Abuse of Canadian Abuse-of-Patent Provisions?

In the latest chapter of a drawn-out legal battle (involving 16 proceedings in the Federal Court) over the enalapril compound (an "ACE" inhibitor used in the treatment of hypertension and congestive heart failure), Brantford Chemicals Inc (Brantford) unsuccessfully appealed a decision of the Commissioner of Patents to the Federal Court. The Commissioner of Patents decision had denied the grant of a compulsory license from Merck & Co Inc (Merck). Apotex Inc (Apotex), Brantford's parent company, previously had been found to have infringed Merck's "˜349 patent covering enalapril and its pharmaceutically acceptable salts. Apotex and its related companies were enjoined from practicing the "˜349 patent. Brantford is the owner of the "˜258 patent that claims sodium enalapril-sodium iodide complex (SESIC) and a method to produce from it pure sodium enalapril (SE). SESIC is likely covered by the "˜349 patent. In these proceedings, Brantford attempted to obtain a license to the "˜349 patent under the patent abuse provisions of the Patent Act (Act). Brantford's claims were grounded on section 65(2)(c) of the Act, which requires an unmet demand for the patented article, and section 65(2)(d), which addresses prejudice resulting from the refusal of the patentee to grant a license on reasonable terms. The section 65(2)(c) argument failed largely because the Court found that Brantford had attempted to fabricate demand through the various branches of its organization. Brantford had requested a license from Merck after receiving a letter from Torpharm Inc (Torpharm) inquiring if it could purchase SESIC. At the time, Torpharm was another wholly-owned subsidiary of Apotex. Torpharm sent a similar letter to Merck. Each of these letters was authorized by the parent company Apotex and the letters from Brantford were drafted by Apotex's in-house counsel. The Court found the "demand" to be artificial and self-generated. It further noted that "demand" under section 65(2)(c) is the demand of the marketplace and not that of a single trader. The Court dismissed the idea that "demand" includes a potential demand for a cheaper version of the patented article being sold. Lastly, the court noted that Torpharm intended to export the patented article to the US, but the only relevant demand under section 65(2)(c) is demand within Canada. The appeal also failed on the section 65(2)(d) grounds because the Court found that Merck had not refused Brantford's request for a license. Merck was not presented with any terms, nor was it given sufficient time to consider the offer. In the circumstances, silence on the part of Merck did not constitute refusal. For the full reasons for judgment (2006 FC 1341), see: http://decisions.fct-cf.gc.ca/en/2006/2006fc1341/2006fc1341.html Summary by: Michael Migus