WHAT ARE THE CONSEQUENCES FOR PHARMACEUTICAL PATENT LITIGATION?
It is necessary and worthwhile to prepare patent litigation for specific pharmaceutical products early on. This is not only true for the US (with its mechanism of Orange Book listing, ANDA patent certification and resulting stay of the grant of marketing authorisation if a patent action is filed), but also for other markets such as Europe.
Clearly the generics companies need to consider the patent and supplementary protection certificate framework for their potential products during development, and to think how to design around the IP rights of originator companies, while at the same time maintaining the possibility of using the originator's product as a reference product for generic regulatory applications.
Originator companies, meanwhile will have preferably considered possible generic products when assembling the patent portfolio. Closer to the expected launch of generic products (depending on the expiration of data exclusivity) the originator company needs to compile information on what IP rights are available in which market and to evaluate which rights should be enforced where, against upcoming generic products.
This requires an understanding of how the scope and validity of a specific patent may be assessed by the competent national courts, at least in key markets. Although the legal framework throughout Europe is becoming more and more harmonised, the fact remains that (at least for the time being) patent litigation is handled on a national basis, so national differences need to be considered (and be put to the best advantage) when developing the strategy.
For example, a claim reading "product A as obtained by process B" may be understood in one country to cover any product having the same characteristics as a product produced by process B without the need for it to have been manufactured by this process, whereas in other countries this claim may be understood to cover only a product manufactured by process B. Or, for example, the courts in one country may have a different understanding of the validity of method of treatment claims than in another country.
The duration and requirements for specific proceedings also differ from country to country. The experience of the national courts with patent cases is varied, and connected to this is the predictability of a potential outcome. One country (eg, Italy) may have long main proceedings, but this may be counterbalanced by the willingness to grant preliminary injunctions on a quick and efficient basis. Other countries (such as Germany) may offer the possibility to obtain enforceable injunctions in a main proceeding very quickly. One of the reasons for this in Germany is that validity is not examined in the infringement (injunction) proceeding, but in a separate one. The German infringement court will only consider validity to the extent that it can suspend the infringement proceeding if convinced that the patent will be revoked in the invalidity proceeding.
Also, the view of what is the earliest act of infringement differs from country to country. The courts in most European countries seem to disregard the pursuit of a marketing authorisation as an infringing act, whereas this is seen differently by the Italian courts, provided that the marketing authorisation is sought far in advance of the expiry of the IP right.
Developments in the various national jurisdictions need to be constantly monitored to provide an up-to-date strategy. Because of the expansion of the EU, for example, the Eastern European jurisdictions have gained importance. With the implementation of the EU IP Enforcement Directive, ex parte evidential seizures and ex parte injunctions have become available in jurisdictions where they were previously unknown or not really used. This may result in the long run in a decreased role of the traditional seizure proceedings known, for example, in France and Italy, when devising the strategy. On the other hand, because of this increased importance of ex parte measures available to the IP holder, instruments seen in one jurisdiction may also become used in others. Protective letters, which were previously only used in Germany, are now being introduced in other European jurisdictions (eg, the Netherlands). Such protective letter is a submission of a potential defendant to the competent courts, containing arguments why an ex parte measure (eg, a preliminary injunction) should not be granted or at least not without a hearing. The advantage of such letters is that they will not be available to the IP holder until he applies for the measure, that is, he will not become aware of the arguments, and ideally also that a protective letter has been filed, in advance.
To obtain the above-mentioned information, and for counsel to be prepared, the litigation team needs to be assembled and instructed in a timely fashion. This requires quite substantial coordination efforts. A system needs to be set up that transfers the information to and from the local counsel but avoids unnecessary duplication of work. One model that aims to unburden the in-house legal team while keeping them up to speed at all times is the involvement of a limited number of law firms (eg, one per world region) who serve as points of contact for both the in-house legal people and the various national counsel, and who take over strategy, instruction and coordination functions. A very important aspect of any litigation team will be the interplay between the separate national litigations based on the same patent portfolio. All proposals and decisions need to be constantly evaluated for their potential impact on other ongoing or potential litigations elsewhere. This is in particular true if litigation is in progress in the US. It is extremely helpful if for example potential arguments of an opponent are known in advance because they have been set forth already in another jurisdiction, but this requires a constant channelling of the information flow.
Increasingly, the decision of which product to use to treat a particular patient is being regulated by the national health systems. The tools used by these systems are various (eg, fixed prices, tender proceedings, substitution, discount contracts) and have the effect that competition between drug products is conducted almost solely based on price. Thus, an originator product loses immediately its market share or pricing, or both, once a cheaper generic product enters the market. Later obtained damage claims (which are the result of successful patent litigation) generally do not reflect the actual losses. For this reason preliminary injunctions are of particular importance in the pharmaceuticals field. That price erosion plays an important part in preliminary injunction proceedings in the UK and Germany reflects this.
The formulation of a cohesive patent litigation strategy requires more than just patent knowledge. Regulatory aspects also come into play. Regulatory requirements shape in an important way what characteristics a drug will have. In some instances the regulatory and patent approach may go hand in hand. Understanding which products could be authorised under a generic application helps in understanding what the expected generic product may look like. Regulatory requirements (eg, entries in pharmacopoeia monographs) may supply the necessary information to allege infringement without having the product yet available for an analysis. In other instances a decision may have to be taken, whether it can be argued that: a generic product is the same as the patented (and authorised) originator product, which is helpful for a patent litigation; or that the generic product is different from the authorised (and patented) originator product, which is helpful to point out that a generic application is not the appropriate authorisation route for this product.
Exclusive rights such as patents and supplementary protection certificates are by their very nature directed at excluding others from practising the protected technology without consent of the rightholder. There is a natural friction between the interests of the originator companies (the rightholders), who have developed a drug at a very high cost to maintain exclusivity as long as possible, and the interests of competitors to come onto the market as early as possible. The European Court of First Instance has held that, under exceptional circumstances, litigation (frivolous and vexatious litigation that cannot be reasonably considered as an attempt to establish the rights of the plaintiff, but only serves to harass with the goal to eliminate competition) can be prohibited as an abuse of dominant position. But when is litigation really frivolous and vexatious? At what point should the probability of success dictate the IP holder's right to bring litigation?
Finally, life science litigation takes place in a highly politically charged environment which affects, for example, the way certain provisions from EU law are implemented and interpreted on the national level. One example is the implementation of the Bolar-type provision of Directive 2004/27/EC exempting test and trials (and practical requirements for such tests and trials) for marketing-authorisation purposes from patent protection. In some countries the national provision is limited to generics or is limited to test and trials, specifically for obtaining a marketing authorisation in the EU, whereas the application in other countries is not limited in this way.
The key to successful life science litigation is the development of a tailor-made litigation strategy that reflects the differences of the national jurisdictions with respect to the concrete case (including regulatory aspects and aspects specific to the national health systems), but maintains its cohesiveness.