Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.
1. WARMING UP: SPC'S, BASF VS THE BUREAU FOR INDUSTRIAL PROPERTY
Research and infringement
A patent is only valid for a well defined period of time. After that period, any competitor may use the invention. Normally, this does not pose any serious problems. In the pharmaceutical sector however, and therefore in the biotech sector, most products can only be marketed after obtaining marketing approval. The approval procedure may take quite some time, as testing may have to be done.
If one can only start testing after the patent has expired, this means that the period during which the patent holder is protected from competition, is in fact extended until the competitor has obtained his marketing approval.
Patent laws contain an exception for scientific research. The basis for this exception is found in article 27 of the Community Patent Convention, to which national law has been adapted on the basis of a 1975 resolution. In a case before the Dutch Supreme Court, Medicopharma and Pharbita therefor argued that they should be allowed to conduct tests, required for marketing approval, during the term of validity of the patent. This was denied by the Supreme Court, which held that this exception was only meant for purely academic research, or research that was purely conducted for a purpose that was in concordance with the aims of the patent law (1). The latter is not a criterion in the Community Patent Convention, as was pointed out by Mr Brinkhof, President of the Court of Appeal at The Hague in a lecture on 19 November 1993 (2).
If the research is conducted to determine whether a method, described in a patent, does in fact work, such research does not constitute patent infringement. This is also the case if the results of such research may be used in the application for marketing approval at a later stage or for other economic applications. This has been decided by the Dutch, German and British courts (3).
In addition to this there is no patent infringement according to the Dutch courts if research is conducted in order to establish a second medical indicatio (4).
Since applying for marketing approval of a pharmaceutical product constitutes patent infringement, the courts at The Hague will grant an injunction against a party who is committing such an infringement. If the application for marketing approval was filed before the expiration of the patent, the applicant is not allowed to market the medicinal product for a period equivalent to the normal amount of time it takes to obtain marketing approval, which is set by the courts at 14 months (5). Such an injunction is a consequence of the patent law and therefor not contrary to article 30 of the EC Treaty, according to the Court of Appeal.
The Supreme Court has referred some of the aspects of this matter to the European Court of Justice, which ruled on 9 July 1997 that an injunction to do research for marketing approval was allowed under European law, while a moratorium of 14 months if marketing approval had been applied for or even obtained by infringing the patent, is also allowed under European law (6).
Supplementary protection certificate
As you know, the European Union came to the aid of patent holders who, due to the long patent granting procedures and the long marketing approval procedures would only have left a small period of protection, by means of the Regulation concerning the creation of a supplementary protection (7). This certificate gives an extension of the patent protection for a maximum period of five years.
The European Court of Justice has ruled that, if several basic patents cover a medicinal product, there is no objection to granting a certificate for each of those patents (8). The duration of the certificate is to be calculated on the basis of the issue of the marketing approval, which will be the same for all patent holders. Sometimes one company will be the holder of all patents, i.e. if more recent patents cover inventive improvements of the original patents, or new processes for preparing the substance. It may be however that there are several patent holders.
In order to apply for the certificate, a copy of the marketing approval has to be submitted. As a rule, only one of the patent holders will also be the holder of the marketing approval. As a result of this, the other patent holders are dependent on this holder to obtain such a copy. The Court decided that the Regulation does not oblige the holder of the marketing approval to supply the other patent holders with copies, although this might be an implied undertaking, dependant on their contractual relations. If a patent holder is nevertheless unable to obtain a copy of the marketing approval, this is no ground for refusal of the certificate. In that case, the authority issuing the certificate should directly request a copy from the authority issuing the marketing approval.
These cases show that the SPC Regulation can be applied in a flexible way.
A new process or a new substance?
BASF had quite a different experience when applying for an SPC for Chloridazon. Chloridazon is in itself a known substance, for which BASF obtained a patent in the sixties and a marketing approval on 27 February 1967. This old Chloridazon contained up to 20% of contaminations.
