The Jurisdiction of the Patented Medicine Prices Review Board is Clarified

1
THEJURISDICTIONOFTHEPATENTEDMEDICINEPRICESREVIEWBOARDIS
CLARIFIED

FrançoisGrenierandGraemeBromby*
LEGERROBICRICHARD,
L.L.P.
Lawyers,PatentandTrademarkAgents
CentreCDPCapital
1001Square-Victoria–BlocE–8
thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.(514)9876242–Fax(514)8457874
www.robic.ca–info@robic.com
Introduction
HoechstMarionRousselCanadaInc.(HMRC)whoistheexclusivedistributor
ofNicoderm,anaidforthecessationofsmoking,wasseekingjudicialreview
oftwodecisionsofthePatentedMedicinePricesReviewBoard.Asitstitle
suggests,thePatentedMedicinePricesReviewBoardhasthemandateof
reviewingthepricesofpatentedmedicinesinCanada,pursuanttothe
PatentAct.TheBoardinformedHRMC(arguablya“patentee”)in1998thatit
wasinvestigatingthepricingofNicoderm(arguablya“medicine”)towhich
3patentsand2patentapplicationspertained,accordingtotheBoard.The
ChairpersonoftheBoard,afterreviewingthefile,issuedanoticeofhearing
todetermineifthesalepriceofNicodermwasexcessive,thewholepursuant
tosections83and85ofthePatentAct.HRMCthensoughttohavethe
noticeofhearingrescindedbyraisinganumberofjurisdictionalissues.The
jurisdictionalissueswerearguedintwoseparatemotionsinfrontofaBoard
panelconsistingoftheChairpersonandthreeothermembers.
PatentedMedicinePricesReviewBoarddecisions
Biasandproceduralfairness
InitsdecisionrenderedAugust3rd,1999,theBoardPanelunanimously
dismissedHMRC’sargumentswithrespecttotheissuesofinstitutionalbias,
breachofproceduralfairnessandlackofparticulars.



















































©CIPS,2006.*Lawyer,FrançoisM.Grenier.isaseniorpartnerinLEGERROBICRICHARD,L.L.P.a
multidisciplinaryfirmoflawyers,andpatentandtrade-marksagents.GraemeBrombyisan
articlingstudentinthisfirm.Publication142.182.

2
TheBoardPanelcametotheconclusionthatthePatentedMedicinePrices
ReviewBoardisanexperttribunalwithoverlappingfunctionsauthorizedby
thePatentActandthatitdidnotexceeditsjurisdiction.Inaddition,it
concludedthattheBoardproceededinafairmannerasallaspectsof
proceduralfairnesswererespected.
Statutoryguidelines
Inaseparatehearing,theBoardPanelrejectedHMRC’sargumentthat
NicodermisnotamedicineforthepurposesoftheAct,butratheradelivery
devicefortheadministrationofnicotine.TheBoardconcludedthat
Nicodermwasamedicineforthepurposesofsubsections83(1)and79(2)of
theActbyrelyingonthefactthatthetermmedicineisnotdefinedandthat
jurisprudencehasconcludedthatthewordmedicineshouldbeinterpreted
broadly.
TheBoardPanelalsodecidedthat,exceptforone,thepatentsandpatent
applicationsinissuepertainedtoNicodermandthatHMRCwasapatentee
withinthemeaningoftheAct.TheBoardPanelruledthatithadjurisdiction
overthepatentapplicationsinissue,asofthedateonwhichtheywerelaid
open.
FederalCourtdecision(part1)
Thefirstpartoftheapplicationforjudicialreviewquestionedthejurisdiction
oftheBoardonthebasisofproceduralfairnessandbias.Thefollowingissues
wereraisedbyHMRC.
1.DidtheprocedurefollowedbytheBoardforconductingahearing
provideforafairandimpartialtribunalinaccordancewiththeprinciples
ofproceduralfairnessandtheBillofRights?
2.Whetherornotthefollowingfactorsconstituteareasonable
apprehensionofbiassoastojustifyjudicialintervention:
a)DotheoperationsoftheBoardcreateanimpermissibleoverlapof
investigativeandadjudicativefunctionsbytheBoardandthe
Chairperson?
b)DidtheBoardandChairpersonpredeterminecertainmattersthat
wereinissueatthehearing?
c)DidtheparticipationoftheChairpersonintheBoardPanel,having
previouslyreviewedtheStaffReportandVCUandissuedtheNoticeof
Hearing,constituteareasonableapprehensionofbias?
TheCourtdecidedthatHMRC’sproceduralfairnessrightswererespectedas
anoticeofhearingandopportunitytomakerepresentationswasgiven.In

