Analysis: Argentine Court Clarifies What Patent Holders Can – And Cannot – ProhibitPublished on 14 November 2012 @ 4:04 pm
By Maximiliano Marzetti 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 firstname.lastname@example.org.