Patent infringement
During recent years the number of patent infringement cases in
the pharmaceutical field has increased significantly. A battle between patent
owners and generic companies has revealed different interpretations in the
Russian judicial system.
The law allows lawsuits to prevent activities that infringe an
exclusive right or create a threat of infringement. Such suits may be filed
against those who undertake specific activities or make necessary preparations
for such activities or against other persons that can prevent infringing
activities.
A range of defendants are to be found in pharmaceutical patent
litigation in Russia, including:
- the
marketing authorisation holder;
- contractual
manufacturers indicated in the marketing authorisation;
- local
distributors participating in state tenders for the supply of medicines;
and
- the
Ministry of Health, as the authority entitled to revoke the marketing
authorisation.
Where the marketing authorisation holder is not the manufacturer
of the medicines, infringement liability cannot be imposed on the marketing
authorisation holder. The courts have disagreed with this argument, indicating
that the introduction of a medicine into civil circulation is impossible
without the will of the marketing authorisation holder (First Commercial Appeal
Court, March 23 2017, A43-12199/2015).
According to Section 26.1(4) of the Federal Law on the
Circulation of Medicines (April 12 2010, 61-FZ), the marketing authorisation
holder is:
- the
medicine developer;
- the
medicine manufacturer; or
- another
legal entity that owns the marketing authorisation and is responsible for
the medicine’s quality, effectiveness and safety.
Since medicines are legally commercialised on condition that a
marketing authorisation is granted, it is logical to assume that obtaining a
marketing authorisation for the generic product where a patent is used (before
its expiration) creates at least the necessary pre-condition for launching the
generic medicine before the expiration of the patent term.
Further, the same applies where the patented medicine and
generic medicine refer to life-saving and essential drugs. The maximum sale
price registration is required to commercialise such drugs via state tenders.
Development of live-saving and essential drugs by innovators is
costly and involves numerous factors. Patent prosecution and subsequent patent
protection are the crucial elements of further investment activity.
By obtaining the marketing authorisation and maximum sale price
registration within the patent term for the original (referential) medicine,
the generic medicine may not appear on the market until the court, enforcement
authority or regulator takes measures. Taking such measures involves patentee
participation (eg, filing a lawsuit) and, until the enforcement decision, the
interest of patients and innovators’ distributors should be paramount.
There is no
express Bolar-like provision under the Civil Code (the main legal act on
patent protection matters), where it is clearly and expressly written that it
is completely legal to obtain the marketing authorisation or maximum sale price
registration of the medicine within the patent protection term. However,
reflection regarding a Bolar-like provision as interpreted by the courts is
found in Article 1359 of the Civil Code. Among other exemptions, the article
provides that performance of scientific research on the product or process in
which the invention is used or experimented with does not constitute an
infringement of patent rights.
The precedential case applying this norm was Case 2578/09 of the
Supreme Commercial Court (June 16 2009), where the court indicated that
manufacturing and submitting the samples of the generic medicine (for obtaining
an marketing authorisation) cannot be considered as an infringement of the
patent rights. However, the court highlighted that the manufacturing and
storage of a medicine before a patent expiration for sale or other
commercialisation following patent expiration would be patent infringement.
Despite being applied in later cases (eg, Ninth Commercial
Appellate Court, October 14 2009, 09A∏-14020/2009-GK (Case A40-56217/08-110-454)
the position of the Supreme Commercial Court did not answer the question
regarding whether obtaining the marketing authorisation (including but not
limited to cases where there was a gap of several years between the generic
marketing authorisation grant and the patent expiration, let alone the maximum
sale price) is a threat of patent infringement.
Further, the Supreme Commercial Court decision was rendered at a
time when there were no such provisions in the Medicines Law regarding termination
of a marketing authorisation should the medicine be unavailable in the market
within three years of the marketing authorisation grant.
Indeed, if there is a gap between the generic medicine marketing
authorisation grant and expiration of the patent – and under the Medicines Law
the marketing authorisation is revoked if the medicine is not commercialised
within three years of the marketing authorisation grant – is the position of
the defendant, arguing that the medicine was registered for scientific purposes,
well-grounded and reasonable?
The fact that the marketing authorisation is granted during the
patent protection term may lead to the premature launch of a generic medicine
on the market during the patent protection term. Such a situation occurred in
Cases A40-30124/2015 and A40-30012/2015, where the defendants’ medicines were
offered for sale via state tenders before expiration of the patent term. The
patent owner was successful in the said patent infringement actions, but it
demonstrated that a marketing authorisation is obtained to commercialise the
generic medicine and the courts should use other legal tools to prevent such
infringements.
The breakthrough example changing this can be found in the
recent decision of the Ninth Commercial Court of Appeals (December 26 2017,
10A∏-18326/2017, Case A41-85807/16). In this case, the defendant argued that
threat of infringement was not proven since the defendant was not advertising,
manufacturing or offering for sale his generic product by participating in state
tenders. The court dismissed these arguments, citing the two following
provisions:
- The
defendant’s generic medicines were registered on October 5 2016. The
plaintiff’s patent is effective until July 4 2023. Under Section 8(32) of
the Medicines Law, the absence of the product within three years (from
2016 to 2019) entails the termination of the marketing authorisation.
- Under
Articles 28 and 29 of the Medicines Law, the impossibility to submit
information regarding the monitoring of the medicine’s safety within five
years (from 2016 to 2021) gives rise to the termination of the marketing
authorisation.
