Will Recent IP Developments Remove Canada From US Trade Watch List?

Published July 11th, 2017

Several months ago the Office of the US Trade Representative (USTR) published the 2017 Special 301 Report. This report identified trade barriers and includes a Watch List of countries where IP concerns exist.  As in 2016, Canada remains on the Watch List. The Office of the USTR indicated that U.S. innovators face challenges “including restrictive patentability criteria” in Canada and uncertainties surrounding the “promise doctrine.”  The Office of the USTR also highlighted the Supreme Court of Canada’s (SCC) upcoming opportunity to clarify this doctrine through case law.

As is being widely reported, the SCC did just that and released its decision in AstraZeneca Canada Inc. v. Apotex Inc. 2017 SCC 36. In this decision, the SCC unequivocally stated that “the Promise Doctrine undermines a key part of the scheme of the [Patent] Act; it is not good law”.

Two other major decisions have further strengthened the position of IP rights holders in Canada. In Google Inc. v. Equustek Solutions Inc. 2017 SCC 34 the SCC upheld a worldwide interlocutory injunction against Google ordering the search giant to de-index websites that are being using to sell the intellectual property of another company. The SCC stated that “[t]he only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. …  If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm”.

In Dow Chemical Company v. Nova Chemicals Corporation, 2017 FC 637, the Federal Court (FC) issued what is thought to be the largest ever patent infringement award in Canadian history. The FC ordered Nova to pay Dow $644,623,550.00.  While this decision may still be appealed, a patent infringement award of such magnitude is not common in Canadian jurisprudence.

These three decisions issued in close chronology may point to a strengthening of IP rights in Canada. Now rights holders have the opportunity to get a global interlocutory injunction, a six hundred million dollar patent infringement award and no longer have to be concerned with the promise doctrine as potentially invalidating their patents.  We shall have to wait until next year to see if these strengthened rights are sufficient to finally move Canada off of the Special 301 Report’s Watch List.

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