Life Sciences

In a recent Federal Court decision, Justice Fothergill dismissed AbbVie’s applications for judicial review of the following decisions of the Minister of Health (the “Minister”): that JAMP was not a “second person” for the purposes of s 5(1) of the PM(NOC) Regulations; and to issue NOCs to JAMP for its SIMLANDI Presentations. Background AbbVie's drug HUMIRA first received approval in Canada in 2004 as a 50 mg/mL concentration of adalimumab. HUMIRA is widely used to treat numerous medical conditions including rheumatoid arthritis, adult and pediatric Crohn’s disease, and psoriasis. In 2016, high-concentration (100 mg/mL) HUMIRA was approved in Canada in a 40 mg/0.4 mL pre-filled syringe (DIN 02458349), and as a 40 mg/0.4 mL pre-filled auto-injector pen (DIN 02458357). In fact, AbbVie has marketing authorization in Canada for a variety of concentrations, but is actively selling only: the original (lower) 50 mg/mL concentration in 40 mg/0.8 mL strengths in both auto-injector pen and pre-filled syringe presentations, and the newer (higher) 100 mg/mL concentration in a 20 mg/0.2 mL pre-filled syringe. In December 2020 or January 2021, JAMP sought regulatory approval in Canada for its SIMLANDI drug, a “biosimilar” of AbbVie’s HUMIRA, in some of the strengths not actively sold by AbbVie (i.e., a 40 mg/0.4 mL pre-filled syringe, a 40 mg/0.4 mL auto-injector pen, and an 80 mg/0.8 mL pre-filled syringe). In its NDS, JAMP relied on three HUMIRA drug products having the same exact dosage forms, strengths, and routes of administration as the drugs to be marketed as SIMLANDI. None of these formulations of HUMIRA was marketed in Canada by AbbVie at the time JAMP submitted its NDS. Hereinafter, these drugs (DINs 02458349, 02458357, and 02466872) are referred to as the “referenced HUMIRA products”. In its correspondence with Health Canada’s Office of Submissions and Intellectual Property (“OSIP”), and after being told that their NDS was incomplete, JAMP submitted Form Vs on a “without prejudice” basis, yet took the position that it was not required to comply with s 5(1) of the PM(NOC) Regulations, as they were not a “second person” as defined therein because the referenced HUMIRA products had not been marketed in Canada for several years and therefore they were not drugs “marketed in Canada” as required by s 5(1). 5 (1) If a second person files a submission for a notice of compliance in respect of a drug and the submission directly or indirectly compares the drug with, or makes reference to, another drug marketed in Canada under a notice of compliance issued to a first person and in respect of which a patent list has been submitted, the second person shall include in the submission the required statements or allegations set out in subsection (2.1). [Emphasis ours] Health Canada’s Office of Patented Medicines and Liaison (“OPML”) later advised AbbVie of its preliminary view that the referenced HUMIRA products were indeed not currently being marketed in Canada. Therefore, the referenced HUMIRA products did not trigger s 5(1) of the PM(NOC) Regulations. However, AbbVie argued that JAMP nevertheless made reference to a drug product they marketed in Canada, thus falling within s 5(1) of the PM(NOC) Regulations. Namely, AbbVie argued that JAMP SIMLANDI indirectly made reference to their HUMIRA 20 mg/0.2 mL pre-filled syringe because both products had the same drug concentration (i.e., 100 mg/mL). Hence, the issue was to determine whether a second person seeking approval for a drug with a specific dosage strength could be considered to indirectly refer to a “drug marketed in Canada” with another dosage strength but having the same concentration. The Minister’s Decision After reviewing submissions from both parties, the OPML issued its final decision on December 23, 2021, in which it confirmed its preliminary determination that JAMP was not a second person for the purposes of s 5(1) of the PM(NOC) Regulations, and the corresponding obligations did not arise unless the second person’s NDS “directly or indirectly compares the drug with, or reference” to “another drug marketed in Canada”. The OPML found that “another drug marketed in Canada” must be interpreted to be specific with respect to strength, dosage form, and route of administration (i.e., it is DIN-specific).” The Minister found that the “indirect” comparison of s 5(1) did not expand the scope of the drugs for which a second person must address the patents listed on the Patent Register beyond the DIN-specific “another drug”. Hence, the HUMIRA 20 mg/0.2 mL pre-filled syringe marketed by AbbVie was not a proper reference product for JAMP’s 40 mg/0.4 mL pre-filled syringe, 40 mg/0.4 mL auto-injector pen, and 80 mg/0.8 mL pre-filled syringe. Accordingly, on January 5, 2022, the Minister issued NOCs to JAMP and JAMP launched its products on April 13, 2022. Subsequently, AbbVie sought judicial review of these two related decisions of the Minister, the result of which is the presently-discussed Federal Court decision. Ultimately, the Federal Court agreed with the Minister. Specifically, the Federal Court concluded that inter alia the following findings by the Minister were reasonable: that the term “another drug” in s 5(1) of the PM(NOC) Regulations is confined to the drug products identified by Health Canada, and that these products must have an identical dosage form, strength, and route of administration to the drug product of the second person. that s 5(1) of the PM(NOC) Regulations applies only where a second person files a submission for an NOC that (1) directly or indirectly compares its drug, or makes reference to “another