Consultation on the Proposed Agreement for Data Compensation at Re-evaluations and Special Reviews under Section 66 of the Pest Control Products Act

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Pest Management Regulatory Agency
22 July 2022

(PDF Version - 347 KB)

Table of Contents

• Agreement for Data Compensation at Re-evaluations and Special Reviews under Section 66 of the Pest Control Products Act
  • Consultation Foreword
• Foreword
• Agreement
• Appendix A - Test data of (Data Holder name) the Registrant (name) wishes to use or rely on (Re-evaluation or Special Review name)
• Appendix B - Conduct of negotiations
  • Part A: Direct negotiations
  • Part B: Mediated negotiations
• Appendix C - Conduct of arbitration
• Appendix D - Confidentiality and privacy
• Appendix E - Compensation principles
• Appendix F - Form of last offer for use in relation to a re-evaluation or special review

Agreement for Data Compensation at Re-evaluations and Special Reviews under Section 66 of the Pest Control Products Act

Consultation foreword

Health Canada's Pest Management Regulatory Agency (PMRA) invites stakeholders to comment on the proposed Agreement for Data Compensation at Re-evaluations and Special Reviews under section 66 of the Pest Control Products Act. This agreement is proposed for use in conjunction with the Pest Control Products Act and the proposed "Regulations Amending the Pest Control Products Regulations (Protection of Test Data)" published in Canada Gazette, Part I for consultation on 11 June 2022.

Under section 66 of the Pest Control Products Act and section 17.14 of the proposed Regulations, a Registrant and Data Holder must enter into an agreement when, in the context of a re-evaluation or special review, the Parties wish to follow the formal process specified in the Regulations to determine compensation payable for the Registrant's use or reliance on the Data Holder's test data.

The PMRA will accept written comments on the consultation on the proposed Agreement for Data Compensation at Re-evaluations and Special Reviews under section 66 of the Pest Control Products Act up to 30 days from the publication of this document.

Consultation Summary:

This agreement for use at re-evaluations and special reviews is modified from the current "Agreement for Data Protection under section 66 of the Pest Control Products Act" that is in use for generic product applications. Modifications include:

1. The use of the term "Registrant" to specify the party seeking to rely on a "Data Holder's" test data for which compensation may be payable. This is consistent with the proposed regulatory amendments and largely replaces the use of "Applicant" and "Registrant" in the current agreement.
2. Unlike the current agreement where only the applicant initiates sending the agreement, here either party (Registrant or Data Holder) can deliver the proposed agreement.
3. Parties must enter into the agreement within 60 days of the final re-evaluation or special review decision being published. This 60-day time period is in the proposed regulations.
4. The arbitration can be ended if the Registrant indicates their intent to discontinue their registration.

This consultation is open for 30 days from the date of publication.

Please forward your comments to email: pmra.regulatory.affairs-affaires.reglementaires.arla@hc-sc.gc.ca. Questions or comments can also be directed to the Pest Management Information Service.

Comments should include:

• Title of this consultation document;
• Your full name and organization;
• Your phone number; and
• Your complete mailing address or email address.

Foreword

This document outlines the terms and conditions of agreements prescribed by the Minister under section 66 of the Pest Control Products Act. An agreement has to be entered into when a Registrant or Data Holder wishes to follow the formal process specified in the Pest Control Products Regulations (also referred to as "Regulations") in the context of a re-evaluation or special review to determine the compensation payable by a Registrant for the right to use or rely on test data of the Data Holder. The Agreement is to be used in conjunction with the Pest Control Products Act and Pest Control Products Regulations.

This document has been designed as a template agreement to be signed by the Parties; but, in the absence of one or both Parties signing a version of the template Agreement or varying certain terms and conditions of the Agreement (where the Regulations or the terms of the Agreement provide that the Parties can agree otherwise), Articles 1 to 14 of the Agreement (and associated Appendices) will apply to any negotiation for compensation entered into by the Parties under subsection 17.15(1) of the Pest Control Products Regulations, as well as any arbitration triggered by the registrant or data holder under subsection 17.16 (1) of the Pest Control Products Regulations. Sections of the Agreement template that are shaded in grey are not terms and conditions prescribed by the Minister, but are included to facilitate entry into an agreement by the Parties. Unless otherwise varied, Articles 1 to 14 form the Agreement entered into by the Parties under section 17.14 of the Pest Control Products Regulations whether or not this template agreement is signed by both Parties.

Agreement

Article 1 Registrant not prevented from discontinuing registration of product

This Agreement does not prevent the Registrant from discontinuing the registration of its registered pest control product pursuant to section 22 of the Pest Control Products Act.

