JDSupra | 3 January 2020
What the amendments to the USMCA mean for Canadian IP law
[co-author: Walter Chan, Articling Student]
On December 10, 2019, Canada, the United States and Mexico signed the Protocol of Amendment to the Agreement between the United States of America, the United Mexican States and Canada (commonly referred to as the USMCA). The Parties originally signed the USMCA on November 30, 2018, but the United States reopened negotiations after the Democrats gained control of the House of Representatives in the 2018 midterm elections.
For details of the original USMCA, please see our previous article here.
If ratified, the amended USMCA will replace the North American Free Trade Agreement (NAFTA), and require a number of changes to Canada’s IP laws. Many requirements of the original USMCA have already been met by recent changes in Canadian IP legislation, but more amendments will be required to implement the USMCA.
Patents and Undisclosed Test or Other Data
The USMCA requires the Parties either to give due consideration to ratifying or acceding to the Patent Law Treaty (PLT), or to adopt or maintain procedural standards consistent with the objectives of the PLT.
Canada ratified the PLT on July 30, 2019. Amendments made to the Patent Act and the Patent Rules to implement the PLT came into force on October 30, 2019, such that Canadian law is now compliant with this aspect of the USMCA.
Patent Term Adjustment for Unreasonable Granting Authority Delays
The USMCA specifies that a Party shall provide adjustment of the term of a patent to compensate for Patent Office delays in issuing patents. Patent term adjustment may accrue if a patent issues more than five years from the date the application is filed, or three years after examination is requested, whichever is later.
The United States has had such provisions in its patent laws for some 20 years, but patent term adjustment to compensate for Patent Office delay will be entirely new to Canadian patent law.
Canada must implement its obligations under this provision within 4.5 years of the date the USMCA enters into force.
Current Canadian data protection law provides an eight-year data protection term (with a possible six-month paediatric extension) for both biologics and small molecule drugs.
The original USMCA required a Party to provide a data protection term for biologics of at least ten years from the date of first marketing approval, and would have required changes to Canadian law. But the amendments to the USMCA have removed this requirement, and Canada will not be required to amend its domestic data protection regime.
Copyright and Related Rights
One of the most significant changes flowing from the USMCA will be to increase the basic term of copyright protection in a work by 20 years. Currently, the basic term of copyright protection in Canada is life of the author plus 50 years. Under the USMCA, that term will increase to no less than life of the author plus 70 years. This will align the term of protection in Canada with the United States and the European Union.
Canada must comply with this requirement within 2.5 years of the date the USMCA enters into force.
In addition, the USMCA contemplates providing “safe harbors” for internet service providers (ISPs). Such safe harbors will shield ISPs from liability for copyright infringements that they do not control, initiate or direct, which take place through their networks. In order to be eligible for the safe harbor protection, ISPs will need to expeditiously remove or disable access to infringing content and implement a policy of terminating the accounts of repeat infringers. Notably, however, ISPs will not be required to monitor their networks for infringing activity.
Canada is already greatly in compliance with the trademarks provisions of the USMCA, having acceded to the Madrid Protocol, the Singapore Treaty, and the Nice Agreement on March 17, 2019. Amendments to the Trademarks Act and the Trademarks Rules came into force on June 17, 2019, implementing those agreements.
Collective Marks and Certification Marks
The USMCA requires each Party to provide that trademarks include “collective marks” (marks used by members of an association or collective) and certification marks. As Canadian trademark law does not presently allow for the registration of collective marks, it appears that legislative amendments will be required for compliance with the USMCA.
Canada is already in compliance with the domain name provisions of the USMCA. These provisions include a domain name dispute mechanism modelled on the principles of the Uniform Domain-Name Dispute-Resolution Policy (UDRP) for its .ca domain registry and online public access to a reliable database of contact information for domain name registrants.
The USMCA provides a number of provisions relating to the protection of geographical indications (GIs), similar to provisions in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Canada is already in compliance with these provisions, which notably relate to the administrative procedures for the protection or recognition of GIs, grounds of denial, opposition, and cancellation, as well as guidelines for determining whether a term is deemed generic. The USMCA will prevent Canada from automatically protecting GIs related to agricultural products and/or food through the mechanism of bilateral or multilateral agreements without first providing the possibility of opposing and removing these from the list of protected GIs. However, geographical indications for wines and spirits may continue to be automatically protected through bilateral or multilateral agreements (such as was the case with the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)).
The provisions contained in the USMCA largely reflect amendments to Canada’s Industrial Design Act and Regulations that came into force on November 5, 2018. These amendments included accession to the Hague Agreement. With these changes, Canada is in compliance with the industrial design provisions contained in the USMCA.
Under the USMCA, customs officials will be given the authority to “initiate border measures ex officio against suspected counterfeit trademark goods or pirated copyright goods” that are imported, destined for export, in transit, and admitted into or exiting from a free trade zone or a bonded warehouse. Currently, “in transit” goods are off-limits and may not be detained.
Customs officials will also be permitted to inspect, detain and destroy “suspected counterfeit trademark goods or pirated copyright goods” following a determination that the goods are infringing. Notably, these provisions do not necessarily require a court to make a finding of infringement. Rather, they permit “competent authorities”, which may include law enforcement authorities, such as customs officials, to determine whether the suspect goods infringe an intellectual property right. If they do, then the goods will be destroyed or “disposed of outside the channels of commerce in such a manner as to avoid any harm to the right holder.” Amendments to the Customs Act will be required to implement these provisions.
Steps to Ratification
The amended USMCA must be ratified by all Parties before it can come into force. Each Party must notify the others in writing once it has ratified the amended agreement. The amended USMCA will enter into force and supersede NAFTA on the first day of the third month following the last notification of ratification.
Mexico was the only Party to ratify the original USMCA. The Mexican Senate ratified the amended USMCA on December 12, 2019.
President Trump submitted a bill implementing the amended USMCA to both chambers of the United States Congress on December 13, 2019. The House of Representatives voted to approve the bill on December 19, 2019. The Senate will be able to consider and vote on the same bill once the Senate Finance Committee refers it back to the Senate floor, or in any case after 45 session days have elapsed since December 13, 2019. Majority Leader Mitch McConnell has stated that a vote on the USMCA may be delayed by the anticipated impeachment trial.
Bill C-100, implementing the original USMCA, died on the Order Paper when the Canadian Parliament was dissolved before the 2019 federal election. A bill to implement the amended agreement must be tabled in the new Parliament, where it can be debated in both the House of Commons and the Senate, before ratification is possible.
Accordingly, the timeline to ratification is not certain. We will keep our readers informed of further developments.