Teva Canada Innovations v. Canada (Attorney General)

Last month the Federal Court released its decision setting aside the decision of the Patent Medicine Prices Review Board (the “Board”) which found Teva Canada Innovations (“Teva”) had sold its Copaxone Syringe in the Canadian market at an “excessive price” and ordered Teva to pay almost three million dollars in compensation to the Federal Government.

The full text of the case can be found at:

http://decisions.fct-cf.gc.ca/en/2013/2013fc448/2013fc448.html

As noted in Justice Zinn’s decision, this is the second time the Federal Court has quashed the Board’s finding that Teva’s Copaxone Syringes were sold at excessive prices. In the first case, Justice Hughes quashed the decision of the Board and referred it back to the Board for redetermination in Teva Neuroscience GP-SENC v Canada (Attorney General), 2009 FC 1155. (See paragraph 2 of FC decision). Justice Hughes had found that

the Board had improperly limited its attention to only one of the four factors that must be considered under subsection 85(1) of the Patent Act, namely paragraph 85(1)(d) – “changes in the Consumer Price Index,” and that “[l]ip service only was given to [the] other factors [in subsection 85(1)].” Justice Hughes returned the matter to the Board “for redetermination preferably by a different panel if sufficient members can be provided for that purpose […] [and] [i]n redetermining the matter the Board must consider all factors in section 85(1) and provide intelligible, clear reasons as to the consideration and weight given to each factor.” (Paragraph 10)

Subsection 85(1), states: ·

• 85. (1) In determining under section 83 whether a medicine is being or has been sold at an excessive price in any market in Canada, the Board shall take into consideration the following factors, to the extent that information on the factors is available to the Board: 

(a) the prices at which the medicine has been sold in the relevant market;  

(b) the prices at which other medicines in the same therapeutic class have been sold in the 

relevant market; 

(c) the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada;  

(d) changes in the Consumer Price Index; and  

(e) such other factors as may be specified in any regulations made for the purposes of this subsection. 

In particular, the Board in making its decision discounted the facts that the Copaxone Syringe was the lowest priced medicine in its therapeutic class and that the Copaxone Syringe was priced lower in Canada than in other countries.

Justice Zinn found that the Board in its redetermination had again only paid “lip service” to paragraphs 85(1)(b) and (c). Justice Zinn’s comments with respect to the reason why decisive weight was given to CPI are particularly interesting. Justice Zinn noted that the Board had considered it’s own Guidelines to be binding and disregarded the language of the Statute.

In short, the Board has fallen into exactly the error suggested by Justice Hughes– it has considered the Guidelines, and specifically those portions dealing with CPI to be binding. The Guidelines are not binding: See Patent Act, s 96(4). As Justice Hughes noted at para 32 of his decision: “Where the Guidelines or their application conflicts with the Act or Regulations, they cannot prevail.” As was noted by Justice Rothstein, as he then was, in ICN Pharmaceuticals, Inc v Canada (Patented Medicines Prices Review Board), [1996] FCJ No 112, para 6, footnote 2: “Had it treated the Guidelines as binding, the Board may well have erred.” (paragraph 45) 

Although this case related to the PMPRB, it is more generally applicable. In particular, it should serve as a reminder to the Patent Office and its Examiners and the Patent Profession, that documents created by the Patent Office to facilitate prosecution of an application including MOPOP and guidance documents are not binding and are just guidelines.

By Claire Palmer

Vermont Enacts a New Law to Reduce Frivolous Patent Suits

In a move that legal observers agree is a first, Vermont Governor Peter Shumlin has enacted a law requiring potential patent litigants to clearly identify the nature of their claim when alleging patent infringement against another party. Under this new state law, potential litigants can be accused of bad faith if they do not clearly identify the patent in question, the patent owner and an explanation of the manner by which the patent is allegedly being infringed when initially notifying a potential infringer of the disputed actions (typically by way of as a cease-and-desist letter).

Will the law be effective in reducing frivolous and vexatious lawsuits? That remains unclear. In the US and Canada, patent law is regulated on a federal level and as such, it is difficult to predict the exact effect of a state or provincial law attempting to govern patent litigation.

