RESTRICTED
WORLD TRADE IP/C/W/72
23May1997
ORGANIZATION(97-2166)
Original: English Council forTrade-Related Aspects
ofIntellectual Property Rights
REVIEW OFLEGISLATION INTHE FIELDS OFPATENTS, LAYOUT-DESIGNS
(TOPOGRAPHIES) OFINTEGRATED CIRCUITS, PROTECTION OF
UNDISCLOSED INFORMATION AND CONTROL OF
ANTI-COMPETITIVE PRACTICES INCONTRACTUAL LICENCES
Replies from Canada toquestions posed bytheEuropean Communities
andtheirMember States, Japan andtheUnited States
Thefollowing communication, dated 15May1997, hasbeenreceived from thePermanent
Mission ofCanada.
_______________
I. REPLIESTOQUESTIONSPOSEDBYTHEEUROPEANCOMMUNITIESANDTHEIR
MEMBER STATES
Patents
1. Inthecircumstances where theCommissioner ofPatents exercises thepower toauthorize use
ofthesubject matter ofapatent bythirdparties without theauthorization oftherightholder, arethere
anyconditions applicable totheexercise ofthatdiscretion which meettheterms ofTRIPS, Article 31,
especially paragraphs (b),(c)firsthalfsentence, (d)and(e)?
InCanada, Section 65ofthePatent Actallows foranapplication totheCommissioner ofPatents
where therehasallegedly beenanabuse oftheexclusive rights contained inapatent. TheCommissioner
maygrant licences forthepurpose ofremedying suchabuses upon"such terms astheCommissioner
maythink expedient" (Section 66).Byadministrative practice, therequirements oftheabove Article
would betaken intoaccount bytheCommissioner insettling suchterms. Section 19ofthePatent
Actallows fortheGovernment ofCanada orofaprovince toapply totheCommissioner forauthorization
touseapatented invention, upon terms tobesettled bytheCommissioner ofPatents, inaccordance
withSections 19,and19.1to19.3oftheAct.Theprinciples andconditions contained inthose sections
areconsistent withTRIPS Article 31.
2. Does thePatent Act,R.S.C. 1985, asamended, contain anyprovision toensure thatinthe
caseoftheCommissioner ofPatents exercising thepower toauthorize anypublic, non-commercial
useofapatent byagovernment without theauthorization oftherightholder, theright holder shall
beinformed promptly where thegovernment without making apatent search knows orhasdemonstrable
grounds toknow thatapatent isorwillbeusedbyorforthegovernment (Article 31(b) TRIPS)?
Subsection 19(3) ofthePatent Actrequires theCommissioner tonotify thepatentee ofany
useofthepatented invention thatisauthorized under thatsection.IP/C/W/72
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3. Does thePlant Breeders 'Rights Act,S.C.1990, c.20extend toallMembers ofTRIPS as
required byTRIPS? Please explain.
Article 3.1ofTRIPS requires national treatment fornationals ofother WTO Members with
regard totheprotection ofintellectual property. TRIPS Article 1.2provides that"[f]or thepurposes
ofthisAgreement, theterm"intellectual property" refers toallcategories ofintellectual property that
arethesubject ofSection 1through 7ofPartII".Plant breeders rights isnotacategory ofintellectual
property listed inTRIPS.
4. Could theGovernment ofCanada clarify whether andhowmicro-organisms arepatented
(Article 27.3(b) TRIPS)?
Living matter orlower lifeforms which areessentially unicellular incomposition (e.g.bacteria,
many fungi (including yeasts), cellsinculture, transformed celllinesandhybridomas) arepatentable
inCanada provided thattheyarenew, useful andinventive. Aprocess toproduce orwhich utilizes
these organisms mayalsobepatentable.
5. Does thePatent Act,R.S.C. 1985, asamended, expressly confer therights toofferforsale
orimport aproduct, based oneither product- orprocess-based patents, pursuant toArticle 28.1of
TRIPS?
Under theinherent equitable jurisdiction ofCanada 'ssuperior courts, thereisaremedy available
forofferingforsalewithouttheauthorizationofthepatentholder.UnderCanadiancaselaw,importation
ofapatented article forinfringing purposes hasitself beenheldtobeaninfringement.