drug”, (2) that other drug is marketed in Canada under an NOC issued to a first person, and (3) that other drug is a drug in respect of which the first person has submitted a patent list; that a drug that is not marketed is not eligible for the protections under the PM(NOC) Regulations; and that JAMP was not a second person under s 5(1) for the simple reason that AbbVie was not marketing in Canada the HUMIRA drugs that JAMP relied on for its NDS. Conclusion The Minister's decisions, as well as the Federal Court's finding that they were reasonable (pending any appeal), emphasizes one of the statutory objectives of the PM(NOC) Regulations, namely to provide a patent enforcement mechanism only in relation to products that are in fact available to Canadians. This also clarifies certain practical effects of this statutory objective, namely that the enforcement mechanism of the PM(NOC) Regulations is only available to an innovator that markets its innovative drug in Canada, and that s 5(1) of the PM(NOC) Regulations applies only to reference drug products that are identical down to a DIN-specific level with the drug to be approved. However, this does not mean that innovators are entirely without recourse when it comes to drugs they are not marketing in Canada. Under such circumstances, while innovators may not be able to utilize the PMNOC Regulations to prevent a NOC from being issued to a competitor, it can nonetheless commence normal patent infringement proceedings in Federal Court.   A copy of this decision, AbbVie Corporation v. Canada (Health), 2022 FC 1209, is available here.   Our intellectual property team would be happy to help you with any questions you may have regarding the PM(NOC) Regulations.

Natural products play an important role in pharmaceutical innovation. They are active components in many medicines. For example, nearly half of the small molecules used to treat cancer are natural products or directly derived from natural products.1 They are also components of vaccines. The pharmaceutical industry is constantly seeking access to natural products and the traditional knowledge associated with them. These include plants (roots, bark, leaves), micro-organisms (terrestrial and marine), toxins, venoms and other natural biological agents.  In the current race to develop a drug and/or vaccine against COVID-19, natural products or derivatives are surely worth considering as a starting point. The harvesting of natural resources for use by the pharmaceutical industry is usually carried out by partners such as traditional healers, farmers, academics or businesses. Thus, the process usually involves several stakeholders, including providers and users of natural resources and associated traditional knowledge, which are often located in different parts of the world. Fair and equitable collaboration in such a context requires well-developed collaboration agreements and access and benefit-sharing agreements. Various instruments of international law encourage the signing of such agreements, including: The Convention on Biological Diversity (CBD), which recognizes the sovereignty of states over their natural resources. The CBD sets out fundamental principles to regulate access and benefit-sharing, including that access to natural resources, their use and the sharing of benefits arising from them should be based on “mutually agreed terms.”2 The Nagoya Protocol covers the sharing of the results of research and development, the payment of royalties and joint ownership of intellectual property (IP) rights.3 The World Intellectual Property Organization (WIPO) has developed a guide to assist providers and users of natural resources and associated traditional knowledge in the negotiation and establishment of IP clauses in access and benefit-sharing agreements. The guide describes how IP rights can be exploited and managed to achieve the desired objectives, and how the benefits arising from the use can be created and shared in a fair and equitable manner, thereby promoting the conservation and use of biodiversity.4 Furthermore, research and development activities in the pharmaceutical industry are known to be associated with high risk and high investment costs. Indeed, it is widely recognized that the process to develop a drug can take up to 15 years, only about 16% of molecules entering the clinical phase will be approved, and only 1 in 5 marketed drugs generates revenues equal to or greater than the research and development costs involved.5  In the pharmaceutical industry, intellectual property, especially patents and data protection, is thus considered an essential instrument for securing the economic benefits of an innovation. Efforts in this intense period of development of a drug/vaccine against COVID-19 are of course focused on the technical aspects directly related to research and development. Nevertheless, those involved should not lose sight of the importance of collaboration agreements and access and benefit-sharing agreements.  