Judgments

Decision Information

Decision Content

A-909-85
Smith Kline & French Laboratories Limited, Smith Kline & French Canada Ltd., Graham John Durant, John Colin Emmett and Charon Robin Ganellin (Appellants) (Plaintiffs)
v.
Attorney General of Canada (Respondent) (Defendant)
INDEXED AS: SMITH, KLINE & FRENCH LABORATORIES LTD. V. CANADA (ATTORNEY GENERAL)
Court of Appeal, Heald, Mahoney and Hugessen JJ.—Ottawa, November 25, 26, 27 and December 9, 1986.
Constitutional law — Charter of Rights — Equality rights — Patents for medicine — Subject to compulsory licensing pursuant to s. 41(4) Patent Act — Whether s. 41(4) denying patentees equality rights under s. 15 Charter — S. 15 pro scribing discrimination only among those similarly situated — Permissible grounds for categorisation — Criteria: text of s. 15, rights otherwise guaranteed by Charter and values inherent to free and democratic society — S. 41(4) categories unrelated to those enumerated in s. 15 — No suggestion within s. 41(4) of discrimination, prejudice or stereotype — Economic inter ests less subject to scrutiny — S. 41(4) direct and specific expression of parliamentary will requiring Court to exercise deference and restraint — Discrimination allegation unsub stantiated — Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 7, 8, 9, 11(d), 15, 29 — Patent Act, R.S.C. 1970, c. P-4, s. 41(4).
Patents — Compulsory licensing — Appeal from Trial Division decision rejecting argument s. 41(4) ultra vires and inconsistent with Bill of Rights and Charter ss. 7 and 15 — Appeal dismissed — Decision focussing on content of s. 15 equality rights — Voluntarily assumed rights and obligations, as those involving patents, not giving rise to s. 15 guarantee — Patent Act, R.S.C. 1970, c. P-4. s. 41(4) — Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 1(a),(b) — Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) ZR.S.C. 1970, Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1), s. 92 — Judges Act, R.S.C. 1970, c. J-1, s. 36.
The individual plaintiffs are the inventors and the corporate plaintiffs are, respectively, the patentee and licenses of a pre scription drug known generically as Cimetidine. Since the patents at issue relate to a medicine, they are subject to the compulsory licensing provisions of subsection 41(4) of the Patent Act. By their action, the plaintiffs sought a declaration
that the exclusive rights granted to the patentees may be enjoyed free of any compulsory licence under subsection 41(4). Their submission is that subsection 41(4) is ultra vires in that it is legislation within exclusive provincial jurisdiction, that it is contrary to paragraphs 1(a) and (b) of the Canadian Bill of Rights, that it infringes section 7 of the Charter and finally, that it denies them equality rights guaranteed by subsection 15(1) of the Charter. The Trial Judge dismissed the action. The Court of Appeal was in complete agreement with the Trial Judge's conclusions and reasoning in so far as the arguments based on the distribution of powers, on paragraphs 1(a) and (b) of the Bill of Rights and on section 7 of the Charter were concerned. There remained the question of equality rights under section 15.
Held, the appeal should be dismissed.
The approach to the interpretation of section 15 followed by the Trial Judge—to view any distinction based upon one of the enumerated categories in section 15 as prima facie in breach of the section and therefore requiring justification under section I to avoid being struck down—had not found favour in the substantial volume of case law subsequent to November, 1985 when the decision under appeal was written.
Charter section 15 does not come into play when the alleged "discrimination" results directly from voluntarily assumed rights and obligations. The law does not require any inventor to patent his invention. A patent is a bargain voluntarily entered into by the patentee in which the latter obtains time-limited but state-supported exclusivity for his invention in return for his disclosure of it to the public.
