Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 8 - Third and Fourth Reports of the Committee
Thursday, April 5, 2001
The Standing Senate Committee on Banking Trade and Commerce has the honour to present its
THIRD REPORT
Your Committee, to which was referred Bill S-17, An Act to Amend the Patent Act, has, in obedience to the Order of Reference of Monday, March 12, 2001, examined the said Bill and now reports the same without amendment, but with observations, which are appended to this report.Respectfully submitted,
E. LEO KOLBER
Chairman
APPENDIX
Observations on Bill S-17
The Committee recognizes that these observations are outside the purview of S-17. However, the Minister, in his appearance before the Committee, indicated his intention to review the Patent Act at a future date in this Parliament. Any future review should consider the issues that follow.
The Committee recognizes that framework laws, such as intellectual property, must remain modern and progressive, and play an important role in the promotion of an innovative economy.
The Committee heard testimony suggesting that aspects of the present regulations may not be working in the way that Parliament originally anticipated. This may be leading to an increase in costly litigation. Such costs are normally passed on to the consumer through higher prices.
These regulations essentially superimpose special rules on court procedures. Testimony by government officials indicated that the regulations in question were a trade-off in exchange for the "early working" exception, which permits the generic manufacturers to begin work on the product before the expiry of a patent. The Patent Act created this legislative exception, which would otherwise be a violation of the patent holder's rights.
The case that witnesses raised is one in which an existing patent on a drug is coming to an end and a manufacturer is planning to create a generic edition. If one or more other patents related to the same drug have been issued, a claim by the original patent holder that the generic copy will infringe these other patents automatically prevents the Minister of Health from issuing a notice of Compliance for up to two years.
The Committee was told the result is that the generic product cannot be marketed for a longer period of time than would otherwise be the case, and that this use of the regulations is tantamount to an abuse of process.
In general, it is the Committee's view that the courts are fully capable of determining appropriate procedures, which should not differ substantially from one industry to another. Regulatory interference carries a risk that an unfair advan tage may inadvertently be provided to one side or the other.
Given the testimony suggesting that the cost and volume of related litigation was high, that a significant majority of the cases were ultimately lost by the patent holders, and that the patent holders gain an unintended benefit from the delay created, modifications of the regulations could be in order.
Indeed, the Minister of Industry agreed that "the intention should be to avoid things which would allow abuse to unnecessarily and, in an unearned way, extend that period of patent protection."
The Committee, therefore, strongly urges that the Min ister, in a future review of the legislation and regulations in question, ensure that they do not provide any of the parties implicated in patent protection with an advantage unintended by Parliament.
In addition, the Committee strongly urges any future proposed changes to regulations made under the Patent Act be tabled in both Houses of Parliament and automatically referred to appropriate committees for study and report within 30 sitting days of their being referred to Committee.
Thursday, April 5, 2001
The Standing Senate Committee on Banking Trade and Commerce has the honour to present its
FOURTH REPORT
Your Committee, to which was referred Bill S-11, An Act to Amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence, has, in obedience to the Order of Reference of Wednesday, February 21, 2001, examined the said Bill and now reports the same with the following amendments:1. Page 1, long title: Replace the long title with the following:
"An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts".
2. Page 23, clause 42: Replace lines 1 to 6 with the following:
"113. (1) A corporation shall, within fifteen days after
(a) a change is made among its directors, or
(b) it receives a notice of change of address of a director referred to in subsection (1.1),
send to the Director a notice, in the form that the Director fixes, setting out the change, and the Director shall file the notice.
(1.1) A director shall, within fifteen days after changing his or her address, send the corporation a notice of that change."
3. Page 38, clause 55:
(a) Replace line 20 with the following:
"(4) Unless the by-laws otherwise provide, any person"; and
(b) Replace line 27 with the following:
"during the meeting, if the corporation makes available such a communication facility. A person participating in".
4. Pages 42 and 43, clause 59: Replace lines 43 and 44 on page 42 and lines 1 to 3 on page 43 with the following:
"may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal.".
5. Page 44, clause 61: Replace lines 3 to 7 with the following:
"(3) Despite subsection (1), unless the by-laws otherwise provide, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the corporation makes available such a communication facility.
(4) Unless the by-laws otherwise provide, any person participating in a meeting of shareholders undersubsection 132(4) or (5) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the corporation has made available for that purpose.".
6. Page 48, clause 68: Replace line 10 with the following:
"(b) has fifty or fewer shareholders en-".
7. Pages 58 and 59, clause 97: Replace lines 29 to 39 on page 58 and lines 1 to 8 on page 59 with the following:
"193. A corporation may carry out a going-private transaction. However, if there are any applicable provincial securities laws, a corporation may not carry out a going-private transaction unless the corporation complies with those laws.".