3
fact,HMRCreceivedseverallettersfromtheBoardrelatingtothepriceof
Nicodermandwasgiventheopportunitytorespondtotheallegationsof
excessivepricingbyprovidingadditionalinformationaswellasthepossibility
ofmakingapriceadjustmentproposal(VCU)whichitdid.
Asfortheissueofwhetherareasonableapprehensionofbiasexisted,the
CourtrecognizedthatanoverlapoffunctionsdoesexistwithinthePatented
MedicinePricesReviewBoard.Thisoverlapoffunctionsisauthorizedby
statute,allowingtheBoardtodischargemultiplefunctions,including
investigation,prosecutionandadjudication.Inaddition96(2)ofthePatent
Act,givestheBoardthepossibilityofadoptingitsownrulesandprocedures.
Furthermore,thewaytheBoardproceededdidnotgiverisetoareasonable
apprehensionofbiasastheChairperson’sdecisiontoholdahearingandto
participateinthishearingwasinnowayadeterminationthattherewas
excessivepricing.TheCourtdecidedthatthiswasamattertoberesolvedin
apublichearingasthefunctionoftheChairpersonatapreliminarystageis
merelyanadministrativeone.
DecisionoftheFederalCourt(Part2)
ThesecondpartofHMRC’sapplicationforjudicialreviewdealtwithstatutory
guidelineissueshavingtodowiththejurisdictionofthePatentedMedicine
PricesReviewBoard.ThefirstissuethattheCourthadtodeterminewas
whetherNicodermwasamedicinewithinthemeaningofthePatentAct.
TheCourtreiteratedthatthewordmedicinemustbeinterpretedbroadly
andinitsordinarysense.TheCourtdecidedthatareasonablepersoncould
conclude,basedontheevidenceavailabletotheBoard,thatNicodermisa
medicineforthepurposesoftheBoard’sjurisdiction.Noerrorsweretherefore
madebytheBoardPanelinarrivingatthisconclusion.
TheCourtalsofoundthattheBoardPanel’sconclusionthatthepatentsin
issue(exceptone)pertaintoNicodermwasreasonable.HMRChadargued
thatthestructureofthedeliverysystemprotectedbyoneofthepatentsin
issuewasnotthesystemusedinNicoderm.TheCourtconcludedthat
whetherthepatenteeismakinguseofthepatentisirrelevant.Theonly
relevantquestioniswhetherthatpatentpertainstoamedicinewithinthe
meaningoftheAct.
WhiletheCourtagreedthattheBoardhadjurisdictionoverissuedpatents
pertainingtoNicoderm,itconcludedthattheboardlackedjurisdictionover
patentapplicationsasofthedateonwhichtheywerelaidopen.TheCourt
determinedthattheBoardmustonlyassumejurisdictiononpatentsfromthe
dateonwhichtheyaregrantedasnomonopolyisgrantedtothepatent
holderpursuanttosection42oftheActpriortotheissuance.Theexistence
ofalaidopenpatentapplicationinnowayleadstotheconclusionthata

4
patentwilleventuallybegranted.TheCourtthereforequashedthepartof
theBoard’sdecisiondealingwiththetwopatentapplicationsinissue.
Conclusion
ThisdecisionoftheFederalCourtofCanadaclarifiesissuespertainingtothe
jurisdictionofthePatentedMedicinePricesReviewBoard.TheCourtupheld
inlargepartthedecisionofthePatentedMedicinePricesReviewBoard
recognizingthebroadjurisdictionandauthorityoftheBoardinrelationtothe
pricingofmedicines.Also,theproceduresputinplacebytheBoardwhen
determiningwhetherthepriceofamedicineisexcessive,wererecognized
bytheCourtasbeingfairandimpartial.However,theCourtconcludedthat
thebroadjurisdictionoftheBoarddoesnotextendtopatentapplications
pertainingtomedicines,asthepatenthasnotyetbeengranted.Medicines
thataresubjecttopatentapplicationsarenowevidentlyoutsideofthe
realmofthePatentedMedicinePricesReviewBoard.
HoechstMarionRousselCanadaInc.v.Canada(AttorneyGeneral)2005FC
1552(F.C.;2005-11-17)

5
ROBIC,ungroupedavocatsetdagentsdebrevetsetdemarquesde
commercevouédepuis1892àlaprotectionetàlavalorisationdela
propriétéintellectuelledanstouslesdomaines:brevets,dessinsindustrielset
modèlesutilitaires;marquesdecommerce,marquesdecertificationet
appellationsdorigine;droitsdauteur,propriétélittéraireetartistique,droits
voisinsetdelartisteinterprète;informatique,logicielsetcircuitsintégrés;
biotechnologies,pharmaceutiquesetobtentionsvégétales;secretsde
commerce,know-howetconcurrence;licences,franchisesettransfertsde
technologies;commerceélectronique,distributionetdroitdesaffaires;
marquage,publicitéetétiquetage;poursuite,litigeetarbitrage;vérification
diligenteetaudit.ROBIC,agroupoflawyersandofpatentandtrademark
agentsdedicatedsince1892totheprotectionandthevalorizationofall
fieldsofintellectualproperty:patents,industrialdesignsandutilitypatents;
trademarks,certificationmarksandindicationsoforigin;copyrightand
entertainmentlaw,artistsandperformers,neighbouringrights;computer,
softwareandintegratedcircuits;biotechnologies,pharmaceuticalsandplant
breeders;tradesecrets,know-how,competitionandanti-trust;licensing,
franchisingandtechnologytransfers;e-commerce,distributionandbusiness
law;marketing,publicityandlabelling;prosecutionlitigationandarbitration;
duediligence.
COPYRIGHTER
IDEASLIVEHERE
ILATOUTDEMÊMEFALLULINVENTER!
LAMAÎTRISEDESINTANGIBLES
LEGERROBICRICHARD
NOSFENÊTRESGRANDESOUVERTESSURLEMONDEDESAFFAIRES
PATENTER
R
ROBIC
ROBIC+DROIT+AFFAIRES+SCIENCES+ARTS
ROBIC++++
ROBIC+LAW+BUSINESS+SCIENCE+ART
THETRADEMARKERGROUP
TRADEMARKER
VOSIDÉESÀLAPORTÉEDUMONDE,DESAFFAIRESÀLAGRANDEURDELA
PLANÈTE
YOURBUSINESSISTHEWORLDOFIDEAS;OURBUSINESSBRINGSYOURIDEASTO
THEWORLD