Patents

• Author: International Law Group

During the 1970s, the National Cancer Institute, a U.S. government-funded organization learned that the bark of the Pacific yew (taxus brevifolia) contained paclitaxel, an anticarcinogenic substance, and put this data into the public domain. Since the yew bushes died when stripped of their bark, however, doubts arose on whether drug companies could turn out enough quantities for pharmaceutical production.

The respondents here include Bristol-Meyers Squibb headquartered in New York City plus its Canadian subsidiary (collectively BMS). In the following decade, BMS produced a drug containing paclitaxel, later marketed as Taxol. In the course of that work, it secured several Canadian patents which involved new formulations and new methods of administering the medicine. None of these patents applied to paclitaxel as such.

Working independently of BMS, the appellant, Biolyse Pharma Corporation (BPC) found out that it could extract paclitaxel from a different species of yew (taxus canadensis) without killing the trees. It applied to the Minister of Health for a notice of compliance (NOC) in order to put its product on the market. The Minister required BPC to submit a New Drug Submission (NDS) rather than an Abbreviated New Drug Submission (ANDS), contending that its different botanical source and its claims for new and different uses for the medicine prevented any reliance on BMS's Taxol as a Canadian reference product.

BPC then submitted independent clinical studies. The Minister approved the safety and efficacy of the BPC product as a new drug and issued it an NOC in 2001. BMS sought to quash this NOC, however, claiming that its issuance had turned on a finding of bioequivalence to the BMS product.

In a reversal of policy, Parliament in 1993 repealed the compulsory licence provisions of the Patent Act and canceled all compulsory licences issued on or after December 20, 1991. In part, these changes flowed from international duties accepted by Canada under the Agreement on Trade-Related Aspects of Intellectual Property Rights, 1869 W.N.T.S. 299 (TRIPS). Some may have thought that Canada's compulsory licensing system might also clash with Canada's obligations under the North American Free Trade Agreement, Can. T.S. 1994/02, in particular Art. 1709(10), signed at the end of 1992

The new statute abrogated the usual regulatory lag of two years before a generic manufacturer could obtain an NOC. To prevent the generic companies from abusing these "early...