As taught in R. v. Oakes, the Court must first determine the content of the right which is invoked to see if there was a breach and then, if asked to do so, look to section 1 to see if the limitation is justifiable. The text of section 15 contains its own limitations. It proscribes discrimination only among members of categories which are themselves similar. The issue in each case will be to know which categories are permissible in deter mining similarity of situation and which are not. No single test serves to determine that issue. A range of criteria, drawn from three sources, might be suggested: the text of section 15 itself; the other rights, liberties and freedoms enshrined in the Chart er; and the underlying values inherent in the free and democrat ic society which is Canada. With respect to the text of section 15, the question to ask is whether there is discrimination in the pejorative sense and whether the categories are based upon the grounds enumerated or grounds analogous to them. This inqui ry concentrates on the personal characteristics of the complai nants. It involves questions of prejudice, stereotyping, historical disadvantagement. The second question is whether the catego ries under examination have any impact upon the rights and freedoms otherwise guaranteed by the Charter. This inquiry turns on the interest affected by the alleged inequality and recognizes that in the context of the Charter some rights are more important than others. Since the Charter's primary focus is on personal rights, property and economic rights will be less
subject to scrutiny. Finally, the courts must exercise some degree of deference and restraint when dealing with a legisla tive category subject to a section 15 attack. It must be remem bered that any legislative category results from the actions of a freely and popularly elected legislature. The degree will be greatest when the categories are found in the text of the legislation and will diminish as they become further removed from the expression of legislative will, either by delegation or by indirection.
The plaintiffs failed to meet the above-mentioned criteria. The categories created in subsection 41(4) bear no remote relation to those enumerated in section 15 and carry within them no suggestion of discrimination, prejudice or stereotype. All patentees of a process for the preparation of medicine are subject to subsection 41(4). The interests allegedly suffered by the plaintiffs are purely economic and commercial in nature. Finally, the text of subsection 41(4) is a direct and specific expression of parliamentary will. It is the result of extensive consultation and is a deliberate expression of the views of a free and democratic society.
CASES JUDICIALLY CONSIDERED
APPLIED:
R. v. Oakes, [1986] 1 S.C.R. 103.
REFERRED TO:
MacKay v. The Queen, [1980] 2 S.C.R. 370; Re McDo- nald and The Queen (1985), 51 O.R. (2d) 745 (C.A.); Reference re an Act to amend the Education Act (1986), 53 O.R. (2d) 513 (C.A.); Blainey v. Ontario Hockey Association (1986), 26 D.L.R. (4th) 728 (Ont. C.A.); Regina v. Hamilton, Regina v. Asselin, Regina v. McCullagh (1986), 30 C.C.C. (3d) 257; 54 C.R. (3d) 193; 170 A.C. 241 (C.A.); Shewchuk v. Ricard (1986), 4 W.W.R. 289 (B.C.C.A.); Rebic v. Collver (1986), 4 W.W.R. 401 (B.C.C.A.); Andrews v. Law Society of British Columbia (1986), 4 W.W.R. 242 (B.C.C.A.); Cromer v. British Columbia Teachers' Federation (1986), 5 W.W.R. 638 (B.C.C.A.); Re B.C. Motor Vehi cle Act, [1985] 2 S.C.R. 486.
COUNSEL:
Gordon F. Henderson, Q.C., Robert M. Nelson and Emma C. Hill for appellants (plaintiffs).
Derek Aylen, Q.C. and Bruce S. Russell for respondent (defendant),
SOLICITORS:
Gowling & Henderson, Ottawa, for appellants (plaintiffs).
Deputy Attorney General of Canada for respondent (defendant).
The following are the reasons for judgment rendered in English by
HUGESSEN J.: This is an appeal from a judg ment of Strayer J. in the Trial Division,' dismiss ing plaintiffs' action for declaratory relief.
The individual plaintiffs are the inventors and the corporate plaintiffs are respectively the paten- tee and licensee of inventions described in Canadi- an patents nos. 1,045,142 and 949,967. Those patents are in respect of a prescription drug known generically as Cimetidine, which is widely used in the treatment of stomach ulcers. Since the patents relate to a medicine and the processes used in its preparation or production, they are subject to the compulsory licensing provisions of subsection 41(4) of the Patent Act (R.S.C. 1970, c. P-4):
41....
