Impact of U.S Supreme Court Patent Law on Canadian Intellectual Property and Regulatory Rights Landscape

Article excerpt

I. Introduction

Medical research, product development and public health regulation have been on the minds of Canadians lately, due in large part to an array of controversies over the safety and efficacy of marketed drugs (1) and the decision of the Supreme Court of Canada in Chaoulli regarding two-tiered medicine. (2) In addition, Canadians have by now experienced a number of situations where products were approved by the Therapeutic Products Directorate (TPD) of Health Canada, only to experience reduced or even denied access owing to cost considerations. (3) Moreover, the antennae of public interest scholars and commentators are being tweaked repeatedly over the increasing comfort level shown by the government with industry in relation to a wide array of issues relating to public health. These include, but are not limited to, the push by a number of agencies such as Industry Canada, Health Canada, the Canadian Institutes for Health Research (CIHR) and Genome Canada to engage in critical debate and policy development with industry over (1) the nature and degree of funding for medical research; (2) the importance of public-private partnerships in commercializing that research; (3) the extent of intellectual property and regulatory (IPR) rights attached to research products; and (4) the manner in which evidence of safety and efficacy is accrued and judged, given the present "front-loaded" approval regime and the potential "progressive licensing regime" for market authorization. (4) Finally, it has become commonplace in media discussions of national productivity and prosperity to focus on stimulating innovation in technology-heavy sectors, particularly in the life and medical sciences.

There are a number of reasons why patent jurisprudence handed down by the Supreme Court of the United States (SCOTUS) is important for scholars of Canadian health law and policy--or indeed for those of any other nation seeking to leverage its domestic science and technology base to enhance productivity in the global marketplace. These can be grouped into three broad categories, each of which revolves around a central focus on IPR rights. The fourth, dealing with a domestic "innovation ecology," and its relation to a global systems-based innovation ecology, is dealt with separately in a companion paper. (5)

From an economic perspective, Canada is one of the largest trading partners of the United States. (6) Even with a relatively small population of 32M and a GDP of U.S. SIT, total trade between nations was U.S. $500B in 2005. Added to this is the fact that the majority of successful Canadian small and medium sized enterprises (SMEs) in the biomedical industry typically have some form of venture capital funding from U.S. firms. (7) Thus, foreign sources of capital, particularly those from out largest and most valuable trading partner, continue to be important to the success of local firms. A related issue is that of economic efficiency for Canadian firms, particularly SMEs coming out of Canadian universities. This is because the costs of patenting and patent litigation escalate dramatically to the degree there are different standards of patentability in different jurisdictions. This concern extends to the growing desire by firms and government for regulatory harmony with the United States and European Union and for deregulation generally, which has become a topic of increasing debate over the last decade via the Smart Regulations policy (8)--and in a manner more focused on medical product development owing to assertive harmonization efforts by Health Canada and Industry Canada in the context of drug approval, public-private partnerships in medical research, and IPR rights associated with food and drugs legislation and regulation. (9)

A second set of issues revolves around the importance of IPR rights to a system of state-sponsored public health. IPR rights are responsible for the determination of whether and for how long products will be protected by patent and regulatory monopolies, and thus whether they are affordable and accessible to large swaths of the public, particularly those who are not shielded from monopoly costs via health care insurance. …