Canada: Canada Concludes Negotiations On Free Trade Agreement With Trans-Pacific Partners

Last Updated: November 11 2015
Article by Smart & Biggar/Fetherstonhaugh and Daphne Lainson

Canada and eleven other countries, including Australia, Chile, Japan, Malaysia, Mexico, Peru and Singapore, have entered into an agreement to create the world's largest free-trade zone.  The text of the TPP deal, which sets common standards on a wide variety of issues relating to trade, including intellectual property, was released on November 5, 2015.  The agreement will need to be ratified by each of the participating countries, including Canada, before coming into force.  Chapter 18 of the TPP agreement addresses Intellectual Property and provides that the objectives of the chapter are to facilitate the protection and enforcement of intellectual property rights such that it contributes to:

  • the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conductive to social and economic welfare; and
  • a balance of rights and obligations.

The following areas are addressed:

Cooperation

The agreement provides that parties shall endeavour to cooperate on subject matter covered by this chapter, for example, by:

  • coordinating, training and exchanging information between the intellectual property offices of the parties;
  • simplifying and streamlining patent office procedures and processes;
  • facilitating the sharing of search and examination work of other parties;
  • reducing differences in the procedures and processes between the intellectual property offices of the parties; and
  • cooperating to enhance the understanding of issues connected with traditional knowledge associated with genetic resources and to pursue quality patent examination.

Further, the agreement requires that parties recognize the importance of giving due consideration to ratifying or acceding to the Patent Law Treaty or adopting or maintaining procedural standards consistent with the objectives of the Patent Law Treaty. Canada has already taken steps to comply with this provision through the passage of Bill C-43, as previously reported in our October 28, 2014 IP Update, which includes the necessary amendments to the Patent Act in order to move forward with that treaty.

Trademarks and Geographical Indications

The agreement requires parties to allow for the registration of sound marks, to make best efforts to register scent marks and to adopt or maintain a trademark classification system that is consistent with the Nice Classification system. Canada has already taken steps to comply with this provision through the passage of Bill C-31, as previously reported in our March 31, 2014 IP Update, which will expand the definition of a "trademark" to formally include, among other things, a sound or a scent and provide for the adoption of the Nice Classification system for goods and services.

The agreement also provides for greater protection for registered trademarks, well-known marks, and geographical indications:

  • With regard to a registered trademark owner's exclusive right to prevent third parties from using identical or similar marks, likelihood of confusion is to be presumed in the case of the use of an identical mark for identical goods or services.
  • With regard to well-known marks, parties undertake to refuse or to cancel the registration, and to prohibit the use, of a trademark that is confusingly similar to a well-known trademark, regardless of whether the goods and/or services are similar and regardless of whether the well-known trademark is registered, provided that such use would indicate a connection between the goods or services associated with the confusingly similar trademark and the owner of the well-known trademark and their interests are likely to be damaged.
  • With regard to geographical indications, administrative or judicial procedures are provided, including grounds of opposition and cancellation.

Patents

Many provisions in the agreement, including in relation to patentable subject matter, reiterate Canada's existing obligations under prior treaties including TRIPS. Other provisions, including regarding specifics of grace periods for assessing novelty and obviousness, publication of applications and patents and public availability of related information, and filing and revocation of patents, all appear to be consistent with the provisions of Canada's existing Patent Act.

At least one provision of the TPP would require legislative change in Canada: patent term adjustment for Patent Office delays. Already available in other countries, patent term adjustment (PTA) allows the term of a patent to be adjusted to compensate for unreasonable delays during processing or examination. The agreement provides that unreasonable delays shall include delays in issuance of more than five years from the date of filing or three years after a request for examination is made, whichever is later, though parties will be permitted to exclude periods not directly attributable to the granting authority, as well as periods of time attributable to the applicant. The provisions allow countries to require that a patentee request term adjustment; as such, it remains to be seen whether any Canadian PTA would be automatic or would instead require that a request be filed.

Protection of Undisclosed Test or Other Data for Agricultural Chemical Products

The agreement requires a period of data protection of at least ten years from the date of marketing approval of new agricultural chemical products. A period of exclusive use consistent with this requirement is provided in Canada's current Pest Control Products Regulations.

Pharmaceuticals

Although the agreement includes a number of provisions relating to pharmaceutical products, as with patents, there will be little impact on Canadian legislation, as Canada is already largely TPP compliant.  One distinction is in the area of patent term restoration.  The agreement will require that parties provide a patent term adjustment to compensate for the "unreasonable curtailment of the effective patent term as a result of the marketing approval process".  Canada has already committed to providing such protection in the Canada-EU Comprehensive Trade and Economic Agreement (CETA), as previously reported in our September 29, 2014 IP Update.  In the TPP Technical Summary, Canada has indicated that the TPP obligations will still allow Canada to retain the export exception and two year cap on additional protection guaranteed under CETA, as previously reported in our November 14, 2013 IP Update.

Copyright

The agreement differs from current Canadian copyright law in two major respects:

  • The term of copyright protection is extended from life of the author plus 50 years to life plus 70 years.
  • Prohibitions on the importation and distribution of work where rights management information has been removed or altered are broadened and parties are required to provide criminal penalties for rights management information violations that are engaged in willfully and for purposes of commercial advantage or financial gain.

The agreement includes provisions for a notice-and-takedown system. However, an exception is provided for parties that already have a framework of legal remedies and safe harbours for copyright infringement in the online environment that meets criteria set out in the agreement.

Enforcement

The agreement provides for special requirements related to border measures, which includes requiring parties to provide that its competent authorities may initiate border measures ex officio with respect to goods under customs controls that are in transit. This is an expansion on Canada's recently introduced new border measures under the Combating Counterfeit Products Act, which adds new prohibitions to the Trademarks Act and Copyright Act, criminal offence provisions to the Trademarks Act, and new prohibitions providing for ex officio action by Canadian customs authorities to the Trademarks Act and Copyright Act.

In addition, the agreement requires criminal procedures and penalties for certain disclosures or unauthorized access to or misappropriation of trade secrets. Given the limited circumstances in which such criminal procedures are required by the agreement, this requirement appears to be met by the economic espionage provisions of Canada's Security of Information Act

Further required by the agreement is access to criminal and civil penalties for various acts related to unauthorized decryption of program-carrying satellite or cable signals. It appears that these requirements would already be met by provisions in Canada's Radiocommunication Act and the Criminal Code.

Concluding remarks

As indicated in the disclaimer that accompanies the final text of the agreement, it will be subject to legal review and will be translated into French and Spanish language versions prior to signature. Following legal review and formatting, the complete text will become binding upon the completion of the ratification process by the parties. The newly elected Liberal Party of Canada has promised "a full and open public debate in Parliament" on this agreement.

The long process of statutory reform and regulatory reform will likely not begin until the agreement is ratified. It may therefore be a number of years before specific changes to Canadian law are implemented.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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