International Life Sciences Update September 2013

16 September 2013

Gerry Kamstra, Ning-Ning Li, Henry Elliott

Welcome

In this edition we report on a range of recent developments, at EU national level, relating to patent and SPC decisions and regulatory news. We hope you enjoy reading this update and are happy to address any comments or questions you may have, either through your usual contact or through any of the contacts listed in this update.
 
Patents & SPC Decisions

Spain: Protective Letters in Spain. An Important Development for the Health Sector
Manuel Lobato, Madrid

A protective letter is a well-known instrument by which a company which is likely to be sued for patent infringement files a document (in German, 'Schutzfrist' or in English 'protective letter') with the competent courts. It is an anticipatory defence explaining why the potential infringement claim is unfounded. The intention is to avoid or render more difficult the granting of an ex parte Preliminary Injunction (PI), even if normally the court is not legally bound to take the protective letter into account. This practice is admitted in countries including Germany, Holland, Belgium and Switzerland. Significantly, protective letters are also mentioned in the draft Rules of Procedure for the Unitary Patent Court.

Protective letters in the unitary patent system will have an efficacy of 6 months (unless renewed). They are communicated to the panel or appointed judge together with the application for the PI (the applicant is served with a copy of the protective letter after it has been sent to the judges). The Registry will also provide details of the protective letters to all local and regional divisions.

The Spanish Judicial system is very complex; it has more than 30 first-instance courts with jurisdiction on patent matters in all 17 Autonomous Communities. This poses a serious difficulty as the protective letter must be filed in a multitude of competent courts. There are also procedural problems as any writ before a court must take the form of a claim. Consequently, any informal communication will be disregarded and not accepted.

This tough Spanish environment is beginning to change however. A recent decision of the Barcelona Commercial Court admitted protective letters for the first time in Spain. The case involved potential PI proceedings against a generic medicament for the treatment of osteoarthritis. The Barcelona Courts are specialised in patent matters and most of the Spanish patent cases are dealt with here. It is therefore a very relevant precedent.

The Barcelona Commercial Court has shown the legal process and requirements that should be followed to file such preventive briefs. The protective letter will be handled as a non-contentious jurisdictional matter (so called voluntary jurisdiction), which is an innovative and intelligent way to solve the procedural problems. When a protective letter is filed in Barcelona, the Court to which the case is assigned will inform the Barcelona Court Registry, so any future PI application on that matter will also be assigned to the same court. The effect of the protective letter is therefore limited to cases lodged in Barcelona and there is no coordination with other courts that may also have jurisdiction in patent matters.

The scope of this non-contentious matter is that the interested party will have any PI request directly served to its legal representative at the Court (the Attorney at Court or, in Spanish, Procurador, who acts as a liaison between the parties and the Court so any notification is immediate). This avoids the need for an ex parte injunction as the claim will not be served through the usual and lengthy procedures.

The Court, while accepting the protective letter, will normally declare that an ex parte injunction would not be admissible. However, this declaration does not exclude the granting of an ex parte PI in exceptional circumstances, (which was precisely what happened in the present case). The efficacy of protective letters is limited to 6 months under the Barcelona decision (following the draft rules of the unitary patent). After that date, it is probable the PI would not be justified for lack of urgency. Another feature of Spanish protective letters (contrary to other jurisdictions) is that they are served to the potential applicants for a PI. This is a two-fold obligation. If the applicant files a PI outside Barcelona (an unlikely “if”), the patentee would be obliged to disclose the existence and content of the notified protective letters.

There are some limitations of the protective letters as admitted by the Barcelona Courts. The main one is that because their use is limited to Barcelona, it will not affect PIs filed in other regions outside Catalonia (although the majority of cases are handled in Barcelona).

However, even though Spain is, for the moment, outside the Unitary Patent System, the above-described decision allows the use of a process which is well known in other jurisdictions. This could be used as way of aligning the Spanish patent legal system with other EU jurisdictions.

