Canada: Patent Infringement Action Dismissed Since No Claims Were Both Valid And Infringed (Intellectual Property Weekly Abstracts Bulletin - Week Of June 2, 2014)

Last Updated: June 6 2014

Edited by Chantal Saunders and Beverley Moore , Adrian Howard and Ryan Steeves

Patent Cases

Patent Infringement Action Dismissed Since No Claims Were Both Valid and Infringed
Vieira c. 9078-4042 Quebec inc., 2014 QCCS 2141

This was a patent infringement action, relating to an invention that pertains to the general field of building construction.

The Court conducted a claim-by-claim analysis of the claims in issue, and compared the device manufactured by the Defendant with the claim in question. The Court noted that it is wrong to compare the Defendant's device with the device manufactured by the Plaintiff. Following the Court's analysis, the Court held that: (i) certain claims were invalid as between the parties (and thus, no infringement analysis was carried out), and (ii) the remaining claims were not infringed (and thus, no validity analysis was carried out). Since none of the claims in issue were found to be both valid and infringed, the action failed. No costs were awarded due to an "unexplained" lack of communication on the part of the Defendant which, in the Court's view, might have helped to avoid a trial.

Experts Permitted to Attend Testing at Plaintiff's Facility
Dow Chemical Company v. Nova Chemicals Corporation, 2012 FC 754

This Order was issued in 2012, but just made public now. The defendant brought a motion seeking to permit its experts to attend testing, for samples from the testing, and to file reply affidavits on the motion. The Court granted the motion.

In considering the reply affidavit issue, the Court held that the affidavits met the test for seeking reply, and admitted them. All three comment on evidence filed by the plaintiffs in response to the defendant's motion. Cross-examinations had occurred on the affidavits. Furthermore, the Court held that there was no substantial or serious prejudice to the plaintiffs and the evidence would serve the interests of justice.

The defendant produced samples of its allegedly infringing product on the condition that its experts be permitted to attend and monitor the tests. The plaintiff refused on the basis of safety and privacy concerns at their facilities. The Court held that it is its practice to allow attendance of the opposing party at testing conducted in support of an action where the results are planned to be used at trial. Any experts appointed to attend the testing would be well aware of the safety issues. Furthermore, they would be covered by the protective order, and likely a confidentiality agreement. Thus, the privacy concerns are not warranted.

PMPRB not found to have jurisdiction over two generic companies in separate decisions

  1. Sandoz Canada Inc. v. Canada (Attorney General), 2014 FC 501

In the first of two similar decisions, the Federal Court has found that Sandoz Canada is not under the jurisdiction of the PMPRB because Sandoz does not hold any patents and no monopolies. Sandoz is the wholly-owned subsidiary of Novartis Canada Inc., which is itself a subsidiary of Novartis AG. Novartis AG owns patents relating to some of the medicines that sparked the PMPRB's concerns. The PMPRB was aware that Novartis AG authorizes Sandoz to sell generic versions of those medicines.

Accordingly, the PMPRB argued it had jurisdiction over Sandoz because of sections 2 and
79(1) of the Patent Act. It was submitted that section 79(1) provides that a patentee includes any other person who is entitled to exercise any rights in relation to that patent. According to the PMPRB, Sandoz is effectively controlled by its parent companies as they authorize Sandoz to enter the market, making Sandoz a patentee.

In finding the PMPRB's decision to be unreasonable, the Court said that the PMPRB's jurisdiction was restricted to reviewing prices charged by patent holders to determine whether those prices are excessive. Further, the Court found that while the federal government can regulate patents of invention, it has no overall jurisdiction to regulate the price of generic versions of patented medicines because the legislation is not aimed at protecting consumers from high drug prices generally.

  1. Ratiopharm Inc. v. Canada (Attorney General), 2014 FC 502

In the second related decision, the Federal Court has found that Ratiopharm is not a patentee and therefore not subject to the jurisdiction of the PMPRB. Ratiopharm sells ratio HFA, the generic equivalent of a product manufactured by GlaxoSmithKline Inc. (GSK). Ratiopharm sold their product to pharmacies after having purchased it under contract from GSK. The two products competed in the Canadian market, and GSK retained all rights to its product.

The PMPRB submitted that the agreement between Ratiopharm and GSK gave Ratiopharm the right to sell and set the prices for ratio HFA. Without that agreement, the PMPRB argued that Ratiopharm would have violated GSK's patent, and so in that sense, Ratiopharm was entitled to "exercise... rights in relation to that patent", which brought it within the definition of a "patentee" in section 79(1) of the Patent Act. The PMPRB said that ratio HFA was being sold at an excessive price and that Ratiopharm must pay damages of $65.9 million.

The Federal Court followed the same reasoning as in the Sandoz decision, concluding the PMPRB did not have jurisdiction over generic companies who do not own patents and the governing legislation is not aimed at protecting consumers from high prices generally.

Industry News

Health Canada has released a Guidance Document: Biopharmaceutics Classification System Based Biowaiver.

Health Canada has released an Information Sheet - Management of Drug Company Contact and Financial Account Information.

Reports relating to Bill C-31, which amends the Trade-marks Act, among others, were tabled by the Standing Senate Committee on National Finance and the Standing Committee on Finance in the House of Commons.

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