On November 9, 2017, the Federal Court released a decision in which it overturned the decision of a Panel of the Patented Medicine Prices Review Board in which the Board Panel found that it had jurisdiction over the medicine, Differin. As a consequence, Galderma Canada Inc. was not required to file information concerning Differin.

At stake in this case was the correct approach to determining whether the Board had jurisdiction over the price of this medicine drug and, in particular, the proper legal test for determining whether an invention "pertains" to a medicine.

Background

This case concerns two medicines, Differin (adapalene, in a concentration of 0.1%) and Differin XP (adapalene, in a concentration of 0.3%). Patents on Differin were, in the past, duly reported to Board Staff; however, the last applicable patent relating to Differin expired in 2009. Galderma reported a different patent, in respect of Differin XP, which lapsed in 2016.

The sole issue contested on judicial review was whether the patent which the parties agreed “pertained” to Differin XP ought to have been reported also in relation to Differin.

The effect of such a finding would be that the medicine Differin, which had been “off patent”, and outside the Board’s jurisdiction since 2009, would be found to be within the jurisdiction of the Board for the period of 2009 through 2016. This would mean that Galderma would potentially have to report sales data for those years, and could possibly be liable for alleged “excess revenues” should the price of Differin be determined to be exceed the Board’s Guidelines during that period.

The Board Panel concluded that the relevant test established by the case law, held that the connection between the invention and the patent can be one of the “merest slender thread”, was sufficiently broad to establish that the patent in question “pertains” to the medicine Differin. In particular, the Panel found that:

(1) “it was not clear from the face of the patent that it applies exclusively to 0.3 adapalene”;

(2) “adapalene is the only active ingredient in Differin and Differin XP”;

(3) the patent provides for the use of adapalene to treat skin disorders; and

(4) finally, both medicines use adapalene to treat such disorders.

Analysis

On judicial review, Justice Phelan held that the Panel made two critical errors in its decision:

First, the Panel failed to address the proper question. The Panel evidently failed to determine that the issue was not whether the patent pertains to the medicine Differin, but whether there was a rational connection or nexus between the invention described in the patent and the medicine. It is the invention, not the patent, which must “pertain” to the medicine. This was critical, because the Panel never determined what the invention disclosed in the patent was, much less whether it “pertained” to the medicine Differin.

The Court observed that since the Panel had used the terms "patent" and "invention" interchangeably in its decision, it was not clear to the Court that the Panel was aware that these terms, often used synonymously as a form of short hand, were different under the scheme of the Patent Act with important and distinct meanings. The Court ruled the Panel failed to consider whether the 0.3% (‘extra strength’) formulation disclosed in the patent at issue was intended or capable of being used for the ‘original’ (0.1%) Differin medicine.

Second, while the Court agreed with Panel that the proper analysis is to review the "face of the patent" when deciding whether an invention pertains to a medicine, a review on its face requires that the patent be reviewed as a whole. This would include the claims, description, and scope of the invention. The Court found that the Panel failed to review the later patent "holistically" and therefore erred in concluding that the patent at issue covered more than the 0.3% concentration formulation based on the whole patent, and particularly its claims. The Court held that it was well-established in the jurisprudence on patents that “what is not claimed is considered disclaimed”, so it was unreasonable to assert that the claims to the 0.3% adapalene patent could be held to apply to the 0.1% adapalene medicine, simply because the claims in the patent did not expressly exclude the 0.1% adapalene formulation.

On November 21, 2017 the Attorney General of Canada appealed this decision to the Federal Court of Appeal.