The recent patent developments in the pharma sector

The developments of pharmaceuticals in today’s world would not work without patent protection and the right to exclude others from using the new pharmaceutical inventions for a defined period of time. There probably is no other industry sector that that relies as heavily on patent protection as the pharma sector.

While this basic assessment is clear, there are many questions and trends when it comes to what patent protection means in reality. We’d like to highlight some of the most recent and important trends.

Scope of patent protection
In almost every patent dispute the question is how far patent protection reaches and whether it includes “modifications” of the invention. This technical question interlocks with legal questions, two of which have been debated most recently: second medical use claims and equivalent infringement.

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Second medical use claims: Second medical use claims are available when protection for a compound as such has expired but where someone has discovered a new way of using a pharmaceutical substance. Article 54 (5) EPC enables this kind of claim. Accordingly the patentee can only exclude competitors from using the compound within the scope of that particular utility. Problems arise where there are patent protected and non-patent protected uses of a compound. Widely discussed are the obligations that can be imposed on a generic company in order to make sure that the as such non-patent protected compound is not applied in the newly discovered area. At the latest when it is statistically obvious that the generic drug is also used “off-label” – for the protected use – legal protection for the patentee is warranted.

Second medical use claims are available when protection for a compound as such has expired but where someone has discovered a new way of using a pharmaceutical substance

SEE: Why patents are so important for Pharmaceuticals 

Equivalent infringement: Under the doctrine of “equivalent patent infringement” a patent can also extend to acts that are not covered literally by the words used in the claims of the patent. This is necessary to cover loopholes that would otherwise exist and which would allow the exploitation of the invention without making use of the literal claims. As the extension of a patent’s protection beyond its wording is a sensitive issue assessing the scope of the equivalent area is always difficult. Recently legal proceedings between Actavis and Eli Lilly in the Netherlands, Germany and the UK have some shed light on the question in which cases a patentee can claim such equivalent infringements and where the protection ends, e.g. because the patentee is deemed to have “waived” a certain technical aspect by describing alternative technical solutions in the patent without including them in the patent claims.

Compulsory licenses

There are cases in which patentees do not actively exploit their invention and instead try to exclude others from the market (possibly asking for unreasonably high license fees in licensing negotiations). In these situations, the grant of compulsory licenses may be warranted. Having been a merely theoretical possibility for the past decades, Germany’s Federal Supreme Court has recently upheld the granting of a compulsory license in a case relating to the HIV drug Raltegravir. This may have some influence on contractual license negotiations if a case is at hand in which it may be suitable to apply for a compulsory license.

Brexit implications

The current pillar of the European patent system is not part of the European Union. The European Patent Convention is an independent international treaty. While some EU directives influence the patent law landscape within the EU, e.g. with regard to enforcement of claims, meaningful deviations from EU law are not to be expected in post-Brexit UK patent law.

Meaningful deviations from EU law are not to be expected in post-Brexit UK patent law.

The most important development concerns the Unified Patent Court. Fundamentally, only members of the EU may be part of the new system. Brexit has raised doubts over the UK’s future in the system. While the UK has ratified the UPC treaties it will not be part of the EU once Brexit takes effect. Furthermore, the timing of a pending German constitutional complaint against Germany’s ratification may result in the taking effect of the UPC treaties after the Brexit date. This adds further uncertainty.
Assuming the UK will not be part of the UPC will have a variety of implications for litigation strategy. These implications are very hard to predict. In some cases an EU-reaching injunction might be sufficient for the patentee to force negotiations and a settlement. On the other, hand a different set of rules and characteristics of a system always opens up possibilities in a litigation strategy, especially taking into account the size and importance of the UK market.

 

By Andreas von Falck & Miriam Gundt

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