Italy: Recent decisions on SPCs for combinations of active ingredients
Evelina Marchesoni, Milan

In the last few months, the Court of Milan has issued several decisions and orders[1] fitting within the framework of the European-wide litigation concerning Sanofi's combination supplementary protection certificate ("SPC") on irbesartan and hydrochlorothiazide ("HCTZ").

Background

Sanofi was the owner of the European Patent No. EP 0454 511 claiming the anti-hypertensive drug irbesartan. The patent expired on March 20, 2011 and in Italy Sanofi obtained two SPCs based on this patent: one for irbesartan and one for the combination of irbesartan + HCTZ. The latter is based on claim 20 of the basic patent claiming irbesartan in combination with a diuretic.

All the generic companies who were brought into different infringement and preliminary injunction ("PI") proceedings by Sanofi tried to dismiss the claims of the originator, challenging the validity of the combination SPC.

In particular[2], they alleged that the SPC for irbesartan + HCTZ would have been invalid on the grounds that:

i) the combination was not specified in the wording of the claims in compliance with Article 3(a) of Regulation 469/2009/EC ("SPC Regulation") as interpreted by the ECJ decision of the European Court of Justice ("ECJ") of 24 November 2011 in Medeva (C-322/10 - "Medeva");

ii) only one SPC is allowed per patent in compliance with Article 3(c) of SPC Regulation.

Furthermore the generic companies asked for the Italian proceedings to be stayed in anticipation of the decision on a referral by Arnold J in September 2012  to the ECJ in parallel UK proceedings. This concerned Actavis' invalidity action relating to the corresponding UK SPC and Articles 3(a) and 3(c) of SPC Regulation (C-443/12).

The Court of Milan, both in the first instance and in the appeal filed against the grant of the PI orders, rejected all the arguments of the generic companies and confirmed the validity of the enforced SPC on the combination product. The Court granted the injunction requested by Sanofi.

Grounds of the first instance decisions

At first, according to the Court of Milan in the first instance decisions, the staying of the proceedings was not necessary since the rules of the SPC Regulation, as well as the case law of the ECJ, are sufficient to decide the issue.

As a matter of fact, the Judge pointed out that "Article 3(a) of SPC Regulation provides that the combination of active ingredients of the "product" has to be protected by a valid basic patent, without setting as requirements ad validatem also the express individuation and description of any single active ingredients".

The Court of Milan highlighted that, by reading the SPC Regulation (in particular Articles 4 and 5), the strict correlation between the basic patent and the extension of the protection granted by the SPC was evident. The latter was not subjected to further requirements not provided by the patent law.

The reference to Medeva was considered irrelevant for the case at issue according to the Judge at first instance.

Firstly Medeva concerned a different case since the SPCs at issue were based on a patent which protected an active ingredient constituted by the combination of two different substances. The relevant marketing authorisations (MAs) also referred to medicinal products containing different active ingredients which did not fall in the scope of protection of the basic patent.

Secondly Medeva stated that the claims have to identify the invention claimed by the basic patent in compliance with the patent law and that, in any case, if the patent protection is conferred to a sole active ingredient, an SPC for the combination of different active ingredients cannot be granted.

The Judge concluded: "there are no indications by the ECJ providing that any element of the product (i.e. the active ingredient or the composition of active ingredients of a medicinal product) has to be expressly and nominally individuated in the claims, in case the patent is valid in compliance to the patent law".

By so doing the Court of Milan seems to have broadly interpreted the ECJ principles.

As to the objection of invalidity to Sanofi's SPC under to Article 3(c), the Court of Milan highlighted that this rule excludes the grant of a further certificate if it has been already granted for the same product but not the grant of a further SPC for the same patent.

