Certificates of supplementary protection: Canada's new sui generis patent term restoration regime

17 minute read
24 July 2017

We previously reported on Bill C-30 (the "Act to implement CETA") which made important changes to Canada's intellectual property landscape reflecting its commitments under the Comprehensive Economic and Trade Agreement between Canada and the European Union ("CETA"). That bill passed on May 16, 2017, and, on July 14, 2017, the Canadian Government published proposed amendments to regulations reflecting these changes (the "Proposed Regulations").

This article focuses on proposed amendments to the Patent Rules relating to Certificates of Supplemental Protection ("CSP"), a sui generis version of patent term restoration which will be available once the Act to implement CETA comes into force (which is provisionally set to occur on September 21, 2017). CSPs are intended to address lost patent protection due to delays related to fulfilling regulatory requirements and obtaining marketing approvals for a pharmaceutical product encompassed by that patent.

The Proposed Regulations are open to public consultation for 15 days following their publication. Comments must thus be submitted by Sunday, July 30th.

Key takeaways

  • CSPs are available in connection with a "first authorization for sale" of a product containing a "medicinal ingredient" or "combination of medicinal ingredients". This requirement cannot be circumvented by making certain prescribed changes to the medicinal ingredient (eg. enantiomer, solvate, etc) or combination (eg. the ratio of ingredients), which are treated as the same as that of the authorized product. However, this treatment also prevents circumvention of CSP protection which extends only to drugs containing the medicinal ingredient / combination set out in the CSP.
  • Innovators should review Canadian patent applications to ensure that they include appropriate claims to take advantage of CSP protection. Patents with claims directed to the medicinal ingredient / combination or its use are eligible for a CSP. Claims to the medicinal ingredient / combination made by a specific process are also acceptable. However, process claims or claims to formulations and dosages are not eligible.
  • Innovators should strive, where possible, to ensure that Canadian drug submissions are filed shortly after foreign filings and diligently pursued thereafter. The CSP regime emphasizes timeliness to ensure new drugs are introduced quickly into Canada. A first Canadian authorization for a product will thus be eligible only if filed within one year (or 18 months for CSP applications filed within the first year of the legislation coming into force) of equivalent filings in certain foreign jurisdictions, including the United States and the European Union. The Minister is also granted discretion to reduce the term of the CSP due to delays during the process of obtaining an authorization. No guidance is provided yet as to how this discretion will be exercised.
  • CSPs will be available only for products for which a first authorization is issued after the legislation comes into force (anticipated to be in September 2017, per above).
  • Subject to priority rules for CSP applications, innovators are at liberty to select for which eligible patent it will seek a CSP. Factors to consider would include the anticipated term for each patent and the nature of the claims of the patent.

Eligibility for a CSP

CSPs will not be available for all patents. Briefly, CSPs are intended to extend protection for a single patent in connection with the first "authorization for sale" of a product containing a "medicinal ingredient" or a "combination of medicinal ingredients" to which that patent "pertains". We summarize below key aspects of the eligibility requirements for a CSP.

(a) Single CSP per "Medicinal Ingredient" or "Combination of Medicinal Ingredients"

CSPs pertain to a specific "medicinal ingredient" or "combination of medicinal ingredients." The Act to implement CETA provides that a CSP will only issue if no other CSP has been issued with respect to that medicinal ingredient / combination. This bar applies even where the other CSP is subsequently held to be invalid or void, or it never takes effect or ceases to have effect.

Further narrowing the availability of a CSP, "medicinal ingredients" which differ only with respect to "prescribed variations" as the "same medicinal ingredients" are treated as the same. The Proposed Regulations provide further guidance concerning the prescribed variations to "medicinal ingredients", defining them as follows:

  • 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[1];
  • a variation that is an enantiomer, or a mixture of enantiomers, of a medicinal ingredient;
  • a variation that is a solvate or polymorph of a medicinal ingredient;
  • an in vivo or in vitro post-translational modification of a medicinal ingredient; and
  • any combination of the variations set out above.

The RIAS also indicates the above-noted kinds of variations apply to medicinal ingredients within a combination. That is, a combination of medicinal ingredients which comprises ingredients which are treated as the same (ie. prescribed variations, per above) as the ingredients in another combination will be treated as the same combination.

