Sunday, March 21, 2010

Intellectual Property and the Canada/EU Free Trade Agreement: time to pay attention

Canada and the European Union are negotiating a free trade agreement ( CETA ), and I don’t think the Canadian IP community has been paying enough attention. After all, how often does Canada negotiate an intellectual property treaty with a giant partner that cares about Canada’s IP systems? There’s the potential for significant impact on Canada’s IP regime – perhaps greater than the TRIPs Agreement (which was largely anticipated in Canada by the CUSFTA and NAFTA negotiations and Agreements).

The EU’s draft chapter on intellectual property rights – presumably the EU’s starting negotiating position – has been leaked. It came to my attention via Michael Geist's blog, who has mainly focused on copyright issues; but there are several other interesting points in the patent and trade-mark areas.

It should be kept in mind that this is a draft position, not a final document. For all I know, the entire chapter will be scrapped when the final draft treaty comes out. Although I doubt that – official documents over several years including the “scoping exercise” have highlighted intellectual property as a core part of the agreement. IP chapters now seem to be firmly entrenched in the archetype for free trade deals. I could see the two sides digging in their heels on any number of points, however.

From another viewpoint, it is interesting to observe how Canada’s intellectual property laws are influenced by lobbying and through international treaties. When I’ve mentioned this draft to some people, their reaction is “wait a minute – in the US, provision X was balanced out by provision Y – you can’t have X without Y! These things have to balance!” Others ask “is there any reason to think that Canada’s laws on X need to be fixed? Any evidence?”
I think this reflects a lobbying mindset – i.e. that laws are set largely through lobbying by interested groups, which often circle around trade-offs and can be bolstered through argument or evidence of effects. But laws are also influenced by treaties – and yes, the perceived self-interest of states in negotiations is probably set by interest groups, but the context of engagement is different. Specifically, one gets a different set of trade-offs – instead of, for example, trading off the interests of generic versus innovative pharma groups, there might be a trade-off between Canada’s position on intellectual property for pharmaceuticals versus agricultural issues. Also, different people are doing the negotiating – trade negotiators will bring a trade-law mindset to negotiations as opposed to an IP-mindset or pharmaceutical-mindset. More bluntly, the years of lobbying person X at Health Canada might be futile when person Y at the Department of Foreign Affairs and International Trade is the person making the important decisions (and he thinks that pesky person X is pushing a narrow-view agenda compared to the important project of Constructing the International Trade System… etc. etc. )

Suffice it to say I find this all fascinating, but I won’t bore you with an endless diatribe (for that, see my hypothetical book… assuming it ever appears ;) ).

Speaking of the perceived self interest of states and interest groups… it seems that Canadian officials have been disappointed with the lack of commentary and input from Canadians, and are still actively seeking feedback although the official deadline for consultations has passed. This leaked document is a big insight into a (regrettably?) opaque process - maybe now is a good time to speak up before positions are hardened.

Meanwhile, here are the specific points I find interesting (largely ignoring copyright).

1) Data protection for pharmaceuticals

Most importantly, the EU position is that data protection should apply to “data submitted for the purpose of obtaining an authorization to put a pharmaceutical product on the market.” Canada grants data protection only for pharmaceuticals that are “innovative drugs”, and in the mid-2000’s there was a storm of lobbying about the meaning of innovative drugs. The EU position would get rid of all that fussing about with innovative drugs, and just grant data protection widely.

The EU also wants to extend Canada’s data protection regime to 8+2 years rather than the present 6+2 – i.e. no filing an application relying on someone else’s data for 8 years, and no granting an authorization that relies on the data for 10 years.

The EU position is also to extend the period to 11 years if the holder of the basic authorization obtains another authorization for new therapeutic indications of significant clinical benefit compared to existing therapies.

2) Patent term extension

Unsurprisingly, the EU would like Canada to implement patent term extension.

Whatever one thinks of this, the proposed mechanism seems unrealistic – “the period that elapses between the filing of the application for a patent and the first authorization to place the product” on the market minus five years. There is no mention of the actions of the pharmaceutical company in here – i.e. did they move promptly to get marketing approval, or sit on it for ten years? There have been cases in Canada where the marketing approval comes after the expiration of the first relevant patent. This seems to be a free pass for applicants to dawdle.

3) Data protection for plant protection products

Personally, I was unfamiliar with the term “plant protection products” or the idea of granting data protection for related “test or study reports”. A quick google search suggests that plant protection products is a European term which basically means pesticides and herbicides –

“Plant protection products: these are products consisting of, or containing, active substances, safeners or synergists, intended for one of the following uses:
• protecting plants or plant products against all harmful organisms or preventing the action of such organisms, except if they are mainly designed for reasons of hygiene rather than protection of vegetables or vegetable products;
• influencing the life processes of plants, other than as a nutrient (e.g. plant growth regulators);
• preserving plant products, in so far as such substances or products are not subject to Community provisions on preservatives;
• destroying undesirable plants, or parts thereof, with the exception of algae;
• checking or preventing undesired growth of plants, except algae.”

My quick read is that this does not apply to genetically modified organisms (GMOs), although it would apply to pesticides and herbicides designed to be applied to GMOs.

In any case, if a test or study report is necessary for the marketing authorization of the plant protection product, the EU would like a ten year period of data protection to apply starting at the date of first authorization in Canada, to be extended to 13 years for “low risk” plant protection products.

3) Copyright for industrial designs

The EU would like industrial designs to be eligible for copyright protection. This is the opposite of Canada’s present law, which states that copyright cannot be enforced if 50 articles are produced to which the design is applied.

4) Patent Law Treaty

The EU wants Canada to comply with Articles 1 to 16 of the Patent Law Treaty (Geneva, 2000). Canada signed the treaty, but I believe has not implemented it. I don’t think the Patent Law Treaty is particularly contentious – it focuses on the formalities and procedures to obtain a patent – but it might be embarrassing for Canada to implement it while ignoring various copyright treaties that are similarly signed but not implemented.

5) Legal procedures and remedies

The EU draft chapter also has a lengthy section setting out minimum standards for courts and enforcement – i.e. who is entitled to enforce IP, discovery obligations, anton piller and mareva orders, the availability of costs, interlocutory injunctions, what looks like a new legal tool to force disclosure of the distribution networks of infringing goods, the recall from the channels of commerce and destruction of infringing goods, permanent injunctions, the calculation of damages (including elements other than economic factors, such as “the moral prejudice” caused to the right holder), the publication of judicial decisions, border measures, and the standards applicable to administrative procedures.

This section probably has parts that have bite in terms of changing Canadian laws – but I suspect that a big motivation here for the EU and perhaps for Canada is to set precedents for use in other contexts with other countries.

6) Geographical Indications

What would a discussion of European intellectual property concerns be without a reference to geographical indications? Prepare for more fussing about Parma, (C)cheddar and Roquefort cheese, (C)champagne and Newcastle Brown Ale.

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