6. Section 55.2(2) ofCanada 'sC-91 Billappears topermit, incertain circumstances, athird
party tomake andstockpile anunlimited supply ofapatented product without theconsent ofthepatent
holder during thelifeofapatent. Ifthisisthecase, could Canada please explain howthisisconsistent
withtherights, including therighttoprevent unauthorized making ofapatented product, conferred
onthepatent holder byArticle 28TRIPS?
TheManufacturing andStorage ofPatented Medicines Regulations ,of1993, provide that"[t]he
applicable period referred toinsubsection 55.5(2) ofthePatent Actissixmonth period immediately
preceding thedateonwhich thetermofthepatent expires".
Thisprovision, inconjunction withSection 55.2(2) ofthePatent Act,allows themanufacturing
andstorage ofmedicines under patent bysomeone elsethanthepatent holder during thelastsixmonths
ofthelifeofthepatent.
Theexception totherights ofthepatent holder arelimited exceptions totherights ofthepatent
holder thatarepermitted byTRIPS Article 30.
7. HowdoesthePatent Act,R.S.C. 1985, asamended, inreversing theburden ofproof foran
actionforinfringementofapatentedprocessforobtaininganewproduct,takeintoaccountthelegitimate
interests ofdefendants inprotecting theirmanufacturing andbusiness secrets pursuant toArticle 34.3
ofTRIPS)?
Thesuperior courts have inherent jurisdiction tomake protective orders forconfidential
information.IP/C/W/72
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Layout-designs (topographies) ofintegrated circuits
1. Does theICTA (Integrated Circuits Topography ActS.C.1990) fullyimplement Canada 's
obligations under Article 37.2ofTRIPS (which incorporates byreference sub-paragraphs (a)through
(k)ofArticle 31ofTRIPS) withrespect totheconditions fortheauthorization ofacompulsory licence
forusebyorforthegovernment ofanintegrated circuit topography?
Sections 7.1,7.2,7.3and7.4oftheIntegrated Circuit Topography Actreflect Canada 's
obligations under TRIPS Article 37.2.
2. What doesCanada understand byreference to"anyprivate andnon-commercial purpose" in
sub-paragraph 6(2)(d) oftheICTA, anddoesthisprovide thesamescope ofprotection fortopographies
asrequired byArticle 35ofTRIPS?
Paragraph 6(2)(d)oftheIntegrated Circuit Topography Actreflects theexception contained
inArticle 6(2)oftheTreaty onIntellectual Property inRespect ofIntegrated Circuit s,i.e.,acts
performed byathirdparty forprivate purposes orforthesolepurpose ofevaluation, analysis, research
orteaching.
Protection ofundisclosed information
1. Does Article 1472 ofthenewQuebec CivilCode inrespect ofdisclosure oftrade secrets for
considerations ofgeneral interest permit undisclosed information tobedisclosed byaperson contrary
toArticle 39.2ofTRIPS evenifthatinformation issecret, hascommercial value because itissecret,
andhasbeensubject toreasonable steps tokeepitsecret?
[notyetavailable]
2. Towhatextent doesCanadian legislation (onafederal andsub-federal level) protect undisclosed
information obtained byanemployee during his/her employment inthecasewhere thisperson 'sterm
ofemployment ends, evenifthatinformation meets therequirements ofArticle 39.2(a), (b)and(c)
ofTRIPS? Please explain.
There isnorequirement inTRIPS Article 39.2thatsuchundisclosed information beprotected
bylegislation. Under Canadian caselaw,where information isgiven under circumstances where a
reasonable person would realize, upon reasonable grounds, thatthatinformation wasbeing given in
confidence, theequitable obligation ofconfidence attaches. Thatrulehasbeenapplied innumerous
cases toemployees whoobtain access toconfidential information inthecourse oftheiremployment.
Similarly, Article 2088 oftheCivil Code ofQuebec provides that"The employee isbound...not to
useanyconfidential information hemayobtain incarrying onorinthecourse ofhiswork".
3. Whatlegislation orregulations existtofulfilCanada 'sobligations under Article 39.3ofTRIPS?
Please explain.