If the Parties enter into a negotiated settlement, the terms of the settlement agreement will be binding upon the Parties. If the Parties proceed to binding arbitration, then the arbitral award will be enforceable as set out in Article 7.

Article 2 Negotiation period

During the 120-day period beginning on the day after the date of the delivery of this Agreement in accordance with the Regulations, by either Party sending to the other party within 60 days of the final re-evaluation or special review decision, the Parties shall enter into negotiations for the purpose only of determining the compensation payable and the method and security of such payment for the right to use or rely on the data identified in Appendix A.

Article 3 Conduct of negotiations

The Parties may elect to enter into direct negotiations for the whole duration of the negotiations period or for a limited period. The Parties may decide to seek the assistance of a third party neutral to facilitate their negotiations, including through mediation, at any time during the period of direct negotiations.

The Parties shall follow the steps described in Appendix B, unless the Parties agree otherwise, for the conduct of their negotiations within the time period determined in accordance with Article 2.

Article 4 Negotiated settlement

Where a settlement is reached through the conduct of negotiations in accordance with Article 3, the Parties shall sign a settlement agreement.

Article 5 30-Day period to submit to arbitration

If the Parties fail to conclude a negotiated settlement within the time period determined in accordance with Article 2, the Registrant or the Data Holder may, by delivering a written notice to the other Party within 30 days of the end of the negotiation period, submit the determination of the compensation payable and the method and security of such payment to binding arbitration.

Article 6 Arbitration period

Where written notice has been delivered under Article 5, the arbitration period begins on the day after delivery of the written notice in accordance with the Regulations. The arbitration period ends:

1. When the Arbitral Tribunal issues an order to terminate the proceedings because the Parties have reached a negotiated settlement;
2. When the Arbitral Tribunal issues an order to terminate the proceedings because the Registrant has provided written notice to the Data Holder and the Arbitral Tribunal that it will discontinue the registration of its registered pest control product and has notified the Minister of its intention to discontinue pursuant to subsection 22(1) of the Act; or,
3. 30 days after a final arbitral award is issued by the Arbitral Tribunal, or such other time period if the Parties agree.

As per subsection 17.16(3) of the Regulations, an arbitral award must be made within 120 days after the day on which the notice is delivered, unless, before the end of that period, the Parties agree to an extension and provide written notice to the Arbitral Tribunal or the Arbitral Tribunal provides written notice of an extension to the Parties. When informed of the Parties' agreement on an extension or when the Arbitral Tribunal has extended the period, the Arbitral Tribunal may delay the delivery of an arbitral award until the extended period expires.

Article 7 Enforcement of arbitral award

7.1 Subject to the requirements of this Article, an arbitral award is binding and enforceable following:

1. 30 days from the date that an arbitral award was issued, unless the Arbitral Tribunal orders a longer notice period or the Parties agree otherwise.

7.2 The part of the arbitral award dealing with compensation payable by the Registrant to the Data Holder for use or reliance on the Data Holder's data is not binding and enforceable in the event of the following:

1. during the arbitration period the Registrant notifies the Data Holder and the Arbitral Tribunal in writing, that it will discontinue its registration of the applicable pest control product, but any costs awarded by the Arbitral Tribunal in favour of the Data Holder pursuant to Appendix C, sections 10.2 and 11.2 will be binding and enforceable against the Registrant; or,
2. the Registrant notifies the Data Holder and the Arbitral Tribunal in writing that it will discontinue its registration of the applicable pest control product within 30 days of the issuance of the arbitral award, but any costs awarded by the Arbitral Tribunal in favour of the Data Holder pursuant to Appendix C, sections 10.2 and 11.2 will be binding and enforceable against the Registrant.

Article 8 Conduct of arbitration

The Parties shall conduct the arbitration in accordance with the rules prescribed in Appendix C, unless the Parties agree otherwise.

Article 9 Confidentiality and privacy

The Parties shall comply with the confidentiality and privacy requirements set out in Appendix D, unless the Parties agree otherwise, except with respect to matters provided in section 5 of that Appendix.

Article 10 Delivery of letter of access

When a negotiated settlement is reached or an arbitral award is issued, the Data Holder must provide the Registrant with a letter of access pursuant to subsection 17.17(1) of the Regulations. The letter of access provided by the Data Holder to the Registrant must not contain any restrictions on the use of the data by the Registrant. However, this does not limit any restrictions on the use of the data by the Registrant that the Parties may otherwise agree to.

