Patent Act (R.S.C., 1985, c. P-4)

Marginal note:Form and content of authorization

• 21.05 (1) The authorization must be in the prescribed form and, subject to subsection (2), contain the prescribed information.

• Marginal note:Quantity

  (2) The quantity of the product authorized to be manufactured by an authorization may not be more than the lesser of

  • (a) the maximum quantity set out in the application for the authorization, and

  • (b) the quantity set out in the notice referred to in any of subparagraphs 21.04(3)(d)(i) to (v), whichever is applicable.

Marginal note:Disclosure of information on website

• 21.06 (1) Before exporting a product manufactured under an authorization, the holder of the authorization must establish a website on which is disclosed the prescribed information respecting the name of the product, the name of the country or WTO Member to which it is to be exported, the quantity that is authorized to be manufactured and sold for export and the distinguishing features of the product, and of its label and packaging, as required by regulations made under the Food and Drugs Act, as well as information identifying every known party that will be handling the product while it is in transit from Canada to the country or WTO Member to which it is to be exported.

• Marginal note:Obligation to maintain

  (2) The holder must maintain the website during the entire period during which the authorization is valid.

• Marginal note:Links to other websites

  (3) The Commissioner shall post and maintain on the website of the Canadian Intellectual Property Office a link to each website required to be maintained by the holder of an authorization under subsection (1).

• Marginal note:Posting on the website

  (4) The Commissioner shall, within seven days of receipt, post on the website of the Canadian Intellectual Property Office each application for authorization filed under subsection 21.04(1).

Marginal note:Export notice

21.07 Before each shipment of any quantity of a product manufactured under an authorization, the holder of the authorization must, within fifteen days before the product is exported, provide to each of the following a notice, by certified or registered mail, specifying the quantity to be exported, as well as every known party that will be handling the product while it is in transit from Canada to the country or WTO Member to which it is to be exported:

• (a) the patentee or each of the patentees, as the case may be;

• (b) the country or WTO Member named in the authorization; and

• (c) the person or entity that purchased the product to which the authorization relates.

Marginal note:Royalty

• 21.08 (1) Subject to subsections (3) and (4), on the occurrence of a prescribed event, the holder of an authorization is required to pay to the patentee or each patentee, as the case may be, a royalty determined in the prescribed manner.

• Marginal note:Factors to consider when making regulations

  (2) In making regulations for the purposes of subsection (1), the Governor in Council must consider the humanitarian and non-commercial reasons underlying the issuance of authorizations under subsection 21.04(1).

• Marginal note:Time for payment

  (3) The royalties payable under this section must be paid within the prescribed time.

• Marginal note:Federal Court may determine royalty

  (4) The Federal Court may, in relation to any authorization, make an order providing for the payment of a royalty that is greater than the royalty that would otherwise be required to be paid under subsection (1).

• Marginal note:Application and notice

  (5) An order may be made only on the application of the patentee, or one of the patentees, as the case may be, and on notice of the application being given by the applicant to the holder of the authorization.

• Marginal note:Contents of order

  (6) An order may provide for a royalty of a fixed amount or for a royalty to be determined as specified in the order, and the order may be subject to any terms that the Federal Court considers appropriate.

• Marginal note:Conditions for making of order

  (7) The Federal Court may make an order only if it is satisfied that the royalty otherwise required to be paid is not adequate remuneration for the use of the invention or inventions to which the authorization relates, taking into account

  • (a) the humanitarian and non-commercial reasons underlying the issuance of the authorization; and

  • (b) the economic value of the use of the invention or inventions to the country or WTO Member.

Marginal note:Duration

21.09 An authorization granted under subsection 21.04(1) is valid for a period of two years beginning on the day on which the authorization is granted.

