Law Times

Law timeS • September 21, 2009 FOCUS PAGE 9 Drug makers score victory in data protection case B BY JULIUS MELNITZER For Law Times rand-name drug makers won a big victory in July when the Federal Court upheld data protection regula- tions that shield information submitted for regulatory ap- proval of new drugs. "Striking out the regulations would have been the pot of gold at the end of the rainbow for the generics because the infor- mation would have given them more ammunition to attack the innovators' pat- ents," says Anthony Creber of Gowling Lafl eur Henderson LLP in Ottawa. Th e regulation took eff ect in 2006 to bring Canada into compliance with its interna- tional obligations to protect brand- name companies' data under the North American Free Trade Agree- ment and the World Trade Or- ganization's Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS). Th e regulation gives brand companies' data eight years of protection from the date they fi le their fi rst notice of compli- ance for a new drug with the possibility of a six-month exten- sion. During that time, competi- tors can't compare their products to the innovative drug in order to obtain approval, which eff ec- tively stops them from using the brand companies' data to their advantage in seeking approval for their own drugs. Th e Canadian Generic Phar- maceutical Association, repre- sented by Edward Hore of Toron- to's Hazzard & Hore, and Apotex Inc., represented by Harry Ra- domski of Toronto's Goodmans LLP, challenged the regulations as unconstitutional in separate applications that were eventually heard together. Th e case centred on the federal government's juris- diction to enact the regulations. Th e court granted intervenor status in the generic association's proceedings to Canada's Research- Based Pharmaceutical Compa- nies, represented by Gowlings' Martin Mason, and to Eli Lilly Canada and Co., represented by Gowlings' Richard Dearden, in the Apotex matter. Frederick Woyiwada of Jus- tice Canada, who acted for the federal government, argued that the generic association did not have public-interest standing that would allow it intervenor status. But Justice Leonard Man- damin ruled the organization demonstrated there was a seri- ous issue to be tried, that it had a direct or genuine interest in the matter, and that there was no other reasonable or eff ective way to bring the issue to court despite the fact that Apotex, as a private litigant, was raising the matter. "At the time the [generic association] commenced its application, Apotex had not yet fi led its application," Mandamin noted. "In my view, at the time the [generic association] com- menced its application, it was en- titled to public-interest standing. "Since Canada has not pro- vided any jurisprudence that sets out the proposition that a party that was entitled to stand- ing at the commencement of its application loses that standing because another party com- mences an application on the same issue, I see no reason to decide the [generic association] lost that public interest standing when Apotex com- menced its own ap- plication." On the substan- issues, Man- ruled that tive damin the regulation could not be upheld un- der the federal Anthony Creber criminal-law power. But it was consti- tutional under the federal trade and commerce power as "integral to the operation of an overall scheme concerning the marketing of drugs" in Canada. "I have found the dominant feature of the data protection reg- ulation is the balancing of com- mercial considerations between the protection of an innovator drug manufacturer's investments . . . for a new drug and the even- tual . . . approval of a generic drug company's [submission] for a lower-cost generic copy of the new drug," Mandamin wrote. Th e regulation had a national dimension, he ruled. "It was enacted in compliance with NAFTA and TRIPS," Man- damin noted. "NAFTA involves Canada, the United States, and Mexico. Th e TRIPS agreement involves many countries around the world, most of which par- ticipate to some degree or other in the TRIPS scheme for the protection of new drug research investment through market ex- clusivity mechanisms." As such, the regulation related to Canada's ability to participate in world trade. "Th e data protection regula- tion comes within the second branch of the s. 91(2) regulation of trade and commerce power as this provision meets the criteria set out by the Supreme Court of Canada in National City Leasing for being a matter of genuine national economic concern," Mandamin wrote. "Th e data protection regula- tion rounds out the valid federal drug regulatory scheme, has a national economic dimension because of Canada's obligations pursuant to international trade agreements NAFTA and TRIPS, and is a matter which the prov- inces cannot address legislatively, individually or collectively." Mandamin also dismissed the argument that the regula- tion was beyond the regulatory power of the federal cabinet. "Th e data protection reg- ulation is not beyond the regulatory power of the gover- nor in council in that the regu- lation is properly concerned with data protection for inno- vator drug companies which are required to provide confi dential, commercially valuable data . . . to introduce new drugs to the Canadian market," he concluded. "Th is is consistent with the requirement in the NAFTA and TRIPS provisions." Th e argument that the regula- tion constituted an improper del- egation of power also failed. "Finally, the data protec- the governor in LT When it comes to IP in Canada, We're Well Read Ridout & Maybee LLP: Editors of the Canadian Patent Reporter it all starts somewhere www.ridoutmaybee.com tion regulation is a permissible sub-delegation by Parliament to council since the delegated regulatory power is constrained by the limitations in the NAFTA and TRIPS agreements," Man- damin concluded. 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