The Data Holder must provide the letter of access to the Registrant within the period specified in the negotiated settlement or the arbitral award. If the Data Holder fails to provide the letter of access to the Registrant within the period specified in the negotiated settlement or arbitral award, the Registrant may, in accordance with subsection 17.17(2) of the Regulations, use or rely on the test data without having to continue to comply with the settlement or award.

If the Data Holder does not provide a letter of access to the Registrant, the Registrant may, on an application to renew its registration, deliver to the Minister, under clause 16(2)(e)(i)(C) of the Regulations, a document that establishes that a negotiated settlement between the Registrant and the Data Holder has been reached or an arbitral award has been made in respect of the test data and that the Data Holder has not provided a letter of access to the Registrant.

Article 11 Compensation principles

The Parties shall have regard to the compensation principles set out in Appendix E.

Article 12 Last offers

A Party's last offer will be presented in the form provided in Appendix F.

Article 13 Proprietary interest in data

The Registrant has no proprietary interest in test data which they obtained the right to use or rely on in accordance with the Regulations.

Article 14 Applicable law

Except as otherwise indicated herein, this Agreement shall be subject to, and construed in accordance with, the laws in (specify the name of the Canadian jurisdiction). If the Parties fail to specify a Canadian jurisdiction, the laws of Ontario apply.

Appendix A - Test data of (Data Holder name) the Registrant (name) wishes to use or rely on (Re-evaluation or Special Review name)

The Parties will provide the list of test data here that the Registrant wishes to use or rely on in the context of the re-evaluation or special review.

Appendix B - Conduct of negotiations

Part A: Direct negotiations

First meeting

1. The Parties will convene their first direct negotiations meeting within 10 days after the delivery of the agreement entered into in accordance with the Regulations, unless the Parties agree otherwise.

Organizational matters

2. Before the first scheduled meeting, the Parties will discuss and attempt to reach agreement on organizational matters (for example, time, date, location and participants) that will facilitate their direct negotiations.

3. No transcript or recording will be kept of the direct negotiations; but this does not prevent a Party from keeping its own notes of the negotiations.

Role of the parties

4. The Parties will attempt to obtain a negotiated settlement by:

1. identifying underlying interests;
2. isolating points of agreement and disagreement;
3. exploring alternative solutions;
4. considering compromises or accommodations; and
5. taking any other measures that will assist in the determination of the compensation payable by the Registrant to the Data Holder.

5. The Parties undertake to communicate and exchange information during the negotiation process and make serious efforts to obtain a negotiated settlement in accordance with Article 3.

First offers

6. Unless the Parties agree otherwise, the Parties will exchange with one another first offers on the amount of compensation payable within 40 days after delivery of the agreement entered into by the Registrant and Data Holder in accordance with the Regulations. The first offers must be in writing and set out the proposed amount to be paid for the test data listed in Appendix A as well as information outlining how the amount was calculated with reference to the compensation principles set out in Appendix E to this Agreement.

Termination of direct negotiations

7. Direct negotiations are terminated when any of the following occurs:

1. the negotiation period (120 days after the day on which the decision statement referred to in subsection 28(5) of the Act was made public by the Minister or at the end of any additional negotiating period agreed to by the Parties in writing), expires and no settlement has been reached;
2. the Parties agree, in writing, to submit the matter to arbitration in accordance with the agreement, prior to the expiration of the negotiation period; or
3. the Parties reach a settlement and sign a written agreement resolving the determination of the compensation payable by the Registrant to the Data Holder and the method, and security, of payment.

Suspension of direct negotiations

8. The Parties may agree to suspend their direct negotiations if they decide to seek the assistance of a third party neutral to facilitate their negotiations, including through mediated negotiation as provided in Part B of this Appendix.

Cost of direct negotiations

9. Each Party shall bear its own costs with respect to the conduct of direct negotiations. Any common costs will be shared equally between the Parties.

Last offers

10. When the direct negotiations between the Parties are terminated pursuant to paragraph 7(a) or 7(b), each Party may present a last offer in writing to the other Party in accordance with the Regulations. It is agreed that the last offers will be made in the form annexed hereto as Appendix F.

Negotiated settlement

11. For the purposes of clause 16(2)(e)(i)(C) and subsection 17.17(2) of the Regulations, the Registrant may deliver to the Minister a redacted version of a settlement agreement that discloses the identities of the Parties, the identity of the Data Holder's test data set out in Appendix A, and the name of the re-evaluation or special review, the amount, method, and security of payment of the compensation payable, the identities and signatures of the signatories and the date of execution of the settlement agreement.

