Sep 26 2017

Summary

Two forms of exemptions in Canada provide “safe harbours” against patent infringement:

1. research relating to generating a submission for regulatory approval of a product by a government agency (statutory law); and
2. other types of non-commercial research and experimentation (common law).

Statutory Research Exemption

The Canadian Patent Act provides a safe harbour against patent infringement for activities that are “reasonably related” to a submission for regulatory approval of a product. The type of product is not specified nor is the type of regulatory approval and as such, the exemption is not limited to pharmaceuticals.  As well, the activity need not be related to a regulatory approval by a Canadian agency and as such, the activities can relate to a regulatory approval by a government agency in another country.

Section 55.2(1) of Canada’s Patent Act states:

It is not an infringement of a patent for any person to make, construct, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product.

This provision has been interpreted expansively by the courts. In 2006, The Federal Court in Merck & Co.stated that the exemption is not restricted to uses directly necessary to obtain a marketing approval for a product, but rather includes a broader range of activities. For example, the exemption can apply to “incoming raw material and finished products… in the event they are required for future reference in accordance with regulatory governmental requirements.”

It is reasonable to conclude that the exemption covers a range of “upstream” activities such as  pre-clinical studies that do not directly lead to a submission to a government agency.

Common Law Exemptions

Canada also has a broad “experimental use” exemption based in common law. The Supreme Court of Canada in Micro Chemical determined that a patent is not infringed by a person who performs experiments to determine whether one can manufacture the invention according to the specification.

The Federal Court in Merck & Co. further found that development of alternate formulae or alternate processes for making a patented drug constitutes “fair dealing” and does not infringe a patent.

One limitation to the exemption is that the full inventory of the patented product that is made by the defendant is used for experimental or regulatory purposes and nothing is sold or used for commercial purposes (Teva).

In general, the common law “experimental use” exemption applies if the following factors are present (Micro Chemical):

1. the patented product is produced only in small quantities, commensurate with the research activities;
2. The product remains in the possession of the researcher and does not enter into commerce;
3. The use of the patented invention causes no loss to the patentee;
4. The researcher makes no profits from the activities; and
5. The research and related activities are bona fide.

This article is for information purposes only and does not constitute legal or professional advice, nor is it intended to provide information or advice regarding any specific fact situation.  Please contact us on a confidential basis for expert advice on any specific matter.

Authors: Ken Ma, Adrian Zahl (former partner), Meika Ellis

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Tags: Ken Ma, Meika Ellis, Patent Act, Patent Infringement