By Manuel Lobato and Marco Yago of Bird & Bird
This article intends to briefly describe two elements of indirect infringement of pharmaceutical patents that have been discussed in Spanish Courts, namely, products with a skinny label and the principle of territoriality in the article 51.1 Spanish Patent Act.
Indirect infringement is a highly topical issue in the current IP landscape, especially regarding pharmaceutical patents for new indications. The application of the court of the “skinny label” problem has so far been scant. These cases are closely related to the rules governing the prescription of medicinal products. Consequently, the possibility of a doctor prescribing a generic product for a protected indication may differ from country to country (this also applies when the pharmacist, who can also be entitled to replace the prescribed medicinal product by a generic) and, in the same way, the key elements considered by national courts to appreciate indirect infringement. In that context, this article intends to briefly describe two elements of indirect infringement of pharmaceutical patents that have been discussed in Spanish Courts, namely, products with a skinny label and the principle of territoriality in the article 51.1 Spanish Patent Act.
Article 51 of the SPA defines indirect infringement:
“A patent shall also entitle its owner to prevent a third party from handing over or offering to hand over to unauthorised persons without his consent elements related to an essential part of the invention to be used for putting the invention into effect, when the third party knows, or the circumstances make it obvious, that such elements are capable of putting the invention into effect and are to be used for that purpose.”
The tenor of this provision shows that there are several requirements that must be fulfilled in order to appreciate indirect infringement. For the purposes of indirect infringement of indication patents, the relevant requirement is “the third party knows, or the circumstances make it obvious, that such elements are capable of putting the invention into effect and are to be used for that purpose”.
The normal case in indication patents is that the controversy arises when the product patent protection has lapsed. In that scenario, a generic drug and a branded drug, both consisting in the same active substance, may coexist in the market, with the caveat that the generic drug shall not be used for the indications protected by the patent. For that purpose, the laboratory that commercialises the generic drug includes a summary of the products characteristics (SmPC) that does not contain the indications protected by the patent (“skinny label”).
The Spanish Royal Legislative Decree 1/2015 of the Guarantees and Rational Use of Medicines establishes that doctors shall generally prescribe by active substance and only on grounds of efficiency or for the treatment of chronic processes doctors may prescribe by the commercial name of the drug. Moreover, the rules regarding dispensation operate in favour of the cheapest drug of the cluster.
Hence, following the example, it is possible that the generic drug is dispensed by a pharmacist or prepared in hospitals for the indication protected by the patent, notwithstanding that the SmPC includes only permitted indications. In this case, does the generic company know, or the circumstances make it obvious, that doctors and pharmacists will put into effect the invention? Has the generic company any liability with respect to the use of the product by doctors and hospital personnel regardless of the skinny label?
In Spain the Court of Appeal of Madrid issued a decision on 16 April 2008 in relation to preliminary injunction measures in a case very similar to the example. The claimant owned a patent which protected the use of venlafaxine for the treatment of anxiety disorders. The defendant commercialised a generic drug consisting in venlafaxine. The Court of Appeal dismissed the injunction measures, arguing that:
“The infringement would have been produced if the claimant had commercialised its generic drugs having applied and obtained the administrative authorisation for the new patented therapeutic indication or having carried out other actions for promoting the use for the new indication”.
The Court understood that, otherwise, the scope protected by the patent would be enlarged to the point to reactivate the patent on the active substance which has already expired.
In this sense, the Court stated that the claimant is free to initiate as many information campaigns for doctors and pharmacists as he considers pertinent for the compliance with the regulation. The Court of Appeal of Madrid confirmed this criterion in its decision dated on 22 January 2010.
Another remarkable decision in this regard is the Docetaxel case. In this case, the Court of Granada dealt with a patent that protected a combination of docetaxel with other active ingredients. The generic company commercialised docetaxel with an SmPC that expressly contained the combinations protected by the patent. This was considered an indirect infringement as the company “provided the staff of the hospitals with the necessary information regarding the effectiveness of the patented combination and its form of administration for putting into effect the patented invention” (Supreme Court, 14 April 2015). This interpretation was recently followed by the Commercial Court of Barcelona in a decision of 23 June 2015 (The Pregabalin case).