The Act to implement CETA also contemplates that "combinations of medicinal ingredients" which differ only with respect to "a variation in the ratio between those ingredients" are to be treated as the same combinations.

Notably, the new CSP regime appears to allow a CSP for a new combination product despite the issuance of a CSP in connection with a product comprising one of the medicinal ingredients in that combination. For example, CSPs relating to authorization for Product A (containing only medicinal ingredient X) and Product B (containing only medicinal ingredient Y) would not prevent a CSP for authorization for Product C (containing the combination of medicinal ingredients X and Y).

(b) CSP Available Only for First Authorization for Sale

A CSP may only be obtained for the "first authorization for sale" that has been issued with respect to the medicinal ingredient / combination. The Proposed Regulations clarify that such authorization is one under the Food and Drugs Act (or predecessor legislation) that permits the sale of a drug in Canada (practically, this is a Notice of Compliance or NOC), except for certain specified limited purpose authorizations and interim orders permitting the sale of a drug.

Consistent with the above example about overlapping CSPs, the new CSP regime appears to allow an applicant to obtain a CSP for a new combination product despite authorizations for sale having previously issued for single-ingredient products containing each of the same medicinal ingredients. The RIAS in fact states that "to be eligible, the medicinal ingredient or combination cannot have been the sole medicinal ingredient or the combination of all medicinal ingredients in a drug previously authorized for regular sale in Canada."

(c) CSP Available only for Authorizations for Sale after the Legislation comes into Force

CSPS will only be available in connection with authorizations for sale (eg. a NOC) issued on or after the day on which the legislation comes into force. As noted above, this is currently anticipated to occur in late September 2017. Patentees, or applicants for drug submissions, should thus carefully review their portfolio of drug submissions in Canada in the next few months to consider an application for a CSP can be made.

(d) Patent must "Pertain" to the Medicinal Ingredient / or Combination

Only patents which "pertain" to a medicinal ingredient / combination are eligible for a CSP. The Proposed Regulations prescribe this pertinence as a patent claim for:

  • the medicinal ingredient / combination contained in a drug for which the authorization for sale was issued;
  • the medicinal ingredient / combination as obtained by a specified process and contained in a drug for which the authorization for sale was issued; or
  • a use of the medicinal ingredient / combination contained in a drug for which the authorization for sale was issued.

A CSP thus cannot be obtained for a dosage form or formulation, or claims directed exclusively to processes for making a medicinal ingredient / combination. The Proposed Regulations also specify that, for combinations, only patents which contain the above-noted claims relating to "all the medicinal ingredients" in the authorization for sale will satisfy the pertinence requirement.

(e) Applications for an Authorization for Sale Must be Timely Filed

The Act to implement CETA requires that, to be eligible for a CSP, an application for authorization for sale be filed within a prescribed time from filing an equivalent application for the same medicinal ingredient / combination in other countries. The RIAS describes this as the timely submission requirement, which is intended to incentivize the early introduction of innovative drugs into the Canadian market.

The Proposed Regulations limits this requirement to the following countries: European Union (and any country member of it), the USA, Australia, Switzerland and Japan.

More importantly, the Proposed Regulations specify that the Canadian submission must be filed within only 12 months of the filing of the equivalent submissions in those countries. This is extended to 18 months for CSP application filed during the first year the CSP regime comes into force.

Formally, an applicant for a CSP will be required to include in its application an attestation that either it has not filed for an authorization in these countries or, if it has, the application in Canada was filed before the end of the above-noted period.

Supplemental protection for up to 2 years

CSPs will last for at most two years. Subject to that cap, the term is calculated by subtracting five years from the period beginning on the filing date of the patent and ending on the approval date of the drug. For example, if an applicant files a patent on January 1, 2013 and obtains an authorization for a product to which that patent pertains on January 1, 2019, the default term of the CSP would be 1 year (2019 – 2013 – 5 = 1 year), assuming the eligibility requirements are satisfied.

The Act to implement CETA however gives the Minister the discretion to reduce this term. The Minister may do so if he or she is of the opinion that the person who obtained the authorization for sale failed to act, resulting in a "period of unjustified delay in the process of obtaining the authorization". In such case, the term can be reduced "by the amount of that period". This discretion only applies, however, if the person who obtained the authorization is also the patentee.

The Proposed Regulations provide no further guidance on how the Minister is to exercise this discretion. There is thus uncertainty about when the Minister will do so and what factors the Minister will consider in determining whether a delay has occurred. For example, this discretion appears limited to delays in the process of obtaining an authorization, that is, after the submission for that authorization has been filed in Canada. This is particularly the case given that the CSP regime permits, as noted above, an acceptable (and "timely") period for filing in Canada after filing in other jurisdictions.

Competing applications for CSPS

Where there are multiple eligible patents, patentees may choose in respect of which patent it wishes to seek a CSP.

The Act to implement CETA however sets out priority rules and challenge mechanisms for determining which CSP application ought to issue when there are multiple eligible applications in respect of the same authorization for sale. No conflicts can arise for applications in respect of different authorizations because either (1) they will relate to sufficiently different products to each be potentially eligible for a CSP, or (2) one of the applications will not satisfy the "first authorization for sale" requirement.

CSP applications with patents issued before the authorization have equal priority as between each other, and greater priority than those with patents issued after the authorization. As between applications with patents issued after the authorization, the date the patents issued determines their priority. Applications for a CSP with a lower priority patent then simply expire when a higher priority CSP issues.

Potential conflicts thus only arise where there are multiple applications with equal priority for CSPs relating to the same authorization. The Proposed Regulations encourage non-judicial resolution of these conflicts by requiring the Minister to provide notice to the applicant(s) of conflicting applications and by permitting applicants to withdraw one or more applications for a CSP.

Applicants may however commence a proceeding in the Federal Court within 90 days of receiving notice of the conflict from the Minister. In such proceeding, the applicant seeks a declaration that the other pending application is invalid for non-compliance with the eligibility requirements for a CSP. Unfortunately, neither the Act to implement CETA, the Proposed Regulations nor the RIAS set out how such applications become non-compliant. The CSP regime thus provides no guidance to the Federal Court as to how to resolve such conflicts.

Reduced scope of sui generis protection

The Act to implement CETA limits the protection afforded by the CSP to "any drug that contains the medicinal ingredient, or combination of medicinal ingredients" set out in the CSP, rather than the full scope of protection of the patent itself. CSP protection should nonetheless extend to different formulations or dosage forms of drugs containing those same medicinal ingredients / combinations, where the underlying patent claims support such extension. In addition, CSP protection also does not extend to exports.

Holders of CSPs should however benefit from the CSP regime's treatment of medicinal ingredients / combinations with the above-noted prescribed variations as the same (including in defining the scope of protection) may make it easier to establish infringement. Indeed, the RIAS expressly states that this treatment is intended to ensure that such variations cannot be used to circumvent the scope of protection granted by an issued CSP.

Administrative matters

The Proposed Regulations also clarify several procedural matters. For example:

  • Deadline to apply for a CSP: Applicants will have 120 days from the issuance of an authorization (if the patent has already issued) or otherwise from the grant of the patent. However, no applications for a CSP will be permitted during the two years before patent expiry.
  • Consent by Patent Owner: The Applicant must also include in its application an attestation that either it is (1) the patentee and is recorded as an owner of the patent in the Patent Office or (2) the manufacturer who is authorized by the patentee to file the application. Only the recorded owner of the patent may authorize a manufacturer to file an application for a CSP on its behalf. Patentees will thus want to ensure that a patent's ownership details are properly updated and that this is done on a timely basis.
  • Cost of a CSP: The currently prescribed fee for a CSP is $9,011CAD. It will however begin increasing annually at a rate of 2% starting on April 18, 2018.
  • Correction of obvious errors: The RIAS expressly states that the validity of a CSP should not be jeopardized by clerical errors. The Proposed Regulations permit the Minister to correct obvious errors, including obvious omissions, in an application or CSP in appropriate circumstances. A corrected application or CSP has the same effect as if it were originally filed or issued in its corrected form.

[1] The Regulatory Impact Statement which accompanied the Proposed Regulations (the "RIAS") describes "an appendage" as a portion of the molecule that is connected or joined to a larger or more important part, or the non-principal part of the molecule which is not principally responsible for the mechanism of action of the medicinal ingredient

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