Part B: Mediated negotiations

Choice of mediator

12. Further to the Parties' agreement to suspend their direct negotiations in accordance with section 8 above, the Parties agree to appoint [name of mediator] / will appoint a third party neutral to assist them in their negotiations and act as mediator within five days of the suspension of the negotiations. Where the Parties cannot agree upon the choice of a mediator at the expiration of the 5-day period, the Parties shall apply within the next 10-day period to the Alternative Dispute Resolution (ADR) Institute of Canada for the appointment of a mediator.

First mediated negotiation session

13. The Parties shall request a mediated negotiation session within 10 days of the mediator being appointed, unless the Parties agree otherwise.

Responsibilities of the parties during mediation

14. The Parties undertake to communicate and exchange information during the mediated negotiation process and make serious efforts to obtain a negotiated settlement in accordance with Article 3. The Parties and/or their representatives attending the mediated negotiation will have the authority to reach a settlement in this matter, or will have the means to readily and rapidly obtain that authority.

15. While no transcript or recording will be kept of the negotiations during the mediated negotiation, this does not prevent the Parties or the mediator from keeping their own notes.

Termination of the mediated negotiation

16. (1) The mediated negotiation is terminated when any of the following occurs:

1. the negotiation period (120 days after the day on which the decision statement referred to in subsection 28(5) of the Act was made public by the Minister or at the end of any additional negotiating period agreed to by the Parties in writing) expires and no settlement has been reached;
2. the Parties agree in writing to submit the matter to arbitration in accordance with the agreement, prior to the expiration of the negotiations period; or
3. the Parties reach a settlement and sign a written agreement resolving the determination of the compensation payable by the Registrant to the Data Holder and the method and security of payment.

16. (2) The mediated negotiation can also be terminated when a Party engaged in the mediated negotiation either advises the other Party and the mediator in writing of its intention to withdraw from the mediated negotiation or is deemed by the mediator to have abandoned the process. The termination does not terminate the direct negotiations unless the negotiation period (120 days or as extended by agreement of the Parties) has expired and no settlement has been reached.

Costs

17. The Parties agree to share equally the mediator's fees and the costs of the mediated negotiation session, such as the mediator's travel expenses and rental costs. Each Party shall bear its own costs with respect to the conduct of the mediated negotiation.

Last offers

18. When the mediated negotiation is terminated pursuant to paragraph 16(1)(a) or 16(1)(b) of this Appendix, each Party may present a last offer in writing to the other Party in accordance with the Regulations. It is agreed that the last offers will be made in the form annexed hereto as Appendix F.

30 Days to pursue binding arbitration

19. If the Parties fail to conclude a negotiated settlement within the negotiation period (120 days or as extended by agreement of the Parties), and the negotiation period has expired, the Registrant or Data Holder may, by giving written notice to the other Party if delivered within 30 days of the end of the negotiation period, submit the determination of the compensation payable and the method and security of such payment to binding arbitration.

Appendix C - Conduct of arbitration

1. Scope of the rules

1.1 The Rules on the conduct of arbitration set out in this Appendix apply to the arbitration of disputes between the Parties arising under the Pest Control Products Act in relation to the Registrant's use of or reliance on test data in a re-evaluation or special review for the purposes authorized or permitted by the Pest Control Products Act.

2. Appointment of arbitral tribunal

2.1 The Parties shall designate an Arbitral Tribunal, consisting of either a single arbitrator or three arbitrators, to preside over the arbitration process within 5 days, unless the Parties agree otherwise, of the delivery by the Registrant or Data Holder of the notice in writing to submit to binding arbitration in accordance with section 17.16 of the Regulations.

2.2 Where the Parties are unable to agree upon the number of arbitrators, a single arbitrator will be appointed. If the Parties cannot agree upon the identity of that arbitrator at the expiration of the 5-day period, the Parties shall apply within the next 10-day period, unless the Parties agree otherwise, to the ADR Institute of Canada, or alternatively, to a judge of the Federal Court of Canada for the appointment of an arbitrator.

2.3 Where the Parties agree to appoint three arbitrators, each Party shall appoint one arbitrator within 5 days, unless the Parties agree otherwise, of the delivery by the Registrant or Data Holder of the notice to submit to binding arbitration. Those two arbitrators so appointed shall jointly appoint a third arbitrator within 5 days of their appointment, or failing their agreement at the expiration of the 5-day period, the Parties may apply within the next 10-day period, unless the Parties agree otherwise, to the ADR Institute of Canada, or alternatively, to a judge of the Federal Court of Canada for the appointment of a third arbitrator. The appointed third arbitrator shall act as chair of the Arbitral Tribunal.