In the seventies, BASF developed a new process for manufacturing Chloridazon containing less than 5% of contamination. A European patent was granted for this new process on 23 June 1982, with priority date 15 September 1979. A new French marketing approval was granted on 28 February 1986 and a new Dutch approval on 19 January 1987. On 3 March 1997 BASF filed an application for an SPC with the Bureau for Industrial Property. The SPC was refused, as the Bureau held that the approval of 1987 was not the first approval for the product, as it was not the first approval for the active chemical component therein. This decision was affirmed on review, where upon BASF went to court.
This seems to be the first law suit on the interpretation of the SPC Regulation. According to the Bureau, their view is in concordance with that of the other national bureaus.
BASF's position in this court case is that they meet all the requirements of the Regulation, since their Chloridazon is indeed a new product; it has a new composition, as it contains significantly less contamination. Since it is clear that an SPC can not only be obtained for a new active substance, but also for a new process protected by a patent, it should be clear that SPC's are not limited to only new chemical compounds. If that would be the case, it would be incomprehensible why an SPC can be based on a process patent, as the inventor of a really new compound will always apply for a product patent.
In addition to this, EU experts have already held that isomers are considered to be different active substances, which will lead to a new marketing approval.
Besides, the new process of BASF is clearly an important innovation, as it considerably decreases the effects of the use of Chloridazon on the environment by decreasing the contaminations.
A judgement by the District Court at The Hague is to be expected within a few months, although the court of course may refer the mater to the European Court of Justice. To be prudent, we already submitted draft questions with the District Court, but they of course can draft their own.
2. IMPLEMENTATION OF THE BIOTECH DIRECTIVE
On 28 May 1999, a draft act to adapt the Patents Act 1910 and the Patent Act 1995 was submitted to parliament.9 It may still take quite some time before this act will be in force, and it remains to be seen whether the draft will be changed by parliament, but this means that we now know which adaptations are necessary according to the Dutch government. The following changes are being made to the Patent Act 1995 (10).
The definitions of the Biotech Directive are literally incorporated into Dutch patent law. Two new provisions are inserted. Article 2a contains the content of article 3, article 4 section 2 and 3 and article 5 section 2 of the Directive, thereby guaranteeing that patent protection is possible for the those biotech inventions. The wording is that patent protection is at least granted for those specific inventions, which leaves it to the courts to decide whether other inventions will be regarded as susceptible of industrial application and thus patentable.
On the other hand, article 3 contains some new exceptions to patentability. Under the present act, there is already a general exclusion for inventions, the publication or exploit of which would be contrary to public order or morality. This is modified into inventions, the commercial exploitation of which would be contrary to public order or morality, as is the phrase in the Directive. According tot the Dutch government, the TRIPs treaty, considerations 36 and 42 of the Biotech Directive and the European Convention on Human Rights can be used for the interpretation of this provision.
There were also some specific exclusions, such as the human body, plant or animal varieties and essentially biological processes, like mere crossing or selection. According to the government, the exclusion for varieties means that a biotech invention which can be applied to only one variety, is not patentable.
Four new categories are added:
- processes for cloning human beings;
- processes for modifying the germ line genetic identity of human beings;
- uses of human embryo's for industrial or commercial purposes;
- processes for modifying the generic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and the results of such.
The last exclusion is broader than stipulated by the Directive, which limits the results to animals resulting from such processes. Moreover, it is hardly likely that this exclusion will become very important, as nobody in the pharmaceutical sector intends to patent processes without any medical benefit. An example is a biotech "pesticide" which causes suffering to insects only for agricultural purposes. As the government points out, such processes are also in contradiction with the Dutch Animal Health and Welfare Act. This fact in itself does not make them unpatentable, due to article 6 section 1 of the Directive which is incorporated in article 3 section 3 of the Patent Act, but is does form an indication that such a process is contrary to public order or morality.
The exclusion of human embryos is most likely to be the provision that is first to cause problems. As I understand, there is an ongoing discussion in the United States whether foetal tissue, available from abortions, could be used in research into the possibility of cloning organs. Obtaining patents for such a process seems to be blocked in Europe by article 6 section 2c of the Directive and in the Netherlands by article 3 section 2c of the Patent Act 1995.