As a matter of fact: "if a patent can claim more products or more compounds [in compliance with Article 82 EPC[3]], on the basis of a sole patent more marketing authorizations may be granted and therefore also more SPCs, provided that such different SPCs refers to different products "as medicinal products" (all included in the scope of protection of the basic patent), which are authorized through different MAs".

Furthermore the Court pointed out that the word "product" of Article 3(c) of the SPC Regulation corresponds to "the medicinal product as authorised by the MAs", i.e. the "product as a medicinal product" and not to the term "patent" (which, as seen above, may legitimately claim more products).

Otherwise the alleged invalidity of the SPC could be easily avoided by the owner by simply filing two different patent applications.

Moreover, according to the Court of Milan, even the ECJ decision in Biogen (C-181/95) does not state that a patent can be the basis only and exclusively for one SPC but affirms that a sole SPC can be granted for the same "product".

In the case at issue Sanofi's SPCs covered two different "products", i.e. "irbesartan" and "irbesartan + HCTZ", which had been authorized by two different MAs, both "first authorization[s] to place the product on the market as a medicinal product" in compliance with Article 3(d) of the SPC Regulation.

Grounds of the Appeal Decisions

In the appeal proceedings filed by various generic companies against the PI orders, the Panel of Judges of the Court of Milan confirmed the decisions of first instance.

In their reasoning, with reference to the validity of the SPC on irbesartan + HCTZ according to Article 3(a) of SPC Regulation, the Judges highlighted the peculiarity of the case at issue where the basic patent claims the combination of irbesartan and a diuretic.

In particular, according to the Court of Milan, the person skilled in the art, reading claim 20 of Sanofi's basic patent, would have immediately understood that the diuretic could be HCTZ. As a matter of fact: "one of the active ingredients of the composition is indicated as belonging to the class of substances (diuretics) but in reality it could be directly identified by the person skilled in the art on the basis of his common knowledge and through routine operations".

Conclusions

These decisions provide an important and interesting overview of the interpretation of the SPC Regulation and ECJ case law regarding combination SPCs carried out by the Italian Judges.

Nevertheless, it seems that such an interpretation is not the same across Europe[4].

All we can do is wait for the ECJ decision in the parallel Actavis case, in the hope that this will produce  some clear and unambiguous principles.

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[1] Decision of the Court of Milan, 29 December 2012 in Doc Generici vs Sanofi; decision of the Court of Milan, 29 December 2012 in Sanofi vs EG; first instance PI order of the Court of Milan, 22 December 2012 in Sanofi vs Teva; first instance PI order of the Court of Milan, 22 December 2012 in Sanofi vs Mylan; first instance PI order of the Court of Milan, 20 April 2013 in Sanofi vs Sandoz; appeal PI order of the Court of Milan, 6 March 2013 in Teva vs Sanofi; appeal PI order in Mylan vs Sanofi.

[2] The other objections relate to the invalidity of the basic patent for lack of inventive step and insufficiency and the invalidity of the SPC for violation of Article 3(c) of SPC Regulation.

[3] And the possible sanction for having claimed two different inventions in a patent is the obligation to file a divisional application and not the invalidity of the patent.

[4] For example, very recently, by decision dated 27 August 2013, the Court of Appeal of The Hague has decided in the parallel Dutch irbesartan case that Medeva should be read as "one SPC per patent" and not "one SPC per product per patent".

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Regulatory News

Hungary: Stricter obligations for pharmaceutical companies and wholesalers 
Bálint Halász & Bettina Kövecses, Budapest

On 6 July 2013 significant amendments to Act 95 of 2005 on Medicinal Products for Human Use (Medicines Act) entered into force. The new provisions introduce an obligation for pharmaceutical companies to supply Hungarian wholesalers and also an export ban for certain medicines if it is likely that this is necessary to satisfy the demand of Hungarian patients. The amendment also provides the National Institute of Pharmacy (NIP) with strong investigation tools, including powers to impose a fine of up to HUF 500 million(approx. EUR 1,650,000), conduct a dawn raid, search any premises(including private homes and cars of company representatives), seize a wide range of evidence and clone computer hard drives and other storage media.

