U.S.-Mexico-Canada Trade Agreement to Promote Innovation in Biotechnology

On September 30, 2018, the United States, Mexico, and Canada reached an agreement in principle to replace the North American Free Trade Agreement (NAFTA). The pending United States-Mexico-Canada Agreement (USMCA) includes provisions governing the protection and enforcement of intellectual property rights. This blog post will cover the IP provisions of the USMCA, particularly as applied to pharmaceuticals and biologics. It’s important to note that the provisions of the USMCA prescribe a minimum requirement, some of which is already met or surpassed by the individual countries’ respective patent regimes.

1. Data protection for biologics

Under Article 20.F.14, each country must provide, with respect “to the first marketing approval” of a product that “is or contains a biologic,” protection of undisclosed test or other data concerning the safety and efficacy of the product for “a period of at least ten years from the date of first marketing approval of that product.” This ten-year data exclusivity applies “at a minimum” to “a product that is produced using biotechnology processes and that is, or, alternatively, contains, a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein, or analogous product, for use in human beings for the prevention, treatment, or cure of a disease or condition.” Under Article 20.K.1, this provision need not be implemented until five years after the treaty is enforceable. These provisions mirror existing data exclusivity provisions found in the United States 2009 Biologics Price Competition and Innovation Act (BPCI Act), created to provide an abbreviated pathway for biological products.

2. Data protection of pharmaceuticals

Under Article 20.F.13, each country must provide, with respect to new pharmaceutical products, protection of undisclosed test or other data concerning the safety and efficacy of the product “for at least five years from the date of marketing approval” of the new product. Moreover, each country must provide protection of “at least three years with respect to new clinical information submitted as required in support of a marketing approval of a previously approved pharmaceutical product covering a new indication, new formulation or new method of administration.” Under Article 20.K.1, this provision need not be implemented until five years after the treaty enters into force. These provisions mirror existing data exclusivity provisions found in the United States 1984 “Hatch-Waxman Act” (as amended), which sets forth provisions for approval of new and abbreviated new drug applications.

3. Patent term extension

Under Article 20.F.9, each country “shall make best efforts to process patent applications in an efficient and timely manner, with a view to avoiding unreasonable or unnecessary delays.” In the event of unreasonable delays in issuing a patent, the country “shall provide the means to, and at the request of the patent owner shall, adjust the term of the patent to compensate for such delays.” An unreasonable delay, at minimum, includes “a delay in the issuance of a patent of more than five years from the date of filing of the application…, or three years after a request for examination of the application has been made, whichever is later.” Under the USMCA, this provision need not be implemented until 4.5 years after the treaty enters into force and will apply only to applications filed after that date or two years after the signing of the agreement, whichever is later.

The United States Senate and House of Representatives have yet to approve the agreement. Although the IP provisions need not be implemented until years after the treaty is approved, biotech innovators practicing in Mexico and Canada stand to benefit from the pending treaty.

Gibbons will continue to monitor developments relating to the USMCA, and provide updates as applicable. Please contact the authors for additional information.

Tryn T. Stimart, a Director in the Gibbons Intellectual Property Department, and Jean E. Dassie, an Associate in the Gibbons Intellectual Property Department, authored this post.
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