Patent Act — P-4 21.17
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. 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. 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. 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. 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. Definitions (6) The following definitions apply in this section. 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 , 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 , 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 ) 2004, c. 23, s. 1