A-407-86
Syntex Pharmaceuticals International Limited
(Appellant)
v.
Medichem Inc. (Respondent)
INDEXED AS: SYNTEX PHARMACEUTICALS INTERNATIONAL
LTD. V. MEDICHEM INC. (C.A.)
Court of Appeal, Urie, Marceau and MacGuigan
JJ.A.—Toronto, November 1, 2 and 3, 1989;
Ottawa, January 15, 1990.
Patents — Grant of compulsory licence respecting medicine
— Jurisdiction of Commissioner of Patents to entertain
application cannot be challenged on ground s. 39(4) and (5)
Patent Act and Patent Rules deny patentee fair hearing —
Failure to serve patentee with counterstatements in concurrent
applications for licences breach of natural justice — Close
relationship between corporate entities and failure to discharge
licence obligations "good reason" within meaning of Act s.
39(4) to refuse licence — Evidence insufficient to justify
royalty awarded.
This was an appeal from the decision of a Project Officer
granting a compulsory licence to the respondent, Medichem, in
respect of medicines known as "naproxen" and "naproxen
sodium" under patents owned by the appellant, Syntex. The
respondent also filed concurrent applications for licences for
medicine produced by six other patentees. Pursuant to the
instructions of the Commissioner of Patents issued in accord
ance with the Patent Rules, the respondent's compulsory
licence application was served on the appellant. However, none
of the concurrent applications nor the patentees' counterstate-
ments thereto were served on it.
The. appeal raises the following issues: (1) whether the
Project Officer lacked jurisdiction and whether the proceedings
were conducted in breach of the rules of natural justice; (2)
whether there was "good reason" within the meaning of subsec
tion 39(4) of the Act to refuse the licence; (3) whether there
was sufficient evidence to justify the royalty of 4/7 of 1% of the
net selling price of the medicine.
Held, the appeal should be allowed, the licence set aside and
the matter referred back to the Commissioner of Patents.
(1) The submission that the Commissioner of Patents or his
designee lacks jurisdiction to entertain compulsory licence
applications on the ground that subsections 39(4) and (5) of the
Patent Act and the Patent Rules, as written, deny the appellant
its right to a fair hearing was without merit. Although factual
distinctions existed, they did not affect the binding authority of
the decision of this Court in American Home Products Corpo
ration v. Commissioner of Patents et al. wherein it was held
that neither subsection 41(4) (now subsection 39(4)) nor the
rules made under subsection 41(14) (now subsection 39(15))
offend paragraph 2(e) of the Canadian Bill of Rights (right to
a fair hearing).
However, there remained the question of whether there was a
breach of natural justice given the fact that the Rules, read
literally, do not provide for service of the concurrent applica
tions or the counterstatements thereto. The failure to serve the
counterstatements of the other patentees on the appellant
amounted to a breach of natural justice. Fair hearing required
that the appellant be made aware of the contentions in the
counterstatements and given an opportunity to respond thereto
since those contentions may have had some bearing on the
royalty awarded to it. Furthermore, the failure to provide the
appellant with the counterstatements has deprived it of the
knowledge necessary to respond to the issue whether a licence
should be granted.
(2) The appellant argued that the respondent was the alter
ego of Apotex Inc., the real licence applicant, that the true
intent of the respondent in seeking a licence was to protect its
alter ego and reduce its royalty payments to absurdly low
amounts, and that those facts constituted "good reason" to
refuse the licence.
In determining whether the facts provide "good reason" to
grant or refuse a licence, the Project Officer must act on proper
principles. His finding that arguments based on the conduct of
Apotex were irrelevant because it was "a separate, legally
distinct company" from the respondent was a misapprehension
of the law in view of the circumstances relied upon by the
appellant as showing the true purpose for the respondent's
incorporation and application for licence. Close relationship
between two corporate entities has a bearing on the public
interest in fostering competition to provide medicine at the
lowest possible price consistent with the patentee's due reward
for its invention. The Project Officer erred in ignoring that
relationship and the apparently undisputed failure of Apotex to
discharge its licence obligations to the appellant and other
patentees. Furthermore, the fact of the existence of separate
corporate entities is insufficient, per se, to preclude a court
from lifting the "corporate veil" where allegations are made
that a corporation has been created to conceal facts relevant to
the determination of whether to grant a licence.
(3) The following principles are applicable to the determina
tion of the amount of royalty: the Commissioner of Patents
must have before him evidence from which he can fix the
royalty having regard to the requirements of subsection 39(5)
of the Act; it is incumbent on the patentee and on the licence
applicant to provide the Commissioner with the evidence neces
sary to discharge his duty; the applicant should satisfy the
Commissioner that there is a reasonable possibility that an
additional licence or licences are required and will be used; and,
finally, the equal division of a global royalty is not invariably
the proper method of exercising the duty imposed on the
Commissioner where there is little or no evidence as to the
process actually to be used.
Those principles were not met in the case at bar. The
respondent supplied insufficient evidence and failed to indicate
why it required the other six licences. In addition, the appellant
failed to discharge the burden of adducing the requisite
evidence.
That the royalty award may have been inconsistent with the
Project Officer's reasons was not a ground for setting aside the
licence. The terms of the licence prevail, not the reasons for
granting the licence and making the royalty award. The Project
Officer did not err in rejecting opinion evidence that the two
substances in question were different. Nor did he err in using
The Merck Index or the Compendium of Pharmaceutical
Specialties 1985 in finding that the substances were the same
or substantially the same.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Bill of Rights, R.S.C., 1985, Appendix III,
s. 2(e).
Patent Act, R.S.C., 1985, c. P-4, s. 39(4),(5),(15).
Patent Act, R.S.C. 1970, c. P-4, s. 41(4),(5),(14).
Patent Rules, C.R.C., c. 1250, ss. 118, 119, 120, 121,
122.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
American Home Products Corporation v. Commissioner
of Patents et al. (1983), 71 C.P.R. (2d) 9 (F.C.A.).
APPLIED:
Nedco Ltd. v. Clark et al. (1973), 43 D.L.R. (3d) 714;
[1973] 6 W.W.R. 425 (Sask. C.A.).
CONSIDERED:
Magnasonic Canada Ltd. v. Anti-dumping Tribunal,
[1972] F.C. 1239; (1972), 30 D.L.R. (3d) 118 (C.A.); Re
Smith, Kline & French Laboratories Ltd. and Frank W.