(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 such a licence; and, in settling the terms of the licence and fixing the amount of royalty or other consideration pay able, 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.
Now reported: [1986] 1 F.C. 274.
By their action, plaintiffs seek a declaration that the exclusive rights granted to the patentees in question may be enjoyed free of any compulsory licence under subsection 41(4). They found their claim that subsection 41(4) is ultra vires, in-opera tive or invalid, upon five separate grounds, namely:
1. That it is legislation in relation to a matter of exclusive provincial competence within section 92 of the Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1)];
2. That it is contrary to the rights declared in paragraph 1(a) of the Canadian Bill of Rights [R.S.C. 1970, Appendix III]:
1....
(a) the right of the individual to life, liberty, security of the person and enjoyment of property, and the right not to be deprived thereof except by due process of law;
3. That it is contrary to the rights declared in paragraph 1(b) of the Canadian Bill of Rights:
1....
(b) the right of the individual to equality before the law and the protection of the law;
4. That it denies to plaintiffs the rights guaran teed to them by section 7 of the Canadian Charter of Rights and Freedoms [being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)]:
7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
5. That it denies the plaintiffs the equality which is guaranteed to them by subsection 15(1) of the Canadian Charter of Rights and Freedoms:
15. (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
In . a carefully and clearly written decision, Strayer J. examines and rejects each of plaintiffs' claims on their merits. 2
In so far as concerns the arguments based upon the distribution of powers under the Constitution Act, 1867, the alleged breach of paragraphs 1(a) and 1(b) of the Canadian Bill of Rights and the alleged denial of the rights to life, liberty and security of the person under section 7 of the Chart er, I am in complete agreement with the Trial Judge's conclusions and with the reasoning by which he, arrives at them. If anything, he has given those arguments a fuller treatment than they deserve; any additional comments on my part would be superfluous.
There remains the question of equality rights under section 15. At the time that the Trial Judge wrote, in November 1985, that section had only been in force a few months and he did not have available to him the substantial volume of appel late jurisprudence which has since developed.' The approach which he adopted to the interpretation of section 15 has not found favour in subsequent decisions. That approach, stated in the briefest possible terms, was to view any distinction based upon one of the enumerated categories in section 15 as being prima facie in breach of the section and therefore requiring justification under section
2 Any possible problems resulting from the attempt by corpo rate plaintiffs to assert rights which can only be enjoyed by individuals are resolved by the Trial Judge's finding, not put in issue on appeal, that the individual plaintiffs possessed the necessary standing to assert the claims in their own behalf.
See, in particular: Re McDonald and The Queen (1985), 51 O.R. (2d) 745 (C.A.); Reference re an Act to amend the Education Act (1986), 53 O.R. (2d) 513 (C.A.); Blainey v. Ontario Hockey Association (1986), 26 D.L.R. (4th) 728 (Ont. C.A.); Regina v. Hamilton, Regina v. Asselin, Regina v. McCullagh (1986), 30 C.C.C. (3d) 257; 54 C.R. (3d) 193; 170 A.C. 241 (C.A.); Shewchuk v. Ricard (1986), 4 W.W.R. 289 (B.C.C.A.); Rebic v. Collver (1986), 4 W.W.R. 401 (B.C.C.A.); Andrews v. Law Society of British Columbia (1986), 4 W.W.R. 242 (B.C.C.A.); Cromer v. British Columbia Teachers' Federation (1986), 5 W.W.R. 638 (B.C.C.A.).
1 to avoid being struck down; any distinction based on any other categories would only be in breach of the section if it failed to meet the tests of legitima cy, rationality and proportionality, enunciated by McIntyre J. in MacKay v. The Queen, [ 1980] 2 S.C.R. 370.