2.4 Where an Arbitral Tribunal consists of more than one arbitrator, the Parties may agree or the Arbitral Tribunal may decide, after hearing the submissions of the Parties, to delegate the determination of some or all pre-hearing procedural matters to the chair of the Arbitral Tribunal.

2.5 Unless otherwise agreed by the Parties, a person appointed to the Arbitral Tribunal shall be and remain at all times wholly independent and shall not act as an advocate for any Party to the arbitration.

2.6 Every arbitrator shall, before accepting an appointment, sign and deliver to the Parties a statement declaring that he or she knows of no circumstances likely to give rise to a reasonable apprehension of bias and that he or she will avoid and disclose to the Parties any such circumstances arising after that time and before the arbitration is concluded.

2.7 Any arbitrator who is unable to serve or to continue to serve due to disqualification, death or disability shall be replaced in the same manner as his or her original appointment.

3. Binding arbitration method

3.1 Final offer arbitration shall be the binding arbitration method used by the Arbitral Tribunal to determine awards under these rules. The Arbitral Tribunal shall have regard to the compensation principles in Appendix E.

3.2 If the Parties provided last offers at the termination of the negotiation period pursuant to Appendix B, they are deemed final offers for purposes of the arbitration.

3.3 If either Party fails to provide a last offer, that Party shall provide a final offer for purposes of the arbitration within 5 days of the appointment of the Arbitral Tribunal, unless the Parties agree otherwise. It is agreed that the final offer will be made in the form annexed hereto as Appendix F.

3.4 The Arbitral Tribunal shall, in conducting a final offer arbitration, have regard to the information provided to the arbitrator by the Parties in support of their final offers and, unless the Parties agree to limit the amount of information to be provided, to any additional information that is provided by the Parties at the Arbitral Tribunal's request.

3.5 The decision of the Arbitral Tribunal in conducting final offer arbitration shall be the selection by the Arbitral Tribunal of the final offer of either of the Parties, including setting terms and conditions for the payment of compensation.

4. Communications

4.1 Any notification or communication to the Arbitral Tribunal or to a Party or its designated Representative may be delivered by registered mail, or any other method that would provide proof of delivery, including email or fax, at a location identified for such purpose by the Arbitral Tribunal and each Party.

4.2 No Party or person acting on behalf of a Party may communicate ex partewith the Arbitral Tribunal, except as directed by the Arbitral Tribunal, or where the communication is initiated by the Arbitral Tribunal for the purposes of administrative coordination of the arbitration.

5. Case management procedure or procedural conference

5.1 The Arbitral Tribunal may convene a procedural conference within 5 days, unless the Parties agree otherwise, of the appointment of the Arbitral Tribunal, and, where the Arbitral Tribunal consists of more than one arbitrator, of the appointment of the last member of the Arbitral Tribunal to resolve procedural or administrative issues. A procedural conference agenda may be created to assist any discussions involving the identification and clarification of the issues in dispute. The questions to be addressed at a procedural conference may include:

1. Should the hearing be oral or based on submitted documents and written interrogatories posed to the Parties by the Arbitral Tribunal?
2. If an oral hearing is not required, how much time will be required for the production of documents and responses?
3. If an oral hearing is required, how much time will be required and where should the oral hearing be held?
4. If an oral hearing is required, should the evidence be pre-filed in written form under statutory declaration to facilitate cross-examination? Where multiple witnesses will be cross-examined, is it appropriate to allow for cross-examination of a panel of witnesses?
5. To what extent, and pursuant to what procedure, will there be any disclosure and production of facts and documents?
6. Should time be scheduled for the hearing of any issues with respect to pre-hearing disclosure?
7. Are there any specific issues of confidentiality that the Arbitral Tribunal should address?
8. Are the Parties willing to jointly prepare briefs or legal authorities for use in the arbitration?
9. Can the Parties agree on time limits and a schedule for the introduction of viva voce evidence?
10. Will expert evidence be required? Are any special rules relating to experts required?
11. What language will be used in the arbitration?
12. Should final argument be oral or written? If oral argument is necessary, should there be a time limit? Should there be a timetable for delivery of written argument? Should there be any special procedures for reply argument by a Party on any new point raised by the other Party?
13. Should the Parties agree on a provisional timetable with timelines other than the ones provided in these Rules?

