House of Commons Hansard #44 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was federal.

Topics

Canada Border Services Agency Act
Government Orders

5:50 p.m.

Some hon. members

Question.

Canada Border Services Agency Act
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5:50 p.m.

The Acting Speaker (Mr. Marcel Proulx)

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Canada Border Services Agency Act
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5:50 p.m.

Some hon. members

Agreed.

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5:50 p.m.

The Acting Speaker (Mr. Marcel Proulx)

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Justice, Human Rights, Public Safety and Emergency Preparedness.

(Motion agreed to, bill read the second time and referred to a committee)

Patent Act
Government Orders

December 13th, 2004 / 5:50 p.m.

Vancouver Kingsway
B.C.

Liberal

David Emerson Minister of Industry

moved that Bill C-29, an act to amend the Patent Act, be read the second time and referred to a committee.

Patent Act
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5:50 p.m.

Chatham-Kent—Essex
Ontario

Liberal

Jerry Pickard Parliamentary Secretary to the Minister of Industry

Mr. Speaker, I am pleased to begin the second reading of Bill C-29, a bill that makes technical amendments to the Patent Act. The changes provided in this bill are strictly technical and narrow in scope. I am hopeful that the House and the other place will have no problem passing this bill expeditiously.

It is very important that we move quickly on this bill for, although it deals with details that are of a technical nature, the jobs of many Canadians and the competitiveness of Canadian companies in a global marketplace could be stake if we delay.

Canada's reputation as a good place to invest and perform leading edge research and development may also be hurt if we do not move quickly to clear up the technical issues covered by the bill.

First, what the bill represents is a response to an unexpected court decision that has raised uncertainties about the status of some patents. It is designed to clear up the confusion about the patent fees and potentially the status of a significant number of patents. It is a measure to avoid clogging the courts with patent infringement lawsuits, and the sooner we pass the bill the sooner we can remove the element of uncertainty regarding Canada's patent regime.

I want to provide the House with some of the background that made these technical amendments necessary. The Patent Act is designed to protect the intellectual property of investors. The patent offer the investor a monopoly on the creation for a specific period. In this way we provide incentive for research and development so that people will invest the time and money it takes to devise and perfect a new product.

In order to apply and maintain a patent application or patent, a set of fees must be paid and these fees vary according to several factors. One of the variables today is the reason that we have a problem.

The fees paid for patent protection vary according to the size of an entity. If one is a small entity defined as an individual, a university or a business with 50 employees or less, the fees will generally be half of those of a large entity.

This distinction between small entities and large entities gave rise to the technical amendments that we seek to address. Those who filed patents and paid their fees always had to ask themselves whether they should be filing as a small entity or a large entity. On the surface, the definitions are straightforward, but over time the situation became much less clear.

What happens, for example, if a person starts off as a single individual inventor and his or her company grows quickly so that it becomes a large entity? What happens when, for instance, a person is a large entity with more than 50 employees but decide to break up into a company of smaller components, one of which maintains the patent? What happens when a person is a small entity but enters into an agreement with a large entity for exclusive use of one's invention?

Above all, with respect to the technical amendments before us, what happens if a person makes a mistake? What happens if a person files as a small entity and then realizes that he or she should have filed as a large entity instead?

Those are important questions for innovators, especially for individuals and small businesses who have the opportunity to use their ingenuity and innovation to grow a business.

The Commissioner of Patents is responsible for addressing the system and setting collective fees. In the past, in the case of small and large entities related fees, the commissioner acted on the principle that an entity that had made an honest mistake in determining the level of the fees should be given the benefit of the doubt. If the entity had submitted the incorrect amount in good faith and it was later determined that the amounts submitted was incorrect, the entity could top up the fees to maintain their rights in accordance with the act.

That was the practice and many individuals, small businesses and universities maintained their protection under the system that allowed for corrective measures, or so they believed.

However all this has changed as a result of a court case know as the Dutch case. In patent infringement suit brought against Dutch Industries by Barton No-Till Inc. and Flexi Coil Ltd., Dutch Industries successfully maintained that the patent had been abandoned because the proper fees were not paid. Moreover, the judge found that the Commissioner of Patents had no legal authority to accept top up payments.

The court decision means that the top up practice is no longer accepted. This opens a Pandora's box of potential legal trouble. It has created the possibility of a Dutch defence against patent legislation if a company is found to have used the top up policy in order to correct and oversight.

