CUSMA Consultations
Global Affairs Canada
Trade Negotiations – North America
John G. Diefenbaker Building
111 Sussex Drive
Ottawa, Ontario
K1N 1J1
BIOTECanada strongly supports the Canada-United States-Mexico Agreement (CUSMA) and the role it plays in creating strong and stable economies that support the creation and building of companies. Accordingly, the industry urges the Government of Canada to commit to strengthening and deepening economic and commercial relationships with its North American partners. To ensure CUSMA remains effective in an evolving economic landscape, it is vital that the Government of Canada fulfill its existing commitments under CUSMA. Canada is currently not in compliance with its CUSMA obligations. Specifically, the CUSMA chapter on Intellectual Property includes a requirement to provide patent term adjustment (PTA) to compensate patentees for unreasonable delays by the Canadian Intellectual Property Office (CIPO) in the processing of patent applications.
The government has proposed a PTA implementation framework that doesn’t meet the intended benefits for patentees as set out in CUSMA. Moreover, Canada’s approach differs significantly from the approach taken by CUSMA signatories. Accordingly, the industry strongly urges that remedial measures be taken in time for the required implementation timeline of January 1st, 2025, and in advance of the 2026 CUSMA joint review.
BIOTECanada is the national Association representing Canada’s biotech sector. The more than 230 members of BIOTECanada are representative of the Canadian biotechnology ecosystem, including emerging research-focused small and medium sized enterprises, universities, investors, incubator, and accelerator organizations, as well as multi-national companies. Importantly, in the context of the CUSMA, the membership includes many early-stage patentees and the investors/partners to those patentees. These companies are producing the next generation of health care solutions and biologic based medicines, including vaccines, therapies for rare diseases, cell and gene therapies, and many new dynamic technologies holding great promise for the future of healthcare. A stable and competitive patent protection policy environment is essential to successfully scale their companies and fulfill the promise of their innovation.
For an early-stage biotech company, the intellectual property (the patent) of a biotech company is the very core of the company. The mechanism of action, molecule, or process is the intellectual property protected by the patent. Importantly, translating that IP into where it is being used by patients requires significant time and investment capital. The complexity of the IP and time needed to take it from the lab into commercial use correspondingly requires both significant investment capital but also investors who have the knowledge and ability to invest in these complex companies over the extended period required to undertake clinical work and meet regulatory requirements. For this reason, biotech investors are unique, rare, and are scouting globally for biotech investment opportunities. These investors can be traditional venture capital type investors but are also frequently large global pharma or biotech companies. Regardless the type, investors will invest where they see the greatest opportunities and where they feel their investments will be safe. A strong and competitive IP policy regime is fundamental to providing this safe space for global investors. In this context, to remain an investment destination, Canada must at a minimum ensure that they do not fall out of step with other like-minded jurisdictions. Being uncompetitive in this regard will reduce the availability of investment and correspondingly force companies to take their IP and innovations to other jurisdictions that are protective and respectful of IP rights and patent protection.
Accordingly, BIOTECanada strongly recommends the Government of Canada take immediate steps to amend its proposed PTA framework to ensure it is compliant with its trade obligations and that patentees can benefit in a meaningful way from the patent term adjustment provision as required under CUSMA that is consistent with the letter and the spirit of our CUSMA obligations.
Sincerely,
Andrew Casey