
  rights enjoyable without discrimination as to the
  place of invention, the field of technology and
  whether products are imported or locally
  produced.

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Article 28.1

• A patent shall confer on its owner the following
  exclusive rights
• (a) where the subject matter of a patent is a
  product, to prevent third parties not having the
  owners consent from the acts of making, using,
  offering for sale, selling, or importing for
  these purposes that product
• (b) where the subject matter of a patent is a
  process, to prevent third parties not having the
  owners consent from the act of using the
  process, and from the acts of using, offering
  for sale, selling, or importing for these
  purposes at least the product obtained directly
  by that process.

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Article 30

• Members may provide limited exceptions to the
  exclusive rights conferred by a patent, provided
  that such exceptions do not unreasonably conflict
  with a normal exploitation of the patent and do
  not unreasonably prejudice the legitimate
  interests of the patent owner, taking account of
  the legitimate interests of third parties.

12
Article 33

• The term of protection available shall not end
  before the expiration of a period of twenty years
  counted from the filing date.

13
Canadas Regulatory Review System
for Drugs

• Application for regulatory review

14
Arguments Of The Parties

• Section 55.2(1)?55.2(2)and 55.2(3) of the
  Patent Act together with the Manufacturing and
  Storage of Patented Medicines Regulations

15
Article 28.1 together with Article 33 of the
TRIPS Agreement

• The European Communities and their member States
  requested
• -Section 55.2(1)
• - Section 55.2(2)and 55.2(3) of the
• Patent Act together with the
• Manufacturing and Storage of
• Patented Medicines Regulations

16
Article 28.1 together with Article 33 of the
TRIPS Agreement

• Canada requested
• The Object, Purpose and Meaning of Article 30
• Article 30 ?Limited Exception?
• (i) they must be limited
• (ii) they must not unreasonably
  conflict with a normal
• exploitation of the
  patent??taking account of the
• legitimate interests of third
  parties
• (iii) they must not unreasonably
  prejudice the legitimate
• interests of the patent owner,
  taking account of the
• legitimate interests of third
  parties .

17
Article 28.1 together with Article 33 of the
TRIPS Agreement

• The exceptions created by subsection
• 55.2(1) and (2) of its Patent Act met Articl30
• (i)Section 55.2(1) and 55.2(2) created
  limited
• exceptions.
• (ii)Section 55.2(1) and 55.2(2) did not
  conflict
• with a normal exploitation of the
  patent.
• (iii)Section 55.2(1) and 55.2(2) took
  account of
• the legitimate interests of third
  parties.
• The exceptions created by subsection
• 55.2(1) and (2) of its Patent Act met Articl33

18
Article 28.1 together with Article 33 of the
TRIPS Agreement

• The European Communities and their member States
  requested
• The Object, Purpose and Meaning of Article 30
• Article 30 ?Limited Exception?
• (a) they must be limited
• (b) they must not unreasonably
  conflict with a normal
• exploitation of the patent
• (c) they must not unreasonably
  prejudice the legitimate
• interests of the patent owner,
  taking account of the
• legitimate interests of third
  parties .

19
Article 28.1 together with Article 33 of the
TRIPS Agreement

• The exceptions created by subsection 55.2(1) and
  (2) of its Patent Act cant met Articl30
• (i)Limited.
• (ii)Do not unreasonably conflict with a
  normal
• exploitation of the paten
• (iii)Do not unreasonably prejudice the
  legitimate
• interests of the patent owner, taking
  account
• of the legitimate interests of third
  parties

20
Article 27.1 of the TRIPS Agreement

• The European Communities and their member States
  requested
• Canada treated holders of pharmaceutical
  patents less favorably than holders of patents in
  all other fields of technology and thus violated
  its obligations under Article 27.1 of the TRIPS
  Agreement.

21
Article 27.1 of the TRIPS Agreement

• Canada requested
• The European Communities and their member
  States did not seek to read Article 27.1 in its
  context and in light of the TRIPS objectives but,
  instead, asserted that Article 27.1 was absolute
  in nature, such that "violations" of its
  provisions could not be justified under
  Article 30.

22
Article 27.1 of the TRIPS Agreement

• The European Communities and their member States
  requested
• A violation of Article 27.1 of the TRIPS
  Agreement could not be justified by Article 30,
  because Article 30 was not applicable to Article
  27.1.