This case was appealed to the Federal Court of Appeal and on March 7, 2003 the court rendered its decision. The Federal Court of Appeal agreed with the lower court that late top up fees could not be corrected.

Furthermore, the Federal Court of Appeal ruled that the determination as to whether an applicant would be considered a small or a large entity is to be fixed at the time of entry into the patent regime. That interpretation by the court was inconsistent with the long-standing practice of fees varying over the life of a patent if the entity changed size.

This new interpretation meant that any applicant who had entered as a large entity and later became a small one, and paid commensurate fees, suddenly found themselves in the position of having underpaid the prescribed fees. These applicants and patent holders risk invalidation of their rights.

This creates a very difficult situation for holders of patents who may not have paid the right fee. We want to end this confusion. We want to remove the uncertainty as it relates to those who have used the flexibility as described. In fact, in August 2003 the government announced that it would amend the Patent Act to clarify the payment of certain patent fees.

The amendments contained in the bill provide a 12 month timeframe for patent holders and applicants who are negatively affected by the court decision to maintain their rights by making necessary top up payments. In effect, we are giving patent holders the right, for a 12 month period, to continue making the arrangements that the courts found they had no right to do under the current legislation.

The longer this legislation is delayed the more likely the number of patent infringement court cases would increase. This would have an adverse effect on Canada's reputation as a good place to do business. It would undermine our reputation as a country that protects intellectual property rights.

The intellectual property stakeholders have been consulted on these technical amendments and they support the patent provisions of the bill. I would urge hon. members to pass it as quickly as possible and remove the uncertainty.

The second issue dealt with in the bill involves the legislation that was passed in the last Parliament as Bill C-9, the Jean Chrétien Pledge to Africa Act. Hon. members who were present in the last Parliament will recall that this was an initiative to provide lower cost pharmaceutical products to least developed and developing countries. At its heart, the bill aimed at helping those countries fight HIV-AIDS, malaria, tuberculosis and other public health problems by giving them easier access to patented medicines.

Bill C-9 amended the Patent Act and the Food and Drugs Act. It provides the legislative framework that enables Canada to authorize someone other than the patent holder to manufacture a lower cost version of a patented medicine for export to a developing country. Canada was very proud to be one of the first countries to take such action.

However there was a technical oversight in that legislation, one which we seek to correct now. An expert panel, to be appointed by the Minister of Industry and the Minister of Health, was to be named to advise the government on which pharmaceutical products should be eligible under the regime.

In response to recommendations from some hon. members from across the floor, the government agreed that the appointment of this panel would be reviewed by a committee of the House. Of course, the other place also has a rightful responsibility in matters that come before Parliament, and a committee of the other place should have the right and authority to review these appointments as well.

Hon. members who were present during the final weeks of the last Parliament will recall the urgency of getting this humanitarian and life-saving legislation through Parliament before the election writ was dropped. There was no time to make the necessary amendments to Bill C-9 that would ensure the other place was given the same rights of review as the House. However the then minister of industry gave the other place her commitment that at the next available opportunity the government would correct that oversight in the new Parliament.

The next available opportunity is now. We wish to take advantage of the need to pass technical amendments affecting payment of fees to make a further technical amendment that would provide the other place with its rightful responsibility to review the appointments to the expert panel.

This is not a controversial measure. It is a step to do the right thing and correct an oversight of the last Parliament, an oversight that, were it not for the generosity and spirit of the other place, might have killed the bill at that time.

Both of the measures in Bill C-29 are very technical in nature. Neither of them is controversial. Both of them deserve swift passage and that is why I urge the House to focus sharply on the technical content of the bill.

This is not an overhaul of the Patent Act. It does not break new ground in how we protect and encourage innovation in Canada. I urge hon. members from both sides of this House to join me in voting for the passage of this bill as soon as possible.

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6 p.m.

Conservative

James Rajotte Edmonton—Leduc, AB

Madam Speaker, I have a few questions for my colleague.

The member talked about the Jean Chrétien Pledge to Africa Act in terms of a technical amendment, which we do support on the Conservative side. He also accurately mentioned in his speech that the purpose of this was to facilitate the delivery of cheaper medicines into Africa and other developing nations. As he mentioned, it was to deal with HIV-AIDS, tuberculosis and malaria.