Horner Ltd. (1983), 6 D.L.R. (4th) 229; 1 C.I.P.R. 183;
52 N.R. 294 (F.C.A.); Rainham Chemical Works v.
Belvedere Fish Guano Co., [1921] 2 A.C. 465 (H.L.).
REFERRED TO:
American Home Products Corp. v. ICN Can. Ltd. (No.
1) (1985), 7 C.I.P.R. 174; 5 C.P.R. (3d) 1; 61 N.R. 141
(F.C.A.); Syntex Pharmaceuticals Int. Ltd. v. Pat.
Commr. (1986), 8 C.I.P.R. 18; 9 C.P.R. (3d) 249; 3
F.T.R. 60 (F.C.T.D.); affd A-245-86, Urie, Marceau and
MacGuigan JJ.A., 15/1/90, not yet reported; Tunstall v.
Steigmann, [1962] 2 Q.B. 593 (C.A.); Scherico Ltd. v.
P.V.U. Inc. (1989), 24 C.I.P.R. 161 (F.C.A.); American
Home Products Corp. v. I.C.N. Canada Ltd. (No. 2)
(1988), 18 C.I.P.R. 104; 19 C.P.R. (3d) 257 (F.C.A.);
American Home Products Corp. v. Novopharm Ltd.
(1988), 18 C.I.P.R. 128; 19 C.P.R. (3d) 279 (F.C.A.);
Takeda Chemical Industries Ltd. v. Novopharm Ltd.
(1988), 19 C.P.R. (3d) 278 (F.C.A.); Re Application for
Compulsory Licence by Novopharm Ltd. (1988), 18
C.I.P.R. 121; 19 C.P.R. (3d) 274 (F.C.A.); Otsuka
Pharmaceutical Co. v. Torcan Chemical Ltd. (1988), 20
C.I.P.R. 138; 20 C.P.R. (3d) 35 (F.C.A.); Re Applica
tion for compulsory licence by Apotex Inc. (1987), 17
C.I.P.R. 51; 17 C.P.R. (3d) 449 (F.C.A.).
COUNSEL:
Conor McCourt for appellant.
Malcolm S. Johnston, Q.C. for respondent.
Michael F. Ciavaglia for Attorney General of
Canada.
SOLICITORS:
McCarthy & McCarthy, Toronto, for appel
lant.
Malcolm Johnston & Associates, Toronto, for
respondent.
Deputy Attorney General of Canada for
Attorney General of Canada.
The following are the reasons for judgment
rendered in English by
URIE J.A.: This, the first of two appeals argued
consecutively before us, is an appeal from the
decision of P. J. Davies, described as a Project
Officer, rendered on June 6, 1986 granting a
compulsory licence to the respondent, in respect of
the medicines known as naproxen and naproxen
sodium under nineteen Canadian patents owned by
the appellant. The authority of the Project Officer
to make the decision appealed was not disputed by
either of the parties. The Attorney General of
Canada appeared through counsel as an interve-
nant who was heard on the appeal.
In its licence application, dated October 15,
1984, the respondent stated, inter alias'
Concurrently, the applicant has filed an application for licence
under Patents owned by The Boots Company, P.L.C.; Montedi-
son S.p.A.; Prodotti Chimici Sabbatini S.R.L.; Alfa Far-
maceutici; The Upjohn Company; and Blaschim S.p.A.
Two of the patentees named—Alfa Far-
maceutici and Blaschim S.p.A.—were also named
' Appeal Book, Vol. 4, p. 608.
by the respondent as manufacturers and sources of
naproxen and naproxen sodium from whom the
licence applicant proposed to obtain its naproxen
and naproxen sodium.
Pursuant to the instructions of the Commission
er of Patents dated December 3, 1984, issued in
accordance with the requirements of paragraph
120(1)(b) of the Patent Rules [C.R.C., c. 1250],
the respondent's compulsory licence application
was served on the appellant's representative for
service on December 12, 1984. None of the other
six concurrent applications were so served.
Having been granted a three-month extension of
the time prescribed by Rule 121 for so doing (two
months after service of the application), the appel
lant served its counterstatement, together with
four supporting affidavits, on the respondent's rep
resentative for service on May 10, 1985. The coun-
terstatement, four affidavits and proof of service
thereof were duly filed by the appellant on May
13, 1985.
Although permitted by the Patent Rules to do
so, the respondent neither served nor filed any
reply to the counterstatement nor to any of the
supporting affidavits thereto.
On March 10, 1986 the Commissioner advised
the appellant that the respondent had requested an
interim licence and that the appellant had twenty-
one days to make submissions in respect thereto.
The appellant took advantage of this opportunity
by making its representations in writing on April
3, 1986. In them it reiterated the objections it had
raised in its counterstatement. It also placed
before the Commissioner a copy of its statement of
claim in a royalty recovery suit which it had
instituted against Apotex Inc. in respect of com
pulsory licence No. 558 and, as well, a copy of this
Court's decision in American Home Products
Corp. v. ICN Can. Ltd. [No. 1] . 2
On March 24, 1986, the appellant applied to the
Trial Division for a writ of prohibition pursuant to
section 18 of the Federal Court Act [R.S.C. 1970
(2nd Supp.), c. 10], to prohibit the Commissioner
2 (1985), 7 C.I.P.R. 174 (F.C.A.).
from considering further or deciding any aspect of
the respondent's licence application, on the ground
that the Commissioner lacked jurisdiction to do so.
On April 8, 1986, Teitelbaum J. dismissed that
application with reasons [Syntex Pharmaceuticals
Int. Ltd. v. Pat. Commr. (1986), 8 C.I.P.R. 18
(F.C.T.D.)]. It is from that order that the second
appeal earlier referred to has been brought [appeal
dismissed, A-245-86, Urie, Marceau and Mac-
Guigan JJ.A., 15/1/90, not yet reported].
The Commissioner apparently having delegated
his authority to decide the respondent's application
to him, to the Project Officer, Mr. Davies, on June
6, 1986 granted the respondent the licence it
sought under No. 754, setting the royalty at the
quantum it proposed, namely, 4/7 of 1%. It is from
that decision that this appeal was brought.
On the argument of the appeal, counsel for the
appellant based the appeal on five grounds which I
will deal with seriatim.