There isnorequirement thatTRIPS Article 39.3beimplemented bylegislation orregulations.
byadministrative practice reflecting common lawprinciples andconsistent withSection 20oftheAccess
toInformation Act,testorother datawhich aresubmitted totheGovernment ofCanada, asacondition
ofapproving themarketing ofpharmaceutical oragricultural chemical products which utilize new
chemical entities, arenotdisclosed tothirdparties.IP/C/W/72
Page4
II.1. REPLIES TOTHE COMMON QUESTIONS POSED BYJAPAN TOALL MEMBERS
Patents
1. Inyourcountry, arethefollowing subject matters protectable bypatent: (1)Plants andanimals,
and(2)Plant andanimal varieties?
(i) InCanada, itisnotpossible toobtain apatent containing claims toplants oranimals
perse.However, patents maybeobtained forclaims covering plant andanimal genes andcelllines.
(ii) InCanada, itisnotpossible toobtain apatent containing claims toplant andanimal
varieties perse.However, patents maybeobtained forclaims covering plant andanimal genes and
celllines.
2. Inyourcountry, istheactofoffering forsaleincluded intheexclusive rights ofpatent?
Under theinherent equitable jurisdiction ofCanada 'ssuperior courts, thereisaremedy available
forofferingforsalewithouttheauthorizationofthepatentholder.UnderCanadiancaselaw,importation
ofapatented article forinfringing purposes hasitself beenheldtobeaninfringement.
3. Inyourcountry, whatkinds ofactsarerecognized asexceptions totheexclusive rights conferred
byapatent right?
ThePatent Actcontains thefollowing exceptions:
(a) section 23-use,otherthanmanufacturing, ofapatented invention isallowed onvisiting
ships, aircraft andvehicles;
(b) subsection 55.2(1) -usesrelated tothedevelopment andsubmission ofinformation
forregulatory approval ofaproduct;
(c) subsection 55.2(2) -manufacturing andstorage ofpatented articles (sofar,onlypatented
medicines) during thesixmonths period prior topatent expiry;
(d) (asreferred tosubsection 55.2(6)) -non-commercial uses, suchasexperimentation;
and
(e) section 56-using apatented article which waspurchased prior tothepatent filing or
priority date.
4. Inyourcountry, inwhich caseisusewithout theauthorization oftherightholder permitted,
including usebythegovernment orbythird parties authorized bythegovernment?
InCanada, Section 65ofthePatent Actallows foranapplication totheCommissioner ofPatents
where therehasallegedly beenanabuse oftheexclusive rights contained inapatent. TheCommissioner
maygrant licences forthepurpose ofremedying suchabuses upon "such terms astheCommissioner
maythink expedient" (Section 66).Byadministrative practice, therequirements oftheabove Article
would betaken intoaccount betheCommissioner insettling suchterms. Section 19ofthePatent
Actallows fortheGovernment ofCanada orofaprovince toapply totheCommissioner forauthorization
touseapatented invention, upon terms tobesettled bytheCommissioner ofPatents inaccordance
withSections 19and19.1to19.3oftheAct.Inaddition, theMinister ofPublic Works andGovernment
Services oftheGovernment ofCanada mayrelieve adefence contractor from liability forroyalties,IP/C/W/72
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upon compensation agreed tobythepatentee orfixed bytheCommissioner ofPatents, inaccordance
withSection 21oftheDefence Production Act.Under Section 32oftheCompetition Act,where patent
rights areexercised torestrain competition, theFederal Court may, oninformation bytheAttorney
General, make anorder directing thegrantofalicence, provided thatthatorder complies withCanada 's
international agreements.
5. Inyourcountry, howistheobligation under TRIPS Articles 34.1and34.2regarding theshift
oftheburden ofproof incivilproceedings forpatent infringement related toaprocess patent
implemented?
Under TRIPS Article 34.2, Member States areallowed toimplement theobligation inparagraph
(1)either inrespect ofsub-paragraphs (a)or(b).canada gives patent protection inaccordance with
sub-paragraph (a),fornewproducts, ascontained inSection 55.1ofthePatent Act.
