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USMCA: Four Important Changes to Intellectual Property Rights

Earlier this week, Canada, the United States and Mexico reached an agreement in principle on the successor to NAFTA, dubbed the United States-Mexico-Canada Agreement (USMCA).[1] For a general overview of the USMCA, please see our commentary here.

In this post we highlight four important changes to intellectual property rights.

  1. 10-Year Data Protection for Biologics

Canada imposes an eight-year period of market exclusivity to manufacturers of innovative drugs, during which a generic manufacturer cannot obtain approval to market a generic version of the innovative product. This period of market exclusivity is called “data protection” because it protects undisclosed data necessary to determine the safety and efficacy of the innovative drug.

Under the USMCA, Canada will be required to extend the period of data protection for new biologics from eight to ten years. Canada will have five years to implement this requirement.

  1. Patent Term Restoration for Unreasonable Delays During Prosecution

Last year, as a part of its obligations under CETA, Canada introduced patent term restoration for up to two years when the regulatory process consumed part of the 20-year term of a pharmaceutical patent (see our commentary here and here).

Under the USMCA, Canada will be required to extend patent term restoration for unreasonable delays in the prosecution and issuance of any patent. “Unreasonable delay” is defined in the USMCA to include at least a delay in the issuance of a patent of more than five years from the date of filing of the application, or three years after a request for examination of the application has been made, whichever is later. Certain delays will be excluded in the final text.  Canada will have 4.5 years to fully implement this requirement.

  1. Copyright Term Extension to Life of Author Plus 70 Years

Canada’s Copyright Act provides that the term of a copyright is the life of the author plus 50 years. Under the USMCA Canada is required to extend copyright protection to the life of the author plus 70 years. Canada will have 2.5 years to fully implement this requirement.

  1. Statutory Damages for Trademark Infringement

Under the USMCA, Canada is required to provide a scheme for “pre-established damages” for trademark infringement. These damages are required to “be in an amount sufficient to constitute a deterrent to future infringements and to compensate fully the right holder for the harm caused by the infringement”. Canada’s Copyright Act provides for pre-established statutory damages, but the Trade-marks Act does not.

It will be interesting to monitor how Canada implements the above obligations resulting from the USMCA, and we will provide updates as and when such developments occur.

[1] The full text of the USMCA is available here, with the IP rights chapter being available here.

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