I THE PROCEEDINGS WERE CONDUCTED IN
BREACH OF THE RULES OF NATURAL JUSTICE
AND ARE VOID FOR LACK OF JURISDICTION
The attacks on the impugned decision under this
head were based on three contentions which are
quite intertwined:
(a) the concurrent six applications made for
licences for medicines produced by six other
patentees were not served on the appellant, pre
sumably because the Patent Rules do not
specifically require that they be served;
(b) consequently, the appellant had no opportu
nity to intervene in the proceedings in the other
six applications and to make submissions in
respect of them, notwithstanding that such sub
missions might be highly relevant in the deci
sions to be made in all seven applications, again,
presumably because the Rules do not specifical
ly require or permit such an intervention;
(c) the failure to require service of any counter-
statement in the companion applications,
deprived it of the opportunity to answer or make
submissions with respect to allegations made in
the companion counterstatements which might
have been against the appellant's interests or
rights.
In the appellant's submission, as stated in para
graph 44 of its memorandum of points of
argument,
... it is evident that subsection 41(4) of the Patent Act and its
ancillary provisions have been construed or applied so as to
deprive the Appellant of its right to a fair hearing in accord
ance with the principles of fundamental justice for the determi
nation of its rights, contrary to section 2(e) of the Canadian
Bill of Rights and, accordingly, the Project Officer erred in not
quashing the proceedings.
Instead of quashing the proceedings, it was
argued, the Officer in fact relied on submissions
made in third party counterstatements to which
the appellant had no right of reply, either in
respect of the grant of licence or in setting the
terms and conditions of the licence.
The argument that subsections 41(4) and (5)
[Patent Act, R.S.C. 1970, c. P-4] (now subsections
39(4) and (5)) 3 and the Patent Rules transgress
3 R.S.C., 1985, c. P-4
39....
(4) Where, in the case of any patent for an invention
intended or capable of being used for medicine or for the
preparation or production of medicine, an application is made
by any person for a licence to do one or more of the following
things as specified in the application, namely,
(a) where the invention is a process, to use the invention for
the preparation or production of medicine, import any medi
cine in the preparation or production of which the invention
has been used or sell any medicine in the preparation or
production of which the invention has been used, or
(b) where the invention is other than a process, to import,
make, use or sell the invention for medicine or for the
preparation or production of medicine,
the Commissioner shall grant to the applicant a licence to do
the things specified in the application except such, if any, of
those things in respect of which he sees good reason not to
grant a licence.
(5) In settling the terms of a licence granted under subsec
tion (4) and fixing the amount of royalty or other consideration
payable, the Commissioner shall have regard to the desirability
of making the medicine available to the public at the lowest
possible price consistent with giving to the patentee due reward
for the research leading to the invention and for such other
factors as may be prescribed.
paragraph 2(e) 4 of the Canadian Bill of Rights
[R.S.C., 1985, Appendix III] and thereby should
be declared inoperative was settled, in my view, by
this Court in 1983 in the case of American Home
Products Corporation v. Commissioner of Patents
et al. 5 Admittedly, in that case the argument that
the patentee had been deprived of a fair hearing in
accordance with the principles of fundamental jus
tice, arose because it was argued that the rules of
procedure made under subsection 41(14) (now
subsection 39(15)) 6 do not guarantee to the paten-
tee an oral hearing, an opportunity to cross-exam
ine the deponent whose affidavit verifies the
application or the right to the last word in answer
to what the applicant may say in the reply which
he is entitled to make under the Rules. Here, on
the other hand, as has been stated, the argument,
in essence, is that the Commissioner lacks jurisdic
tion by virtue of paragraph 2(e) because the Rules
do not permit or require service of either the
application or counterstatement in companion
licence proceedings on a patentee thereby depriv
ing it of the right of reply to any adverse allega
tions which might be made against it or to make
submissions in respect of matters affecting its
rights. I am of the opinion that such factual dis
tinctions do not affect the binding authority of the
American Home Products case on this Court on
the paragraph 2(e) issue.
4 2. Every law of Canada shall, unless it is expressly declared
by an Act of the Parliament of Canada that it shall operate
notwithstanding the Canadian Bill of Rights, be so construed
and applied as not to abrogate, abridge or infringe or to
authorize the abrogation, abridgment or infringement of any of
the rights or freedoms herein recognized and declared, and in
particular, no law of Canada shall be construed or applied so as
to
(e) deprive a person of the right to a fair hearing in accord
ance with the principles of fundamental justice for the deter
mination of his rights and obligations;
S (1983), 71 C.P.R. (2d) 9 (F.C.A.).
6 R.S.C., 1985, c. P-4.
39....
(15) The Governor in Council may make rules or regulations
(a) prescribing anything that by this section is to be
prescribed;
(b) regulating the procedure to be followed on any applica
tion made pursuant to subsection (3) or (4), including,
without limiting the generality of the foregoing, the informa
tion to be contained in the application and the making of
(Continued on next page)
At pages 10 and 11 of the report, Thurlow C.J.
speaking on behalf of the Court had this to say:
It should be noted that an application under s-s. 41(4), is an
administrative procedure, one that gives the commissioner au
thority to make a decision on a quasi-judicial basis. In this
procedure the patentee has a right to a fair hearing but he does
not have all the panoply of procedural rights available to a
litigant in civil proceedings in a court of justice. The rules
provide the patentee with an opportunity to raise in a counter-
statement whatever he may wish to put before the commission
er as reasons why a licence should not be granted. That, in our
view, amounts to a fair hearing. In a proceeding of this kind
fairness, in our opinion, does not necessarily require that there
be an oral hearing after issues have been settled by pleadings.
Nor does it require that there be a right to cross-examination of
deponents on their affidavits, or that the patentee be given the
last opportunity to reply. We do not think that s-s. 41(4) or the
rules made under s-s.41(I 4) transgress s. 2(e) of the Canadian
Bill of Rights or deprive the appellant of a fair hearing within
the meaning of that Act. [Emphasis added.]
The last sentence of the excerpt is clear, unam
biguous and unequivocal. As I see it, it forecloses
any successful argument in this Court that the
Commissioner of Patents or his designee lacks
jurisdiction to entertain compulsory licence
applications because subsections 39(4) and (5) of
the Patent Act and the Patent Rules, as written,
offend paragraph 2(e) of the Canadian Bill of
Rights.