5.2 Procedural conferences will take place by telephone conference call, unless otherwise agreed.

5.3 The Arbitral Tribunal shall issue a procedural order and record any agreement made at any procedural conference and shall promptly send a copy of such order or record to each of the Parties.

6. Compliance with the Provisional Timetable

6.1 The Arbitral Tribunal and the Parties should make all reasonable efforts to comply with the provisional timetable provided in these Rules or the one they have agreed upon. Extensions and revisions of the timetable can be made by the Parties or by the Arbitral Tribunal within the arbitration period or as extended by the Parties.

6.2 The Arbitral Tribunal shall conduct the arbitration process as expeditiously as possible and, subject to the timetable in section 6.1, in the manner the Arbitral Tribunal considers appropriate having regard to the circumstances of the matter.

7. Written proceedings only

7.1 The Arbitral Tribunal may dispense with an oral hearing if the Parties agree that an oral hearing is unnecessary, given the issues in dispute. In such case, the Arbitral Tribunal shall set timelines for the presentation of written evidence and submissions.

7.2 Where a documents-only arbitration is convened in accordance with section 7.1, each Party may direct interrogatories to the other Party 7 days after having received communications from the Arbitral Tribunal or the other Party, and the other Party shall answer the interrogatories within 14 days, unless the Parties agree otherwise.

7.3 The deadline for any final written evidence and submission should be within 20 days after the interrogatories are done, unless the Parties agree otherwise. Written evidence shall be submitted pursuant to a statutory declaration.

8. Need for a hearing

8.1 If an oral hearing is required, then following the first procedural conference the Arbitral Tribunal shall determine if further procedural conferences are required and either set the dates for those procedural conferences, or establish the timelines for any other procedural matters and the date for an oral hearing for the arbitration, which date should be within 40 days of the first procedural conference, unless the Parties agree otherwise.

8.2 In the case where an oral hearing is required, then, unless the Arbitral Tribunal otherwise directs or the Parties otherwise agree:

1. sworn statements of evidence shall be filed in advance of the hearing in lieu of examination-in-chief and witnesses shall be subject only to cross-examination and re-examination in accordance with timelines to be set following the first procedural conference;
2. the oral hearing, including oral arguments, shall be completed within 5 days, unless the Parties agree otherwise; and
3. no transcripts of the proceedings shall be required.

8.3 The Parties may agree that an oral hearing of the arbitration may also take place by telephone conference call.

9. Additional evidence

9.1 At any time during the arbitration process, the Arbitral Tribunal may, subject to section 3.4, request any Party to provide further evidence or submissions in such a manner as it determines.

9.2 The Arbitral Tribunal may, at any time, seek independent advice on any matter in dispute from any person or review and take notice of relevant facts or law provided that the Parties shall be given notice and provide input as well as have the opportunity to review the content of the advice and make submissions thereon. At the request of a Party, the Arbitral Tribunal may require that the person providing such advice sign a declaration that they have no reasonable apprehension of bias and attend the hearing and answer questions posed by any Party or the Arbitral Tribunal.

10. The arbitral award

10.1 The Arbitral Tribunal will render its arbitral award within a reasonable time period after the close of the oral hearing or the presentation of written Reply argument, or after the Registrant has provided written notice of its intention to discontinue its registration of the applicable pest control product, but no later than 120 days after the day on which the notice to submit to binding arbitration was delivered by a Party or as extended by the Parties or the Arbitral Tribunal, as set out in subsection 17.16(3) of the Regulations.

10.2 The arbitral award shall set out:

1. the nature of the issues in dispute;
2. the final decision regarding the final offers presented on compensation payable for use or reliance on the Data Holder's data;
3. the terms and conditions for the payment of compensation, including the payment of compensation in accordance with a schedule of payments;
4. the facts and the law to the extent the Arbitral Tribunal deems them necessary to explain its award; and
5. any costs payable by either Party as determined under section 11 of this Appendix.

10.3 In the event that the Parties have not stipulated the interest payable on compensation in their final offers, the Arbitral Tribunal may order the Parties to pay simple or compound interest on the compensation payable for reliance on the Data Holder's data and for any costs ordered to be paid by either Party for the applicable time period and at a rate that it considers just.

10.4 When issuing an arbitral award, the Arbitral Tribunal shall also provide the Parties with a signed copy of a summary of, or extract from, the award which shall include the identities of the Parties to the arbitration, the identity of the Data Holder's test data specified in Appendix A of the Agreement, the amount, method and security of payment of the award and the date on which the award was issued.