Since my approach to section 15 differs substan tially from that taken by the Trial Judge, I think it appropriate that I should set it out in some detail, even though the result is ultimately the same. In the first place, and in the particular context of this action, it must be said that a short answer to the plaintiffs' section 15 attack is that, when the alleged "discrimination" results directly from a voluntarily assumed package of rights and obliga tions, section 15 simply does not come into play. A number of simple examples serve to illustrate the point. Certain offices, professions or callings have, as a condition of their exercise, a prohibition to carry out certain other activities open to the citi zenry at large. Section 36 of the Judges Act [R.S.C. 1970, c. J-1] is a case in point. Section 15 surely cannot be invoked here for no one is ever obliged to subject himself to the restraint imposed.
An example from a wholly different field would be a licence to fish for trout or shoot partridge. An argument that the holder was, by operation of section 15, entitled to claim a right to fish for salmon or shoot big game would properly be laughed out of Court.
A third example of what I would describe as "phony" discrimination is the purchase of a lot zoned for the construction of residential bungalows only. Section 15 cannot be engaged to support an argument for the construction of a commercial highrise on the site.
It is elementary, in my view, that no inventor is ever obliged by law to patent his invention. He may keep it to himself and exploit it virtually
forever, provided he is able to keep the secret from others and provided no other inventor manages to hit upon it on his own. In the case of a process patent, the only kind envisioned by subsection 41(4), this is not a merely theoretical possibility and it is common knowledge that successful recipes for food and drink (alcoholic and other wise) are virtually never patented. A patent is, accordingly, a bargain which, even though its terms and conditions are set by statute, is volun tarily entered into by the patentee. He obtains time-limited but state-supported exclusivity for his invention in return for his disclosure of it to the public.
There is, however, a suggestion in the present case that, as a matter of fact though not of law, the inventor of a pharmaceutical product is obliged to patent his process. Without accepting that suggestion as being either true or relevant to the issues herein but assuming, for the sake of argu ment, that it is correct, it is my view that it still does not serve to bring section 15 into play.
At the most basic level, the equality rights guar anteed by section 15 can only be the right of those similarly situated to receive similar treatment. 4 The issue will be to know, in each case, which categories are permissible in determining similari ty of situation and which are not. Here, all paten- tees take subject to the Patent Act. More narrow ly, all patentees of a process for the preparation or production of medicine are subject to the compul sory licensing provisions of subsection 41(4). As long ago as Aristotle's time, it was accepted that equality consisted of treating equals equally and unequals unequally. Herein, in my opinion, lies the answer to the conundrum, more apparent than real, of the relationship between sections 15 and 1, which has already given rise to so much discus
4 I do not overlook the possibility that section 15 may also include the right of those unequally situated to receive unequal treatment so as to achieve an equal result, but it is not relevant to the present case; whatever else they may be, the plaintiffs are not amongst the handicapped.
sions in the literatures and which has been given further impetus by the decision of the Supreme Court in R. v. Oakes, [ 1986] 1 S.C.R. 103. Oakes, which dealt with legal rights and more particularly those contained in section 7 and paragraph 11(d) of the Charter, teaches us that the tests of section 1 are not to be used as a gauge to determine the extent of Charter-guaranteed rights. In any given case, the court must first determine the content of the right which is invoked to see if there was a breach. Only then, if asked to do so, does the Court look to the criteria of section 1 to see if the limitation of the right is justifiable. The difficulty comes about because many of the rights contained in the Charter are themselves expressed in value- laden language similar to that employed in section 1. Obvious examples are sections 8 and 9, with their guarantees against unreasonable and arbi trary state action. Clearly there is nothing con trary to the Oakes teaching in a section 9 case for the Court's first inquiry to be whether there has, in fact, been "arbitrary" detention or imprisonment and it is not inconceivable that a court having so found might yet go on to determine that such imprisonment could be justified under section 1 (as, for example, under conditions of war).