23
Canada
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The Regulatory Review Exception

• Section 55.2(1) and 55.2(2)of the Canadian Patent
  Act
• Subsequent Practice
• Articles 31 and 32 of the Vienna
  Convention on the law of Treaties

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• Article 27.1 of the TRIPS Agreement

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Article 30 of the TRIPS agreement

• Articles 7 and 8 of the TRIPS Agreement
• Interpretation of the Conditions Enumerated in
  Article 30 for the Grant of Exceptions to Rights
  Conferred
• (i) The prior use exception
• (ii) The scientific/experimental use
  exception

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• (c) Section 55.2(1) and 55.2(2) of the Canadian
  Patent Act
• (i) Limited
• (ii) Do not unreasonably conflict with a
  normal exploitation of the patent
• (iii) Do not unreasonably prejudice the
  legitimate interests of the patent owner, taking
  account of the legitimate interests of third
  parties

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• Exception for a regulatory submission to a
  country other than Canada

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• The Global Nature of the Pharmaceutical Industry
• The Global Need for Access to Essential Medicines
• The Context of the TRIPS Agreement Foreign
  Regulatory Approval and Article 30 of the TRIPS
  Agreement
• Creation of a Trade Barrier

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• Application of Article 33 of the TRIPS Agreement

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Principles of treaty interpretation

• Subsequent practice
• Article 27.1 of the TRIPS Agreement
• Article 30 of the TRIPS Agreement
• Exception for a regulatory submission to a
  country other than Cnanda

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• Agreements presented by
• Third Parties

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FINDINGS OF THE PANEL
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Outline

• Substantive Issues
• 55.2(2) The Stockpiling Exception
• TRIPS Article 30
• 55.2(1)The Regulatory Review Exception
• TRIPS Article 30
• TRIPS Article 27.1

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THE STOCKPILING EXCEPTION
36
Article 28.1 (1/1)

• Article 28.1 provides
• 1. A patent shall confer on its owner the
  following
• exclusive rights
• (a)where the subject matter
  of a patent is a
• product, to prevent third
  parties not having
• the owners consent from
  the acts of making,
• using, offering for sale,
  selling, or importing
• for these purposes that
  product
• Canada acknowledged the violation of Article 28.1
  if not excused under Article 30
• Burden of proof

37
Article 30 Criteria (1/3)

• Article 30 provides
• Members may provide limited exceptions to
  the exclusive rights conferred by a patent,
  provided that such exceptions do not
  unreasonably conflict with a normal exploitation
  of the patent and do not unreasonably prejudice
  the legitimate interests of the patent owner,
  taking account of the legitimate interests of
  third parties.
• Both parties agreed upon the basic structure of
  Article 30.

38
Article 30 Criteria (2/3)

• Article 30 establishes three criteria that must
  be met to qualify for an exception
• (1) Limited exception
• (2) Not unreasonably conflict with normal
  exploitation
• (3) Not unreasonably prejudice the legitimate
  interests of the patent owner and third parties
• Cumulative criteria each being separate and
  independent

39
Article 30 Criteria (3/3)

• Canada
• Article 7 and 8.1 are relevant to its object and
  purpose
• Call for a liberal interpretation
• EC
• Articles 7 and 8.1 describe the balancing of
  goals already taken place in negotiating the
  final texts of the TRIPS
• Panel
• TRIPS negotiators did not intend to bring a
  renegotiation of the balance of the Agreement
• Goals limitations must be borne in mind

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Article 30 The First Criterion - Interpretation
(1/1)

• Canada
• Confined within definite limits, restricted in
  scope, extent, amount
• EC
• Connotes a narrow exception, described as
  "narrow, small, minor, insignificant or
  restricted"
• Panel
• The narrower definition is more appropriate when
  the word "limited" is used as part of the phrase
  "limited exception"
• Agree with EC connote a narrow exception

41
Article 30 The First Criterion - Application
(1/3)

• Canada
• The Stockpiling Exception is "limited" as long as
  the exclusive right to sell to the ultimate
  consumer during the term of the patent is
  preserved
• Is further limited by the six-month duration and
  by persons under Section 55.2(1)

42
Article 30 The First Criterion - Application
(2/3)

• EC
• Impairment of 3 out of 5 basic rights is
  extensive enough to be considered "not limited"
• 6 months not a limited period in the 20-year
  patent term
• There is no limitation on the quantities that
  could be produced, no limitation on the markets
  of these products, no royalty fees paid, and no
  right to be informed of the use of the patent

43
Article 30 The First Criterion - Application
(3/3)

• Panel
• Not by simply counting the number of rights
  impaired by an exception
• The exclusive right to sell to the ultimate
  consumer during patent term not the only right
• 6 months was commercially significant, especially
  since no limits at all on quantities
• It abrogates the rights entirely
• no limitations at all upon the quantity of
  production
• without regard to what consequences it might have

44
Article 30 The First Criterion - Conclusion
(1/1)

• Panel
• The Stockpiling Exception constitutes a
  substantial curtailment thus cannot be considered
  limited under Article 30
• Without seeking to define exactly what level of
  curtailment would be disqualifying

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THE REGULATORY REVIEW EXCEPTION
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Article 30 The First Criterion - Application
(1/2)