From a practitioner’s perspective, one observation that I can make is that cease and desist letters in Vermont will certainly become more expensive as a result of this law. Patent infringement analysis is typically very complex and painstakingly considered, and the costs of conducting such analysis reflect this reality. As such, potential litigants will have to make immediate and substantial economic decisions when considering whether to enforce their rights. This will result in both beneficial effects (by curbing extortionary lawsuits) and deleterious effects (by increasing costs to rights holders).

Will the benefits outweigh the drawbacks on the scales of justice? Other jurisdictions will certainly be watching this Vermont test case closely to see.

By Adam Tracey

CIPO May Process Final Fees Faster than Expected

Several actions can, at least theoretically, be undertaken with respect to a patent application after the final fee has been paid following allowance. Section 4(10)(b) of the Patent Rules allows for a final fee to be refunded if a request for its return is received before the start of technical preparations for issuance of a patent. This allows an additional opportunity to amend the patent application, for example if an issue is discovered only at a late stage. Section 36(2) of the Patent Act requires that a divisional application must be filed before issuance of the parent application. Theoretically, the divisional may therefore be filed after payment of the final fee.

In the past, the time interval between payment of the final fee and the start of technical preparations for issuance has been on the order of 8 to 9 weeks. However, recent experience has shown that there is considerable variance in this estimate. In one recent case, the time interval between payment of the final fee and the start of technical preparations was very short – at just over one week.

We have always advised that filing of amendments and divisional applications should be made before or concurrently with payment of the final fee, as much as possible, rather than relying on the unpredictable window of time between payment of the final fee and issuance of the patent. In view of the above, it appears to be more important than ever to follow this strategy as closely as possible, since the time window can be much shorter than expected.

By Michael Maskery

Chain of Title (Part 4 of an Occasional Series of Articles on Due Diligence)

Any party acquiring IP needs to be confident of the effects of the series of transactions transferring ownership from the original creators to the vendor. This is commonly known as the “chain of title”, and like any other chain, it is only as strong as its weakest link.

There are a variety of issues that can weaken the chain of title or lead to uncertainty over the true ownership of the property . Common problems include the following:

Failure to obtain assignments from all the relevant parties: If an inventor or co-owner has not executed a suitable binding assignment then they may retain rights. In some jurisdictions, unless there is a written agreement to the contrary, co-inventors may be free to independently exploit a patent, or may have to account to other co-inventors for any profits.

Failure to accurately identify the parties: Is the correct owner SmithCo, SmithCo Inc.; SmithCo Ltd.; SmithCo Corp.; or Smith & Co.? Naming errors may be difficult or impossible to correct at a later date. Failure to properly identify the subject matter: Which specific trade-marks, patent applications, or industrial designs have been assigned? Were worldwide rights assigned or, did an assignment limit itself to specified countries?

Lack of capacity: In some jurisdictions only specified individuals have the authority to bind a company. A corporate assignment may not be effective unless signed by the authorized legal representative.

Formalities: Some jurisdictions may require that signatures on the assignment be properly witnessed, notarised or comply with other formalities in order to be enforceable.

Registration: Some jurisdictions require that assignments and licenses be registered with the authorities in order to be given legal effect.

IP is a complex and sometimes counterintuitive area of law and this article only touches the surface of some issues that may arise. You should always seek qualified professional assistance before making any decisions.

Euan Taylor is a lawyer, patent agent and trade-mark agent and is based in MBM’s Vancouver office. He has wide experience of IP due diligence for a range of commercial transactions and can be reached at etaylor@mbm.com or at 604-239-0271

Equitable Solutions to Copyright Assignment

Case Considered: Planification-Organisation-Publications Systèmes (POPS) LTÉE v. 9054-8181 Québec Inc 2013 FC 427

This case deals with an interesting problem posed by the Copyright Act, R.S.C. 1985, c. C-42. Where there is no written assignment or written license to use a work, does a person who contributed resources have any rights to the copyrighted product?

Facts 

This case involves a piece of business simulation software that was originally developed for DOS. The original code for the software was developed in large part by Planification-Organisation-Publications Systèmes LTÉE (POPS). Any aspect of the code not developed by POPS was developed by a third party that assigned his rights to POPS.

The principals for POPS and 9054-8181 Québec Inc (IDP) worked together to promote the software, with the principals of IDP bringing pedagogical content, and POPS providing the software.

