In two recent decisions, the Federal Court of Appeal (FCA) confirmed that licenses can be implied with respect to trademarks and patents based upon the actions of the parties involved. In Apotex Inc. v. The Wellcome Foundation Ltd., the FCA found that the past licensing practices of a parent company concerning its subsidiaries can result in an implied license between the parties. According to the FCA, evidence showing that the parent company routinely granted unwritten licenses to its subsidiaries, together with evidence that the parent company only required written licenses in the case of non-wholly-owned subsidiaries, implied that a license agreement existed between the parent company and its subsidiary. In EliLilly & Co. v. Novopharm Ltd., the FCA found that the licensor’s attempts to control the appearance of its PROZAC capsules, subsequent to the execution of the original license agreement, implied the licensor’s intent to include such trade dress rights in the original license agreement. Thus, the “labeling and packaging” rights granted to the licensee within the license agreement extended not only to the outer packaging of the products (i.e., the bottles holding the capsules) but also to the trade dress of the actual capsules (i.e., the size, color and shape of the capsules).

In both of the above-mentioned decisions, the FCA also noted that it will not consider an alleged infringer’s defense of “non-existence of a license” when both the licensor and licensee are before the court attesting to the validity of the license.