• Canada
• Being "limited" when right to sell is preserved
• Added two arguments based on
• The negotiating history of Article 30
• The subsequent practices of certain WTO Members
• EC
• It often require applicants to produce commercial
  quantities
• Infringing activities are authorized any time
  during the term of the patent

47
Article 30 The First Criterion - Application
(2/2)

• Panel
• No documented evidence of the claimed negotiating
  understanding
• The acts by individual countries did not
  constitute subsequent practice under VCLT
• Confined to conduct needed to comply with the
  requirements of regulatory approval, its
  narrowly bounded
• Substantial amounts are solely for regulatory
  purposes and no commercial
• Satisfies the first criterion

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Article 30 The Second Criterion -
Interpretation (1/2)

• Exploitation
• Canada extraction of commercial value from
  working the patent (selling the product or
  licensing others or selling the patent)
• EC refers to the same three ways
• Panel refers to the commercial activity to
  extract economic value from the patent

49
Article 30 The Second Criterion -
Interpretation (2/2)

• Normal
• Panel
• The term normal" defines the kind of commercial
  activity Article 30 seeks to protect
• Ordinary meaning (dictionary) regular, usual,
  typical, ordinary, conventional
• Combined two meanings
• an empirical conclusion within a relevant
  community
• a normative standard of entitlement

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de facto extension
The term of the patent 20 years
3 to 6.5 years
Date of Application
Expiration of The patent
to get regulatory approval for generic drugs
Canada normal exploitation
NOT normal
EC normal exploitation term post expiration
effect
51
Article 30 The Second Criterion Application
(2/2)

• Issue
• whether "normal exploitation" includes the
  additional period of market exclusivity after the
  term of the patent
• Panel
• Additional period by precluding submissions for
  regulatory authorization is not normal
• Not a natural or normal consequence of enforcing
  patent rights
• No need to consider unreasonable

52
Article 30 The Third Criterion - Interpretation
(1/2)

• EC
• Legitimate interests legal interests
• Canada
• Legitimate interests relate to rights and
  duties conferred or imposed by patent laws
• Rest on norms or policies deduced from patent laws

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Article 30 The Third Criterion - Interpretation
(2/2)

• Panel
• Lawful, justifiable, proper, normal, regular,
  conformable to a recognized standard type
• Broader than legal rights
• Must be defined in the way of legal discourse
  interests "justifiable" and supported by relevant
  public policies or other social norms

54
A number of governments have enacted de jure
extension to compensate for delays
de jure extension
EC
The exception removes de facto extension
unreasonably prejudices legitimate interest
de facto extension
The term of the patent 20 years
8 to12 years to get regulatory approval
de facto market exclusivity is 8 to 12 years
(40-60)
3 to 6.5 years
Date of Application
Expiration of The patent
to get regulatory approval for generic drugs
55
ECs claim is NOT universal
de jure extension
Canada
Removal several countries have adopted similar
exception no de jure extension
de facto extension
The term of the patent 20 years
3 to 6.5 years
Date of Application
Expiration of The patent
to get regulatory approval for generic drugs
56
Article 30 The Third Criterion - Application
(3/3)

• Panel
• Neither so compelling nor so widely recognized
• Governments were obviously still divided
• Legitimate interests" concept should not be used
  to decide a normative policy issue still
  obviously a matter of unresolved political debate
  
• No prejudice of "legitimate interests" of the 3rd
  criterion

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Article 30 Conclusion

• The Stockpiling Exception is inconsistent with
  Article 30
• The Regulatory Review Exception is not
  inconsistent with Article 30

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Article 27.1 Applicability (1/1)

• Canada
• Article 27.1 refers to "patent rights in Article
  28.1 and does not apply to exceptions
• Panel
• The text of the TRIPS offers no support for such
  an interpretation
• No indication of any exemption from
• non-discrimination rules is intended in Article
  30

59
Article 27.1 Application (1/3)

• EC
• The Regulatory Review Exception is limited, both
  de jure and de facto, to pharmaceutical products
• de jure the legislative history concentrated on
  pharmaceuticals
• de facto the actual effects are limited to
  pharmaceutical producers
• Thus discriminates by field of technology

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Article 27.1 Application (2/3)

• Canada
• de jure the words of that provision making the
  exception available to "any product" subject to
  marketing approval
• de facto the legal decision did involve a
  producer of medical devices who had employed
  Section 55.2(1) as a defense

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Article 27.1 Application (3/3)

• Panel
• de jure the exception was legally available to
  every product subject to marketing approval
  requirements
• de facto discriminatory effect and purpose, but
  no sufficient evidence found
• Consistent with Article 27.1

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Conclusion

• The Stockpiling Exception
• Article 28.1
• Article 30
• The Regulatory Review Exception
• Article 30
• Article 27.1