Novopharm held a compulsory licence for the patented medicine nizatidine, owned by Eli Lilly.
Novopharm and Apotex entered into a supply agreement whereby Novopharm would obtain the medicine and supply it to Apotex.
Eli Lilly sought to terminate Novopharm's licence, arguing the agreement constituted an impermissible sublicence, and sought prohibition orders against the issuance of Notices of Compliance to both Novopharm and Apotex.
The Supreme Court of Canada held that the supply agreement did not constitute a sublicence, as it did not grant Apotex the independent right to exercise Novopharm's licensed rights.
The Court also held that Apotex's proposed reformulation of the bulk medicine into final-dosage form would not infringe Eli Lilly's patents.
The appeals by Novopharm and Apotex were allowed.
