While the Data Protection Regulations appear to provide a more "dependable" period of exclusivity than patents, in that they circumvent the complex and somewhat unpredictable legal battles surrounding patent enforcement, this is not necessarily the case. Data protection is better seen as complementary to, rather than a replacement for, patent protection. In this regard, there are three particular areas of note when comparing patents and data protection: (1) the subject matter of the protection; (2) the susceptibility of that protection to legal challenges; and (3) the scope of the protection.
Subject Matter Being Protected
There are key differences in scope between data protection and patent protection. Data protection applies only to an "innovative drug," one that has not previously been approved. As such, data protection related to new uses is generally not available, although there may be exceptions in rare circumstances (e.g., Celgene case). Moreover, data protection is not available for "variations" of previously approved medicinal ingredients (e.g., enantiomers, salts, esters, solvates and polymorphs) as confirmed by the decision of the Federal Court in Takeda v. Canada and by the Minister's decision involving f uticasone furoate in CGPA v. Canada. Data protection does not extend to combinations of old compounds, methods or processes. In contrast, patents can protect inventions related, not only to new compounds, but also new uses and variations thereof, combinations of old compounds and methods or processes for their manufacture.
As such, patents offer a more multifaceted approach for protecting investments in a drug products, recognizing that there is often more than one aspect of a drug that is inventive.
Susceptibility to Legal Challenges
While data protection is subject to a smaller range of legal challenges than patents, it is not immune to litigation. A challenge may be brought by an innovator seeking to list a drug or by a generic company seeking to de-list it. The Federal Court of Appeal recently affirmed that: (1) a generic has standing to seek to de-list a drug where they have had a rejection of a drug submission because of the presence of a drug on the Innovative Drug Register; and (2) the Minister of Health may make a fresh decision about the listing of a drug at any time (e.g., at the request of a generic). The stakes are high in the case of challenges to data protection, especially in the absence of patents covering the product. Patents offer a second, very important layer of protection.
Scope of Protection
Data protection does not provide against activities that do not require regulatory submission and approval (NOC). Examples include the importation of a pharmaceutical compound (without sale in Canada), manufacture of a pharmaceutical compound, and export of a compound. The only way to protect against these activities is by asserting a patent right either under the Patented Medicines (Notice of Compliance) Regulations, if the patent is listed; or by a patent infringement action. In addition, there are often instances where key aspects of the product (e.g., formulation) are developed as the product is maturing (e.g., at the end of the data protection period) which, as such, can only be protected by patents. A further consideration is that patents may offer additional protection and value: they provide an incentive for investment in R&D, licensing opportunities and a basis of negotiation in litigation beyond what data protection offers.
Finally, it should be noted that interpretation and application of the Data Protection Regulations are in their early days and are therefore unpredictable. Indeed, five relevant decisions issued in 2011 and 2012 were all appealed (two appeals are pending) at this writing. This is not dissimilar to the early days of the Patented Medicines (Notice of Compliance) Regulations, when, 19 years ago, what began as a trickle of cases turned into an avalanche of jurisprudence now comprising hundreds of decisions including a substantial number of patent listing decisions.
In view of the above, the best strategy continues to be concurrent use of both patents and the Data Protection Regulations to ensure the greatest scope and likelihood of protection for innovators.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