Nevertheless, the Dutch Civil Code already contained a much better provision, which perhaps only needed slight adaptation. Article 2 of Book 1 reads:
"The child of which a woman is pregnant, is regarded as already born, in as far as it's interests require so. If born lifeless, it is deemed to have never existed."
This means that a live embryo is already a person and thus protected by law, but if an abortion is conducted in accordance with the law, the lifeless born embryo in retrospect has never been a person. This provision does of course not prevent patentability, but does in my view prevent any research on embryo's that would be contrary to public order or morality.
Article 25 will contain the provision that the industrial application of a gene sequence should be clear from the patent description, which is at present already a condition set by the Bureau for Industrial Property. According to the government, this is needed tot distinguish between discoveries and inventions. As is common knowledge, this provision is also directed against patenting the results from the human genome project. It seems to be somewhat superfluous, but will not change much.
Since the wording of the law is "the" industrial application and not "an' industrial application, this opens the door for patents for second industrial applications.
Article 25 is also somewhat modified due to articles 13 and 14 of the Directive, but the government does not expect any major changes in the implementation decree that gives the details for the general requirements of the Patent Act. Therefor, this change should have no practical consequences.
The articles 53 a and 53b contain the implementation of the Directive provisions on propagation; this is nothing new, but an explanation of what the subject of the exclusive right will be in case of a biotech patent. However, according to the government the new article 53a implies that patent protection may extend to animals or plants in which patented (micro) biological material comes to expression. Although not explicitly provided, this was deemed to be excluded from the scope of protection of the patent until now. This would be the one provision of the Directive, which clearly deviated from Dutch patent law.
Article 53c is the farmer's privilege. The government points out that there are many more rules regarding transgenetic plants than regarding cattle, which is considered to be logic as transgenetic cattle is not used for agricultural purposes. Article 53c opens the possibility for a future implementation decree on the farmer's privilege for cattle. The impact of the Directive in this field is therefor still uncertain.
A new section is added to article 57, implementing the compulsory license as stipulated in article 12 of the Directive.
In comparison to the Directive, the Dutch implementation law brings no shocking surprises. I do not think that any of the biotech patent cases that have been decided by the courts so far would have been decided differently, had this law been in effect earlier.
3. DUTCH CASE LAW ON BIOTECH PROTECTION
Many of the Dutch judgements in procedures involving biotech patents only deal with procedural questions, such as jurisdiction, suspension and sufficient urgency for a preliminary injunction. I will not discuss those here, but will make a few remarks on the current status on cross border injunctions later on.
When judging a supposed infringement, according to article 69 EPC and the Protocol regarding that provision, the court will have to strike a fair balance between a reasonable protection for the inventor and a reasonable certainty for third parties. Real literal infringements do not occur all that often, as these are seldom taken to court. In the field of biotechnology, pirates are seldom found. Most of the time patent cases are part of razor edge competition between innovative industries. Moreover, real pioneer inventions are much more rare than slight improvements on the state of the art, which are sometimes just novel and inventive enough to be rewarded with a patent. In my experience, today's plaintiff might be tomorrow's defendant and in both cases is a respectable innovative company, involved in extensive research.
Until recently, the District Court and the Court of Appeal in so many words applied the standard of the Protocol regarding article 69, but the Supreme Court decided the scope of the patent by establishing the essence of the invention. In a recent judgement however, the Supreme Court ruled that a reasonable certainty for third parties did not require the interpretation of the patent as proposed by the infringer (11).
The kind of biotechnology patents that the EPO is willing to grant and therefor the manner in which claims are drafted, develops from year to year. A rather basic invention that was patentable five years ago may not be awarded with a patent now. In infringement cases however, we do not always deal with recent patents, or at least not with recently drafted applications. This means that patent claims that nowadays are deemed to be outdated in respect of their manner of drafting will be the subject of court cases now and even for some time to come.
Amongst those, one can still find patents, which in their claims simply state a DNA sequence. It is obvious that the scope of protection for such a patent will be rather narrow. A difference may be found in the DNA sequence quoted in the claim, or even in a sequence that was not regarded relevant for the invention itself and therefor not quoted in the claim, but is mentioned in the description as part of the product the invention relates to, and this might be sufficient to reject infringement.