When it comes to natural products in particular, concluding agreements with solid clauses on possible innovations and patents is key for providers of natural resources and traditional knowledge. The same applies to users of these resources and knowledge. We explore some of these clauses below. Initial consideration – deciding whether or not to patent Factors to be considered include the nature and purpose of the project, the expected value of the project results, business objectives, and the ability to manage acquired patents. The decision to apply for a patent, or not to do so, depends largely on whether the benefits of patent protection will outweigh the cost of obtaining it. Confidentiality What information must be kept confidential to ensure that its disclosure does not jeopardize the chances of obtaining patent protection? Agreements should include clear clauses on information management (publication of scientific articles, presentations at conferences, press releases, etc.). The parties may agree to make public disclosures only after mutual approval and the filing of a patent application. Some jurisdictions (Canada, United States, Japan) offer a grace period after a disclosure of the innovation, but for other jurisdictions (Europe, China) there is virtually no such grace period. Where patent protection is desired, the US Provisional Patent Application is a key tool for managing the confidentiality of an innovation under development. Patentability of research and development results While a natural substance as such generally cannot be patented, some results derived from the use of natural resource and associated traditional knowledge can be protected by patent, provided that the innovation is new, useful and not obvious. Parties obtaining the patents Should a general principle applicable to all innovations resulting from the use of natural resources obtained from providers be adopted? Should users have the obligation of reporting all developed innovations? Should they have the obligation of agreeing on the terms for obtaining a patent? Countries where patent protection can be obtained Countries where patents can be obtained are determined by taking into account key markets, strategic locations for drug manufacturing and other considerations, such as the country of origin of natural resources and the traditional knowledge associated to them. Depending on the number of countries ultimately chosen, a strategy involving a Patent Cooperation Treaty (PCT) international application could be considered.  Inventors It is important to name the “real” inventors in a patent application—the validity of the future patent could depend on this. Those who participated only in collecting natural resources or verifying use results may not qualify as inventors. The extent of scientific contribution is one of the main factors to consider. Ownership of future patents The Nagoya Protocol mentions joint (provider-user) ownership of patents as a possible benefit-sharing mechanism. However, companies in the pharmaceutical industry are not keen on this practice. They try to avoid the complications and legal uncertainties associated with joint ownership. Although most countries, including Canada, require the co-owner of a patent to obtain the consent of the other co-owner in order to grant a license, this is not the case in the United States, where a co-owner can grant a license without the consent of the other party and without having to give any justification with respect to royalties or other payments. One commonly adopted solution allows the user to retain ownership of the patent while the provider is granted a royalty-free license. However, some providers consider this option unfair because the patent is not co-owned. In cases of joint ownership, it will of course be necessary to determine how responsibilities will be divided between the provider and user. The parties must decide who will be responsible for filing the patent application and for maintaining the continuing effect of the patent, and who will provide the resources necessary for performing these actions. Patent exploitation What is the most appropriate model for exploiting a patent and disseminating innovation? Which among a license, assignment or joint venture is preferable? Who will negotiate and approve the terms of any subsequent patent exploitation agreement? Should licenses be granted free of charge, or should preferential conditions be granted to entities in the provider’s country or to other partners? Benefit-sharing How, when and between whom will the monetary or non-monetary benefits arising from the commercial exploitation of a patent be distributed? What benefit-sharing mechanisms can be applied in this case? Management of conflicts between provider and user It is important to determine what jurisdiction will apply and how possible conflicts will be resolved (mediation, binding or non-binding arbitration, civil action, etc.). Disputes Only a patent owner can sue for infringement. If the patent is owned only by either the provider or the user, the other party’s cooperation can be negotiated. End of collaboration A collaboration can end for a number of reasons, for example, as a result of problems with the flow of natural resources (volume, quality). What happens to acquired patents then? Conclusion Providers and users of natural resources and associated traditional knowledge should carefully consider their relationship ahead of time. It is very likely that research and development using natural resources will lead to patentable innovations. If there are no plans for patent co-ownership, it is important to include relevant clauses in agreements that ensure a fair and equitable distribution of monetary or non-monetary benefits resulting from the commercial exploitation of patents.   Newman D. et Cragg G., “Natural products as sources of new drugs over 30 years from 1981 to 2014”, Journal of Natural Products (2016), 79.3, 629-661. Convention on Biological Diversity. Nagoya Protocol. World Intellectual Property Organization (WIPO) (2018), A Guide to Intellectual Property Issues in Access and Benefit-sharing Agreements. Report of the Meeting of the Group of Legal and Technical Experts on Concepts, Terms, Working Definitions and Sectoral Approaches (UNEP/CBD/WG-ABS/7/2).

