The Patent Policy That Could Harm Canada’s Patients

All investors crave certainty: certainty in product performance, in labor costs, in market climate. For investors in innovative technologies, including medical technologies, there is a fundamental need for certainty.

In short, if an investor company is going to risk billions of dollars and years of manpower to create an innovative medicine, its ownership over that creation for the standard twenty years must be virtually guaranteed. And a country’s patent system can provide just that: certainty and exclusivity for products unique enough and innovative enough to meet a high bar. Granting a patent is essentially a government giving its word that a product will be protected.

Unfortunately, in the Canadian innovation environment, the only guarantee is that there are no guarantees.

Since 2005, the Canadian government has used a relatively new policy known as the “promise utility doctrine” – or the promise doctrine – to undermine patents. As the U.S. Chamber’s Patrick Kilbride has pointed out, Canada’s use of the promise doctrine has discouraged future research and development, weakened its intellectual property (IP) environment, violated international patent standards, and betrayed its own budget goals to boost Canadian innovation.

Under the promise doctrine’s requirements, a new medicine isn’t considered useful unless it performs in exactly the capacity its creator promised it would perform within the patent application. To some, that might sound reasonable at first glance. But consider this: Canada is revoking patent rights from companies if a medicine turns out to be used for anything other than what was described in its original patent application, no matter how innovative, cutting-edge or effective a medicine might be in treating patients.

The consequence: Canadian judges are rescinding patents from medicines that are helping patients and saving lives. They’re going back on their word, reneging on the sacred patent contract on which so many innovators rely.

In particular, Canadian judges recently used the promise doctrine to revoke patents from two of Eli Lilly’s innovative medicines – long after both medicines had been approved by the Canadian health regulatory agency as safe and effective and long after both medicines had been prescribed to patients.

Lilly is far from the only victim of Canada’s promise doctrine; at least 25 additional medical patents have been invalidated in Canada to date.

What’s worse is how the policy has been used to take products out of the hands of the companies that developed cures only to put them in the hands of others. Once the patents of innovative companies have been revoked, domestic generic companies have swooped in – some of which were accused of actually lobbying to revoke the patents – and marketed the very same products.

Innovative pharmaceutical companies are now wary to develop new drugs for sale in Canada, meaning Canadian patients lose access to new lifesaving treatments. According to the Pharmaceutical Research and Manufacturers of America, the number of clinical trials conducted in Canada has declined by 21 percent since the institution of the promise doctrine.

The promise doctrine is a matter of life and death for medical innovation in Canada. Ultimately, no one stands to lose more than Canadian patients. For these reasons, we urge the Canadian government to act swiftly act to address the damaging promise doctrine before it’s too late.

Laura Crist is the director of strategy and communications for the U.S. Chamber of Commerce’s Global Intellectual Property Center.

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