The New Trade Deal Between the United States, Canada and Mexico: The USMCA or the Modernized NAFTA and its Notable Changes to Intellectual Property Rights by Stephanie Espada

On October 1, 2018, the United States, Mexico and Canada announced that they reached an agreement in principle regarding the USMCA, the successor of the North American Free Trade Agreement (NAFTA). This agreement aims to modernize trade between the three countries and to increase the economic growth of each party. Among other impacts, the USMCA will have notable effects regarding Intellectual Property Law. Each party will see its Intellectual Property Laws evolve and they will have to grant the same rights to their own citizens as well as those granted to citizens from the other member party countries. The new agreement states that each party shall ratify the Madrid Protocol and if the United States and Mexico are already member states of such organization, Canada is the last party to join the treaty and will allow trademark owners to register their marks in any member countries using a single application. In terms of trademarks, the USMCA will require the signatories to pre-establish damages for trademark infringement. Canada will be the one to implement this legislation as the United States already have a provision for pre-established damages and require statutory damages for counterfeit marks. The goal is to deter future infringements and to compensate the trademark owner.

One of the most significant changes concerns Canada as it will have to align its national Copyright Law on the United-States’ and increase the basic term of copyright protection to the life of the author plus seventy (70) years after the author’s death. New “take down” provisions will provide safe harbors for Internet Service Providers (ISPs) that will require them to remove or disable access to infringing copyright content. ISPs must implement a policy of terminating the accounts of repeat infringers that will allow them to be shielded from liability for copyright infringements not controlled, initiated, or directed by the ISPs.

If the Intellectual Property landscape experiences substantial changes from a copyright and trademark standpoint, the landscape for pharmaceuticals and for patents will also be impacted. The current term for biologics in the United States is twelve (12) years, but the USMCA will require a party to provide a data protection term for biologics of at least 10 years of market exclusivity from the date on which the first marketing approval is granted. Patents will also benefit from additional protection and will receive term adjustments for unreasonable patent-granting office delays through no fault of the applicant. The delay will be defined in the issuance of a patent of more than “five years from the date of filing of the application in the territory of the party,” or “three years after a request for examination of the application has been made, whichever is greater.” These provisions should encourage the timely granting of patents. The United States already has Patent term adjustment as part of their laws, but it will be new for Canada and require some adjustment. Although the parties have agreed in principle, the countries still need to ratify the agreement to see all these changes coming into effect. The ratification is expected early 2019.

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