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    Analysis: Argentine Court Clarifies What Patent Holders Can – And Cannot – Prohibit

    Published on 14 November 2012 @ 4:04 pm

    By for Intellectual Property Watch

    In the recent decision on the case “Novartis AG versus Laboratorios LKM SA re cease of use of patent” the Third Chamber of the Federal Civil and Commercial Appellate Court of Argentina set an important precedent in relation to the interpretation of the ius prohibendi of patent holders. In other words, the demarcation of what they can and cannot prohibit.

    The decision is here [pdf, in Spanish]

    Novartis AG, a Swiss multinational pharmaceutical company, obtained patent no. AR016351B1 in Argentina. The application was presented in 1998 and a patent finally granted in 2006. The patent concerns the beta crystalline form of imatinib mesylate and its product Imatinib Martian, to the extent that it contains the beta crystalline form of imatinib mesylate; a drug used to combat chronic myeloid leukemia and gastrointestinal stomach tumours.

    Imatinib alone is in the public domain, but Novartis managed to get a patent of polymorph beta of imatinib in Argentina. By contrast, the Indian Patent Office had rejected an identical attempt by Novartis because of lack of inventive step.

    In 2004, LKM SA, an Argentine laboratory, requested authorisation from the National Authority of Drugs, Food and Medical Technology (ANMAT) to market a product with such a compound under Decree 150/92, which allows registration of pharmaceuticals that are similar to previously approved ones. Authorisation was given in 2007, after a patent on the same compound had been conceded to Novartis. LKM then requested ANMAT to change polymorph beta (patented) to polymorph alpha (in the public domain) to avoid infringing Novartis’ patent. ANMAT authorised the change in 2009.

    Novartis considered that LKM’s use of its patented compound infringed its patent, and in 2007, Novartis sued LKM. The first instance judge granted an injunction in favour of Novartis, mandating LKM to cease making, using, offering for sale, selling and/or importing the chemical substance crystalline beta form of imatinib mesylate. But eventually the same judge decided LKM had not infringed Novartis’ patent and dismissed the claim. Novartis appealed.

    Two key legal issues were to be settled by the Appellate Court: the availability of legal protection to a patent application, and the extension and interpretation of the research and test exceptions of the Argentine Patent Act.

    The Appeals Court stated that using a patented drug prior to the date of its grant is not illegal because the Argentine Patent Act does not grant protection to pending patent applications (unlike other jurisdictions). There are no legal remedies against unauthorised use of an invention during the period between publication of the application and the granting of the patent.

    The Argentine Patent Act does not grant any rights to the inventor during the patenting process, protection only arises from the time the patent is granted, the Appellate judges said. That is to say, the Appellate Court did not consider the patent right as retroactive (to the filing date). This implies that the effective legal term of protection is less than the 20 years prescribed in the Argentine law, taking into account the backlog and delays in examining and granting patents at the country’s National Patent Office (INPI). Novartis’ patent application was pending from 1998 to 2006, and since the exclusive rights can only be exerted after the patent is granted, effective protection remains for only 12 years.

    Thus, Consequently, LKM’s request for authorisation of a medicinal product made to ANMAT two years before the drug was patented does not constitute a prohibited act, the judges decided. The fact that the approval of the health authority arrived after the patent was granted cannot be imputed to the defendant, which had requested such authorisation much earlier and is not responsible for delays at ANMAT.

    The other point of law was the nature of the use of the patented compound by the defendant. LKM allegedly used polymorph beta to request ANMAT original authorisation, changing it later to polymorph alpha. Novartis argued this use of the patented compound amounted to infringement.

    The Appellate Court said the use made by LKM of the patented compound was covered by the research exception and thus did not infringe Novartis’ patent. The judges clearly stated the patent holder’s ius prohibendi does not extend to research and test uses or uses protected by the “Bolar Exception”.  That exception allows third parties to undertake research and tests to get regulatory approval for generic drugs without requesting authorisation from the patentee (named after the leading case Roche Products v. Bolar Pharmaceutical, 1984).

    Art. 36 of the Argentine Patent Act explicitly permits research and test exceptions. To reach the conclusion that LKM’s use fit into the exemption the appeal judges construed such exception broadly as Article 36 limits the research and test exception to non-commercial/non-profit purposes. LKM is constituted as a commercial corporation (i.e., for profit), nevertheless the research and testing to get ANMAT’s authorisation was deemed non-commercial by the judges.

    In addition, judges said, Argentine law does not provide the patent holder exclusive rights to impede storage or possession of the product. It was found the defendant never sold or commercialised the patented compound. The judges considered Novartis’ behaviour incomprehensible since LKM only used the patented drug to test non-infringing alternatives. The Bolar Exception was statutorily incorporated to the Argentine patent system by article 8 of Law No. 24.766.

    The Appellate Court upheld the decision of the judge of first instance and dismissed the plaintiff’s claim. The decision sub analysis is controversial. Patent holders argue it contradicts Art. 33 of TRIPS (establishing a minimum term of protection of 20 years). Moreover, no legal protection of pending patent applications and no retroactive rights after grant could imply copycats are free to infringe a patent from publication date until it is finally granted.

    The key to the restrictive interpretation of the patentee’s ius excludendi (or to the extensive interpretation of the research, test and Bolar Exceptions) may be found in an interesting obiter dictum in which the appellate judges said the exercise of the patent holders’ rights “cannot be done at the cost of denying access to medicines or unreasonably compromising the right to health of vulnerable populations.”

     

    Maximiliano Marzetti may be reached at info@ip-watch.ch.

     


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    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

    2. You understand and agree that Intellectual Property Watch is not responsible for any content posted by you or third parties. You further understand that IP Watch does not monitor the content posted. Nevertheless, IP Watch may monitor the any user-generated content as it chooses and reserves the right to remove, edit or otherwise alter content that it deems inappropriate for any reason whatever without consent nor notice. We further reserve the right, in our sole discretion, to remove a user's privilege to post content on our site. IP Watch is not in any manner endorsing the content of the discussion forums and cannot and will not vouch for its reliability or otherwise accept liability for it.

    3. By submitting any contribution to IP Watch, you warrant that your contribution is your own original work and that you have the right to make it available to IP Watch for all purposes and you agree to indemnify IP Watch, its directors, employees and agents against all damages, legal fees and others expenses that may be incurred by IP Watch as a result of your breach of warranty or of these terms.

    4. You further agree not to publish any personal information about yourself or anyone else (for example telephone number or home address). If you add a comment to a blog, be aware that your email address will be apparent.

    5. IP Watch will not be liable for any loss including but not limited to the following (whether such losses are foreseen, known or otherwise): loss of data, loss of revenue or anticipated profit, loss of business, loss of opportunity, loss of goodwill or injury to reputation, losses suffered by third parties, any indirect, consequential or exemplary damages.

    6. You understand and agree that the discussion forums are to be used only for non-commercial purposes. You may not solicit funds, promote commercial entities or otherwise engage in commercial activity in our discussion forums.

    7. You acknowledge and agree that you use and/or rely on any information obtained through the discussion forums at your own risk.

    8. For any content that you post, you hereby grant to IP Watch the royalty-free, irrevocable, perpetual, exclusive and fully sub-licensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part, world-wide and to incorporate it in other works, in any form, media or technology now known or later developed.

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