As WindowsTM became the dominant operating system, the POPS and IDP agreed that a WindowsTM version of the software needed to be developed. A joint venture was developed to further the development of the updated software. Any agreements between POPS and IDP were verbal, or unsigned. Through the development of the updated software, there had been no changes to the source code of the software.

IDP continued to provide pedagogical content to help POPS develop the software. IDP also paid $1000 per year to for the right to use the software in seminars.

Eventually, the principal of POPS became a shareholder and employee of IDP to help accelerate the development of the WindowsTM version of the software. IDP then spent a significant amount of money to update the software. The WindowsTM product still had significant bugs that made it difficult for a person to use the software. It is important to note that the source code remained largely unchanged through this process.

In the end there was a breakdown of the relationship between POPS and IDP. POPS claimed to revoke any license to IDP that permitted IDP to use or develop the software.

POPS then sued IDP for copyright infringement for continued use of the software. IDP counter-claimed seeking an order from the court that IDP had an irrevocable license to use the software.

Decision 

The Chief Justice found that POPS was the owner of copyright in the software, but that IDP was to be granted at least an implied non-exclusive irrevocable license to use the software.

Analysis 

The Copyright Act states an author is the first owner of the copyright in a work. The exception to this rule occurs where the author is an employee, where the employer would be the first owner of the copyright. The Copyright Act also requires any assignment or grant of interest by license to be in writing to be valid. According to statute, then, IDP could not have any valid ownership rights in the software, as there were no written agreements licensing the software.

However, since a non-exclusive license is not a grant of an interest, the Chief Justice found that the verbal and unsigned agreements between IDP and POPS to constitute a grant of a non-exclusive license.

Given the significant consideration IDP gave to the development of the software, the Chief Justice went further to find that IDP’s license is irrevocable. Since the license is non-exclusive, even though it is irrevocable, it is still not a grant of an interest under the Copyright Act, and therefore does not have to be reduced to writing.

Conclusion 

This case shows that some rights may be recognized where a party has invested heavily in the development of a work, even though they may not have contributed to original expression of the work. These rights fall short of ownership in copyright or an exclusive license, however, the party cannot be stopped from using the work they invested in.

By Jahangir Valiani 

Should You Get a Paid LinkedIn Account?

Many LinkedIn users wonder if they should invest in a paid LinkedIn membership. The purpose of this blog post is to give you a brief overview of each membership level. Please note the membership fees referenced are paid per month. You can save up to 25% per year if you pay on an annual basis (of course).

• Who’s Viewed Your Profile – See who viewed your profile and how they find you. 

• Full Profile – See full profiles of all the people in your network including 1, 2nd and 3rd degrees.

• Full Name Visibility – See complete names of 3rd degree connections and group connections. 

• InMail Messages – Send direct messages to anyone on LinkedIn. If you don’t receive a response within seven days, LinkedIn will return the InMail credit to your account. Also, unused InMails roll over and accumulate for three months while you are a paid member. 

• Introductions – Get introductions to LinkedIn members through your LinkedIn connections. 

• OpenLink – Let anyone on LinkedIn message you. This is an optional feature and needs to be activated. Premium Search – Get up to 8 search filters. Filters include Seniority, Company Size, Interests, Fortune 1000, etc. 

• Profiles Per Search – See more profiles when you search. 

• Saved Search Alerts – Save searches and get email notifications when LinkedIn profiles fit your specifications. 

• Reference Search – Get a list of people in your network who can provide a reference of someone you are interested in researching. 

Benefits of a Free Membership

Stick with a free membership if you are a new LinkedIn user. A free membership will allow you to:

• Grow your network with unlimited connections

• Join up to 50 LinkedIn Groups

• Create a Profile 

• Give and receive Recommendations

• Request up to 5 Introductions 

• Do general searches 

Benefits of a Paid Membership

A paid membership is only beneficial if you use all the features. Do you research conference attendees prior to attending? Are you interested in finding out which connections can introduce you to leads you want to meet? If your answer was yes to either of these questions, a paid LinkedIn membership is for you. A paid membership will also allow you to:

• Send a message to anyone on LinkedIn regardless of their play in your network

• Send more introductions 

• View more profile information of 2nd and 3rd connections and people not in your network

By Samantha Collier