That being said, there remains this question: if
literal application of the valid Rules deprives the
patentee of the protection afforded by the common
law rules of natural justice, in that the patentee is
unable to meet the submission of parties who may
(Continued from previous page)
representations to, and the adducing of evidence before, the
Commissioner with respect to the application;
(c) respecting the form and manner in which an applicant or
a patentee may make representations to, and adduce evi
dence before, the Commissioner with respect to any applica
tion or request referred to in this section;
(d) respecting the manner in which any application, request,
notice or other document referred to in this section or in any
regulation made under this subsection may or shall be made,
served, forwarded or given;
(e) providing for the making of representations to the Com
missioner on behalf of the Government of Canada with
respect to any application or request referred to in subsection
(14); and
(I) generally, for carrying the purposes and provisions of this
section into effect.
be adverse in interest to it because the Rules, read
literally, do not require service of either the con
current applications for licences under the six
other patents or the counterstatements thereto, is a
remedy available to the patentee and if so what is
the nature thereof?
The relevant portions of the applicable Patent
Rules are as follows:
118. (I) An application shall be made in duplicate in Form
21 of Schedule I and shall
(a) be made only in respect of one or more patents
(i) that, according to the records of the Office, are in
the name of the same patentee, and
(ii) that are for inventions that relate to or that may be
used in the preparation or production of the same or
substantially the same substance or thing, and
(b) specify, for each patent in respect of which the applica
tion is made,
(i) the thing or things referred to in subsection 41(4)
[R.S.C., 1985, subs. 39(4)] of the Act that the
applicant seeks a licence to do, and
(ii) which of the things, if any, specified pursuant to
subparagraph (i) in respect of the patent will be
done, in whole or in part, on the applicant's behalf
by another person;
119. An application shall be executed by the applicant and
shall be supported by affidavit evidence of the material facts
alleged in the application.
120. (1) Upon receipt of an application that, in his opinion,
complies satisfactorily with sections 118 and 119, the Commis
sioner shall examine the application as soon as possible and
(a) if he sees good reasons why the applicant should not be
granted any licence, reject the application and notify the
applicant, the patentee and the Department of National
Health and Welfare of his decision and the reasons therefor;
or
(b) in any other case, instruct the applicant to serve a copy
of the application on the patentee in the manner prescribed
by subsection (2) and to file with the Commissioner proof
satisfactory to him of such service.
121. The patentee may, within two months after service of
the application on him or within such further period not
exceeding three months as the Commissioner may, on applica
tion made to him by the patentee within those two months,
allow, file with the Commissioner in duplicate
(a) a counter statement in Form 23 of Schedule I, executed
by the patentee and supported by affidavit evidence of the
material facts alleged in the counter statement, or
(b) a statement, executed by the patentee, that he does not
intend to file any counter statement,
and, where a counter statement is filed with the Commissioner
pursuant to paragraph (a), the patentee shall
(c) serve on the applicant, within such two months or such
further period, a copy of the counter statement and of any
affidavit filed with the Commissioner pursuant to that para
graph, and
(d) file with the Commissioner evidence satisfactory to the
Commissioner of such service.
122. Within one month after a counter statement is served
on the applicant or within such further period not exceeding
two months as the Commissioner may, on application made to
him by the applicant within that month, allow, the applicant
may file with the Commissioner in duplicate a statement,
executed by the applicant,
(a) in reply to any matter raised in the counter statement
and supported by affidavit evidence of the material facts
alleged in such statement in reply, or
(b) that he does not intend to make any reply to the counter
statement,
and the applicant shall
(c) serve on the patentee, within such month or such further
period, a copy of such statement and of any affidavit filed
with the Commissioner pursuant to paragraph (a), and
(d) file with the Commissioner evidence satisfactory to the
Commissioner of such service.
Counsel for the appellant advanced his natural
justice argument in his client's counterstatement.
The Project Officer dealt with it in the following
fashion:
The Patentee has argued that since the Commissioner of Pat
ents did not direct service on the Patentee of the six companion
applications referred to above these proceedings before the
Commissioner are in breach of the Canadian Charter of Rights
and Freedoms [sic] and the rules of natural justice, and the
application is a nullity. These arguments were rejected by
Teitelbaum J. in Syntex Pharmaceuticals International Lim
ited v. The Commissioner of Patents and Medichem Inc. (April
8, 1986 Court Number T-618-86, as yet unreported), I am
bound by that decision. A further submission in this regard has
been that the Patentee has no right to be heard with respect to
these companion applications, I do not agree, all applications
for compulsory licence under Section 41(4) of the Act are open
for public inspection at the Patent Office and any submissions
made in a counterstatement regarding companion applications
are considered when making a decision on whether to grant a
licence and in setting the terms and conditions of such a
licence. [Emphasis added.]
It is the underlined portion of the last sentence
to which the appellant takes particular exception.
Counsel agrees that the other applications were
open to both public and his inspection and that he
did, in fact, examine them prior to filing his
counterstatement. However, the counterstatements
of other patentees were not available either to him
or to the public in general. Moreover, from a
practical point of view, they could not have been if
each patentee waited until close to the expiry of
either the two-month limitation date or the extend
ed period granted by the Commissioner, to file
their respective counterstatements. Any or all
could contain comments, submissions or state
ments which might affect the Commissioner's
decision in this application either on the grant of
licence or the quantum of royalty awarded. It was
in respect of these, that, in his view, his client was
denied the fair hearing which the rules of natural
justice require of a tribunal mandated to act in a
quasi-judicial manner as is the Commissioner in
patent licensing matters.' In his view, the last five
lines in the quoted excerpt demonstrated that the
Project Officer utilized the applications and the
counterstatements of all seven companion applica
tions in reaching his decision without allowing his
client an opportunity to make submissions in reply.
In so doing, he saw a flagrant breach of the rules
of natural justice.
Counsel for the intervenant Attorney General of
Canada argued forcefully that appellant's counsel
had misinterpreted the passage. He submitted that
when the Project Officer stated that
... any submissions ... in a counterstatement regarding com
panion applications are considered when making a decision ...
[Emphasis added.]
he was referring to the appellant's counterstate-
ment only and the submissions therein made
regarding companion applications. I do not agree.
The phrase "a counterstatement" can and, I
strongly suspect, does refer to the counterstate-
' American Home Products Corporation v. Commissioner of
Patents et al., supra.
ments in each of the seven applications. I find
support for this view elsewhere in the decision. At
page 5 of the decision, 8 for example, admittedly in
a different factual context, the Project Officer
stated:
I have considered all seven companion applications together,
including all the representations made by all the parties, and I
am satisfied ... [Emphasis added.]