One might make mistakes in establishing the correct amino acid sequence of the material, which might render the patent useless. On the other hand, if others had made such mistakes before, the mere fact that the inventor was able to establish the correct sequence, might make for a valid patent with, as I said before, unfortunately possibly a limited scope of protection (12).
Nevertheless, there are still patents stating in their claims DNA sequences which enjoy a rather broad protection, specifically if they are considered to be pioneer patents, for instance if the inventor was the first to establish this specific DNA sequence. This was the case with the EPO-patent, which according to the District Court also covers methods for preparing cDNA that were not known at the date of filing the application (13).
As I pointed out before, the Biotech Directive now demands that such a patent mentions the industrial application of the sequence, but I have found no cases where such an application was not mentioned. Of course, this on the other hand leaves room for a second application patent. One has to watch out for this. The District Court has adopted the doctrine of file wrapper estoppel, which means that leaving out a possible industrial application opens the way for a new patent application, provided of course that such a patent is inventive (14). Accordingly, in the case of the Nucleic Acid Sequence-Based Amplification tool (NASBA), the Court of Appeal took into account that the inventor himself, according to the file wrapper, apparently had not discerned the possibility of other cyclic amplification methods, as this possibility was not mentioned in the patent application. In the meantime, a separate patent had been granted for NASBA. Given these facts, it would be contrary to a reasonable certainty for the parties to decide that NASBA would be an infringing equivalent to Hoffman-La Roche's Polymerase Chain Reaction tool (PCR (15).
The scope of a patent may be much broader if the product is described by it's properties. This may also prove to be dangerous however. In a patent application, Medeva boldly stated a synergetic effect of the combination of two antigens, but was not able to prove this effect in an infringement case, which caused them to loose that case (16).
An elegant solution half way in between in my view was the Non-A non-B Hepatitis virus patent, which protected a polypeptide that, among other properties, comprised a contiguous sequence of at least 10 amino acids encoded by the genome of Hepatitis C virus and which also comprised an amino acid sequence having at least 40% homology to a 859 amino acid sequence, given in a figure included in the patent. This allows for covering slightly different polypeptides that have the same characteristics and functions by the scope of such a claim, so that this patent could not as easily be circumvented (17).
Nevertheless, when an invention is claimed by it's properties, small mistakes might also prove fatal. This became strikingly clear in the Ciba Geigy vs Oté Optics case. Ciba Geigy had a patent, with a main claim for a salt solution, equivalent to the eye fluid. Somewhere else in the patent a concentration of 0.9% salt was given and the Court of Appeal ruled that a third party would decide that the concentration should be somewhere near 0.9%, so that 0.13% would not constitue an infringement. This was upheld by the Supreme Court (18).
One might think that such variations in parameters would not occur in the field of biotechnology, but that is not true. In the case of the CEA Enzyme Immuno Assay patent, the main claim specified that the tool was specific for an epitope on 200,000 dalton CEA, but years after the application was filed, it appeared that the molecular weight of CEA was rather 180,000 dalton. Since it could not be excluded that several CEA's or CEA-like substances existed, this mistake was prohibitive for stopping the supposedly infringing Cobas Core CEA Enzyme Immuno Assay kit (19).
A patent that has claims of a non-DNA like nature, might still be dealt with in a similar manner as a patent with specific DNA claims. In a still pending case, the plaintiff has a patent for a canine Parvo virus vaccine, characterized in that the virus from which the vaccine was derived, is deposited at the Institut Pasteur at Paris. In view of article 13 of the Directive, this seems to be an attractive way to draft a claim. However, in order to establish (lack of) infringement, both parties are conducting extensive DNA sequencing. If this proves unsuccessful for the plaintiff, he will argue infringement by way of the properties of both vaccines. This was already done at a hearing on 7 November 1997, but so far the court has only decided some jurisdiction matters (20).
A similar defence was put up some time ago against the FSH patent, which mentioned autonomously replicating vectors, while integrated replicating vectors were also state of the art. Therefore, using the patent's properties for a integrated replicating vector was not considered an infringement (21).
