Canada introduces patent term extensions for pharmaceutical patents

For the first time, Canada has introduced sui generis patent term restoration for up to two years for eligible patents relating to human and veterinary drugs. This additional protection, which will be granted in the form of a certificate of supplementary protection (CSP), is intended to partly compensate for time spent in research and obtaining marketing authorization for new drugs.
 
In order to provide this additional protection, the Canadian government has developed the Certificate of Supplementary Protection Regulations [1] (“CSP Regulations”), which in conjunction with amendments to the Patent Act [2], establish a regulatory framework for the administration and issuance of CSP. The new CSP regime will be administered by the Minister of Health.
 
The new CSP regime has been implemented in order to meet Canada’s obligations under the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. However, the benefits of the new regime will be available to everyone, not just members of CETA. 
 
The relevant statutes and regulations will come into force on September 21, 2017 concurrently with the coming into force of section 59 of Bill C-30 “An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures”.
 
Interested parties should take note of the various requirements and deadlines for submissions set forth under the new CSP Regulations. Notably, to be eligible for a CSP, there is a requirement to coordinate the timing of a Canadian application for marketing approval with applications for marketing approval in certain prescribed countries. These and other requirements and deadlines are discussed in more detail below.
 
Term of a CSP
 
A CSP will take effect on the expiry of the original 20-year term of the corresponding patent. The term of a CSP is the difference between 1) the date of the filing of the application for the patent and 2) the date of issuance of the authorization for sale (Notice of Compliance or “NOC”), reduced by five years, and capped at two years. In other words:
 
CSP term = [(NOC date – Patent filing date) – 5 years] but not to exceed a 2-year maximum.
 
However, the Minister of Health may reduce the term of a CSP, if he or she considers that the patentee’s failure to act resulted in “unjustified” delays in the regulatory approval process. 
 
Eligible drugs and excluded variations
 
Not all drugs will be eligible for a CSP. The objective of the CSP Regulations is to provide additional protection for drugs containing new medicinal ingredients and new combinations of medicinal ingredients “as such”.
 
Consistent with this objective, a CSP is only available where no other CSP has been issued with respect to the medicinal ingredient or the combination of medicinal ingredients. Medicinal ingredients contained in drugs will be treated as being the same medicinal ingredient if they differ from each other only with respect to: 

1. a variation in any appendage within the molecular structure of a medicinal ingredient that causes it to be an ester, salt, complex, chelate, clathrate or any non-covalent derivative;
2. a variation that is an enantiomer, or a mixture of enantiomers, of a medicinal ingredient;
3. a variation that is a solvate or polymorph of a medicinal ingredient;
4. an in vivo or in vitro post-translational modification of a medicinal ingredient; and
5. any combination of the above variations. 

These and other requirements are in place to ensure that only one CSP will be issued with respect to a given medicinal ingredient or combination of medicinal ingredients. However, a patent that covers more than one medicinal ingredient or combination of medicinal ingredients would be eligible to support a CSP in respect of each of those medicinal ingredients or combinations.
 
In addition, the medicinal ingredient or combination must not have been in a drug previously authorized for sale in Canada. A CSP can only be issued in relation to an NOC that issues on or after the day on which the law came into force. A marketed drug that received an NOC before the law came into force will not support an application for a CSP. In other words, the new CSP regime has no retroactive effect for drugs that have been previously approved.
 
Eligible patents
 
Not all patents will be eligible for a CSP. To be eligible, a patent specified in a CSP application must:

1. be in force at the time of the application for a CSP and at the time of grant of the CSP; and
2. include at least one claim that pertains to

• the same medicinal ingredient (or combination) contained in the drug for which regulatory approval is being sought;
• the same medicinal ingredient (or combination) as produced by a defined process; or
• any use of the same medicinal ingredient (or combination). 

Thus, by definition, patents directed to solely to processes and formulations are excluded.
 
Eligible marketing approval submissions
 
Not all marketing approval submissions will support an application for a CSP. To be eligible for a CSP, there is a requirement to coordinate the Canadian application for marketing approval (i.e. the NOC application) with any application for marketing approval for the same medicinal ingredient or combination that has already been filed in one of the following prescribed countries: 

1. the European Union or any member country,
2. the United States of America,
3. Australia,
4. Switzerland, or
5. Japan.

If an application for marketing approval has already been filed in one of these countries, then the Canadian application for marketing approval must be made within a prescribed period of:

• 24 months, if the application for a CSP was filed no later than the first anniversary of the day on which the CSP provisions come into force, and
• 12 months, in any other case. 

This requirement has been put in place to incentivize the early introduction of innovative drugs into the Canadian market, while still providing a reasonable transition period for innovators during the first year of the CSP regime.

In addition, as noted above, a CSP can only be issued in relation to an NOC that issues on or after the day on which the law came into force.
 
Application Deadline
 
An application for a CSP must be filed within 120 days of: (a) the day on which an NOC is granted (for an earlier granted patent), or (b) the day on which the patent issues (for an earlier granted NOC).
 
Fees
 
There is a fee of $9,011 payable on filing an application for a CSP. Beginning on April 1, 2018, the fee will increase annually by 2% of the fee payable in the previous year.
 
Concluding comments

Practically speaking, CSP applications will likely be handled by in-house counsel at pharmaceutical companies interacting directly with Health Canada. However, the issuance of a patent or grant of an NOC triggers a relatively short term of 120 days for applying for a CSP, and consequently, you may wish to monitor relevant applications for issuance. If you would like our assistance with this, or if you would like to know more about how these changes will affect your pharmaceutical patent portfolio, please contact one of our professionals at Marks & Clerk Canada.
 
This article is for information purposes only and does not constitute legal or professional advice.