Thank you, Mr. Chair and honourable members of the committee. On behalf of the Canadian Generic Pharmaceutical Association, let me say that we appreciate the opportunity for Canada's generic pharmaceutical industry to contribute to your study.
The bill is largely focused on the important objective of combatting counterfeit products. We've already heard some explanation of the importance of that. I will not address my comments to that issue; I would be happy to address questions about it later. I want to focus on one issue, a very specific issue, and that includes the part of Bill C-8 that is related to changes to the Trade-marks Act.
Before I do that, I'll just say a couple of words about our industry. We, the generic pharmaceutical industry, are operating the largest life sciences companies in Ontario, the largest in Quebec, and the largest in Manitoba. We are Canada's primary pharmaceutical manufacturers and exporters. We are among the top R and D spenders across all industrial sectors. Generic pharmaceutical companies employ directly more than 12,000 Canadians in highly skilled research, development, and manufacturing positions.
We are strong supporters of free and open trade, and we export our high-quality “Made in Canada” generics to more than 115 countries. We supply two out of three of all prescription medicines in Canada—two out of three are with generics—quality products at very good prices. That is our role and responsibility in the Canadian health care system.
The issue I wish to address today, as I mentioned at the outset, will focus on the aspects of the bill aimed at modernizing the Trade-marks Act. They are not really intended at all to deal with the issue of counterfeiting; they're just about modernizing the act.
Our primary concern with Bill C-8 is the change to the definition of what is considered “distinctive” under this act.
By way of background, the Canadian Generic Pharmaceutical Association and our member companies have invested tens of millions of dollars in litigation under the provisions of the current Trade-marks Act to develop decades of Canadian case law on this issue. The case law has determined that trademark applications for the size, shape, and colour of a medicine do not meet the requirement for “distinctiveness” under the current Trade-marks Act.
As a result, there are very few trademarks covering the size, shape, or colour of pharmaceutical products that are registered in Canada today. Very few of those trademark applications are ever granted; they are rejected as being not distinctive. Our Canadian pharmacy customers expect generic medicines to appear in similar size, shape, and colour to their brand-name equivalents. In addition to being beneficial for pharmacists, this is also of enormous benefit to patients, as it helps them adhere to their treatment regimens. Their blue water pill is their blue water pill, regardless of whether they are using a brand name or a generic medication.
So similar trade dress for pharmaceuticals is the situation we have today in Canada, and it has been the situation for several decades. The definition of what is “distinctive” under the Trade-marks Act, as it has been interpreted by the Trade-marks Opposition Board and the courts over the span of several decades, is at the heart of it all.
So why is Bill C-8 of concern to our industry?
Bill C-8 changes the definition of what is distinctive under the Trade-marks Act. In our view, it will create a great deal of uncertainty in the law. The International Trademark Association's submission agrees that legal uncertainty is created by the change in definition.
I'll ask for the committee's indulgence. I'm just going to read the two definitions. They can be found on the last page of our brief, for anybody who wants to follow along with our three-page brief.
The well-established definition in the current Trade-marks Act reads as follows:
“distinctive”, in relation to a trade-mark, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them
The definition in Bill C-8 is different. It sounds different; it is different. This is in Bill C-8:
“distinctive”, in relation to a trade-mark, describes a trade-mark that actually distinguishes, or that is inherently capable of distinguishing, the goods or services of the trade-mark’s owner from those of others
Our concern is with regard to the current case law, which has become clear after decades of litigation around it. It establishes that a mark actually distinguishes something and has acquired that distinctiveness through use, and that a trademark is adapted to distinguish when it is inherently distinctive.
The new language introduces the phrase “is inherently capable of distinguishing”. It will introduce uncertainty. What does “inherently capable of distinguishing” mean? How will this be interpreted by the Canadian Intellectual Property Office, the Trade-marks Opposition Board, and the courts?
It is our understanding from officials...and we understand that Industry Canada officials and the minister made it clear when they were here that in drafting the language in Bill C-8 they had a legal opinion asserting that the new definition is clear under the law and does not create any substantive change in the law.
Industry Canada, the Canadian Intellectual Property Office, and Public Safety Canada have all advised CGPA and this committee that their sole intention is to modernize the language of the act. There was no intention to make a substantive change in the definition of “distinctiveness”. Again, they have clarified that to your committee. Neither was there any intention of altering pharmaceutical trade dress practices in Canada in any way.
This give us little comfort. We have consulted three different law firms who all raised concern that the new definition will create a great deal of uncertainty in the law around pharmaceutical trade dress. It will perhaps come as no surprise to members of this committee that the pharmaceutical industry is the most litigious industry in Canada. At the very least, the change in definition would cost the generic pharmaceutical industry millions of dollars in their efforts to maintain Canadian trade dress for pharmaceuticals and bring increased certainty in the law.
In our view, this is an unintended consequence that is entirely avoidable. On behalf of CGPA, we would urge the members of the committee to table and adopt our proposal for a technical amendment to the definition of “distinctive”. This would not impact the anti-counterfeiting objective of Bill C-8 in any way. It would address the Government of Canada's goal of modernizing the act, as well as the concerns I have outlined to you this afternoon.
I am going to stop there.
I thank the chair and committee for the opportunity to appear and for considering our request.
I look forward to further discussion with you.