Further support of my view is found in the fact,
with which I will deal more fully later in my
reasons, that in fixing the royalty payable to the
appellant, the Project Officer awarded a total
royalty of 4% which, he said, was proposed by the
licence applicant, divided by the total number of
applications, viz., seven, so that each patentee was
to receive a royalty of four sevenths of 1%. It is
obvious that such a decision could not, on its face,
have been reached without considering all seven
applications together since each proposed a four
sevenths of 1% royalty, no mention having been
made in any application of an overall 4% total.
There is no question that the appellant here
protested the quantum of the proposed royalty in
its counterstatement. It is likely that the other
patentees did so too but the reasons for their
opposition or their support for the proposal, if such
existed, were known only to the Project Officer. In
my view, natural justice and a fair hearing
required that before the decision had been made
the Appellant should, at a minimum, have been
made aware of the contentions in the counterstate-
ments of patentees in the six companion applica
tions since they may have had, it seems reasonable
to infer, some bearing on the royalty awarded to
the appellant, which it had argued was much too
low, and should also have been given an opportu
nity to respond thereto. I confine myself to that
observation at this point since, as earlier stated, I
will be dealing with the quantum of the award
more fully in my discussion of the royalty issue
raised by the appellant as part of its appeal. That
breach alone is sufficient to enable the appellant to
succeed on the appeal but other issues raised
8 Appeal Book, Vol. 5, p. 642.
during the appeal should and will be dealt with
shortly.
Further, I should say, that while failure to
accord natural justice on the royalty issue is the
most flagrant of the alleged natural justice viola
tions, it is my view that the failure to provide to
the appellant the counterstatements filed in the
other six applications may well have deprived it of
the knowledge necessary to enable it to respond in
its counterstatement even to the issue of whether,
in the circumstances, there should be a grant of
licence or not and conditions and provisions which
the Commissioner might be persuaded to be appro
priate for inclusion therein.
In reaching these conclusions I am not unmind
ful of the difficulties which the time constraints
imposed by the rules for filing and serving counter-
statements, inflicts on the Commissioner or his
designee in ensuring that the parties are assured of
a fair hearing within the rules of natural justice.
However, I am confident that it is not beyond the
ingenuity of the Commissioner, who is the master
of the procedures in the matters before him, to
devise procedures to enable justice to be done. One
of the more obvious methods, of course, would be
to require oral hearings more frequently or per
haps invariably, in multiple licence applications.
Other practices may well have to be adopted to
achieve the required fairness in the proceedings.
As was said by this Court in another context in
Magnasonic Canada Ltd. v. Anti-dumping
Tribunal: 9
Parliament has imposed a timetable on the Tribunal and the
Tribunal must therefore operate on a timetable which implies a
limit on the time that can be afforded to the parties to make
out their respective cases. It does not, however, negative the
requirement that they be given an opportunity to be heard that
9 [1972] F.C. 1239 (C.A.), at p. 1249.
is necessarily implied by the other provisions of the statute.
[Emphasis added.]
To the last sentence might be added the additional
phrase, "or by the requirements of natural
justice".
I am of the opinion, therefore, that the appellant
should succeed on this branch of the appeal.
II THE ALTER EGO SUBMISSION
The appellant in its counterstatement asserted
that the respondent was the alter ego of Apotex
Inc. ("Apotex") and tendered certain evidence to
substantiate its contention, inter alia, that two of
the respondents were officers and directors of
Apotex; that both entities have the same corporate
address; that the respondent intended to use the
warehousing and quality control facilities of
Apotex; that the bulk medicine to be imported by
the respondent pursuant to the licence would be
manufactured into tablets by Apotex; that the
proposed prices for the medicine in dosage form
were to be the same as Apotex' prices, and that the
royalty proposed treated Apotex' sales as its sales.
The respondent in its memorandum of points for
argument denied the relevance of this evidence
although it did not file with the Project Officer
any reply to the appellant's counterstatement.
Apotex had been granted compulsory licence
No. 558 in June 1982 for the appellant's naproxen
patents, including 960,668. The appellant adduced
evidence that Apotex had been in breach of the
terms of its licence by failing to make sales reports
and to pay royalties pursuant to the licence and
that it had had to institute an action in the Ontario
High Court to endeavour to recover unpaid royal
ties. The respondent in its memorandum denied
the allegations as characterized although it did
acknowledge that there was a dispute as to wheth
er any breach of the licence had occurred. It did
not reply to the allegations in the counterstate-
ment.
The Project Officer dealt with the various sub
missions in the following fashion in page 6 of his
reasons: 10
The Patentee has contended that the Applicant is unqualified
and disentitled to be granted a licence because of the conduct
of, to use the Patentee's expression, the alter ego of the
Applicant, Apotex Inc. It is apparent from the application that
the Applicant is closely related to the company Apotex Inc.,
however, the evidence adduced by the Patentee clearly shows
that the Applicant is a separate, legally distinct company
incorporated in Ontario on March 30, 1981. Therefore I con
sider any arguments based on the conduct of Apotex Inc. to be
irrelevant in my decision as to whether or not a licence should
be granted to the Applicant or as to what the terms and royalty
provisions should be. [Emphasis added.]
In this Court, the counsel for the appellant
argued:
(a) that the respondent is the alter ego of
Apotex which is, therefore, the real applicant for
licence;
(b) that Apotex historically disregarded its obli
gations not only to the appellant as a patentee,
but also those it had incurred to other patentees
from whom it had obtained licences;
(c) that the true intent and purpose of the
respondent in seeking a licence was to protect its
alter ego from the consequences of its breaches
of licence No. 558 and to reduce its royalty
payments to absurdly low amounts; and
(d) that such a consistent practice constitutes
"good reason" for refusing the licence in this
case within the meaning of that phrase in sub
section 39(4) of the Act.
In Re Smith, Kline & French Laboratories Ltd.
and Frank W. Horner Ltd.," Mahoney J.A., in
this Court, had this to say about subsection 41(4)
(now subsection 39(4)):
As to the substantive grounds, s. 41 (4) has been the subject
of considerable judicial consideration. In Parke, Davis & Co. v.
Fine Chemicals of Canada Ltd. (1959), 17 D.L.R. (2d) 153 at
p. 160, 30 C.P.R. 59 at p. 67, [1959] S.C.R. 219 at p. 228, the
Supreme Court of Canada, per Martland J., said:
10 Appeal Book, Vol. 5, p. 643.
" (1983), 6 D.L.R. (4th) 229 (F.C.A.), at pp. 231-233.