II.2. REPLIES TOTHE QUESTIONS POSED BYJAPAN TOCANADA
Patents
1. Article 20(1) oftheCanadian Patent Lawstates thatanypublic officer who,acting within the
scope ofhisduties andemployment, invents anyinvention ininstruments ormunitions ofwarshall,
ifsorequired bytheMinister ofNational Defence, assign tothatMinister onbehalf ofHerMajesty
allthebenefits oftheinvention andofanypatent obtained ortobeobtained fortheinvention. Please
explain howTRIPS Article 31(b) and(h)issecured when theabove provision isapplied.
Thisprovision isjustified byArticle 73(b) ofTRIPS.
2. Does aforeign applicant forpatent inCanada enjoy apriority right based ontheprior
application filedinaWTO Member country which doesnotsatisfy thedescription requirement asis
prescribed inArticle 34(1)(c) oftheCanadian Patent Law? Ifnot,please explain theconsistency
withtheArticle 4oftheParis Convention applied byTRIPS Article 2.1.
Yes.
Itshould benoted thattherelevant provision isnowparagraph 27(3)(c) ofthePatent Act,which
provides asfollows: "(3)Thespecification ofaninvention must...(c) inthecaseofamachine, explain
theprinciple ofthemachine andthebestmode inwhich theinventor hascontemplated theapplication
ofthatprinciple;..."
3. Please explain theconsistency between Article 4oftheParis Convention applied byTRIPS
Article 2.1andArticle 28(1) oftheCanadian Patent Law, which prescribes thatapriority right is
enjoyable inCanada provided thatthepriority claim isbased onanapplication filedinacountry which
affords apriority right toCanadian citizens.
Paragraph 28.1(1)(a) (replacing subsection 28(19) requires thataprior application hasbeen
filedinacountry thataffords similar protection tothatprovided byCanada. Canada assumes that
allWTO Members, orallMembers oftheParisUnion forthatmatter, provide suchsimilar protection.
4. Aretheactsofoffering forsaleorimporting included intheexclusive rights mentioned inArticle
42oftheCanadian Patent Lawwhich prescribes thatpatent rights shallcover making, constructing,
using andselling? Furthermore, regarding theprovision ofthesaidArticle which setsoutthat"subject
toadjudication inrespect thereof before anycourt ofcompetent jurisdiction", whatspecific cases, ifIP/C/W/72
Page6
anyexist? Ifthere areanyexceptions topatent rights regarding theabove-mentioned points, please
explain theconsistency withTRIPS Article 28.
Under theinherent equitable jurisdiction ofCanada 'ssuperior courts, thereisaremedy available
forofferingforsalewithouttheauthorizationofthepatentholder.UnderCanadiancaselaw,importation
ofapatented article forinfringing purposes hasitself beenheldtobeaninfringement.
5. Article 55.2(1) oftheCanadian Patent Lawprescribes thatitisnotaninfringement ofapatent
foranyperson tomake, construct, useorsellthepatented invention solely forusesrelated tothe
development andsubmission ofinformation provided under anylawofCanada, astatethereof ora
country other thanCanada, andparagraph 2(2)ofthesaidArticle prescribes thatitisnotan
infringement ofapatent foranyperson tomake, construct, useorsellapatented invention, during
theapplicable period provided forbytheregulations, forthepurpose ofmanufacturing andstoring
articles intended forsaleaftertheexpiration dateofthepatent. Please explain thespecific cases
envisaged fortheabove provisions andconsistency withTRIPS Articles 28and30.
Subsection 55.2(1) isofgeneral application. Itpermits applicants forregulatory approval in
Canada andelsewhere toengage inactsthatwould otherwise constitute violations oftherights ofa
patent owner inCanada.
Subsection 55.2(2) hasbeenmade operational through theadoption oftheManufacturing and
Storage ofPatented Medicines Regulations ,of1993, which provide that"[t]he applicable period referred
toinsubsection 55.5(2) ofthePatent Actisthesixmonth period immediately preceding thedateon
which thetermofthepatent expires".
Bothsubsection 55.2(1) and55.2(2) arejustified byTRIPS Article 30asconstituting limited
exceptions totherights ofthepatent holder.
6. Article 55.2(6) oftheCanadian Patent Lawprescribes thatanyuse,manufacture, construction
orsaleofthepatented invention solely forthepurpose ofexperiments thatrelate tothesubject matter
oftheinvention areexceptions totheexclusive right ofpatent. Please explain whether the
above-mentioned salefallsunder theexceptions tothepatent right allowed byTRIPS Article 30.