10.5 When providing the Minister with proof of compliance with an award for the purpose of administering paragraph 16(2)(e) and subsection 17.17(2) of the Regulations, the Registrant may include the summary or extract that was provided by the Arbitral Tribunal in accordance with section 10.4.

11. Costs of Arbitration

11.1 Subject to section 11.2, the cost of the arbitration including facility costs, independent advisor fees, translation costs, and the fees and disbursements of the Arbitral Tribunal ("arbitration costs"), shall be fixed by the Arbitral Tribunal and shall be allocated between the Parties in equal shares.

11.2 The Arbitral Tribunal may, at their discretion, vary the allocation of costs referenced in section 11.1 and order one of the Parties to pay all or a greater share of the costs referred to in section 11.1, as well as all or a share of the reasonable legal fees and disbursements incurred by the other Party, taking into account the subject matter in dispute, the outcome, and the conduct of the Parties prior to and during the arbitration, including:

1. if the Registrant notifies the Data Holder during the arbitration period, or within the time period specified by the Arbitral Tribunal or otherwise agreed to by the Parties, that it will discontinue its registration of the applicable pest control product; or,
2. if the Registrant fails to provide notice of its intention to proceed with the discontinuation of registration of the applicable pest control product within 30 days of the issuance of the arbitral award.

Appendix D - Confidentiality and privacy

Confidentiality and privacy

1. Any direct or assisted negotiation or arbitration convened pursuant to this Agreement is confidential and private. Only the Parties, their representatives and advisors may attend the negotiation or arbitration. Other persons may only attend with the consent of the Parties.

2. Any person involved in a negotiation or arbitration in accordance with section 1 shall agree to be bound by this Appendix or any other similar undertaking.

3. The mediator or Arbitral Tribunal, and/or any independent advisors whom they consult, shall not be compelled to disclose such records or to testify in any adversarial or judicial forum. The Parties agree not to subpoena or require the testimony of the mediator or Arbitral Tribunal or to produce records or notes.

Inadmissibility of information disclosed in negotiation or mediated negotiation

4.1 Subject to section 4.2, the Parties will not rely on or introduce as evidence in any proceeding or for any purpose, including an arbitration under this Agreement whether or not that arbitration relates to the subject matter of the negotiations, any oral or written information disclosed in or arising from a direct or mediated negotiation under this Agreement, including:

1. any documents of third parties produced in the course of the direct or mediated negotiation that are not otherwise produced or producible;
2. any views expressed, or suggestions made, by any Party in respect of a possible settlement of the matter;
3. any admissions made by any Party in the course of the direct or mediated negotiation, unless otherwise stipulated by the admitting Party; and
4. the fact that any Party has indicated a willingness to make or accept a proposal for settlement.

4.2 If the Parties proceed to arbitration then the limitations on disclosure in section 4.1 do not apply to:

1. the disclosure of any last offers made by the Parties during negotiations, as these are deemed to be final offers for the purposes of the arbitration as per section 3.2 of Appendix C; and
2. b. any conduct of the Parties during negotiations which is inconsistent with the undertakings set out in section 5 of Appendix B for the purposes of making submissions to the Arbitral Tribunal about the allocation of costs as per Appendix C, section 11.2.

Exception to non-disclosure

5. No oral or written information concerning the existence of the direct or assisted negotiation or arbitration, or anything which occurs or is disclosed within the direct or assisted negotiation or arbitration, shall be disclosed or used outside of that process, or for any other purpose by a Party except:

1. for any administrative purpose in conducting a direct or assisted negotiation or arbitration;
2. in connection with an application to a court for interim relief or to set aside, recognize or enforce an agreement or an arbitral award;
3. to the Minister in relation to the enforcement or administration of the Pest Control Products Act;
4. where a Party is required to do so by law or by a court or competent regulatory body;
   and in the case of an arbitral award,
5. to assist future Arbitral Tribunals as set out in accordance with the Pest Control Products Act; or
6. to an independent expert for the sole purpose of assisting an Arbitral Tribunal in its understanding of the issues under its jurisdiction.

Supplementary confidentiality agreement

6. The Parties may enter into a specific confidentiality agreement governing the disclosure of oral or written information to be used by the Parties in negotiation or arbitration, subject to the rules provided in sections 4.1 and 4.2.

Ruling on confidentiality by the Arbitral Tribunal

7. Notwithstanding these requirements, an Arbitral Tribunal may at any time determine a procedure to rule upon a claim by any Party that certain information must be kept confidential and may rule upon how that information will be treated during and after the arbitration process.

