On November 17, 2005, the Federal Court of Canada released its decision in Hoechst Marion Roussel Canada Inc. v. Canada (Attorney General),clarifying issues about the jurisdiction of the Patented Medicine Prices Review Board (PMPRB), including whether the existence of a patent application "pertaining to a medicine" gives the board jurisdiction over the pricing of the medicine.
The decision is the latest in a series of proceedings that began in April 1999, when the PMPRB issued a notice of hearing seeking to determine whether Hoechst had overpriced its Nicoderm patch. The board maintained that the patch was a medicine, not a delivery device, and it asserted jurisdiction over not merely the issued patents owned by Hoechst, but also Hoechst’s patent applications from the date that they were laid open. The PMPRB found that the patents and patent applications pertained to the patch even though the claimed formulations were not actually used in the marketed product. Hoechst sought judicial review of the board’s conclusion about its jurisdiction, challenging the board’s finding and arguing institutional bias and a breach of procedural fairness.
The Federal Court decided that the PMPRB lacked jurisdiction over patent applications, rejecting the board’s assertion of jurisdiction from the date that a patent is laid open. The Court did not address the issue whether the PMPRB has jurisdiction, once a patent is issued, in the period from publication to grant of the patent. The Court held that a patent application gives rise only to the potential for the grant of a patent. The existence of a laid-open patent application does not in any way support the inference that a patent will inevitably be granted. The result of this finding is that medicines that are the subject of patent applications only, as opposed to issued patents, are not subject to price control, and pricing reports do not need to be submitted to the PMPRB in respect of these products.
However, the Federal Court rejected Hoechst’s argument that the PMPRB lacked jurisdiction because the patch did not fall within the meaning of the term "medicine." The Federal Court concluded that a transdermal patch is a medicine for the purposes of the PMPRB’s jurisdiction. The Federal Court also rejected Hoechst’s argument that its patents did not pertain to Nicoderm because the claimed formulation was not used in the marketed product. Referring to the definition of an "invention pertaining to a medicine" in the Patent Act, the Court held that it is enough that the patent is intended to be used or capable of being used in the product.
Finally, in response to Hoechst’s allegation of institutional bias and breach of procedural fairness, the Federal Court held that there was neither institutional impartiality nor breach of procedural fairness in the way the board proceeded. Hoechst had argued that the bias arose from (i) an impermissible overlap of investigative and adjudicative functions by the board and its chair; (ii) the predetermination of certain issues that were to be decided at the public hearing; and (iii) the chair’s participation in the board panel.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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