The supply obligations aim to tackle the recurring problem of medicine shortages of Hungarian wholesalers and healthcare providers. The increased supply obligation and the export ban are jointly aimed to serve this goal. The strengthened investigative powers of the NIP are also intended to enhance the efficiency of actions against counterfeit medicines (as also required by European legislation including Directive 2011/62/EU).

New supply obligations

The amendments to the Medicines Act were motivated by wholesalers who reported on several occasions that they struggled to supply the needs of Hungarian patients because pharmaceutical companies refused to supply them with medicines. Therefore, the amended provisions state that if a wholesaler notifies a holder of a marketing authorisation (MA) that a given product is necessary to satisfy demands that have arisen on the Hungarian market, then the holder of the MA is obliged to ensure that this product will be supplied to satisfy Hungarian demands. However, this obligation is irrespective of the existence of any contractual relationship – i.e. a distribution agreement - between the holder of an MA and the respective distributor. This may harm the business of certain wholesalers as other wholesalers may also then serve the market. The amending act remains silent on the possibility of pharmaceutical companies asking a wholesaler to provide evidence that the alleged shortage on the Hungarian market actually exists. This seems to remain a task of the NIP as wholesalers must keep separate records of all medicines received under this provision. The new provisions also make it clear that medicines provided under these provisions must be supplied to Hungarian healthcare providers and must not be exported.

There are some uncertainties in relation to the new obligations. The supply obligation is subject to notification by the wholesaler, who is not required to prove or even demonstrate the likelihood that a demand actually exists. The duration of a supply obligation is also not determined, nor are wholesalers required to report the ceasing of any extra demand on the Hungarian market.

Export ban

As mentioned above, medicines which are supplied to satisfy Hungarian demand must not be exported. There is however another obligation to mitigate the risk of supply shortages. The NIP is entitled to order wholesalers to cease and desist from the exportation of a medicine intended for Hungarian patients if it has been notified that the amount of export is so high that it triggers a risk to continuous supply of the Hungarian market. The export ban shall last as long as it is necessary to guarantee supply safety, but no longer than one year.

While the Medicines Act does not address who is obliged to make such a notification, from a practical point of view holders of the MAs may be in a position to do so. They are aware of the quantities of the medicines provided to the distributors, and they are also obliged to report if they are unable to maintain adequate and steady supplies of specific pharmaceutical products resulting in a (potential) shortage of supplies.

It is important to note that the ban applies to a certain product rather than just the distributors who are engaging in excessive exporting activity. This may also create uneven market positions.

Stronger investigation powers for the NIP

The NIP as the supervisory authority of the Hungarian pharmaceutical market is vested with a broad range of regulatory instruments. Pursuant to the new amendments to the act, during official investigation it will be entitled to request declarations, any data and copies of files of any company or organization for the clarification of the matter in hand and may acquire and process the personal data of the party or persons related to a party to the investigation. Furthermore, subject to the prior approval of the public prosecutor, the NIP may conduct a dawn raid, i.e. enter any premises even without the owner's knowledge or authorisation, including private vehicles or property of or used by present or previous representatives, employees or proxies. An approval from the public prosecutor for such actions is valid for 90 days. The NIP is also entitled to clone hard drives and other storage media if it is suspected that these contain relevant data and it can also access information collected by other authorities in separate proceedings. These significantly stronger investigation powers are also intended to facilitate actions against counterfeit medicines. While the new Hungarian Criminal Code imposes a sentence of imprisonment for up to eight years for drug counterfeiting, police and prosecutors may not have the necessary experience to identify and analyse counterfeits and medicaments not authorized in Hungary. Therefore the amendment entitles the NIP to take action on its own, subject to prior approval from the public prosecutor.

