Authored by: Jamie-Lynn Kraft, Associate, Smart & Biggar

Minutes before the September 30, 2018, midnight deadline, Canada reached a new free-trade agreement with Mexico and the United States. The new United States-Mexico-Canada Agreement (USMCA) replaces the North America Free Trade Agreement (NAFTA), which came into effect over 24 years ago.

The USMCA covers a wide range of topics, including intellectual property (IP) law. While Canada is already compliant with many of the requirements set out for the treatment of IP, there are some notable changes that Canadian businesses should be aware of.

1. Copyright

Currently in Canada, copyright protection in a work (e.g. photograph, book, software code) lasts for the life of the author plus 50 years. The USMCA will require Canada to increase the term by 20 years, aligning the protection with the United States and the European Union. This means that businesses which were waiting for a work to enter the public domain so that they could exploit it freely must wait another two decades. On the flip side, creative companies will enjoy longer exclusive rights to display or produce their creative works.

2. Trademarks

With regard to enforcement of trademarks, the USMCA may require Canada to implement a system that provides for “pre-established damages” in civil proceedings relating to trademark counterfeiting (e.g. selling “knock-offs”). The damages must be “in an amount sufficient to constitute a deterrent to future infringements and to compensate fully the right holder for the harm caused by the infringement.” Such damages will give brand owners more certainty of result when taking action against counterfeiters. This will be welcomed by brand owners as Canada is long overdue in implementing statutory damages for trademark counterfeiting.

3. Patents

Currently in Canada, a patent expires 20 years from the filing date of the patent application. This expiry date cannot be extended even if the Canadian Patent Office is significantly delayed in examining the patent application. In situations when the Patent Office incurs an unreasonable delay in examining an application, the USMCA will require Canada to extend the patent’s expiry date. The impact of this change is limited to patented inventions that are still commercially relevant 20 years after filing the patent application, which may not be the case in fast-moving industries like technology and software development.

4. Biologics

The USMCA will also require Canada to increase the data protection term (market exclusivity) for biologics from eight years to 10 years from the date of first marketing and approval. This is a notable change for drug companies in particular.

While the USMCA has been agreed in principle, it must still be ratified by all three countries involved. For Canada, that means that the agreement must be tabled in Parliament where it can be debated and agreed locally before ratification. In the United States, the agreement must be sent to Congress for a 60-day review period, during which time Congress can suggest changes, before it can be signed by the President.

That means that further changes may be possible, and the timeline to implementation of the provisions included in the USMCA is not certain. Staying up to date with this process is one of the many steps Canadian businesses can take to ensure that they are staying on-side of – and taking advantage of – intellectual property laws. Business owners should also consider talking to a lawyer that specializes in IP or a patent or trademark agent, to understand how to protect their inventions and brands, and maximize the commercial value of their IP overall.

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About the author: Jamie-Lynn Kraft is a lawyer and trademark agent at Smart & Biggar, an Invest Ottawa partner.  She is a regular advisor at the Invest Ottawa IP clinics and works with clients in a wide variety of fields, from small- and medium-sized enterprises to multinational corporations, covering all industry areas including fashion, cosmetics, food and beverage, information technology and manufacturing.  Contact Jamie-Lynn at [email protected].