Marginal note:Use is non-exclusive

21.1 The use of a patented invention under an authorization is non-exclusive.

Marginal note:Authorization is non-transferable

21.11 An authorization is non-transferable, other than where the authorization is an asset of a corporation or enterprise and the part of the corporation or enterprise that enjoys the use of the authorization is sold, assigned or otherwise transferred.

Marginal note:Renewal

• 21.12 (1) The Commissioner shall, on the application of the person to whom an authorization was granted and on the payment of the prescribed fee, renew the authorization if the person certifies under oath in the renewal application that the quantities of the pharmaceutical product authorized to be exported were not exported before the authorization ceases to be valid and that the person has complied with the terms of the authorization and the requirements of sections 21.06 to 21.08.

• Marginal note:One renewal

  (2) An authorization may be renewed only once.

• Marginal note:When application must be made

  (3) The application for renewal must be made within the 30 days immediately before the authorization ceases to be valid.

• Marginal note:Duration

  (4) An authorization that is renewed is valid for a period of two years beginning on the day immediately following the day of the expiry of the period referred to in section 21.09 in respect of the authorization.

• Marginal note:Prescribed form

  (5) Applications for renewal and renewed authorizations issued under subsection (1) must be in the prescribed form.

Marginal note:Termination

21.13 Subject to section 21.14, an authorization ceases to be valid on the earliest of

• (a) the expiry of the period referred to in section 21.09 in respect of the authorization, or the expiry of the period referred to in subsection 21.12(4) if the authorization has been renewed, as the case may be,

• (b) the day on which the Commissioner sends, by registered mail, to the holder of the authorization a copy of a notice sent by the Minister of Health notifying the Commissioner that the Minister of Health is of the opinion that the pharmaceutical product referred to in paragraph 21. 04(3)(b) has ceased to meet the requirements of the Food and Drugs Act and its regulations,

• (c) the day on which the last of the pharmaceutical product authorized by the authorization to be exported is actually exported,

• (d) thirty days after the day on which

  • (i) the name of the pharmaceutical product authorized to be exported by the authorization is removed from Schedule 1, or

  • (ii) the name of the country or WTO Member to which the pharmaceutical product was, or is to be, exported is removed from Schedule 2, 3 or 4, as the case may be, and not added to any other of those Schedules, and

• (e) on any other day that is prescribed.

Marginal note:Termination by Federal Court

21.14 On the application of a patentee, and on notice given by the patentee to the person to whom an authorization was granted, the Federal Court may make an order, on any terms that it considers appropriate, terminating the authorization if the patentee establishes that

• (a) the application for the authorization or any of the documents provided to the Commissioner in relation to the application contained any material information that is inaccurate;

• (b) the holder of the authorization has failed to establish a website as required by section 21.06, has failed to disclose on that website the information required to be disclosed by that section or has failed to maintain the website as required by that section;

• (c) the holder of the authorization has failed to provide a notice required to be given under section 21.07;

• (d) the holder of the authorization has failed to pay, within the required time, any royalty required to be paid as a result of the authorization;

• (e) the holder of the authorization has failed to comply with subsection 21.16(2);

• (f) the product exported to the country or WTO Member, as the case may be, under the authorization has been, with the knowledge of the holder of the authorization, re-exported in a manner that is contrary to the General Council Decision;

• (g) the product was exported, other than in the normal course of transit, to a country or WTO Member other than the country or WTO Member named in the authorization;

• (h) the product was exported in a quantity greater than the quantity authorized to be manufactured; or

• (i) if the product was exported to a country that is not a WTO Member, the country has permitted the product to be used for commercial purposes or has failed to adopt the measures referred to in Article 4 of the General Council Decision.

Marginal note:Notice to patentee

21.15 The Commissioner shall, without delay, notify the patentee, or each of the patentees, as the case may be, in writing of any authorization granted in respect of the patentee’s invention.