Exploiting a stock of product, available before the date of publication of the European patent publication, is not an infringement according to the District Court (22). This might prove to be an important exception, if the European directive on biotechnology is taken into account, because the directive contains some additional (implied) exceptions for replication.
A further exception is for production according to an older patent. In the case of recombinant erythropoietine (rEPO), Kirin Amgen was attacked by Genetics Institute Inc. Both parties owned a patent and the court ruled that the younger Genetics patent was not dependent on the older Kirin Amgen patent. The court further ruled that the system of the exclusive right for the patent holder was based on the idea that at least the patent holder was allowed to apply the patent and that therefor an injunction against Kirin Amgen was not possible (23).
As appears from the above, the Dutch case law provides quite a labyrinth of specific decisions which either broaden or limit the scope of protection of biotech patents, thereby also paving the way for biotech generics. Unfortunately, this field is so new that it has been extensively developing over the past few years. Given the fact that it takes quite some time for a patent to be granted and therefor to see the effect of the way the application was drafted, in many cases it will be too late for repair. Nevertheless, these cases offer some guidelines of how to obtain the broadest protection.
It is too soon however to take the next step and draft a catalogue of validity informal guidelines; the step to be taken now is to draft the scope of protection informal guidelines, deducted from case law.
4. COOLING DOWN: CURRENT STATUS ON CROSS BORDER INJUNCTIONS
Current main rule for EU defendants
As you all know, the Dutch courts have long held that cross border injunctions against defendants from other European countries are possible as long as a Dutch co-defendant can be found. This doctrine was based on article 6 section 1 of the Brussels Convention and on a Supreme Court judgement in a trademark case against a Dutch defendant (24). These injunctions are enforceable in other European countries due to the same Brussels Convention.
In Expandable Grafts vs Boston Scientific, the Court of Appeal at The Hague has now ruled that a cross border injunction against a defendant from another European country is only possible if the Dutch company is "the spider in the web" with regard to the supposedly infringing product and if both companies are part of the same concern (25).
Exceptions to the main rule
This of course did not influence the Supreme Court ruling that a cross border injunction is always possible against a Dutch defendant. It also did not influence the jurisdiction over non-EU companies, which follows directly from the Dutch Procedural Code, although enforcement in such cases will of course be difficult.
The District Court decided to follow the rules laid out by the Court of Appeal, although it is of the opinion that those rules are incorrect (26). Therefore, the District Court is looking for exceptions that fit within the ruling of the Court of Appeal. In the case of Augustine vs Mallinckrodt, the spider in the web was a company based in the United States. According to the District Court this meant that the court had jurisdiction over all companies of the Malinckrodt concern, also those based in other European countries (27). The consequence of all this is that the District Court will rule that it has no jurisdiction, only if the spider in the web with regard to a supposedly infringing product is based in another member state of the European Union.
But there is even an exception to that rule. In Velouta vs Schellens II, the Belgium based company Velouta requested a declaratory judgement, with effect for all designated countries, that they were not infringing Schellen's patent. Since it was the choice of Velouta themselves to bring the case before the Dutch court, the court also accepted jurisdiction to hear Schellen's counterclaim foracross border injunction (28).
In the meantime, the Court of Appeal has ruled that Article 5 section 3 of the Brussels Convention does not establish jurisdiction to grant cross border declarations of non-infringement (29). This only poses a problem if there are only defendants from other EU-countries. I believe the "spider in the web" doctrine would also apply here if there were a Dutch co-defendant.
Abuse of right
The District Court will not accept jurisdiction if the case is a clear abuse of right. This was held to be true in a case where only 0.4% of the turn over in the supposedly infringing product was made by the Dutch defendant and the remainder by the English defendants (30).
In another case, the Dutch defendant did not appear in court and was granted default. The circumstances of the case however made it very likely that the foreign defendants were being set up by means of a deal between the plaintiff and the Dutch defendant made in order to create jurisdiction of the Dutch courts. Therefor the President of the District Court denied jurisdiction (31).
