Thank you, Russell.
Thank you for the opportunity to speak to the committee today.
Dual litigation, as a first point, was never raised with the innovative industry in the context of CETA, and we are deeply concerned about any changes that grant the industry a right of appeal at the expense of other existing legal rights.
Just in terms of background, in Canada, when a generic elects to make a copy of an innovative drug before the expiry of all the relevant patents, it will engage what's called the patent linkage system. Why does Canada have a patent linkage system? This is because without it, generics would enter the market while patent issues are being resolved in the courts. This is different from the European Union, where the innovator can obtain an injunction to keep the generic challenger off the market while the legal issues are being resolved in court.
Under our linkage system, when an innovator wins, the generic can appeal. But when the generic wins, it enters the market for the most part within hours, leaving the innovator with no remedy under the linkage regime whatsoever. This is why the industry has been calling for a linkage appeal right for several years. As Russell mentioned, it is simply a matter of balance and fairness.
In addition, if a generic is successful in its linkage case it may sue the innovator for revenues lost due to delayed market entry, and in such cases, as you can well imagine, the generic argues for market conditions that maximize its damages claim. This is unique to Canada.
So what is dual litigation? In Canada, when a party wins its linkage case another challenge is possible. Innovators can sue for damages in an infringement action; that is true. Equally, however, generics can bring a similar action seeking to impeach an innovator's patent. Even if the generic loses all the linkage cases up to the Supreme Court of Canada, it can still start a new proceeding to invalidate the patents. The point is that dual litigation cuts both ways: it exists equally for all parties and has been used by both innovators and generics alike.
There are many aspects of the current IP enforcement regime that are unfavourable to the innovative industry. Innovators must win every linkage case against every generic. If you win two and lose the third, you have lost your market and you have no right of appeal.
As for section 8 damages, claims worth hundreds of millions of dollars that only benefit the generic industry, again, are characteristic only of the system in Canada.
Moreover, heightened patent utility requirements and the promise of the patent doctrine, again, exists only in Canada.
In closing, the right of appeal is an issue of fundamental fairness that has a relatively simple regulatory solution. This was the mutually agreed upon outcome of the CETA negotiations.
Thank you very much.