The March 22, 2017 Budget of the Government of Canada, through its “Innovation and Skills Plan” (http://www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf) mentions that Canadian academic and research leadership in artificial intelligence will be translated into a more innovative economy and increased economic growth. The 2017 Budget proposes to provide renewed and enhanced funding of $35 million over five years, beginning in 2017–2018 to the Canadian Institute for Advanced Research (CIFAR) which connects Canadian researchers with collaborative research networks led by eminent Canadian and international researchers on topics including artificial intelligence and deep learning. These measures are in addition to a number of interesting tax measures that support the artificial intelligence sector at both the federal and provincial levels. In Canada and in Québec, the Scientific Research and Experimental Development (SR&ED) Program provides a twofold benefit: SR&ED expenses are deductible from income for tax purposes and a SR&ED investment tax credit (ITC) for SR&ED is available to reduce income tax. In some cases, the remaining ITC can be refunded. In Québec, a refundable tax credit is also available for the development of e-business, where a corporation mainly operates in the field of computer system design or that of software edition and its activities are carried out in an establishment located in Québec. This 2017 Budget aims to improve the competitive and strategic advantage of Canada in the field of artificial intelligence, and, therefore, that of Montréal, a city already enjoying an international reputation in this field. It recognises that artificial intelligence, despite the debates over ethical issues that currently stir up passions within the international community, could help generate strong economic growth, by improving the way in which we produce goods, deliver services and tackle all kinds of social challenges. The Budget also adds that artificial intelligence “opens up possibilities across many sectors, from agriculture to financial services, creating opportunities for companies of all sizes, whether technology start-ups or Canada’s largest financial institutions”. This influence of Canada on the international scene cannot be achieved without government supporting research programs and our universities contributing their expertise. This Budget is therefore a step in the right direction to ensure that all the activities related to artificial intelligence, from R&D to marketing, as well as design and distributions, remain here in Canada. The 2017 budget provides $125 million to launch a Pan-Canadian Artificial Intelligence Strategy for research and talent to promote collaboration between Canada’s main centres of expertise and reinforce Canada’s position as a leading destination for companies seeking to invest in artificial intelligence and innovation. Lavery Legal Lab on Artificial Intelligence (L3AI) We anticipate that within a few years, all companies, businesses and organizations, in every sector and industry, will use some form of artificial intelligence in their day-to-day operations to improve productivity or efficiency, ensure better quality control, conquer new markets and customers, implement new marketing strategies, as well as improve processes, automation and marketing or the profitability of operations. For this reason, Lavery created the Lavery Legal Lab on Artificial Intelligence (L3AI) to analyze and monitor recent and anticipated developments in artificial intelligence from a legal perspective. Our Lab is interested in all projects pertaining to artificial intelligence (AI) and their legal peculiarities, particularly the various branches and applications of artificial intelligence which will rapidly appear in companies and industries. The development of artificial intelligence, through a broad spectrum of branches and applications, will also have an impact on many legal sectors and practices, from intellectual property to protection of personal information, including corporate and business integrity and all fields of business law. In our following publications, the members of our Lavery Legal Lab on Artificial Intelligence (L3AI) will more specifically analyze certain applications of artificial intelligence in various sectors and industries.

On Thursday, November 7, 2013, the United States Food and Drug Administration (FDA) announced measures to definitively eliminate all the artificial trans fats from processed products in the United States.The purpose of the proposal, which is released for public comments for a 60-day period, is to remove trans fats from the “generally recognized as safe” (“GRAS”) category, which would allow these products to be commonly used in food products.If the proposal was accepted, businesses which would want to use artificial trans fats in their formulas would be required to scientifically prove that such product can be consumed without problems, which would be likely hard to achieve since most scientific studies conclude otherwise.This decision of the FDA occurs after several decades of debates concerning the health hazard posed by adding artificial trans fats to food products, particularly in fried foods, bakery products and common items which are found in our cupboards, such as margarine.The proposal would not apply to trans fats which occur naturally in the food chain.Although many major food processors already removed artificial trans fats from their product formulas or are currently in the process of doing so, these ingredients are still used. Food processors would be well-advised to closely monitor the developments respecting this issue to avoid them having an impact on their exports to the United States.