I wonder if the member could provide the House with, if not today perhaps at a later date, if he does not have the numbers at his fingers, first, the number of medicines that have been transported as a result of the passage of the legislation; second, which countries have been assisted with the passage of the legislation; and third, the number of people who have actually received medicines at a lower cost.

Patent Act
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6 p.m.

Liberal

Jerry Pickard Chatham-Kent—Essex, ON

Madam Speaker, I have to say that at this point in time there was a real urgency at the last election to get this bill put in place. Obviously, the minister will appoint a committee of experts who will look at how we can deliver those services and deal with it.

At this point in time the obvious answer is that we have not implemented the actions of the bill. We have some technical issues, obviously, with the Senate not being involved in the bill as well.

This being the first sitting of the House after the election, we are attempting to get everything in place so that we can get that expert panel in place, and then we can make the decisions on how this should move forward and we can move it forward as expeditiously as possible.

However the obvious first step is to get the bill right, the legislation right and the technical amendments corrected.

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6:05 p.m.

Conservative

James Rajotte Edmonton—Leduc, AB

Madam Speaker, I appreciate the opportunity to speak to Bill C-29, an act to amend the Patent Act.

This is a housekeeping bill, in our view, which addresses two separate patent related issues. The first issue it addresses deals with the Jean Chrétien pledge to Africa act, which does help to facilitate the flow of drugs to deal with HIV-AIDS, malaria and tuberculosis to least developed nations.

The bill called for the creation of a committee of experts to advise the government on what pharmaceutical products should be eligible for export under the licensing regime set up by the act. The first part of Bill C-29 amends the act to allow the Senate, not just the House of Commons, to assess and recommend potential candidates for the committee of experts.

We support this specific aspect of the bill, although we would ask for guidance from the Senate as to which committee or committees should actually deal with this issue.

The second part of the bill deals with patent fees and entity size. Fees are required at all stages of a patent's life: application, review and maintenance. Canada and the United States have separate fee structures, depending on whether a business applying for a patent is a small entity or a large entity. The separation based on size is quite common.

Until recently, a company that filed for a patent under the small business fees structure and then became a large business, or vice versa, was granted flexibility in its patent fees. The company could pay a top-up or could reduce its fees due if the enterprise size changed. The top-up scheme has caused considerable administrative trouble for patent agents and it is my understanding that they would like this matter remedied as quickly as possible.

A court case has clarified that there should never have been such a top-up scheme. The courts ruled that the entity's status is determined when a patent regime is first engaged. Thus if the company files as a small business at day one, it is considered a small business for the life of the 20 year patent.

This set of amendments is required to prevent possible lawsuits for an estimated 7,000 patent holders and patent applicants on the grounds that their fees have not fully been paid and thus their patents could be declared invalid. This was the Dutch industry's case.

We support these amendments as well in a sense that they will certainly reduce a lot of the legislation or the litigiousness that could result from this. We think that the size of the company when it gets a patent should determine its size for the life of the patent.

In conclusion, we also support the amendments to the interpretation of schedules because we would like Canada to have a clear intellectual property framework.

We look forward to dealing with the bill at committee. We hope the legislation will pass as quickly as possible.

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6:05 p.m.

Esquimalt—Juan de Fuca
B.C.

Liberal

Keith Martin Parliamentary Secretary to the Minister of National Defence

Madam Speaker, I did not get a chance to speak to the bill, although I would have loved to have done so.

I want to thank every member and every party in the House for supporting the bill. The bill is critically important in dealing with a disease.

I have been to Africa 20 times. I have seen hundreds of people dying of this disease. I have seen an orphanage where there are 60 bassinets with two to three babies under the age of six months in each bassinet. One-third of those children are dying of AIDS. Those children will never know the touch of a human being and will never know their parents, because most of their parents are dead or have died of AIDS.

This disease is eviscerating entire countries, destroying the workforce of nations and leaving behind a sea of orphans, and not only in sub-Saharan Africa. What is highly unrecognized is that this disease is now on the geometric cusp in Russia, China, eastern Europe and India. Unfortunately, many of the political leaders in those countries have chosen not to be gripped by this problem and have buried their heads in the sand.

I want to thank members from all parties for supporting the bill. I also want to thank my colleagues and the former prime minister, who took such a leadership role. If all of us are seized with the issue, we will not underestimate the fact that this disease will kill 220 million or more human beings, a number far greater than is commonly recognized.

