Background

The Federal Court rendered a decision last week in the case of Shire Biochem Inc. v. Attorney General of Canada, 2007 FC 1316 (the Shire decision). The issue in this case was whether the PMPRB’s price control powers extended back to the publication date of a patent once the patent is issued. Shire Biochem Inc. (Shire) argued that the PMPRB’s jurisdiction only commenced from the time the patent was granted.

Discussion

Summary of decision: The Federal Court held that once a patent is issued, the PMPRB’s jurisdiction extends back to the date the patent application was published (and is not limited only to the date the patent was granted).

This case involved two Applications – one by Shire in respect of the drug Adderall XR, and the other by Janssen-Ortho Inc. in respect of the drug Concerta.

Under Section 79 of the Patent Act, the PMPRB can make certain orders about the pricing of drugs where a "patentee" of an invention pertaining to a medicine is selling the medicine in Canada at a price the PMPRB considers excessive. The key issue for the Court was the construction of the term "patentee" and whether the Board’s jurisdiction extends back to the date on which the patent was published – even though, at that time, the company would not have owned the patent.

The Court noted that the term "patentee" is defined in the Patent Act as "the person for the time being entitled to the benefit of a patent." The Court agreed with the PMPRB’s argument that once an application is issued as a patent, the patentee enjoys certain rights pursuant to the Patent Act. These rights include the right to sue an infringer for "reasonable compensation" back to the date the patent application was published. The Court concluded that because the definition of patentee encompasses the rights enjoyed from the publication date, "a patentee is a patentee from the date the application was laid open." As a result, the PMPRB has jurisdiction with respect to the patentee’s prices during this period.

Justice Russell distinguished the facts of Shire, in which the patents had been issued, from a previous decision in Hoechst Mariod Roussel Canada Inc. v. Canada (Attorney General), 2005 FC 1552 (Hoechst). In Hoechst, the Federal Court held that the PMPRB does not have jurisdiction over patent applications, but in that case the applications had not been issued as patents so the right to reasonable compensation had not arisen. In the case of Shire, however, Shire was "entitled to the benefit of a patent" during the time the patent application was open to the public.

Taking the Shire decision together with that of Hoechst, it is now the clear case in Canada that a medicine for sale in Canada is not subject to the PMPRB’s price review (and enforcement) jurisdiction unless and until a patent application in respect of that medicine is issued as a patent. Once a patent is issued, and the PMPRB determines it has the "merest slender thread" of relevance to the medicine, then the PMPRB’s jurisdiction to penalize a patentee for excessive pricing (if excessive pricing is found) would extend back to the date the patent application was published.