Thus too with section 15. The rights which it guarantees are not based on any concept of strict, numerical equality amongst all human beings. If they were, virtually all legislation, whose function it is, after all, to define, distinguish and make categories, would be in prima facie breach of
5 See: Hogg, Constitutional Law of Canada, 2nd edition, Toronto: Carswell, 1985, pp. 799-801; Gold, "A Principled Approach to Equality Rights: Apreliminary inquiry", (1982) 4 S.C.L.R. 131; Tremblay, "Egalité et clauses anti -dis- criminatoires", (1984) 18 R.J.T. 329; Tarnopolsky, "Equality Rights in The Canadian Charter of Rights and Freedoms", (1983) 61 Can. Bar Rev. 242; Brudner, "What Are Reasonable Limits to Equality Rights?", (1986) 64 Can. Bar Rev. 469; Bayefsky and Eberts, Equality Rights and The Canadian Charter of Rights and Freedoms, Toronto: Carswell, 1985, pp. 69-79; Gibson, The Law of The Charter, Toronto: Carswell, 1986, pp. 135-142.
section 15 and would require justification under section 1. This would be to turn the exception into the rule. Since courts would be obliged to look for and find section 1 justification for most legislation, the alternative being anarchy, there is a real risk of paradox: the broader the reach given to section 15 the more likely it is that it will be deprived of any real content.
The answer, in my view, is that the text of the section itself contains its own limitations. It only proscribes discrimination amongst the members of categories which are themselves similar. Thus the issue, for each case, will be to know which catego ries are permissible in determining similarity of situation and which - are not. It is only in those cases where the categories themselves are not per missible, where equals are not treated equally, that there will be a breach of equality rights.
But how to know who is equal and who is not? And what are the permissible grounds for categori sation? In my view, there is no single test that will serve. Not even a category based upon one of the enumerated prohibited grounds of discrimination will necessarily fail: the refusal of a driver's licence to a child of three does not need to seek its justification under section 1. We are as yet in the early stages of the development of our understand ing of section 15. I do not think it is prudent, or even possible, to lay down any hard and fast rules. The most we can do is suggest a range or spectrum of criteria to determine on which side of the line any given categorisation must fall. These criteria, which are, in effect, no more than indicators, may, as it seems to me, be drawn from three sources. First, the text of section 15 itself; second, the other rights, liberties and freedoms enshrined in the Charter; and, third, the underlying values inherent in the free and democratic society which is Canada.
As far as the text of section 15 itself is con cerned, one may look to whether or not there is "discrimination", in the pejorative sense of that word, and as to whether the categories are based
upon the grounds enumerated or grounds analo gous to them. The inquiry, in effect, concentrates upon the personal characteristics of those who claim to have been unequally treated. Questions of stereotyping, of historical disadvantagement, in a word, of prejudice, are the focus and there may even be a recognition that for some people equality has a different meaning than for others.
In the second area of inquiry, I think we should look to whether the categories under examination have any impact upon the rights and freedoms which the Charter otherwise guarantees. An obvi ous example, because it is specifically mentioned in section 2 as well as in section 15, is religious belief; a category based on this characteristic which was not otherwise under the saving provi sion of section 29 would be highly suspect. It is not difficult to conceive of other legislative categories impacting indirectly on other fundamental rights and freedoms. 6 The inquiry here is into the interest affected by the alleged inequality and recognises that, in the context of the Charter, some rights are more important than others. While the generalisa tion will no doubt require refinement, it would seem to me that, since the Charter's primary focus is upon personal rights, liberties and freedoms, categories whose main impact is elsewhere, such as on property and economic rights, will be less sub ject to scrutiny.