Article 51 SPA is derived from article 26 of the Community Patent Agreement. This provision is the same in the Agreement on a Unified Patent Court (Official Journal of the European Union, C 175/1, 20 June 2013):
Article 26: Right to prevent the indirect use of the invention
(1) A patent shall confer on its proprietor the right to prevent any third party not having the proprietor’s consent from supplying or offering to supply, within the territory of the Contracting Member States in which that patent has effect, any person other than a party entitled to exploit the patented invention, with means, relating to an essential element of that invention, for putting it into effect therein, when the third party knows, or should have known, that those means are suitable and intended for putting that invention into effect.
Article 26 therefore requires a double territoriality element (indirect infringement must take place in the territory of protection and its use is intended for the territory of protection). Most Spanish cases regarding indirect infringement have not implied an extraterritorial aspect, since normally the offer of the elements and the putting of the patented invention into effect occurs in Spain. Only two judgments have dealt with cases showing a double-territoriality aspect. Surprisingly, although both judgments have been issued by the same court, the conclusions are contradictory.
The territoriality principle was not appreciated by the Appeal Court of Barcelona in its judgment dated on 12 June 2001. In this case, the plaintiff owned a patent protecting a procedure to develop besylate salt of amlodipine. On the other hand, the defendant delivered phthaloyl amlodipine (a precursor of the besylate salt of amlodipine – in other words, an essential element according to article 51 SPA) in Spain to third parties that would manufacture the besylate salt of amlodipine outside Spain. The Court considered that the defendant was infringing indirectly the patent merely by offering phthaloyl amlodipine in Spain. In connection with the territoriality principle the Court maintained that “although the origin and the destination of the product may be foreign countries, the offer in Spain and from Spain implies introducing the product in the national market and constitutes infringement.”
By contrast, the territoriality principle was acknowledged in a case of contributory infringement by the same Appeal Court of Barcelona on 15 February 2005. In this case, the plaintiff owned a patent protecting a procedure to manufacture pellets. The potential infringer was a Dutch company that supplied to a Spanish firm with an expander for pellets. The Court dismissed the claim, arguing that it was not proved that the delivery of the expander was carried out in Spain, and stated:
“By virtue of the principle of territoriality, which must be deemed to be inferred from the rule, that relevant act (the supply of the particular means) will have to be verified in the territory in which the right to exclusion conferred by the patent has effect; any supply or offer to supply verified abroad escapes the territorial scope of its protection.”
Even if article 51 does not expressly contain the territorial requirement, the Court appreciated that it can be inferred from the rule. This reasoning is consistent with the unanimous interpretation by Spanish case law of article 50 SPA, which defines direct infringement. Although article 50 SPA does not contain any reference to territoriality either, it is assumed that the infringement must take place in Spain. The territoriality principle is a fundamental legal concept in IP Law and is maintained by several rules – among them, article 10.4 of the Spanish Civil Code; article 6 of the Paris Union Convention; and article 8.1 of the Rome II Regulation (864/2007) on the law applicable to non-contractual obligations.
Apart from the above, this interpretation would be consistent with the application of the all-element-rule to article 51 SPA and, consequently, demanding that all the elements requested by the rule must occur in Spain. In this context, it seems logical to infer from the rule that a double territorial requirement is contained in Article 51.1 SPA, which is consistent with the history of the provision (Article 26 of the Community Patent Convention) and also with the application in other European Union countries (and with the Unitary Patent System).
From the study of case law, we can draw some conclusions. In Spain “skinny label” is a protection against indirect infringement of combinations or indications protected by patents, at least according to the current approach of the Courts. The double territoriality requirement in indirect infringement has not been discussed in-depth; the last position of the Barcelona Appeal Court confirms the interpretation that indirect infringement requires that the intended use must be taken place in Spain as territory of protection.