Of course, the fact that the Dutch courts will accept jurisdiction over non EU-companies is very nice, but enforceability outside the member states of the Brussels Convention will be very difficult, unless there is a bilateral treaty governing the enforcement of foreign judgements.
Whether the spider in the web doctrine of the Court of Appeal is the last word on jurisdiction, remains yet to be seen. The Supreme Court and also the European Court of Justice still have to rule on this matter. However, the EGP vs Boston Scientific judgement has not turned out to be the end for our profession, as some predicted. The Netherlands still offer interesting opportunities for patent litigation.
Supreme Court 18 December 1992, NJ 1993735; BIE 1993/81, Medicopharma & Pharbita vs ICI, confirmed in Supreme Court 23 June 1995, BIE 1997/41, Organon vs ARS
- J.J. Brinkhof, De onderzoeksexceptie, BIE 1994, p. 112.
- For The Netherlands: President of the District Court The Hague 14 September 192, BIE 1995/33. This decision was not challenged in the procedure before the Supreme Court against the judgement in appeal.
- Court of Appeal The Hague 3 February 1994, BIE 1995/103, Boehringer vs Kirin Amgen.
- Court of Appeal The Hague 19 May 1994, BIE 1995/32, Smith Kline & French vs Centrafarm and Court of Appeal The Hague 19 May 1994, BIE 1997/21, Smith Kline & French vs Generics. The latter judgement was upheld by the Supreme Court in it's judgement of 29 September 1995, Bie 1997/21.
- European Court of Justice 9 July 1997, C-316/95, NJ 1999/213, Generics vs Smith Kline & French.
- Regulation 1768/92, 2 July 1992, L 182/1.
- European Court of Justice 23 January 1997, BIE 1997/10, Biogen vs Smithkline Beecham
- Kamerstukken II 1998-1999, 26 568.
- Similar changes are being made to the Patent Act 1910.
- Supreme Court 9 April 1999 (not yet published), Relavit vs Diversey.
- Opposition Division of EPO on the FSH patent, followed by Hof Den Haag 3-2-1994, IER 1994/8, Ares-Serono vs Organon.
- District Court The Hague 13 March 1996 (not published), Kirin Amgen vs Boehringer Mannheim.
- President of the District Court The Hague 12 November 1990, BIE 1991/45, Brijvoederbak and District Court The Hague 3 July 1996, BIE 1999/40, Bonzel vs Cordis.
- Court of Appeal The Hague 12 September 1996, IER 1996/48, Hoffmann-La Roche vs Organon Teknika.
- President District Court The Hague 22 July 1997, IER 1997/51, Medeva vs Chiron.
- President of the District Court The Hague 8 May 1995, IER 1998/23, Chiron vs Murex.
- Supreme Court 13 january 1995, IER 1995/17, Ciba Geigy vs Oté Optics.
- District Court The Hague 1 Oct0ber 1997 (not published) and 1 July 1998, BIE 1999/46, Immunomedics vs Roche.
- District Court The Hague 23 December 1997, IER 1998/10, Akzo Nobel vs Webster.
- Court of Appeal The Hague 1 April 1993, IER 1993/28, Ares Serono vs Organon.
- District Court The Hague 6 July 1993, IER 1993/31, ARS vs Organon.
- President District Court The Hague 5 December 1994, (not published), Genetics vs Kirn Amgen.
- Supreme Court 24 November 1989, NJ 1992/404, Lincoln vs Interlas.
- Court of Appeal The Hague 23 April 1998, IER 1998/30, EGP vs Boston Scientific
- District Court The Hague 20 May 1998, IER 1998/31, Baxter vs Pharmacia & Upjohn.
- District Court The Hague 15 July 1998, IER 1998/40, Augustine vs Mallinckrodt.
- District Court The Hague 18 February 1998, BIE 1999/37.
- Court of Appeal The Hague 22 January 1998, Evans vs Chiron.
- District Court The Hague 23 December 1997, IER 1998/10, Akzo Nobel vs Webste
- President of the District Court The Hague 27 November 1997, IER 1998/11, Goldschmidt vs Elzbieta.