Canada (Attorney General) v. Sandoz Canada Inc., 2015 FCA 249 (Noël C.J., Pelletier J.A., Rennie J.A.)
November 6, 2015
Robert MacKinnon and Craig Collins-Williams of William F. Pentney, for the Attorney General of Canada (Appellant)
Gavin MacKenzie of DLA Piper (Canada) LLP and Neil Fineberg of Miller Thomson LLP for Sandoz Canada Inc. and Ratiopharm Inc. (Now Teva Canada Limited) (Respondent)
The AG brought two appeals from decisions rendered by O’Reilly J. The first allowed an application for judicial review brought by Sandoz from a PMPRB decision. The second allowed three applications for judicial review brought by Ratiopharm from two decisions of the Board and an Order by the Board giving effect to the first of these decisions.
The two appeals were heard together. The central issue in both appeals is whether the Federal Court Judge properly held that Sandoz fell outside of the jurisdiction of the Board as they were not “patentees” within the meaning of subsection 79(1) of the Patent Act. The Attorney General maintains that in so holding, the Federal Court Judge did not give due deference to the Board’s elaborate reasons for concluding that the respondents came within the ambit of that provision.
The FCA allowed both appeals.
Background
Ratiopharm sold an anti-asthmatic, ratio HFA, which was a generic of GSK’s patented medicine Ventolin HFA. GSK sold ratio HFA to Ratiopharm in final packaged and labeled form under a license from GSK.
Sandoz sold medicines covered by patents owned by Novartis or its subsidiaries. Product was supplied through purchase orders. No express license was given to Sandoz from any patent owners.
In 2008, the Board Staff alleged that Ratiopharm was selling its ratio HFA at excessive prices. The Board started an application seeking pricing information. The Sandoz proceeding was initiated in 2010, wherein the Board sought pricing information with respect to 6 medicines. The Board ordered pricing information be provided in both cases. With respect to ratio HFA, the Board ordered Ratiopharm pay over $65 million to offset excess revenues realized in the sale of ratio HFA.
The Board decisions were appealed to the Federal Court, which dealt with two specific questions:
- Are sections 79 to 103 of the Patent Act constitutionally valid?
- That a person need not own the patent in order to be a “patentee” within the meaning of s.79(1)?
The Board had decided that both Sandoz and Ratiopharm were patentees, even though they did not hold any patents over the respective medicines. Each was found to be an explicit or implied licensee under patents, thus satisfying s.79(1).
Before the Federal Court, Justice O’Reilly found the sections constitutionally valid, but he found that the Board had erred in finding Sandoz and Ratiopharm to be patentees.
The Federal Court of Appeal sided with the Board’s original interpretation of patentees covering those having a license, and thus reversed the Trial Judge’s decision. The matters were referred back to the Federal Court in order to address outstanding issues.
By: Peter W. Choe, Gowling Lafleur Henderson LLP