8. Page 63, clause 100: Replace lines 27 to 32 with the following:
"shareholder may
(a) within ninety days after the date of termination of the take-over bid, or
(b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of
(i) the date of termination of the take-over bid, and
(ii) the date on which the shareholder learned of the take-over bid,
require the offer or to acquire those shares.".
9. Pages 64 and 65, clause 102:
(a) Replace lines 34 to 37 on page 64 with the following:
"including the restoration of any rights and privileges whether";
(b) Replace lines 12 to 14 on page 65 with the following:
"(c) a person who, although at the time of"; and
(c) Replace line 19 on page 65 with the following:
"(d) a trustee in bankruptcy for the dissolved".
10. Page 93, clause 148:
(a) Replace line 3 with the following:
"(3) Unless the by-laws provide otherwise, a member or"; and
(b) Replace line 10 with the following:
"ing, if the cooperative makes available such a communication facility.".
11. Page 97, clause 153:
(a) Replace line 3 with the following:
"section 52, the cooperative must, within the";
(b) Replace line 7 with the following:
"tion 58(2.4), as the case may be, notify in writing"; and
(c) Replace line 10 with the following:
"and of the reasons".
12. Page 97, clause 154: Replace lines 20 to 24 with the following:
"(3) Despite subsection (1), unless the by-laws provide otherwise, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the cooperative makes available such a communication facility.
(4) Unless the by-laws otherwise provide, a member or shareholder participating in a meeting of the cooperative under subsection 48(3) or (3.1) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the cooperative has made available for that purpose.".
13. Page 98, new clause 160.1: Add after line 47 the following:
"160.1 Section 91 of the Act is replaced by the following:
91. (1) A cooperative must, within fifteen days after
(a) a change is made among its directors, or
(b) it receives a notice of change of address of a director referred to in subsection (2),
send to the Director a notice, in the form that the Director fixes, setting out the change.
(2) A director must, within fifteen days after changing his or her address, send the cooperative a notice of that change.
(3) Any interested person, or the Director, may apply to a court for an order to require a cooperative to comply with subsection (1), and the court may so order and make any further order it thinks fit.".
14. Page 108, new clause 184.1: Add after line 34 the following:
"184.1 Paragraph 165(2)(b) of the Act is replaced by the following:
(b) it has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.".
15. Page 116, new clause 192.1: Add after line 18 the following:
"192.1 Subsection 176(1) of the Act is replaced by the following:
176. (1) If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may
(a) within ninety days after the date of the end of the take-over bid, or
(b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of
(i) the date of the end of the take-over bid, and
(ii) the date on which the shareholder learned of the take-over bid,
require the offer or to acquire those shares.".
16. Pages 119 and 120, clause 206:
(a) Replace line 37 on page 119 with the following:
"of the Act before paragraph (b) is replaced";
(b) Add after line 46 on page 119 the following:
"(a) restored to its previous position in law, including the restoration of any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and"; and
(c) Add after line 6 on page 120 the following:
"(8) In this section, "interested person" includes
(a) a member, a shareholder, a director, an officer, an employee and a creditor of the dissolved cooperative;
(b) a person who has a contractual relationship with the dissolved cooperative; and
(c) a trustee in bankruptcy for the dissolved cooperative.".
17. Page 136, new clauses 230.1, 230.2, 230.3 and 230.4: Add after line 24 the following:
"Air Canada Public Participation Act
230.1 (1) Subsections 6(4) of the Air Canada Public Participation Act is repealed.(2) The portion of subsection 6(5) of the Act before paragraph (a) is replaced by the following:
(5) For the purposes of this section,
(3) Subsection 6(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).
Canada Development Corporation Reorganization Act
230.2 (1) Subsections 5(6) of the Canada Development Corporation Reorganization Act is repealed.(2) The portion of subsection 5(7) of the Act before paragraph (a) is replaced by the following:
(7) For the purposes of this section,
(3) Subsection 5(7) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).
CN Commercialization Act
230.3 (1) Subsections 8(4) of the CN Commer-cialisation Act is repealed.(2) The portion of subsection 8(5) of the Act before paragraph (a) is replaced by the following:
(5) For the purposes of this section,
(3) Subsection 8(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).
Nordion and Theratronics Divestiture Authorization Act
230.4 (1) Subsections 6(4) of the Nordion Theratronics Divestiture Authorization Act is repealed.(2) The portion of subsection 6(5) of the Act before paragraph (a) is replaced by the following:
(5) For the purposes of this section,
(3) Subsection 6(5) of the Act is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).".
Respectfully submitted,
E. LEO KOLBER
Chairman