Subsection 55.2(6) ofthePatent Actinterprets subsection 55.2(1). Thisisindicated bythe
words "Forgreater certainty". Theeffect ofthisprovision isthattheexception ofsubsection 55.2(1)
willnotbeinterpreted asnarrowing orabolishing anyoftheexceptions described insubsection 55.2(6)
thatexisted inthecaselawpriortotheenactment ofsubsection 55.2(1), e.g.,experimental use.Such
limited exceptions areexpressly permitted byTRIPS Article 30.
III. REPLIES TOQUESTIONS POSED BYTHE UNITED STATES
Patents
1. Article 55.2(1) oftheCanadian Patent Actpermits athird party, without theconsent ofthe
patent owner (i.e., "[i]tisnotaninfringement tomake, construct, useorsellthepatented invention
solely forusesreasonably related tothedevelopment andsubmission ofinformation required under
any…[Canadian law]..thatregulates themanufacture, construction, useorsaleofanyproduct.".
Article 55.2(2) appears toenable athird party tomanufacture andstore articles subject toapatent
without theconsent ofthepatent owner foradefined period oftimeprior totheexpiration ofapatent.
Inrelation tothese provisions, please:IP/C/W/72
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(a) identify thecategories ofproducts whose manufacture, construction useorsaleare
regulated inCanada, andthussubject tothescope ofthisprovision;
(b) explain whether thisauthority would permit athird party tomanufacture andsell
commercially significant amounts ofapatented pharmaceutical product without the
consent ofthepatent owner;
(c) explain whether athird party isentitled tomanufacture andstore anyproduct that
isregulated inCanada, andifso,whether anylimits apply astothescale ofthis
manufacturing andstorage activity;
(d) identify thetimelimits thathavebeensetinregulations inrelation totheright ofa
thirdparty tomanufacture andstore products inanticipation oftheexpiration ofthe
termofpatent, ascontemplated inArticle 55.2(3); and
(e) explain howthese provisions comply withtherequirements oftheTRIPS Agreement:
(i) tonotdiscriminate intheenjoyment ofpatent rights based onthefieldof
technology,orastowhetherpatentedproductsareproducedlocallyorimported
[Article 27];
(ii) concerning theexclusive rights tobeaccorded tothepatent owner [Article 28];
and
(iii) concerning therestrictions thatmustbepresent innational lawconcerning
third party useofaninvention without consent ofthepatent owner found
[Articles 30and31].
(a) Subsection 55.2(1) applies generally. Examples ofthecategories ofproducts are:
medicines andfertilizers.
(b) Anycommercial saleunder subsection 55.2(1) would have tobesolely foruses
reasonably related tothedevelopment andsubmission ofinformation required bylaw.
(c) Byvirtue oftheManufacturing andStorage ofPatented Medicines Regulations ,
subsection 55.2(2) applies tothemanufacturing andstoring ofmedicines andislimited
thelastsixmonths ofthelifeofthepatent concerned.
(d) Seeanswer toquestion 1(c)above.
(e) (i) Bothsubsections 55.2(1) and(2)areneutral astothefields oftechnology to
which theymaybeapplied.
(ii) These provisions establish limited exceptions totherights ofthepatent owners
within themeaning ofTRIPS Article 30.
(iii) These provisions meettheconditions ofTRIPS Article 30.TRIPS Article 31
doesnotapply.
2. Article 2ofthePatent Actdefines asan"invention" "anynewanduseful art,process, machine,
manufactureorcomposition,oranynewandusefulimprovement…[tosuchinventions]".ThisdefinitionIP/C/W/72
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apparently serves todefine thescope ofsubject matter thatcanbepatented inCanada. Please explain
whether, under thisdefinition, anyofthefollowing inventions areconsidered ineligible tobepatented
notwithstanding thefactthattheinvention isnew,useful andinvolves aninventive step:
(a) process inventions which, inwhole orinpart, consist ofsteps thatareperformed by
acomputer andaredirected byacomputer program;
(b) productinventionsconsistingofelementsofacomputer-implementedinvention,including
inparticular:
(i) machine-readable computer program codestored onatangible medium such
asafloppy disk,computer harddrive orcomputer memory; and
(ii) ageneral purpose computer whose novelty overtheprior artarises primarily
duetoitscombination withaspecific computer program.