As to whether he should have seen "good reason to the
contrary" regarding the application for this licence, it would
seem that this is a matter for the judgment of the Commis
sioner of Patents. The wording in question is "the Commis
sioner shall, unless he sees good reasons to the contrary,
grant to any person applying for the same ..." In this case
the Commissioner did not see such good reason. The decision
is his to make and it cannot be said, on the evidence, that his
decision was manifestly wrong, bearing in mind that one of
the main considerations before him is that of the public
interest.
After quoting that passage, Thurlow J., as he then was, in
Hoffman-LaRoche Ltd. v. Delmar Chemicals Ltd. (1964), 46
D.L.R. (2d) 140 at p. 144, 43 C.P.R. 93 at pp. 98-9, [1965] 1
Ex. C.R. 611 at p. 616, observed:
The authority of the Court to determine whether the judg
ment of the Commissioner is "manifestly wrong" in my
opinion necessarily involves authority to determine when
necessary what sort of reason may or may not be treated as
good reason within the meaning of the statute, but as Parlia
ment has seen fit to leave the Commissioner's discretion
unfettered it would not in my opinion be desirable for this
Court on an appeal to lay down principles for its exercise
beyond what is necessary for the particular case.
The appeal from Mr. Justice Thurlow's decision was dismissed
by the Supreme Court of Canada (50 D.L.R. (2d) 607, 45
C.P.R. 235, [1965] S.C.R. 575), which did not find it necessary
to comment on that observation. The Supreme Court of
Canada has found the purpose of s. 41(4) to be clear. In
Hoffman-LaRoche Ltd. v. Bell-Craig Pharmaceuticals Divi
sion of L.D. Craig Ltd. (1966), 56 D.L.R. (2d) 97 at p. 102, 48
C.P.R. 137 at p. 144, [1966] S.C.R. 313 at p. 319, Abbott J.
said:
In my view, the purpose of s. 41(3) is clear. Shortly stated
it is this. No. absolute monopoly can be obtained in a process
for the production of food or medicine. On the contrary,
Parliament intended that, in the public interest, there should
be competition in the production and marketing of such
products produced by a patented process, in order that as the
section states, they may be "available to the public at the
lowest possible price consistent with giving to the inventor
due reward for the research leading to the invention.
What was then s. 41(3) is now s. 41(4). It was amended (by
1968-69, c. 49, s. 1) to provide licences for the purpose of
importation as well as preparation or production. That the
amendment has no material bearing on the earlier authorities is
clear: Eli Lilly & Co. v. S & U Chemicals Ltd. (1976), 67
D.L.R. (3d) 342, 26 C.P.R. (2d) 141, [1977] 1 S.C.R. 536. In
summary, as stated by Abbott J., in Hoffman-LaRoche Ltd. v.
L.D. Craig Ltd., supra:
... it is well established that the appellant could succeed on
its appeal only if it were able to establish that the Commis
sioner acted on a wrong principle, or that on the evidence his
decision was manifestly wrong.
While the court has authority to determine the sort of reason
the commissioner may treat as a good reason for refusing a
licence, it seems clear that such good reason, whether founded
in the public interest or not, must relate to the clear purpose of
s. 41(4). He cannot be said to have acted on a wrong principle
if he rejects as irrelevant a public interest consideration not
bearing on the introduction of competition into the making
available of the particular medicine to the Canadian public so
that it may be available at the lowest possible price consistent
with the patentee's due reward for the research that led to its
invention.
The Project Officer in this case rejected as
irrelevant "any arguments based on the conduct of
Apotex Inc." solely on the basis that "the evidence
adduced by the Patentee clearly shows that the
Applicant is a separate, legally distinct company".
In so finding, as I see it, he erred in two ways:
first, such a finding infers that the close relation
ship of two corporate entities has no bearing on the
public interest in fostering competition to make
the medicine available at the lowest possible price
consistent with the patentee's due reward for the
research that led to its invention. That clearly is an
error given the admitted close corporate relation
ship between the applicant and Apotex and the
apparently undisputed fact of the deplorable
record of the latter in discharging earlier licence
obligations to, among others, the appellant herein.
Those facts may have a real bearing on not only on
the grant of licence at all but also on the terms
imposed upon a licensee in respect of its royalty
payments.
To ignore them completely creates an error in
principle, as I see it, since they may constitute
"good reason" for the rejection of the licence
application.
Secondly, the fact of the existence of separate
corporate entities is insufficient, per se, to preclude
a court from lifting the "corporate veil" where, as
here, allegations are made that a corporation has
been created to conceal facts relevant to the deter
mination which must, in this case be made under
the provisions of subsection 39(4) of the Patent
Act. Culliton C.J.S. in the Saskatchewan Court of
Appeal case of Nedco Ltd. v. Clark et al. 12 put
12 (1973), 43 D.L.R. (3d) 714 (Sask. C.A.).
this view of the law in this fashion [at pages
719-720]:
Notwithstanding that since the judgment of the House of
Lords in Salomon v. A. Salomon & Co., Ltd., [1897] A.C. 22,
the autonomous and independent existence of the corporate
entity has generally been accepted as a fundamental feature of
both English and Canadian law, there have been occasions
when the Courts have found it both possible and necessary to
pierce the corporate veil. The Court has done so when one
company is in fact the agent of the other; or, where one
company is being used as a cloak for the actions of the other;
or, for the just and equitable enforcement of a tax law. The
Court has also done so when it has concluded that while the
corporations are separate in law, one may be under the control
of the other to such an extent that together they constitute one
common unit. [Emphasis added.]
Quoting from Tunstall v. Steigmann, [1962] 2
Q.B. 593 (C.A.), Chief Justice Culliton said [at
page 721]:
If there has been any departure from a strict observance of the
principle of Salomon v. Salomon & Co. Ltd., [ 1897] A.C. 22 it
has only been made to deal with special circumstances where a
limited company might well be a facade concealing the real
facts.
He then went on to find at pages 721 and 722 of
the report that:
In a number of Canadian cases involving labour disputes,
Courts have looked beyond the corporate veil: see Lescar
Construction Co. Ltd. v. Wigman (1969), 7 D.L.R. (3d) 210,
[1969] 2 O.R. 846, and Refrigeration Supplies Co. Ltd. v.
Ellis et al. (1970), 14 D.L.R. (3d) 682, [1971] 1 O.R. 190.