The minimum fine imposed by the NIP for the violation of obligations conferred by the Medicines Act, including mandatory supply of pharmaceutical products to satisfy Hungarian demands and the export ban, remained unaffected by the recent amendments and is still HUF 100,000 (approx. EUR 350). However, the amending provisions introduced a cap for the maximum amount which is currently HUF 500 million (app. EUR 1,650,000). The NIP must consider all circumstances of the case when determining the level of fine to impose.

Poland: Polish Pharmaceutical Chambers have no rights to verify competencies of pharmacy directors
Marta Koremba, Marcin Alberski. Warsaw

On 5 June 2013, the Supreme Court overruled the resolution of the District Pharmaceutical Council on the procedure for approving candidates for the position of pharmacy director (file no. III ZS 8/13).

Based on Polish Pharmaceutical Law, District Pharmaceutical Councils participate in the assessment of a pharmacy permit application by issuing an opinion on the grant or refusal of the pharmacy permit. The Council’s opinion includes inter alia assessment of a candidate for the position of pharmacy director.

One of the District Pharmaceutical Chambers adopted a resolution by which it introduced a new procedure for candidates' assessment involving some additional requirements. Firstly, each candidate was obliged to pass a test on knowledge of the responsibilities of a pharmacist, including those of a pharmacy director. Secondly, a professional experience questionnaire had to be completed by each candidate. Thirdly, each candidate had to attend an interview conducted by the opinion committee. Finally, the candidate was required to evidence his/her efforts to improve their qualifications.

The above-mentioned resolution was challenged by the Minister of Health who claimed that District Pharmaceutical Chambers should issue their opinions based exclusively on the information submitted in the pharmacy permit application. No provision entitles them to introduce additional proceedings which require additional verification of candidates' competencies.

As a result, the Supreme Court overruled the resolution indicating that it imposed requirements on candidates that exceeded the obligations provided under pharmaceutical law. Justice Kiryłło of the Supreme Court restated that the Chambers’ opinions are not binding as Regional Pharmaceutical Inspectors are the only authorities authorised to grant pharmacy permits. Hence, if candidates fulfil the educational requirement and possess a minimum of five years' pharmaceutical experience, the Chambers are not entitled to additionally verify their competencies.

The Supreme Court judgement is important for the future practice of Chambers. Moreover, the decision is another chapter in the on-going dispute over pharmacists' guarantee of their compliance with the total ban on pharmaceutical advertising.

Cassation available to all punished doctors

On 20 July 2013, the amendment to the Medical Chambers Act dated 2 December 2009 became effective. It has unified the appeal procedure for disciplinary judgments against doctors.

The amendment implemented the Constitutional Tribunal's judgment of 29 June 2010, which confirmed that the Medical Chambers Act was partly inconsistent with the Polish Constitution. Under the old regulations, doctors could lodge a cassation only if they were punished with the most severe types of penalty, i.e. suspension or deprivation of the right to practice. In the case of a warning or a reprimand, doctors had no right to appeal the judgment.

The amendment applies to medical chambers, veterinary-medical chambers, pharmaceutical chambers, nurses and midwives’ chambers, as well as the National Chamber of Laboratory Diagnosticians. Practitioners of the above-mentioned professions are entitled to file a cassation against second instance disciplinary court judgements with the Supreme Court. The term for lodging a cassation has been unified and is now two months from delivery of the judgement.

Cassation is a type of extraordinary means of appeal. Regardless of the type of penalty imposed, cassation is available on the grounds of the irregularities listed in the Criminal Procedure Code, or gross violation of the law. It is also possible to submit a cassation due to the disparity of the penalty imposed.

France: Best Practices for the Online Sale of Medical Drugs in France
Anne-Charlotte Le Bihan and Enora Baron. Paris

The online sale of medical drugs has been officially authorised in France following an ordinance of December 19th, 2012 (the "Ordinance") and its regulatory decree of December 31, transposing Community Directive No. 2011/62/EU of June 8th, 2011.

