In these cases, the government appealed Federal Court decisions that allowed judicial reviews of multiple PMPRB decisions. The issue on appeal was whether the Federal Court Judge properly held that Sandoz and ratiopharm fell outside the jurisdiction of the PMPRB, as they were not "patentees". The appeal was granted, as the FCA concluded that the PMPRB had properly interpreted "patentees" to include anyone obtaining a benefit from the patent.
Ratiopharm was granted an exclusive licence in Canada by GSK to sell ratio-salbutamol HFA, and indicated on its forms to Health Canada that it had GSK's permission to sell the product. Ratiopharm also sold a number of other products with the consent of the owner of the patents in question. Sandoz is a subsidiary of Novartis Canada. It sells a number of medicines covered by patents owned by Novartis Canada or one of its parent companies.
The FCA held that the PMPRB's decisions should be reviewed on the standard of reasonableness. In this case, the Federal Court judge had substituted his view of the legislation without considering whether the PMPRB's characterization met the threshold of acceptability and defensibility that separates reasonable and unreasonable decisions. Thus, the standard was misapplied. In this case, the FCA held the PMPRB's determination was a defensible interpretation of the Patent Act. The Federal Court judge focused on those in a position to cause excessive pricing rather than whether that mischief could be caused without the patent owner itself.
The FCA also held that it was not open to the Federal Court Judge to construe subsection 79(1) of the Patent Act narrowly on the basis that the PMPRB's construction might be unconstitutional. Furthermore, the PMPRB's adaption of its "ex-factory price" definition to include the situations with ratiopharm and Sandoz were not unreasonable. The FCA also held that the French text of subsection 79(1) does not give a different answer than the English text as to whether a "patentee" must also have the right to exclude others. The definition includes persons who exercise any rights in relation to a patent. The FCA rejected the concept that generic companies should be treated differently, as the term 'generic company' does not appear in the Patent Act. The FCA also dismissed the argument that s. 79(1) is unconstitutional.