Patents – recent trends in the pharma sector

In this online exclusive, partners from Hogan Lovells International, Andreas von Falck and Miriam Gundt (Dusseldorf), discuss recent trends in patent protection within the pharmaceutical sector.

Innovations in the pharma sector are based on patent protection. Originators are amongst the most innovative companies, applying for a large number of patents each year. The development of new pharmaceuticals would not work without fair and effective patent protection, including the right to exclude others from using the new pharmaceutical inventions for a defined period of time.

The most common instrument a patentee can use to enforce his exclusive rights is to pursue injunctive relief in the courts of the country where the patent has been granted. Injunctions can be obtained in proceedings on the merits as well as in preliminary proceedings. In order to obtain an injunction, the patentee has to prove that the other party has infringed its patent.

Scope of patent protection

In almost every patent dispute the question is how far patent protection reaches in reality and whether it includes ‘modifications’ of the invention. This question is reflected in various legal questions, two of which have been debated most recently: equivalent infringement and second medical use claims.

a) Equivalent infringement

Under the doctrine of ‘equivalent patent infringement’ a patent can extend to embodiments that are not covered literally by the words used in the claims of the patent. This doctrine was designed to cover loopholes that would otherwise exist and which would allow to avoid liability while still exploiting the invention. The extension of a patent's protection beyond its pure wording is of course a sensitive issue and assessing the scope of the equivalent area can be difficult.

Recent developments in this area derive from the Pemetrexed dispute (Actavis vs Eli Lilly). In decisions issued recently in the UK, Germany, and the Netherlands, the courts reflected on the question in which cases a patentee can claim equivalent infringements and where the protection ends, e.g. because the patentee is deemed to have ‘waived’ a certain technical aspect. The common conclusion is that subject-matter which is not part of the claims but works essentially in the same way can be considered as covered by the patent under certain circumstances. Only in rare situations can it be regarded as ‘waived’ by the patentee, namely, where the patent description actually discloses the alternative solution but the patent then does not claim it. If, however, only a class of chemical compounds is disclosed in general in the patent and only one of them is claimed then one cannot simply assume that the patentee wanted to waive protection for any and all solutions using compounds which belong to this class and may be used as an alternative to the specific representative of the class referred to in the patent claim. This case law strengthens the doctrine of equivalence and provides patentees with a reasonable degree of protection against ‘alternative’ solutions which still exploit the teaching of the patent.

b) Second medical use claims

Second medical use claims are available when protection for a pharmaceutical substance as such has expired but where someone has discovered a new way of using it (e.g., to treat a particular disease or a particular group of patients). As a consequence, the patentee can only exclude competitors from using the compound for that particular protected use. Problems arise where there are patent protected and non-patent protected uses of a compound. Recently, 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 protected area have been widely discussed. Any regime defining the rights and obligations in these cases must consider on the one hand that the compound as such — or the use of said compound in one or more indications — is in the public domain, but on the other hand the protection provided by the Second Medical Use patent has to be filled with life. This is a very jurisdiction specific issue as the supply of drugs to the population is heavily regulated by the states' individual social laws. But at least 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. Courts in various jurisdictions have recently issued corresponding injunctions, including orders to take 'appropriate measures'.

Compulsory licences

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 licence in a case relating to the HIV drug Raltegravir. This may have some influence on contractual licence negotiations if a case is at hand in which it may be suitable to apply for a compulsory licence.

Brexit implications on litigation strategies

It is critical for both patentees as well as generic manufacturers to plan ahead (even up to three or four years) before launching their products. Patentees need to look at their enforcement strategies and review the scope of protection of the patents in question. Generic producers in turn need to analyse the market environment and consider possible risks associated with existing patents. If these considerations are only made when a company is already being sued as a defendant or a patent is already being infringed, it's definitely too late. If, however, enforcement strategies have been developed beforehand, risks can be mitigated and patents can be enforced more effectively.

Considering EU-wide litigation strategies, the most important development concerns the Unified Patent Court and the UK's future in that system after Brexit. Fundamentally, only members of the EU may be part of the new system. While the UK has ratified the UPC treaties it will not be part of the EU once the 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 only 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 strategies. 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.