There are some exciting programs that we can adopt. Médecins Sans Frontières in the DRC, the Democratic Republic of the Congo, has put together a very simple plan in villages which gets the anti-retrovirals to the people who need them in a way that is controlled and monitored.

I would only ask every member in the House to please work with all of us. Let us work with those in the field to make sure that the people get the ARVs. Let us make sure that the distribution and the monitoring mechanisms are there and that the ancillary functions required to address this horrible disease are there for people who are far less privileged than we are.

Again, I want to thank all members. I certainly hope the Senate will pass the bill quickly and that we move beyond the bill to deal with the very complex issues surrounding this very complex and horrible disease.

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6:10 p.m.

Conservative

James Rajotte Edmonton—Leduc, AB

Madam Speaker, there were a number of valid points raised by the member. He has personal experience. I have talked to the member about his personal experience in sub-Saharan Africa.

There is the issue of medical infrastructure. It is one thing to have cheaper medicines but the medical infrastructure needs to be in place to actually deliver medicines to the people who need them. People need to be informed, as we do in this country, as to how they should take the medicines. There needs to be proper nutrition, proper diet and a proper water source for people to ingest the medicines so that the medicines do the good that they should be doing. That is certainly a valid point in terms of this whole effort.

Also the member raised a valid point about nations. The bill specifically addresses the least developed nations. There is an appendix that identifies the specific nations, but obviously, nations that are developed or that are developing very quickly, such as China and Russia, need to address the HIV-AIDS epidemic as well.

The member has worked with many companies in this field on a personal basis. We should recognize that many companies have already made some real efforts. First and foremost, GlaxoSmithKline in Africa has done a lot of work. Its infectious diseases centre does a lot of work with all of these infectious diseases. As well there are companies like Merck Frosst in Botswana. Those companies try to do all of it, provide the cheap medicines, medical infrastructure, the advice. They work with groups like Médecins Sans Frontières, which should be commended as well.

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6:10 p.m.

Liberal

Keith Martin Esquimalt—Juan de Fuca, BC

Madam Speaker, I thank my friend on the other side for his comments. There are a couple of points I want to address. He made a very central point that is often forgotten.

The most important thing in dealing with people who have HIV-AIDS is food. The disease actually explodes in a person who does not have proper nutrition. The caloric requirements of an individual who has HIV-AIDS is much higher than for most of us. For most of us it is 1,500 calories but it is 2,200 calories for somebody who has HIV-AIDS. The problem is that in a number of countries political decisions are being made and food is being used as a weapon to wreak havoc, which greatly increases the number of people who move from being HIV positive to having AIDS.

I will cite the example of Zimbabwe where President Mugabe is using food as a weapon. Using food as a weapon in a country that has a 25% HIV rate means that the number of people who have AIDS explodes. Mortality figures go through the roof.

It is extremely important for us not to assume that the food problems, particularly in sub-Saharan Africa, are due to acts of God. They are not. They are due to political decisions that are known in advance. Foods is often used as a tool. This results in massive increases in mortality. We have to address that.

One other point of note, in the Democratic Republic of the Congo, which has done very well, there is a Thai doctor who is working with a pharmaceutical company to produce ARVs at a very low rate within the DRC. The conflict in the DRC has resulted in two million people dead and four million people displaced. The glimmer of hope in the DRC is that one determined physician from Thailand, who is working with the people of the DRC in one area where they are able to make the ARVs and who has the distribution mechanism.

We should work with other countries where there are people who are willing to do this, where there is a stable element of governance, a lack of corruption and a leadership that is prepared to work with us. We could partner with other international groups, NGOs and countries, to focus on those countries, to develop islands of stability on a continent that desperately needs it. If we focused on that, we would do a great deal by providing islands of stability and saving a lot of lives. We must try to turn around this terrible beast that is destroying countries, that is causing amazing security problems and which is leaving a sea of orphans on a continent that can ill afford it.

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6:15 p.m.

Conservative

James Rajotte Edmonton—Leduc, AB

Madam Speaker, the member is quite correct in pointing out the need for food and proper nutrition. He identified the fact that it is often a problem of governance or of political leadership.

The member certainly characterized the situation in Zimbabwe very well. There are other situations, such as in Uganda. The political leadership there really took some courageous decisions and influenced the delivery of medicines and food in a much better way, so that a lot of the problems could be addressed. Certainly a key issue is getting the stable political leadership in place and then working with them.