These cases, however, while recognizing the right to pierce the
corporate veil, do not establish any broad principle upon which
the right to do so is founded. They do, however, make it clear
that each case must be decided in the light of its particular
facts.
In the present case Nedco Ltd. is a wholly-owned subsidiary
of Northern Electric Company Limited. It was organized and
incorporated to take over what was formerly a division of
Northern Electric Company Limited. As such wholly-owned
subsidiary, it is controlled, directed and dominated by Northern
Electric Company Limited. Thus, viewing it from a realistic
standpoint, rather than its legal form, I am of the opinion that
it constitutes an integral component of Northern Electric Com
pany Limited in the carrying on of its business. [Emphasis
added.]
Lord Buckmaster in the House of Lords put the
principle in this way in the oft-quoted case of
Rainham Chemical Works v. Belvedere Fish
Guano Co."
A company, therefore, which is duly incorporated, cannot be
disregarded on the ground that it is a sham, although it may be
established by evidence that in its operations it does not act on
its own behalf as an independent trading unit, but simply for
and on behalf of the people by whom it has been called into
existence.
As will be seen, rather than a piercing of the
corporate veil concept, Lord Buckmaster sees that
it is something akin to a principal/agency relation
ship which must be found.
The foregoing authorities are but a few among
many which show that the pronouncement of the
Project Officer that arguments based on the con
duct of Apotex were irrelevant because it was "a
separate, legally distinct company" from the
respondent was a misapprehension of the law in
the circumstances relied upon by the appellant as
showing the true purpose for the respondent's
incorporation and application for licence. The
determination of whether the facts disclosed did or
did not provide "good reason" for not granting the
licence was solely his to make but in making that
determination he must have acted on proper prin
ciples which, for both reasons given, he did not do.
The appellant should, therefore, also succeed on
this branch of its appeal.
III PROCESS ROYALTY SUBMISSION
The argument advanced under this head, as I
understand it, is that pursuant to clauses
1(a),(b),(c) and (d) of the licence, a royalty of 4/7
of 1% is payable on sales of medicine. "Medicine"
is defined in paragraph 14 of the licence as:
NAPROXEN/NAPROXEN SODIUM, when produced by any pro
cess or from any intermediate covered by the patent herein
mentioned.
Counsel for the appellant argued that the
Project Officer's reasons make it abundantly clear
that he assumed that the royalty would be paid
regardless of whether the respondent used any of
the licensed processes of the appellant or not. But
13 [1921] 2 A.C. 465 (H.L.), at p. 475.
the reference to "sales of medicine" in light of the
definition of the latter term, demonstrates that the
assumption was incorrect. As a result, it was said
that the Project Officer misdirected himself in that
his royalty award cannot be reconciled with his
reasons.
The short answer to this submission is that it is
the terms of the licence which must prevail not the
reasons for granting the licence and making the
royalty award. Assuming, for purposes of this
branch of the argument, that the Project Officer
was entitled in law to make the royalty award that
he did, the fact that such award may be inconsist
ent with what he said in his reasons, does not, at
least in the circumstances relied upon by the
appellant in this case, provide a basis for setting
aside the licence. If, on the other hand, what the
appellant alleged was that the Project Officer mis
apprehended what he was required to decide, it is
an allegation which we cannot accept.
The appellant must, therefore, fail on this
branch of its appeal.
IV THE MULTIPLE DRUG SUBMISSION
Counsel for the appellant argued that the
licence is contrary to Rule 118(1)(a)(ii) of the
Patent Rules in that it is directed towards two
different substances, viz. NAPROXEN and NAPROX-
EN SODIUM
Rule 118(1)(a)(ii) reads as follows:
118. (1) An application shall be made in duplicate in Form
21 of Schedule I and shall
(a) be made only in respect of one or more patents
(ii) that are for inventions that relate to or that may be
used in the preparation or production of the same or
substantially the same substance or thing, and
In making this submission he relied on the
affidavit evidence of Andrew G. Korey, the
Associate Director of Scientific Affairs of Syntex
Inc. who, in essence stated that since the Health
Protection Branch of the Department of National
Health and Welfare had held that the two drugs
are totally different, having issued separate notices
of compliance for each and having assigned two
different drug identification numbers for them, the
Project Officer erred in reaching the following
conclusion:
... I do not accept the proposition that NAPROXEN and
NAPROXEN SODIUM are different substances for the following
reasons. Firstly, NAPROXEN is the d-isomer of 2-(6-methoxy-2-
naphthyl) propionic acid while NAPROXEN SODIUM is merely
the sodium salt of this acid, the chemical equivalency of the two
is well illustrated in "The Merck Index" 10th Edition, Merck
and Co. Inc. 1983 where the entry under monograph 6269
entitled "Naproxen" lists the sodium salt as a derivative of the
title compound, also, in the Patentee's patent number 960,668,
for example, the acid and the salt are considered the same, the
latter is a pharmaceutically acceptable salt of the former.
Secondly, I have compared the entries under ANAPROX (the
Patentee's brand of NAPROXEN SODIUM) and NAPROSYN (the
Patentee's brand of NAPROXEN) in the "Compendium of Phar
maceutical Specialties 1985" 20th Edition Canadian Phar
maceutical Association 1985 which publication reproduces
monographs on drugs based on information supplied by the
Health Protection Branch and manufacturers. I find that
whereas the indications duplicate those affirmed by Dr. Korey
the pharmacology listed for both is essentially the same this is
verified by the titles adopted i.e. "Analgesic-Anti-Inflammato
ry" and "Anti-Inflammatory-Analgesic" respectively. Thirdly,
Rule I18(1)(a)(ii) of the Patent Rules provides for an applica
tion in respect of one or more patents that are for inventions
that relate to or that may be used in the preparation or
production of the same or substantially the same substance or
thing. I have no difficulty in finding that NAPROXEN and
NAPROXEN SODIUM are the same or substantially the same
substance.
The appellant's counsel argued that the Project
Officer ought not to have rejected the expert evi
dence of Dr. Korey. The simple answer to that
submission is that the Project Officer was not
bound to accept the opinion evidence given by the
appellant's witness." He chose not to and made no
error in principle in so choosing.
I am further of the opinion that, contrary to the
submission of counsel, the Project Officer did not
err in his use of The Merck Index or the Compen
dium of Pharmaceutical Specialties 1985 in
reaching his conclusion.
' 4 See Scherico Ltd. v. P.V.U. Inc. (1989), 24 C.I.P.R. 161
(F.C.A.).
