The Supreme Court of Canada has strengthened patent protection and intellectual property rights for brand-name-drug makers. It has also likely removed a Canadian bargaining chip in the upcoming renegotiation of the North American Free Trade Agreement with Mexico and the U.S.
The top court’s June 30 ruling overturns what’s known in legal circles as the promise doctrine. This allowed invalidation of a Canadian drug patent if a court found the pharmaceutical didn’t live up to every promise a company made in the patent application about the effects of the drug.
Canada used this legal doctrine to invalidate 26 patents on 22 medicines during the past decade, says U.S.-based Pharmaceutical Research & Manufacturers of America, which represents brand-name-drug makers.
“This ruling means Canada got rid of a standard that kept out low-quality patents,” says Richard Gold, a law professor and intellectual property expert at McGill University. He’s a member of the Centre for Intellectual Property Policy, which intervened in the case. “The ruling is good for patent holders —and 87% of patents granted in Canada go to foreigners.”
The high court overturned lower court rulings that backed Canadian generic drug maker Apotex’s claims that U.K.-based AstraZeneca’s patent on Nexium, its brand-name esomeprazole, was invalid. A highly successful drug for AstraZeneca, it is used to treat heartburn by reducing production of gastric acid. The patent on the drug has since expired.
The court’s decision is good news for U.S.-based, multinational pharmaceutical companies, which had lobbied for the U.S. to challenge the doctrine as part of the NAFTA talks.
Canadian negotiators might have compromised on the doctrine during trade talks, Gold says, “but probably not have gone as far as the Supreme Court.”
AstraZeneca says the ruling “signals to global investors that Canada is a good place to invest with a predictable and stable market, aligned to other major trading partners.”
Apotex says it’s disappointed in the decision. A spokesperson for the Canadian Generic Pharmaceutical Association says it is reviewing the implications of the case.