(c) non-naturally occurring microorganisms, plants oranimals thathavebeendeveloped
through human intervention.
(a) Process inventions maybepatentable eveniftheyconsist ofsteps thatareperformed
byacomputer andaredirected byacomputer program.
(b) (i) Acomputer-readable memory forstoring theinstructions orstatements for
useintheexecution ofapatentable process onacomputer would notbe
ineligible under thecategory ofmanufacture under thedefinition of"invention"
inSection 2ofthePatent Act.
(ii) Thepresence ofageneral purpose computer incombination withaspecific
computer program ispatentable ifthecomputer-related matter hasbeen
integrated withanother practical system thatfallswithin anareawhich is
traditionally patentable.
(c) Lower lifeforms which arenew,useful andinventive arepatentable. Claims toahigher
lifeform, perse,arenotpatentable subject matter. However, patents maybeobtained
forclaims covering plant andanimal genes andcelllines.
3. Article 42oftheCanadian Patent Actspecifies thatthegrant ofapatent grants tothepatentee
theexclusive rightof"making, constructing andusing theinvention andselling ittoothers tobeused."
Thisprovision doesnotbestow onthepatent owner theexclusive righttoprevent others fromimporting
oroffering forsalethepatented invention. Please explain howArticle 42complies withArticle 28.1
oftheTRIPS Agreement, which requires thatthepatent bestow onthepatent holder theexclusive right
ofmaking, using, selling, offering forsaleorimporting thepatented invention.
Under theinherent equitable jurisdiction ofCanada 'ssuperior courts, thereisaremedy available
forofferingforsalewithouttheauthorizationofthepatentholder.UnderCanadiancaselaw,importation
ofapatented article forinfringing purposes hasitself beenheldtobeaninfringement.
Protection ofundisclosed information
4. Inthenotifications made bytheGovernment ofCanada, anumber oflawsconcerning regulation
ofproducts havebeenprovided. Acommon clause concerning thehandling oftestdataisinthese
lawsstates regulations shallbepromulgated thataredeemed necessary forthepurpose ofcomplyingIP/C/W/72
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withCanada’sobligationsundertheNAFTA(Article1711)andundertheWTOAgreement(Article39.3).
Please explain howtheseclauses havebeenimplemented bythevarious Canadian regulatory agencies.
Please alsoexplain howthepractices dictated bythese regulations relate toandareconsistent with
therequirements ofArticle 39.3oftheTRIPS Agreement withrespect tosteps thatmustbetaken to
prevent disclosure ofconfidential information provided toaregulatory agency byprivate parties seeking
marketing approval.
Although aregulation-making authority wasadded totheFertilizers Act(subsection 5(2)and
(3)), theFood andDrugs Act(subsections 30(3) and(4)), andthePestControl Products Act
(subsections 6(2)and(3)),forpurposes ofTRIPS Article 39.3, those provisions arestrictly suppletive
toexisting measures forprotection. Sofar,noregulations havebeenpromulgated, asthere hasbeen
noneed. Byadministrative practice reflecting common lawprinciples andconsistent withSection 20
oftheAccess toInformation Act,testorother datawhich aresubmitted totheGovernment ofCanada,
asacondition ofapproving themarketing ofpharmaceutical oragricultural chemical products which
utilize newchemical entities, arenotdisclosed tothirdparties.
5. Canadian law[Food andDrugRegulation C.08.004.1] appears toenable thirdparties toobtain
access totestdataprovided byaparty totheregulatory authorities inCanada under certain conditions.
Please explain:
(a) theconditions under which athirdparty cangainaccess toconfidential information
providedtoaCanadianregulatoryagencyforpurposesofobtainingmarketingapproval;
and
(b) howthisregime complies withtherequirements ofArticle 39.3, which require WTO
Members totakesteps toprotect parties thathaveprovided suchdataagainst unfair
competition.
Byadministrative practice reflecting common lawprinciples andconsistent withSection 20
oftheAccess toInformation Act,thirdparties arenotgiven access toconfidential information provided
inanother manufacturer 'snewdrugsubmission.