For these reasons, the appellant ought not to
succeed on this branch of its appeal.
V ROYALTY SUBMISSION
The appellant attacked the royalty awarded in
the compulsory licence of 4/7 of 1% of the net
selling price of the medicine in final dosage form
on three bases:
(1) The Project Officer had insufficient evi
dence before him to fix the royalty at any figure.
(2) Even if he had some evidence before him,
the quantum awarded was absurdly low and did
not comply thereby with the statutory mandate
of giving the patentee due reward for its
research.
(3) The simple arithmetic exercise of dividing a
global royalty fixed at the rule of thumb quan
tum of 4%, equally between the various paten-
tees of the patents alleged by the applicant for
licence to be required, is contrary to the direc
tions given by this Court in the recent case of
American Home Products Corp. v. I.C.N.
Canada Ltd. (No. 2). 15
Jurisprudence has emanated from this Court in
recent years in a number of cases including, inter
alia, in addition to the above American Home
Products case, the following: American Home
Products Corp. v. ICN Can. Ltd. (No. 1); 16
American Home Products Corp. v. Novopharm
Ltd.;" Takeda Chemical Industries Ltd. v.
Novopharm Ltd.; '8 Re Application for Compulso
ry Licence by. Novopharm Ltd.; 19 Otsuka Phar
maceutical Co. v. Torcan Chemical Ltd.; 20 Re
Application for compulsory licence by Apotex
Inc. 21
15 (1988), 18 C.I.P.R. 104 (F.C.A.).
16 (1985), 7 C.I.P.R. 174 (F.C.A.).
" (1988), 18 C.I.P.R. 128 (F.C.A.).
1$ (1988), 19 C.P.R. (3d) 278 (F.C.A.).
" (1988), 18 C.I.P.R. 121 (F.C.A.).
20 (1988), 20 C.I.P.R. 138 (F.C.A.).
21 (1987), 17 C.I.P.R. 51 (F.C.A.).
No useful purpose would be served in reviewing
those cases or the jurisprudence cited in them.
They speak for themselves. Suffice it to say that,
in essence, they stand for the propositions that:
(a) in fixing the royalty to be paid by a licensee to
a patentee the Commissioner must have before
him evidence from which he can fix the royalty
rate having regard to the desirability of making
the medicine available to the public at the lowest
possible price consistent with giving to the paten-
tee due reward for the research leading to the
invention as required by subsection 41(5) (now
subsection 39(5)) of the Act;
(b) that it is incumbent on both parties, viz. the
patentee, who has most of the knowledge of the
research time and cost involved and the applicant
for licence, to provide the Commissioner with the
evidence necessary to discharge his function;
(c) it is not sufficient for the applicant for licence
merely to state that it requires other licences.
Since the effect of licensing more than one patent
has been, as the practice has evolved, to reduce the
royalty otherwise payable to a single patentee, it
should satisfy the Commissioner that there is a
reasonable possibility that such additional licence
or licences are required and will be used. If he is so
satisfied, then the royalty to be awarded each
patentee is solely his decision to make;
(d) where there is little or no evidence as to the
process actually to be used, a fact which is within
the exclusive knowledge of the licensee, it is at
least doubtful that the simple equal division of a
global royalty is invariably the proper exercise of
the statutory duty imposed on the Commissioner.
I can find little difference between the evidence
supplied by the applicant for licence in respect of
the royalty in this case (the respondent) and that
presented in support of the application for licence
in the American Home Products Corp. (No. 2)
and other cases, supra. In those cases the evidence
was found to be insufficient and, in each case, they
were referred back to the Commissioner to have
the royalty fixed on the basis required by subsec
tion 41(5) of the statute (now subsection 39(5)).
In addition, as pointed out in the second American
Home Products case, the appellant failed to dis
charge the burden on it of adducing the requisite
evidence to establish the basis upon which it
claimed that the royalty recommended by the
applicant for licence was insufficient in that it did
not accord it due reward for its research leading
up to the discovery of the invention in so far as it
applied in Canada. The same paucity of evidence
by the patentee in the American Home Products
cases and others referred to above, prevails in this
case.
The respondent in this case, just as the applicant
for licence in the American Home Products case
failed to do, did not indicate in any way why it
required the other six licences, particularly since it
stated that it would make its bulk purchases of the
two products from only two suppliers. I seriously
doubt that licences would. be required from those
two suppliers. It is self-evident, as has been stated
in previous cases, that a prudent licensee naturally
will seek to protect itself from possible patent
infringement suits when it cannot be sure that its
supplier is not itself infringing other patents. But,
as stated in American Home Products (No. 2)
[(1988), 18 C.I.P.R. 104, at page 120], it "should
... satisfy the Commissioner that there is a
reasonable possibility that such additional licences
are required" (emphasis added), because, if there
is not such a reasonable possibility, then one or
more of the patentees may be vitally affected by a
reduction in the royalty which they might other
wise have been entitled to receive for their compul
sory licences. By the same token, of course, the
licensee should not be required to pay combined
royalties to the licensors whose patents they might
reasonably be expected to need, the effect of which
might not make the medicine available to the
public at the lowest possible price. In summary,
what the Commissioner is required to do in multi
ple licence applications is to have all relevant
evidence before him to enable him to make an
informed, balanced decision on the reasonable
possibility that multiple licences may be required
by a licensee, which patents they are and a proper
division of an overall royalty among such paten-
tees. Perhaps the only way such a decision could be
properly reached is by holding oral hearings,
recognizing, of course, that the decision as to
granting a hearing is solely within the discretion of
the Commissioner.
Accordingly, the appellant must succeed on this
branch of its appeal.
VI THE DISPOSITION OF THE APPEAL
For the foregoing reasons, the appeal should be
allowed. The licence granted by the Project Offi
cer on June 6, 1986 should be set aside and the
matter should be referred back to the Commission
er of Patents to reprocess the application himself
or by some person properly designated by him,
other than the Project Officer who granted the
original licence, conducted and decided in a
manner not inconsistent with these reasons for
judgment, and thereafter to fix the royalty proper
ly payable having regard to the desirability of
making the medicine available to the public at the
lowest possible price consistent with giving to the
patentee due reward for-the research leading to the
invention and for such other factors as may be
prescribed. Since no special reasons have been
shown for granting costs, the usual rule should
prevail and there should be no costs of the appeal.
MARCEAU J.A.: I agree.
MACGUIGAN J.A.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.