If applied in further cases and shared by other courts, the
position will lead to a more enhanced level of protection for innovators.
Available remedies
The patentee in a pharmaceutical patent dispute could consider
the following remedies:
- a
claim to recognise the right;
- a
claim to prevent activities infringing the patent right or creating a
threat of its infringement;
- a
reimbursement of damages;
- a
payment of compensation instead of damages;
- the
seizure and destruction of counterfeit medicines; and
- the
publication of the court decision.
Court expenses in Russia, unlike in some jurisdictions, may be
recovered by the court from the losing party.
Interim measures (eg, arrest of products and prohibition to
undertake specific activity pending adjudication of the dispute) are
procedurally possible in Russia. However, the imposition of interim measures
requires an increased burden of proof and, thus far in patent infringement
cases, the court tends to dismiss interim measures motions on the grounds that
enforcement of interim measures may breach the balance of interests or
predetermine the results of the dispute.
Nevertheless, with the emerging trend necessitating more careful
attention to the ‘threat of rights’ concept, it is impossible to exclude the
fact that consistent filing of interim measures may lead to a much-expected
increase of interim measures applied in judicial practice.
Regulatory regime and patent enforcement
Articles 47 and 57 of the Medicines Law expressly ban the import
and sale of counterfeit medicines into Russia (as medicines in circulation in
breach of civil (including IP) legislation). Manufacture of such medicines is
also banned under the general provisions of the Civil Code. According to
Resolution 674 (September 3 2010), such medicines are subject to seizure and
destruction at the expense of the importer or seller under the procedure
approved by the government.
Under Section 7(32) of the Medicines Law, a court decision holding that
exclusive rights were infringed is grounds to revoke the marketing
authorisation of the generic medicine. Judicial practice interprets the
provision to the extent that such a decision must be rendered within a civil
lawsuit, not within a case challenging the decision of the administrative
authority (the Intellectual Rights Court, September 20 2016, C01-542/2016, Case
N A40-158999/2015).
Another important aspect is that patent protection in Russia is
additionally backed up with data
exclusivity protection. In particular, information regarding the results
of pre-clinical drugs trials and clinical trials of medicines submitted by the
applicant for state registration of the medicine, without permission and within
six years of the registration of the original medicine in Russia, is not
allowed for commercial purposes. Filing for marketing authorisation is allowed
after four years have lapsed since registration of the original medicine (for biosimilar
medicines that term is three years since the original medicine registration).
In 2017 the provisions were effectively applied in Russian
judicial practice when the Ninth Commercial Appeal Court held that the Ministry
of Health decision to dismiss the examination of the generic medicine was
legitimate. The court indicated that a marketing authorisation application
could be filed no earlier than the expiration of the original medicine’s
marketing authorisation (June 16 2017, Case A40-657/17).
Patent linkage
Medicines and pharmaceutical substances are recorded in the
state register. The registers do not provide information regarding whether the
specific medicine or substance is under patent protection. There is also no
obligation for the marketing authorisation applicant to cite any patent
protection in the application and registration dossier or to provide a
guarantee that third parties’ intellectual rights are not infringed.
The introduction of information on patent protection in the
state register, as well as the applicant’s obligation to guarantee that the
filed medicine does not infringe patent rights, may serve as a measure to
increase awareness and decrease prospective infringements.
Another option to safeguard a more comfortable and predictable
environment will be to introduce a marketing authorisation system with a
delayed effect of operation (ie, a specific indication in the regulatory
register that the marketing authorisation for a generic medicine becomes
effective after the expiration of the patent for the original (referential)
medicine).
Maximum sale price registration
On February 14 2018 the Ministry of Health issued an information
letter (418/25-5) regarding clarifying questions relating to the supply of
medicines for state needs. The ministry lists examples of cases where the state
customer may reject the maximum sale price submitted by a participant (eg, the
presence of the maximum sale price registration is grounds for participation in
state tenders for the supply of life-saving and essential drugs).
Among such cases are situations where the specific medicines at
issue are not commercialised on the Russian pharmaceutical market and cannot be
supplied to a state customer in case the state supply contact is entered into
(ie, breach of exclusive rights). Such a position, expressly shared by the
regulator, is a breakthrough in comparison with a 2014 case in which the court
indicated that the protection of patent rights should be sought in a judicial
or administrative order and not by rejecting the participation of a generic
medicine in a tender (Federal Commercial Court of Moscow Region, February 17
2014, F05-17393/2013, Case A40-32698/13-17-317).
State procurement system
Federal and local health authorities and institutions regularly
purchase medicines via state tenders. On October 26 2017, as part of its powers
within the procurement system, the Ministry of Health approved the template
contract for supplying medicines (Order 870n).
The template contract includes Provision 13 entitled ‘Exclusive
Rights’, under which:
- the
supplier guarantees that until the expiry of the best-before date, there
is no breach of exclusive rights of third parties to intellectual activity
results relating to the supply and use of the goods; and
- all
damages sustained by the customer in case of breach of exclusive rights of
third parties to intellectual activity results during the supply and use
of the goods (including those resulting from termination of marketing
authorisation) and the impossibility to use the medicines (including court
expenses and reimbursement of material damage) are reimbursed in full by
the supplier.
The presence of such a provision in the template contract for
the supply of medicines is a cold shower for potential infringers. The
provision demonstrates the authorities’ proactive approach to decrease the risk
of potential patent rights infringement.
