Comparing NAFTA & USMCA IP Provisions
By: Katie Rubino
The United States-Mexico-Canada Agreement (UMSCA) is a pending trade agreement, informally agreed to on September 30th, 2018, in an attempt to modernize North American Free Trade Agreement (NAFTA). NAFTA was implemented on January 1st, 1994 to streamline trading among the three nations, and is significant because it was the first trade agreement to implement intellectual property (IP) provisions.
The USMCA is monumental in that it provides strong protection and enforcement of intellectual property rights among the three member nations. Updates to IP provisions in USMCA reflect negotiations among members of the Trans-Pacific Partnership (TPP), which was updated in March 2018, now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Perhaps the most instrumental change provided for by the UMSCA is the length of protection for test data concerning biological pharmaceutical products when submitted to a governmental agency for approval. Biological pharmaceutical products include any pharmaceutical drug product manufactured from biological sources. Biological sources include human, animal, or microorganisms. Existing biological pharmaceutical products on the market today in the United States include drugs such as Lantus, Neulasta, Herceptin, and Humira just to name a few.
Currently, generic forms of biological pharmaceutical products, known as “biosimilars,” exist on the market, after being granted approval by a governmental agency. The approval of biosimilars first started with European regulatory authorities, and the Food and Drug Administration (FDA) was granted this authority soon after, in 2010, upon passage of the Patient Protection and Affordable Care Act. This provision allows for the FDA to approve biosimilars when they are considered interchangeable with a reference product. Prior to this, the FDA approved biosimilars using comparability of products as the standard for review.
In order to obtain approval by a governmental agency such as the FDA, manufactures of biosimilars may use safety and efficacy data from brand name biological pharmaceutical protects. Protection and confidentiality of such data is known as regulatory data protection (RDP,) and is protected under Article 39.3 of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). RDP precludes others from using data for a same or similar product for a specific period of time without consent of the original party.
The USMCA looks to streamline protection of RDP in all three countries so that any one country is not at a disadvantage. Under NAFTA, chemical pharmaceutical products such as small molecules, were given RDP protection for five years. Biological pharmaceutical products were not addressed in NAFTA, because they were not widely developed at the time when NAFTA was negotiated and implemented in the early 1990’s. Currently, the U.S maintains the five year protection window set out in NAFTA for chemical pharmaceutical products, and provides twelve years of RDP protection for biological pharmaceutical products. Canada provides eight years of RDP protection for both chemical pharmaceutical products and biological pharmaceutical products. Mexico currently provides five years of RDP only for chemical pharmaceutical products.
The USMCA creates uniformity of RDP protection in all three member countries, by providing for five year RDP protection for chemical pharmaceutical products and ten years of protection for biological pharmaceutical products. These time periods will run from the date of first marketing approval of a novel product in a relevant country. It is to be noted, that the ten year RDP for biologics is shorter than the twelve years of protection in the U.S. but longer than the eight and zero years of protection in both Canada and Mexico, respectively. In addition, the USMCA provides avenues for the U.S. to enforce the longer RDP time periods in both Canada and Mexico. Furthermore, Canada and Mexico will be granted a transition period of five years to fully implement these new provisions.
A second change to IP rights by this new trade agreement includes adjustments to patent terms for unreasonable delays caused by a patent office. Currently patent terms in the U.S., Canada, and Mexico last for 20 years from earliest filing date. Legislation in the USMCA will allow inventors to benefit from an adjusted patent term when there has been an “unreasonable” delay by the patent office, defined as a minimum of 5 years from the date of application filing, or 3 years after the request for an examination, whichever is later. This is especially important for biological pharmaceutical products because the technology involved can take several years for a patent to be fully prosecuted and eventually granted.
Looking ahead, the USMCA is expected to be implemented in the second half of 2019. The USMCA stipulates that the agreement must be reviewed by all three nations after six years. If the three countries are still in agreement after six years, then the agreement will be in effect for a complete sixteen year period. After expiration of the initial sixteen year period, the agreement has the option to be renewed for another sixteen years.