Lexpert US Guides

www.lexpert.ca | LEXPERT • December 2015 | 23 INTELLECTUAL PROPERTY Currently, the US and EU offer up to five years of patent resto- ration, while Canada offers none: CETA envisions Canadian protections to a maximum of two years. Innovators will also get a right of appeal when a court invalidates their patents. Other- wise, data protection does not appear to have been addressed in CETA, meaning that the gap between Canada, at up to eight- and-a-half years, and the EU, which offers 10 years plus one year for new indications, will likely remain. ere's also a difference between Canada and the US: the US offers five years plus one year for regulatory delays plus three years for new indications for pharmaceuticals, and 12 years for biologics. According to Nadeem Esmail in Calgary, Senior Fellow at the Fraser Institute, the partial harmonization from CETA could signal more change as Canadian trade policy expands. "ese enhanced protections might also be valuable in future trade negotiations and relationships such as the Trans-Pacific Partnership (TPP) and in regions like Asia and Latin America, where the EU and US are aggressively pursuing free trade agree- ments," he writes. DESPITE THESE CHANGES, important harmonization issues remain, especially in patent law. So much so that pharmaceutical giant Eli Lilly, having seen Canadian courts invalidate patents for its ADHD drug Atomox- etine (Strattera) and the anti-psychotic Olanzapine (Zyprexa), has cited the US watch list in filing a C$500-million NAFTA claim alleging that Canadian patent law does not conform with NAFTA and other international treaties because it is unpredict- able and weaker than international norms. "Our patent system is getting a bad rap internationally because it has become extremely liberal in moving from pro-patentee to anti-patentee," says Andrew Bernstein of Torys LLP in Toronto. Canada's allegedly sullied reputation arises largely because it is the sole developed nation that requires applicants to demonstrate the "utility" of an invention at the time of application. "Utility has always been and still is the issue on which Canada remains the biggest outlier," says Christopher Van Barr of Gowling Lafleur Henderson LLP in Ottawa. "Counsel and clients elsewhere still find it difficult to believe that our law is so different from the rest of the world." To be sure, Canada's Patent Act mandates that an invention must be "useful" to be patentable. Usefulness is not defined in the legislation, but throughout the twentieth century courts consis- tently ruled that an invention only needed to have a "scintilla of utility" to be patentable. All this changed in 2002 in the seminal decision of Apotex Inc. v. Wellcome Foundation Ltd. Historically, utility had been examined by the Patent Office as of the date the patent was challenged. But in Wellcome, the SCC held that patent appli- cants must either demonstrate or "soundly predict" the utility of an invention as of the filing date. is effectively required appli- cants to evidence utility in the patent application, even though this disclosure requirement is not found in the Patent Act. Some lawyers say that makes sense because pharmaceutical patent appli- cations are oen filed long before the clinical trial process is over. Consequently, courts have been assessing utility against the "promise of the patent," a subjective construct that the courts determine by reading the patent as a whole, as opposed to just the patent claims. e upshot is that determining the promise has become a very contentious and unpredictable issue in Canadian patent litigation and a fruitful ground for attacking pharmaceuti- cal patents in particular. In following Wellcome, Canadian courts have gone so far as to strike patents on the basis that utility has not been shown in the patent application even though the drugs have in fact proved useful by the time the courts dealt with the issue. Generic drug companies, of course, have benefited from this jurisprudence because it allows them to launch generic versions of a drug in Canada well before a patent would otherwise have expired. According to Donald Cameron of Bereskin & Parr LLP in Toronto, who represents innovators, Canadian courts have decided that a host of blockbuster drugs are not "useful" under Canadian patent law. Apart from Strattera and Zyprexa, the list includes Mevacor, a cholesterol-lowering agent; Nexium, an acid reflux medication; Evista, used to treat and prevent osteoporo- sis; Altace, prescribed for high blood pressure; and Xalatan, for high eye pressure. Eli Lilly says that decisions of this kind have cost it C$1 billion in sales and deprived the country of 280 jobs. Still, utility isn't the only area in which Canadian patent law has departed from international norms. Consider, for example, the case of the "Harvard mouse," known scientifically as the oncomouse. Scientists at Harvard Medical School engineered the oncomouse more than 30 years ago by manipulating genes that cause cancer. Because Harvard scientists created the mouse to quickly develop cancers found in humans, these mice have proven invaluable to researchers study- ing cancer cures and treatments. Harvard obtained numerous patents on the mouse in the United States, Europe, Japan and Australia. But the university's 17-year battle to patent the oncomouse in Canada ended with disappointment in December 2002 when the Supreme Court of Canada ruled, in a 5-4 decision, that the mouse wasn't patentable under Canadian legislation. at le Canada as the only first- world country to refuse the patent. Otherwise, Canada lags far behind other jurisdictions in bringing forward emerging patent issues, such as the patentabil- ity of human genes, for judicial consideration. Consequently, it's uncertain whether Canadian courts will follow the lead of the US Supreme Court's 2013 decision in Association for Molecular Pathology v. Myriad Genetics, Inc., which found that naturally occurring genetic information was a product of nature that could not be patented simply because it had been isolated or sequenced. e Canadian position could be determined in a recent case brought by Nathaniel Lipkus and Sana Halwani of Gilbert's LLP in Toronto on behalf of the Children's Hospital of Eastern Ontario. e hospital is seeking a declaration that University of Utah patent claims relating to five genes implicated in a heart disorder are invalid; the hospital is also attacking the validity of patents for related diagnostic tests. "Canada remains an outlier with respect to utility, with respect to the patentability of methods of medical treatment and to the patent- ability of higher life forms," Van Barr says. "ese issues continue to leave us in a category separate from the US and other countries." Julius Melnitzer is a freelance legal-affairs writer in Toronto.

• NEW-COVER
• Editorial
• Bios
• E-00-Lawyers to Watch