Otsuka Pharmaceutical Co. Ltd. v. Torcan Chemical Ltd., (1988) 91 N.R. 118 (FCA)

• Judge: Pratte, Urie and Stone, JJ.
• Court: Federal Court of Appeal (Canada)
• Case Date: April 20, 1988
• Jurisdiction: Canada (Federal)
• Citations: (1988), 91 N.R. 118 (FCA)

Otsuka Pharmaceutical v. Torcan (1988), 91 N.R. 118 (FCA)

MLB headnote and full text

Otsuka Pharmaceutical Co. Ltd. (appellant) v. Torcan Chemical Ltd. (respondent)

(No. A-325-86)

Indexed As: Otsuka Pharmaceutical Co. Ltd. v. Torcan Chemical Ltd.

Federal Court of Appeal

Pratte, Urie and Stone, JJ.

May 6, 1988.

Summary:

The Commissioner of Patents granted a compulsory licence to Torcan Chemical, respecting a patent on certain medicines owned by Otsuka Pharmaceutical. The Commissioner also fixed the royalty. Otsuka appealed, arguing that the Commissioner erred in (1) granting the licence in absence of an intention by Torcan to sell the medicine in Canada when it applied for the licence, and (2) in fixing the royalty.

The Federal Court of Appeal dismissed the appeal.

Patents of Invention - Topic 5744

Compulsory licences - Royalties - Fixing of - General - A company applied for a compulsory licence to sell a patented medicine - The company stated that it initially intended to sell the drug for the export market, but intended to sell the drug in Canada when the market warranted such action - The Commissioner of Patents granted the licence - The patent holder appealed, arguing that the Commissioner erred in granting the licence in absence of an intention by the company to sell the drug in Canada at the time it applied for the licence - The Federal Court of Appeal rejected the patent holder's argument - See paragraphs 1 to 9.

Patents of Invention - Topic 5745

Compulsory licences - Royalties - Fixing of - Evidence - The Commissioner of Patents granted a company a compulsory licence respecting a patented medicine and fixed a royalty - The patent holder appealed the amount of the royalty - The Federal Court of Appeal dismissed the appeal where the patent holder did not challenge the royalty proposed in the company's licence application, nor did it submit any material facts to assist the Commissioner in fixing the royalty rate - See paragraphs 10 to 12.

Patents of Invention - Topic 5747

Compulsory licences - Royalties - Judicial review - The Federal Court of Appeal held that before it would set aside a compulsory licence issued by the Commissioner of Patents, the court must be satisfied that the Commissioner proceeded on a wrong principle or was manifestly wrong - See paragraph 9.

Cases Noticed:

American Home Products Corporation v. ICN Canada Ltd. (1985), 61 N.R. 141; 5 C.P.R.(3d) 1, consd. [paras. 4, 6, 10, footnote 1].

Merck & Co. Inc. v. S. & U. Chemicals Ltd. et al. (1972), 4 C.P.R.(2d) 193, refd to. [para. 9, footnote 4].

Hoffmann-La Roche Ltd. v. Delmar Chemicals Ltd., [1965] S.C.R. 575, refd to. [para. 9, footnote 4].

American Home Products Corporation v. ICN Canada Ltd. (1988), 84 N.R. 69, consd. [para. 10, footnote 5].

Statutes Noticed:

Patent Act, R.S.C. 1970, c. P-4, sect. 41(4) [para. 4].

Counsel:

D. Hitchcock, for the appellant;

D. Plumley, Q.C., and P. Wells, for the respondent.

Solicitors of Record:

Riches, McKenzie & Herbert, Toronto, Ontario, for the appellant;

Lang, Michener, Lash, Johnston, Toronto, Ontario, for the respondent.

This appeal was heard in Toronto, Ontario, on April 20, 1988, before Urie, Stone and Pratte, JJ., of the Federal Court of Appeal. The following decision of the Court of Appeal was delivered by Urie, J., on May 6, 1988.