Appendix E - Compensation principles

Introduction

These compensation principles are for consideration in the determination of financial compensation under the Pest Control Products Regulationsfor data compensation. These principles are intended as a tool for use by an Arbitral Tribunal in rendering a decision with respect to the amount of financial compensation to be awarded during the arbitration process as well as to aid Parties in reaching a negotiated settlement. These principles are not formally binding on any Party. The Arbitral Tribunal will retain discretion under the final offer binding arbitration process in deciding which Party's compensation offer to accept.

The compensation principles seek to balance the range of stakeholder interests that may be affected, directly or indirectly, by the functioning of the data compensation process. While each process may raise unique issues, it is expected that certain questions regarding compensation - in particular, on what basis data costs should be determined; the sharing of data costs between Parties; and whether and how other potential adjustments should be addressed – will arise regularly during data compensation processes. The purpose of compensation principles is to encourage consistency and predictability in how such issues are considered in the determination of financial compensation.

The absence of wording on other potential principles or factors should not be construed as deterring Parties from raising them for consideration. It is expected that these principles will evolve as experience is gained with the pesticide data compensation system.

Eligible data costs and calculations of costs

The scope of compensable test data costs should reflect the broad range of activities undertaken by the Data Holder to develop and conduct studies, and to analyze data that are considered in support of a registration, confirmation of a registration or amendment of a registration. These may include costs incurred for review by senior scientific experts, overhead, and regulatory submission costs, as well as costs for the development of data, including pilot studies and repeated studies, if valid reasons for the repetition can be demonstrated.

Use of reasonable methods to estimate costs are considered appropriate in instances where actual, historic cost information (for example, invoice records) is unavailable or incomplete.

Note that in some situations, data may be considered by the Minister in support of a re-evaluation or special review decision, and therefore, may be subject to compensation – long after it was originally generated. Discounting costs based on the age of data is not recommended. Instead, where these circumstances arise, it may be appropriate to determine compensation based on a reasonable estimate of the present day costs that would be incurred if this data were to be re-generated.

Basis of compensation

Compensation should be determined on the basis of the cost of data rather than the value of the data. "Value-based" claims for compensation - based on such factors as potential gains or losses in the market share that the Registrant or Data Holder anticipates securing - should be discouraged.

Adjustments to data costs

A recommended approach for addressing key adjustments is as follows:

Inflation - adjusting compensation by applying an established index (for example, the Consumer Price Index) from the period the compensable test data was generated may be appropriate.

Interest on studies - An interest charge accrued from the point at which the test data that was considered in support of the re-evaluation or special review decision and to whom compensation may be payable is relied upon, normally the date the data was considered, may be appropriate.

Financial/Investment Risk Premium - Taking a broad approach to the scope of compensable costs (as recommended in Eligible Data Costs above) represents an appropriate method to recognize the activities and efforts undertaken by Data Holders. Claims for an additional adjustment to the cost of test data to reflect financial risks borne by Data Holders to successfully register a product, amend a registration or confirm a registration should be discouraged.

Appendix F - Form of last offer for use in relation to a re-evaluation or special review

In the matter of the Pest Control Products Act and the Regulations thereunder

Last offer

Whereas section 17.16 of the Pest Control Products Regulations provides that in the absence of a negotiated settlement at the end of the negotiation, the Parties may present their last offers in writing regarding the compensation payable in respect of the test data the Registrant wishes to use or rely on;

And whereas the negotiations between (identity of Data Holder) and (identity of the Registrant) have ended without a settlement having been reached;

And whereas it is acknowledged that this last offer will be the final offer for purposes of arbitration in accordance with Appendix C to the Agreement for Data Compensation at Re-evaluations and Special Reviews under Section 66 of the Pest Control Products Act between the Data Holder and the Registrant (the "Agreement") if the matter is submitted to arbitration;

Now therefore (identity of "the Data Holder" or "the Registrant") hereby presents its last offer to (identity of "the Registrant" or "the Data Holder") as the compensation to be paid by the Registrant for the right to use or rely on the test data specified in Appendix A to the Agreement, as follows:

1. The amount of the offer is _____________ payable in Canadian currency.

2. The payment is to be made in a lump sum.

or

3. (a) The payment is to be made in __(Number)__ equal annual installments on the anniversary of the first such payment.

optional

(b) Security in the form of __(type)__ is to be provided in relation to future installments, and

(c) Interest at the rate of ____________ on future installments is to be paid at the time of payment of an installment.

In witness whereof, this last offer has been

Executed on behalf of the (Data Holder or Registrant) by: (Name and title of signatory)

In the presence of:
(Witness)

Date: