USMCA: Amendments Remove Key Biologic and Patent Obligations

On December 10, 2019, Canada, Mexico, and the United States formally agreed to amend the successor to NAFTA, officially known as CUSMA (short for the Canada-U.S.-Mexico Agreement) in Canada but popularly referred to as USMCA following the American acronym. Our firm’s comprehensive review of the amendments can be found here. This blog focuses on changes affecting biologic drugs and patents.

CUSMA was first published in an agreed form on October 1, 2018. The version released on December 10, 2019 removes a two patent-related provisions that were agreed to in principle last year, as we wrote about here. As a result, under this revised USMCA, Canada will not be required to make certain changes to its domestic patent or pharmaceutical IP regimes, as follows:

  1. Removal of 10-Year Data Protection for Biologic Drugs: In the original agreement, Canada was required to extend the period of data protection for new biologic drugs from eight to ten years, meaning that a biosimilar could not be approved for ten years following the approval of an innovative biologic drug. This two-year extension of data protection for biologics has been removed from the revised regime. Canada’s existing Food and Drug Regulations already provide for eight years’ data protection for innovative drugs, as required by TRIPS and NAFTA.[1]
  2. Removal of Obligation to Provide Patents for New Uses, New Methods, and New Processes: The amendments also remove a provision explicitly requiring that patents be made available for new uses, new methods or new processes of using a known product. While this provision has been removed, new uses for known compounds have long been patentable in Canada.[2]

Note that patent term restoration for patent prosecution delays are unaffected by the new changes.  Article 20.44 of the original text provides that: “If there are unreasonable delays in a Party’s issuance of a patent, that Party shall provide the means to, and at the request of the patent owner shall, adjust the term of the patent to compensate for those delays.”  “Unreasonable delays” are defined as follows:

“For the purposes of this Article, an unreasonable delay at least shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later. A Party may exclude, from the determination of those delays, periods of time that do not occur during the processing of, or the examination of, the patent application by the granting authority; periods of time that are not directly attributable to the granting authority; as well as periods of time that are attributable to the patent applicant.”

While the final text and terms of the amendments have not yet been released, both the Government of Canada and the United States House of Representatives Committee on Ways & Means have posted summaries of the outcomes.

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[1] Food and Drug Regulations, C.R.C., c. 870, s. C.08.004.1. See para. 3 of Art. 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (also known as TRIPS); Art. 1711 of the North American Free Trade Agreement.

[2] Shell Oil Co. v. Commissioner of Patents, [1982] 2 S.C.R. 536.

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