Canada’s Intellectual Property Firm

Federal Court Finds PMPRB Does Not Have Jurisdiction Over Patent Applications

The Patent Act grants the Patented Medicine Prices Review Board (“PMPRB” or the “Board”) jurisdiction to reduce the price of a medicine where it finds that “a patentee of an invention pertaining to a medicine is selling the medicine in any market in Canada at a price that, in the Board’s opinion is excessive.”

In 1996, in ICN Pharmaceuticals and ICN Canada Limited v. Canada (PMPRB), the Federal Court of Appeal held that the connection between the patent in question and the medicine needs only to be of the “merest slender thread”.

On November 17, 2005, in Hoechst Marion Roussel Canada Inc. v. Canada (Attorney General) (“Nicoderm”) (2005 FC 1552), the Federal Court further clarified the Board’s jurisdiction. In this case, the Court held that the Board cannot assert jurisdiction over patent applications.

The Nicoderm decision resulted from two applications for judicial review of the Board’s decisions brought by Hoechst Marion Roussel Canada (“HMRC”), challenging the Board’s jurisdiction to inquire into HMRC’s pricing of NICODERM (a nicotine transdermal patch).

The Court dismissed HMRC’s first application for judicial review involving issues of procedural fairness and bias. In its second application, HMRC challenged the Board’s statutory jurisdiction.

With reference to one of the patents at issue, the Court, noting the ICN decision, found that “the fact that the ‘689 Patent is for a nicotine transdermal patch system, capable of being used in the drug product Nicoderm, is a sufficient connection to support the conclusion that the ‘689 Patent pertains to Nicoderm. It is irrelevant whether the ‘689 Patent is actually being used in connection with the medicine Nicoderm.”

As for the PMPRB’s jurisdiction over patent applications, the government had argued that the PMPRB had such jurisdiction on the basis that patentees are accorded a benefit after the application is laid open (reasonable compensation) creating significant de facto protection. The Court rejected this argument, finding that a patent application gives rise only to the potential for the grant of a patent and found that the Board erred in law in purporting to exercise jurisdiction over two laid-open patent applications.

HMRC and the government may appeal to the Federal Court of Appeal, as of right.