CANADA – PATENT PROTECTION OF PHARMACEUTICAL PRODUCTS

WORLD TRADE ORGANIZATION

WT/DS114/R 17 March 2000

(00-1012)

Original: English

CANADA ? PATENT PROTECTION OF PHARMACEUTICAL PRODUCTS

Complaint by the European Communities and their member States

Report of the panel

The report of the Panel on Canada ? Patent Protection of Pharmaceutical Products is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 17 March 2000 pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report, an appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel, and that there shall be no ex parte communications with the panel or Appellate Body concerning matters under consideration by the panel or Appellate Body.

Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be considered for adoption by the DSB until after the completion of the appeal. Information on the current status of the Panel Report is available from the WTO Secretariat.

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TABLE OF CONTENTS

I. INTRODUCTION

1

II. FACTUAL ASPECTS

1

(a) Relevant Provisions of Canadian Patent Law

1

(b) Canada's Regulatory Review System for Drugs

3

III. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES

7

IV. ARGUMENTS OF THE PARTIES

9

A. EUROPEAN COMMUNITIES AND THEIR MEMBER STATES

9

(1) SECTION 55.2(2) AND 55.2(3) OF THE PATENT ACT TOGETHER

WITH THE MANUFACTURING AND STORAGE OF PATENTED

MEDICINES REGULATIONS

9

(a) Article 28.1 and Article 33 of the TRIPS Agreement

9

(b) Article 27.1 of the TRIPS Agreement

10

(2) SECTION 55.2(1) OF THE PATENT ACT

10

(a) Article 28.1 of the TRIPS Agreement

10

(b) Article 27.1 of the TRIPS Agreement

12

(3) HISTORICAL DEVELOPMENTS IN CANADIAN PATENT LEGISLATION AND

COMPARISON BETWEEN THE SITUATION IN CANADA BEFORE AND AFTER

THE INTRODUCTION OF BILL C-91 AND THE MANUFACTURING AND

STORAGE OF PATENTED MEDICINES REGULATIONS IN 1993

12

(4) ECONOMIC LOSSES SUFFERED BY THE EU PHARMACEUTICAL INDUSTRY

15

(5) ARTICLE 30 OF THE TRIPS AGREEMENT

16

B. CANADA

16

(1) ARTICLE 30 OF THE TRIPS AGREEMENT

16

(a) Object, Purpose and Meaning

18

(i) Section 55.2(1) and 55.2(2) create limited exceptions

21

(ii) Section 55.2(1) and 55.2(2) do not conflict with a normal

exploitation of the patent

24

(iii) Section 55.2(1) and 55.2(2) do not prejudice the legitimate

interests of the patent owner

24

(iv) Section 55.2(1) and 55.2(2) take account of the legitimate

interests of third parties

25

(b) Travaux Pr?paratoires and Subsequent Practice

27

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(2) ARTICLE 27.1 OF THE TRIPS AGREEMENT

30

(a) Object, Purpose and Meaning

30

(b) Travaux Pr?paratoires and Subsequent Practice

31

(c) Section 55.2(1) and 55.2(2) are not Discriminatory

32

(3) ARTICLE 33 OF THE TRIPS AGREEMENT

33

(a) Object, Purpose and Meaning

33

(b) Section 55.2(1) and 55.2(2) do not Reduce the Required Minimum

Term of Protection

34

(4) THE LEGISLATIVE HISTORY OF THE DISPUTED PROVISIONS, THEIR

FRAMING, THEIR LEGISLATIVE CONTEXT AND THE DEBATE ON

COST CONTAINMENT AND GENERIC DRUGS

34

(a) The Legislative History of the Disputed Provisions

35

(b) The Framing of the Disputed Provisions

37

(c) The Legislative Context

39

(d) Cost Containment and Generic Drugs

40

C.

EUROPEAN COMMUNITIES AND THEIR MEMBER STATES

45

(1) ARTICLE 27.1 OF THE TRIPS AGREEMENT

47

(2) ARTICLE 30 OF THE TRIPS AGREEMENT

49

(a) Preliminary Remarks

50

(i) The Preamble of the TRIPS Agreement and its Articles 1.1, 7 and 8.1 51

(b) Interpretation of the Conditions Enumerated in Article 30 for the Grant of

Exceptions to Rights Conferred

53

(i) The "prior use" exception

54

(ii) The "scientific/experimental use" exception

55

(c) Section 55.2(2) and 55.2(3) of the Canadian Patent Act together with the

Manufacturing and Storage of Patented Medicines Regulations

56

(i) "Limited"

56

(ii) "Do not unreasonably conflict with a normal exploitatio n

of the patent"

57

(iii) "Do not unreasonably prejudice the legitimate interests of

the patent owner, taking account of the legitimate interests

of third parties"

58

(d) Section 55.2(1) of the Canadian Patent Act

59

(i) "Limited"

59

(ii) "Do not unreasonably conflict with a normal exploitation of

the patent"

59

(iii) "Do not unreasonably prejudice the legitimate interests of

the patent owner, taking account of the legitimate interests

of third parties"

60

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(3) SUBSEQUENT PRACTICE

61

(a) Section 55.2(2) and 55.2(3) of the Canadian Patent Act together

with the Manufacturing and Storage of Patented Medicines

Regulations

61

(b) Section 55.2(1) of the Canadian Patent Act

62

D.

CANADA

63

(1) PRELIMINARY POINTS

63

(a) Section 55.2(1) and 55.2(2) of the Canadian Patent Act

64

(b) Subsequent Practice

66

(2) ARTICLE 27.1 OF THE TRIPS AGREEMENT

66

(3) ARTICLE 30 OF THE TRIPS AGREEMENT

70

(a) Articles 7 and 8 of the TRIPS Agreement

71

(b) Interpretation of the Conditions Enumerated in Article 30 for the

Grant of Exceptions to Rights Conferred

72

(i) The "prior use" exception

73

(ii) The "scientific/experimental use" exception

74

(c) Section 55.2(1) and 55.2(2) of the Canadian Patent Act

76

(i) "Limited"

76

(ii) "Do not unreasonably conflict with a normal exploitation

of the patent"

77

(iii) "Do not unreasonably prejudice the legitimate interests

of the patent owner, taking account of the legitimate interests

of third parties"

78

(4) EXCEPTION FOR A REGULATORY SUBMISSION TO A "COUNTRY

OTHER THAN CANADA"

79

(a) The Global Nature of the Pharmaceutical Industry

79

(b) The Global Need for Access to Essential Medicines

80

(c) The Context of the TRIPS Agreement

81

(d) Foreign Regulatory Approval and Article 30 of the TRIPS Agreement

82

(e) Creation of a Trade Barrier

83

(5) APPLICATION OF ARTICLE 33 OF THE TRIPS AGREEMENT

83

E.

EUROPEAN COMMUNITIES AND THEIR MEMBER STATES

83

(1) ARTICLE 27.1 OF THE TRIPS AGREEMENT

84

(2) ARTICLE 30 OF THE TRIPS AGREEMENT

84

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