IP overview 2005

Marijo Coates and Hung Nguyen of Deeth Williams Wall assess important changes in Canadian intellectual property law, with a particular focus on how developments fit into the multinational arena.

Throughout 2005, the Canadian government has focused on revision and harmonization of its intellectual property (IP) laws. The courts have also played an active role in re-shaping the landscape of Canadian patent and trade-mark practices.

Patents

Legislative changes

Effective as of 1 June 2005, the Patent Act allows Canadian pharmaceutical manufacturers, often generic drug companies, under a compulsory licensing scheme, to produce and export lower-priced patented drugs to eligible beneficiary countries affected by diseases such as AIDS, malaria and tuberculosis. This amendment provides a limited exception to patent infringement.

The Canadian government did this in response to requests from Africa for medical assistance.

The Patent Act was also amended this year to prevent thousands of patents from being held invalid. The amendment was made in response to a series of Canadian court decisions that found patents void for incorrect ‘small entity’ payments. In 2006 patent owners will be able to correct this problem by making ‘top-up’ payments.

Case law developments

The Supreme Court of Canada had previously ruled in the famous ‘Harvard Mouse’ case that higher life forms, such as plants and animals, are not patentable in Canada. The Supreme Court recently issued another landmark decision, which distinguished its previous ruling. In a 5:4 split decision, the majority of the Court decided in Monsanto v. Schmeiser that, while whole plants themselves are not patentable, the genes and modified cells that make up those plants are patentable subject matter. Consequently, cultivation of plants that contain patented genes and cells, without a licence, will constitute patent infringement. This results in the patentee indirectly obtaining patent protection over whole plants.

This gives hope to companies wishing to protect some life forms in Canada. It appears that at least plants are open to patent protection. This moves Canada towards a more moderate position for the protection of higher life forms.

Trade-marks

Legislative changes

The Canadian Intellectual Property Office (CIPO) has been consulting with the public regarding proposals to amend the Trade-marks Act and to consider accession to treaties such as the Madrid Protocol and the Trademark Law Treaty (TLT). The last significant amendment to the Trade-marks Act occurred over a decade ago.

By way of background, the Madrid Protocol provides a mechanism for obtaining multi-national registration rights through a centralised system. The TLT simplifies and standardises trade-mark office procedures for registering and renewing trade-marks.

Improvements to the Trade-marks Act include allowing for registration of non-traditional marks such as sounds, tastes and scents. This change will bring Canada’s registration system in line with the US and other nations.

CIPO is putting together specific task forces to review these issues before tabling draft legislation. It will likely seek additional public involvement during this process.

Case law developments

Canadian trade-mark examination practice was significantly changed this year as a result of the decision in Procureur Général du Canada v Effigi Inc. (Effigi).

In Effigi, the Federal Court of Appeal held that Canada is a ‘first-to-file’ system at the examination stage. This means that during the examination of competing applications, the examiner must approve the application with the earlier filing or priority date, regardless of any claimed date of first use. This is a significant departure from past practice. According to the Court, the issue of entitlement based on use in Canada should be left for opposition proceedings.

Although the Effigi decision has brought Canadian prosecution practice more in step with other ‘first-to-file’ countries, including the US, it does not remove the applicant’s obligation to accurately identify the date of first use in Canada when filing. Failure to correctly claim use in Canada as a basis at the time of filing may invalidate an application or subsequent registration. In other words, while it is critical for an applicant to file as quickly as possible in Canada, the applicant must also ensure that it claims the correct date of use in its application.

Food and drug regulatory law

Natural health products

In sharp contrast to the US, natural health dietary supplements, vitamins, homeopathic remedies and traditional medicines (NHPs) must be licensed before being sold in Canada. Although the licensing requirement has been law since 2004, Health Canada has adopted a policy in which it has decided to refrain, at least for the time being, from taking enforcement actions against lower risk products.

By 1 January 2006 all Canadian factories that manufacture, import, package or label NHPs sold in Canada will be required to be licensed by Health Canada. Foreign manufacturers will be exempt from this requirement.

We expect there to be a flurry of activity in the health regulatory arena in Canada in 2006.