The first question our party asked at committee on this whole issue was it was one thing to technically try to get cheaper medicines, but what is the Canadian government doing? What is CIDA doing? What is the Department of Health doing to ensure that we are partnering with nations and ensuring that medicines get to the people who need them?

At that time, I have to say, there was not a comprehensive plan in place. We hope that since then the government has put forward a plan and will come forward with a plan to ensure that the infrastructure is in place. Then the people who actually need these medicines will be able to get them and the medicines that they do take will end up actually helping them.

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6:15 p.m.

Bloc

Paul Crête Rivière-Du-Loup—Montmagny, QC

Madam Speaker, out of respect for countries grappling with the AIDS crisis and to which Jean Chrétien had made a commitment to reduce the negative impact, particularly in Africa—in my view this is more like Canada's commitment to Africa—I will briefly come back to the bill.

The Bloc Québécois is in favour of this bill because we feel it is more a technical bill. Senators can sit at committee as planned to consider the issue.

An error had occurred resulting from the fact that all the parties in this House had wanted to pass this bill before the election campaign so that it could come into force as soon as possible. This is important and we feel it must be passed as soon as possible. This will allow Canada's commitment to Africa to be implemented as soon as possible and that is what we want.

The other change is a highly technical one, the outcome of a court ruling. In the past there was some flexibility, that is to say a small company paid taxes on patents, with adjustments as it grew in size. The court felt that a far more formal approach was required and the government decided to regularize the situation. This is, therefore, an appropriate change and one that must be put forward as soon as possible.

As the previous speakers have said, it is important that this bill, which is focussed particularly on accessibility of drugs to the least developed nations, be passed as promptly as possible.

As well, since we are fast approaching the end of a session, I would invite hon. members to pass this bill quickly on second reading, so that it will take effect and ensure that drugs will get to the populations concerned.

We are also calling upon the federal government to ensure the same promptness for enhanced measures to help implement this act. The act alone will not bring about sufficient results unless there is also allocation of the appropriate budgets, either through CIDA or some other means, to ensure the support that is indispensable for delivery, along with the appropriate medical care for patients. The colleague before me spoke along these same lines.

The Bloc Québécois will therefore be supporting this bill in order to see it passed as quickly as possible. We hope that, after a few witnesses in committee, it will come back to the House and be adopted promptly.

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6:20 p.m.

NDP

Jean Crowder Nanaimo—Cowichan, BC

Madam Speaker, I rise to support the bill in principle, and I agree with other members who have spoken about the need for urgency

Others have talked about the part of allowing a one year period for patent holders to collect fee payments, and we absolutely support that. However, I want to take an opportunity to talk about the Jean Chrétien pledge to Africa, which called for the creation of an expert advisory committee to advise on which pharmaceutical products would be on the list of drugs eligible for export. It is this part of the amendment to which I wish to speak.

It is a bit disappointing and frustrating that we are here debating the makeup of an expert advisory committee when people are dying in Africa. It is incumbent upon the House to pass this bill expeditiously. I wonder about having a debate about including the unelected Senate as equal representatives.

In the throne speech, the Prime Minister talked about there being a moral imperative to do all that we could to make medical treatment accessible to untold millions suffering from deadly infectious diseases, notably HIV-AIDS, particularly in the poorest countries of Africa. Here we are several months later, as was noted earlier, and no drugs are going to those countries for people who are the most in need.

The CBC did a story and it talked about the fact that the savings would be enormous. Brand A drugs in North America cost anywhere between $8,000 and $15,000 a person, whereas generic drugs would cost approximately $250. As we speak, these drugs are still not available to people in Africa.

According to the Médecins Sans Frontières, out of the 6 million people needing anti-retroviral treatment in developing countries, only 440,000 people currently have access to it. There is a sense of urgency that we need to get on with this. UNAIDS has released a report in which it states that about 34.3 million people, including 1.3 million children under the age of 15 years, have HIV-AIDS. In most sub-Saharan African countries, adults and children are acquiring HIV at a higher rate than ever before. The number of new infections in regions during 1999 was four million. Botswana has an infection rate of 35.8%, Zimbabwe 25.8%, and South Africa 19.9%. This is having such a wide ranging impact that in many of these countries the labour force is being decimated.

I urge the House to look at the bill quickly and to move on it so we can begin to supply drugs to these countries.