The Jurisdiction of the Patented Medicine Prices Review Board is Clarified
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THEJURISDICTIONOFTHEPATENTEDMEDICINEPRICESREVIEWBOARDIS
CLARIFIED
FrançoisGrenierandGraemeBromby*
LEGERROBICRICHARD,
L.L.P.
Lawyers,PatentandTrademarkAgents
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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.
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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
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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
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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)
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