The final complex of criteria should, I suggest, flow from the fact that Canada is a democratic country and that any legislative category which is subject to attack under section 15 will have result ed from the actions of a freely and popularly elected legislature. Where such a legislature has clearly and consciously made a deliberate choice, some degree of judicial deference and restraint is indicated. That degree will be greatest where the categories are found in the very text of the legisla-
6 See, for example, the very recent decision of the Ontario Court of Appeal in Regina v. Hamilton, supra—failure to proclaim sections of the Criminal Code [R.S.C. I970, c. C-34] in a province, resulting in residents of that province facing obligatory prison terms instead of undergoing treatment for alcoholism, was held to violate section 15. Clearly a liberty interest was at stake.
tion and will diminish as they, and the alleged inequalities flowing from them, become further removed from the expression of legislative will, either by delegation or by indirection. Even where the legislative will is clear and direct, room will, of course, remain for judicial intervention to prevent the tyranny of the majority,' but the likelihood will surely be greater where the perceived injustice is the result of inadvertance, inattention or abuse by subordinates.
It will be seen from the foregoing that the approach which I propose for determining the content of the equality rights in section 15 differs somewhat from that which has been developed and elaborated in some detail by different panels of the British Columbia Court of Appeal in the cases of Shewchuk, Rebic, Andrews, and Cromer, supra. It is with some regret that I do so for I find most of the reasoning attractive and persuasive. The dif ficulty I have with those decisions, as I understand them, is that they conclude that the ultimate test as to whether any given legislative category is in breach of section 15 is whether it meets the twin standards of reasonableness and fairness. With respect, I find this test impossible to reconcile with the teaching of Oakes, supra. If a category must be shown to be unreasonable or unfair before it can be said to give rise to a breach of equality rights, it is difficult to see how there can ever be room for application of section 1. In my view, Oakes requires that any test of the content of section 15 must be both logically and analytically distinct from section 1. 8 In the preceding pages, I have attempted to suggest a possible basis for such
' One would expect, for example, that the Charter would have been effective to prevent the treatment accorded to Japa- nese Canadians during the Second World War.
$ I have the same difficulty with the second branch of the approach taken by the Trial Judge; the application of the tests enunciated by McIntyre J. in MacKay, supra, seems more logically relevant to an inquiry under section 1 than to a determination of the inherent limits to section 15.
a test, founded upon my understanding of the correct approach to Charter interpretation. 9
It will be noted that I have not set out in any detail the content of the criteria which I would apply nor have I attempted to balance their rela tive importance. The omission is deliberate. The interpretation of section 15 is fraught with dif ficulty and prudence dictates a case-by-case approach. On the facts of the present case, it seems to me that there is no basis upon which the application of the suggested criteria could give any substance to the plaintiffs' claim that their rights have been breached. The categories created in subsection 41(4) of the Patent Act bear no remote relation to those enumerated in section 15 and carry within them no suggestion of discrimination, prejudice or stereotype.
The interests in which plaintiffs claim to have suffered are purely economic and commercial in nature; no question of liberty, freedom or human rights is involved. Finally, the text of subsection 41(4) is a direct and specific expression of parlia mentary will; as pointed out by the Trial Judge, it was adopted after the existing state of the law had been reviewed by at least three commissions and a parliamentary committee; there could hardly be a more deliberate expression of the views of a free and democratic society.
I would add that the same result would flow from the application of the tests proposed in the British Columbia cases, supra, or indeed of any other test which has been suggested to set some limits to the reach of section 15. To succeed, plaintiffs have to urge, as they do, that section 15 guarantees absolute equality to every individual in every conceivable circumstance and that every pos sible distinction that can result in one receiving a benefit or incurring a disadvantage which is not enjoyed or suffered by all can only be justified, if at all, under section 1, which has not been invoked by the defendant. As I have attempted to indicate, that view seems to me to be untenable.
9 That approach was most recently summarized in Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486, at pp. 499-500.
For all these reasons, I would dismiss the appeal with costs.
HEALD J.: I agree. MAHONEY J.: I agree.
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