The Appellant (Celgene Corporation) unsuccessfully appealed a decision of the Respondent (the Patented Medicine Prices Review Board), which had decided it possessed the authority to require Celgene to provide certain pricing information

Administrative law – Decisions of administrative tribunals – Patented Medicine Prices Review Board – Consumer protection – Intellectual property – Patents – Legislation – Statutory interpretation – Judicial review – Compliance with legislation – Disclosure – Jurisdiction – Standard of review – Correctness

Celgene Corp. v. Canada (Attorney General), [2011] S.C.J. No. 1, 2011 SCC 1, Supreme Court of Canada, January 20, 2011, McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.

The Appellant (Celgene Corporation) is the American distributor of a pharmaceutical sold under the brand name Thalomid. Since 1995, Celgene had permission to sell Thalomid to Canadians pursuant to the Special Access Programme (the “SAP”). This was an alternative to obtaining a Notice of Compliance (“NOC”) from Health Canada. When a Canadian doctor ordered Thalomid under the SAP, the medicine was packed in Celgene’s facilities in the United States and shipped to the doctor in Canada. Celgene then prepared an invoice in New Jersey, mailed it to Canada, and directed that payment be made in U.S. dollars and sent to Celgene in New Jersey. Any unused portions of the medicine must be returned to the Appellant and not redistributed in Canada.

In 2006, Celgene obtained a Canadian patent in relation to Thalomid and the Respondent (the Patented Medicine Prices Review Board) advised that it had jurisdiction to now request pricing information from Celgene dating back to 1995 when Celgene first sold Thalomid through the SAP. Celgene provided some pricing information but ultimately refused to continue supplying the requested information because the medicine was “sold” in New Jersey and not in Canada. The Board decided that, because its mandate included protecting Canadians from excessive prices that may be charged for patented medicines, sales “in any market in Canada” included sales of medicine that are regulated by Canadian law, that will be delivered and used in Canada, and where the costs of the medicine will be borne by Canadians.

Celgene sought judicial review of the Board’s decision. The Federal Court decided this was a jurisdictional issue and the appropriate standard of review was correctness. The Court concluded that Thalomid is “sold” in the United States and cannot fall within the words “sold in any market in Canada” in the Patent Act. Therefore, the Court held that the Board had no jurisdiction to order Celgene to disclose the pricing information for Thalomid.

The Federal Court of Appeal concluded that the phrase “sold in any market in Canada” was open to different interpretations and therefore, the interpretation chosen should be the one which best implemented the consumer protection objections of the price-regulation provisions of the Patent Act. The Federal Court of Appeal therefore found that the Board’s decision should not be disturbed. The dissenting reasons at the Court of Appeal suggested that the medicine was “sold” in the United States and therefore the Board could not require Celgene to provide pricing information. Celgene was granted leave to appeal to the Supreme Court of Canada from the majority decision of the Federal Court of Appeal.

The Supreme Court of Canada reviewed other provisions of the Patent Act where the words sold (or selling) were used. The Respondent argued that the phrase “sold in any market in Canada” is broad and should not be given the limited, technical interpretation ascribed to it by Celgene. On the other hand, Celgene argued that the word “sold” is so precise and is a legal term of art that should presumptively be given its private law, commercial meaning. In other words, Celgene argued that the plain meaning of “sold in any market in Canada” connotes a commercial contract of sale occurring in Canada.

The Court further reviewed the intention of the legislature in enacting and amending the Patent Act. More specifically, the Court noted the consumer protection purpose of the Respondent. The Court concluded that the legislative context and the consumer protection purpose of the relevant section of the Patent Act support the Board’s conclusion that it had authority over Celgene’s sales of Thalomid to Canadians through the SAP.

The Supreme Court of Canada dismissed the appeal.

This case was digested by Scott J. Marcinkow of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact him directly at smarcinkow@harpergrey.com or review his biography at http://www.harpergrey.com.

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