Two decisions heard concurrently by the Federal Court of Appeal
have confirmed the jurisdiction of the Patented Medicine Prices
Review Board (PMPRB) over generic drug manufacturers that enter
into explicit or implicit licensing arrangements with Canadian
patent owners.1 The decisions also confirmed the
constitutional validity of the PMPRB price control regime over
patent owners and over non-owner entities, like authorized generic
manufacturers, who benefit from rights granted under the Patent
What You Need To Know
The PMPRB is a federal body that regulates the price of
patented medicines. A manufacturer that owns or in-licenses a
patent that pertains to a drug sold in Canada must report the price
of its product at launch, and then report sales every six months
for the duration of patent protection.
In essence, the Federal Court of Appeal found that licensed or
otherwise authorized generics are subject to the PMPRB regime on
the basis that they are entitled to the benefit of, or to exercise
rights in relation to, the relevant patents, despite being
This decision is a reversal of an earlier ruling from the
Federal Court, which held that while the PMPRB provisions are
constitutional, they did not extend to generic drug manufacturers,
aside from generic companies that own patents. On a broad reading
of the decision below, it could be said that the PMPRB regime might
not apply once a product was genericized, meaning that both the
generic and innovator manufacturers could cease being subject to
The matter now returns to the Federal Court to assess the
technical points of quantum of excessive pricing and relationship
of the patents to the products in issue.
The generic manufacturers in question, ratiopharm (now Teva) and
Sandoz, had argued that the patents in question did not give de
facto exclusivity to the two manufacturers, and that therefore the
jurisdictional (and constitutional) requirement of a "patent
pertaining" to their products did not exist. The Court of
Appeal disagreed, holding that a "factual monopoly" is
not relevant to whether there is a "statutory monopoly."
This means that a classic self-infringement analysis is not the
test of whether a patent "pertains" to a medicine. This
ruling continues the "merest slender thread of relevance"
theme in Federal Court of Appeal jurisprudence which first appeared
in the ICN decision.2
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).