Marginal note:Obligation to provide copy of agreement

• 21.16 (1) Within fifteen days after the later of the day on which the authorization was granted and the day on which the agreement for the sale of the product to which the authorization relates was entered into, the holder of an authorization must provide by certified or registered mail, the Commissioner and the patentee, or each patentee, as the case may be, with

  • (a) a copy of the agreement it has reached with the person or entity referred to in paragraph 21.04(2)(f) for the supply of the product authorized to be manufactured and sold, which agreement must incorporate information that is in all material respects identical to the information referred to in paragraphs 21.04(2)(a), (b), (e) and (f); and

  • (b) a solemn or statutory declaration in the prescribed form setting out

    • (i) the total monetary value of the agreement as it relates to the product authorized to be manufactured and sold, expressed in Canadian currency, and

    • (ii) the number of units of the product to be sold under the terms of the agreement.

• Marginal note:Prohibition

  (2) The holder of an authorization may not export any product to which the authorization relates until after the holder has complied with subsection (1).

Marginal note:Application when agreement is commercial in nature

• 21.17 (1) If the average price of the product to be manufactured under an authorization is equal to or greater than 25 per cent of the average price in Canada of the equivalent product sold by or with the consent of the patentee, the patentee may, on notice given by the patentee to the person to whom an authorization was granted, apply to the Federal Court for an order under subsection (3) on the grounds that the essence of the agreement under which the product is to be sold is commercial in nature.

• Marginal note:Factors for determining whether agreement is commercial in nature

  (2) In determining whether the agreement is commercial in nature, the Federal Court must take into account

  • (a) the need for the holder of the authorization to make a reasonable return sufficient to sustain a continued participation in humanitarian initiatives;

  • (b) the ordinary levels of profitability, in Canada, of commercial agreements involving pharmaceutical products, as defined in paragraph 1(a) of the General Council Decision; and

  • (c) international trends in prices as reported by the United Nations for the supply of such products for humanitarian purposes.

• Marginal note:Order

  (3) If the Federal Court determines that the agreement is commercial in nature, it may make an order, on any terms that it considers appropriate,

  • (a) terminating the authorization; or

  • (b) requiring the holder to pay, in addition to the royalty otherwise required to be paid, an amount that the Federal Court considers adequate to compensate the patentee for the commercial use of the patent.

• Marginal note:Additional order

  (4) If the Federal Court makes an order terminating the authorization, the Federal Court may also, if it considers it appropriate to do so, make an order, on any terms that it considers appropriate,

  • (a) requiring the holder to deliver to the patentee any of the product to which the authorization relates remaining in the holder’s possession as though the holder had been determined to have been infringing a patent; or

  • (b) with the consent of the patentee, requiring the holder to export any of the product to which the authorization relates remaining in the holder’s possession to the country or WTO Member named in the authorization.

• Marginal note:Restriction

  (5) The Federal Court may not make an order under subsection (3) if, under the protection of a confidentiality order made by the Court, the holder of the authorization submits to a Court-supervised audit and that audit establishes that the average price of the product manufactured under the authorization does not exceed an amount equal to the direct supply cost of the product plus 15 per cent of that direct supply cost.

• Marginal note:Definitions

  (6) The following definitions apply in this section.

  average price

  average price means

  • (a) in relation to a product to be manufactured under an authorization, the total monetary value of the agreement under which the product is to be sold, expressed in Canadian currency, divided by the number of units of the product to be sold under the terms of the agreement; and

  • (b) in relation to an equivalent product sold by or with the consent of the patentee, the average of the prices in Canada of that product as those prices are reported in prescribed publications on the day on which the application for the authorization was filed. (prix moyen)

  direct supply cost

  direct supply cost, in relation to a product to be manufactured under an authorization, means the cost of the materials and of the labour, and any other manufacturing costs, directly related to the production of the quantity of the product that is to be manufactured under the authorization. (coût direct de fourniture)

  unit

  unit, in relation to any product, means a single tablet, capsule or other individual dosage form of the product, and if applicable, in a particular strength. (unité)