A decree of June 20, 2013 published on June 23, 2013 specifies the operating conditions of websites selling medical drugs. This decree, which came into force on July 12, 2013 places strict rules on these sites.

The website must be operated by a registered pharmacist owning and running a physical pharmacy. The website is a virtual extension of the pharmacy. The site must be authorised by the territorially competent Director of the Regional Health Authority (Agence Régionale de Santé). The French Chamber of Pharmacists must also be informed. The e-pharmacy website must contain information establishing a link between the site and the pharmacy’s owner. The site must have hyperlinks to the websites of the French Chamber of Pharmacists and the Ministry of Health which maintain an up-to-date list of authorised pharmacy websites.

The Ordinance allows for access to the online sale of medical drugs, but only those that are not subject to mandatory medical prescription and that are sold over the counter. However, over the counter drugs represent a residual share of medical drugs that are not subject to mandatory medical prescription. This substantially limits the earning potential of an e-pharmacy.  On February 14, 2013, the French Administrative Supreme Court, in an expedited proceeding, suspended the application of this limitation to over the counter medical drugs due to the fact that the EU Directive covers all medical products that are not subject to mandatory prescription. We have to wait until the French Administrative Supreme Court rules on the substance of the Ordinance to determine the fate of this limitation.

As required by the French Competition Authority, the decree establishes that an e-pharmacy site can sell medical drugs alongside other products (cosmetics or medical devices).  A specific section must be dedicated to the sale of medical drugs.

It is recommended that the name of the pharmacist and perhaps even the pharmacy name be made part of the website’s domain. The site must not contain any hyperlinks to pharmaceutical companies’ websites. Discussion forums are prohibited. Subcontracting to a third party is prohibited except for the design and technical maintenance of the site.  However, these services cannot be provided by companies that produce health products. Paying search engines and price comparison sites for indexation is prohibited.  Information on medical drugs that may appear on the website is exhaustively enumerated by the Ordinance. Price is determined by the pharmacist; it is displayed inclusive of VAT and exclusive of delivery charges

Upon the first order, the patient must fill out a questionnaire. The site must suggest that the questionnaire be updated whenever a new order is placed. The site must provide interactive communication between pharmacists and patients (e-mails or instant messaging). In addition, the site must have a private personal space that logs patients’ orders and their interactions with their pharmacist.

The decree establishes maximum recommended delivery amounts in order to prevent overmedication. Similarly, no minimum order can be imposed. Given the specificity of health products, patients have no withdrawal right. The lack of the withdrawal right must be clear and legible to the patients before the confirmation of their order.

Conclusion. The implementation of medical drug online sales has not been without tribulations. France has caught up with its European counterparts, which, for the most part, have already accepted the online sale of medical drugs not subject to a mandatory prescription.

Contact Us

Belgium Marc Martens marc.martens@twobirds.com
 
Czech Republic Vojtech Chloupek vojtech.chloupek@twobirds.com
 
China and Hong Kong Matthew Laight matthew.laight@twobirds.com 
Finland Ella Mikkola ella.mikkola@twobirds.com
 
France Yves Bizollon yves.bizollon@twobirds.com
 
Germany Boris Kreye
Ulf Grundmann boris.kreye@twobirds.com

ulf.grundmann@twobirds.com
 
Italy Massimiliano Mostardini massimiliano.mostardini@twobirds.com
 
The Netherlands Armand Killan

Marc van Wijngaarden
 armand.killan@twobirds.com
marc.van.wijngaarden@twobirds.com
 
Poland Piotr Dynowski piotr.dynowski@twobirds.com
 
Singapore Sheena Jacob sheena.jacob@twobirds.com
 
Spain Raquel Ballesteros raquel.ballesteros@twobirds.com
 
Sweden Sara Sparring sara.sparring@twobirds.com
 
UK Gerry Kamstra gerry.kamstra@twobirds.com

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