No baseline for Canada/Europe patent and pharmaceutical trade negotiations

Author: Alexander Stack Professional Corporation |

So, last Friday - actually, two weeks ago Friday, where does the time go? - I participated in Foreign Affairs’ briefing phone call regarding the Canada-European free trade negotiations. Overall, the negotiators are reportedly making progress - “better than the two sides had anticipated.”

But, on the patent and pharmaceutical topics that I am interested in, the issues are described as “difficult”, with discussions ongoing but no particular progress. This is unsurprising - since there is no normative or other baseline on which to base discussions or converge on a position, the best the negotiators can do is to define positions (for example, agree on some alternative texts) and present these to the politicians, who will have to make the hard calls regarding trade-offs.

Cue the lobbying ;)

One reason that patent law and pharmaceuticals are a big deal in this negotiation - pharmaceuticals are one of Europe’s largest exports to Canada, at about $5 billion per year.

An interesting point is that it is the provinces that will have to deal with the fallout from any potential patent/pharmaceutical deal via their health care programs. The provinces are being actively consulted by the federal negotiators.

As noted in this article in the National Post, lobbyists are therefore busy lobbying the provincial governments as well as federal officals, and the innovative pharma companies have garnered some support from the Alberta, Quebec and New Brunswick governments.

But to get back to the point that there is no underlying normative baseline on these issues - focus on the reported Alberta position

Alberta decided to write a letter of support in July after the brand sector raised the issue with Premier Ed Stelmach, said George Samoil, director of operations in the Premier’s office.

He said the fact he had himself earlier been manager of government relations for AstraZeneca had nothing to do with the province’s stance.

Quebec and New Brunswick also sent letters of support to Tony Clement, the federal Industry Minister.

“It seems pretty straightforward that if Canada wants to be in line with one of its major trading partners, that its intellectual property protection policies be in line also,” Mr. Samoil said.

I have no problem with that as one underlying principle - heck, its one of the main points in my (shameless plug alert ;) ) book on international patent law cooperation coming out next year.

But I don't think it gets you anywhere in this case. Among other things, which major trading partner is Canada supposed to be getting in line with - the U.S. or Europe?

For example, the US has a "linkage system" - approval to market generic pharmaceuticals from a health perspective is linked to addressing potentially relevant patents held by the innovative or brand-name drug company.

In line with the US, Canada also has a similar linkage system. In fact, Canada arguably goes beyond the protection the US provides by allowing patent holders two shots at stopping generic competition - once via a PM(NOC) application and again via a patent infringement case - while the US system just has one patent infringement action.

Europe does not have this linkage protection for innovator pharma companies.

So, Europe must be satisfied with this - Canada is granting higher protection to patent-holders than Europe itself grants. Right?


Europe is pressing for an additional right of appeal to be added for patent-holders in the PM(NOC) process. Europe is asking Canada to agree in a treaty to strengthen patent protection in a system Europe doesn't adopt itself.

So much for reciprocity. ;)

In light of this, Mr. Samoli's statement of principle doesn't make very much sense as a baseline. Presumably, if Canada wanted to get in line with Europe, it would eliminate the PM(NOC) regulations altogether. But then it would be out of line with the US. There's no baseline here. Its just a non-reciprocal demand.

To put it another way - there really isn’t common ground on these issues - there is an EU position and a Canadian position. At some point there will be a trade-off on political grounds between EU and Canadian positions across a whole range of issues, including patent law and pharmaceuticals.

And that's about it.

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