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European IP Bulletin, Issue 28, January - Patents
Patents
6. Supplementary Protection Certificates for Combination Medicinal Products
On 24 November 2005, Advocate General Léger delivered his opinion in Case C-431/04 referred by the Bundesgerichtshof (German Federal Court of Appeal) in respect of the construction of Article 1(b) of Council Regulation 1768/92/EEC concerning the creation of a supplementary protection certificate (“SPC”) for medicinal products.
The Massachusetts Institute of Technology (MIT) is the holder of a European patent whose application was filed in 1987. The patent covers a product which is a combination of an active substance, carmustine, and a polymeric excipient, polifeprosan. The product was initially put on the market in Germany after marketing authorisation was granted in 1999 under the name Gliadel.
MIT applied to the German Patent and Trademark Office for an SPC for the product as a “combination product” and an alternative application for carmustine only. The application for an SPC for the combination product was rejected on the ground that polifeprosan could not be considered an “active ingredient” within the meaning of Article 1(b) and Article 3 of the said Regulation. The patent office also ruled that no certificate could be granted for the active ingredient alone since carmustine has been an authorised active substance for many years. MIT then lodged a complaint before the Bundespatentgericht (German Federal Patent Court) which handed down a decision in 2002 holding that Gliadel is not a “combination product” for the purposes of Article 1(b) since the “combination of active ingredients of a medicinal product” necessarily requires the presence of two active ingredients, each with its own therapeutic effects.
Therefore, MIT lodged an appeal with the Bundesgerichtshof against the decision. The Court noted that polifeprosan is neither an excipient nor a mere auxiliary component since it contributes to the efficacy of the medicinal product by favouring a controlled release of carmustine, which would have lethal effects were it released in a single dose due to its high toxicity.
In light of these considerations, the Bundesgerichtshof referred the question to the European Court of Justice whether there is a “combination of active ingredients” for the purposes of Article 1(b) when the substance comprises two components one of which is a known active substance with pharmacological properties, and the other increases significantly the therapeutic effects of the first one.
Advocate General Leger stated that the purely literal interpretation of the provision at stake does not disqualify a product made of an active substance and an excipient from classification as a combination medicinal product within the meaning of Article 1(b) where the excipient is necessary for the therapeutic efficacy of the active ingredient. Moreover, in his opinion, within the objectives of Regulation 1768/92/EEC, it is advisable to encourage the research and the development of existing ingredients by developing auxiliary substances enabling their use or their properties for a therapeutic indication and by trying to seek new ways to ensure greater safety of use by reducing undesirable effects. The case at issue, in his view, concerns a combination that is the result of costly and long research and therefore deserves the protection conferred by the Regulation at stake.
On these grounds, the Advocate General stated that Article 1(b) of Council Regulation 1768/92/EEC must be interpreted as meaning that it does not preclude the grant of an SPC when there is a combination of a known active substance used for a specific therapeutic indication and another substance “necessary for the therapeutic efficacy” of the first substance, for this indication.
The interpretation given by the advocate general recognised the possibility that “inactive” substances can, in certain circumstances, be considered to be active when considering whether the product is a combination product. Although the ECJ has not yet issued its judgment in this case, it is likely to have a significant practical importance for the period and scope of protection afforded to medicinal products.
7. Roche Makes U-Turn on Tamiflu Patent
Roche, the Swiss drugs manufacturing company, has bowed to international pressure and agreed to meet with generic manufacturers with a view to sub-licensing its patent for the antiviral drug, Tamiflu, in the wake of possible bird flu pandemic reports MSNBC.
Tamiflu is seen as the first line of defence against the deadly bird flu virus. Although it is not a cure for the flu, it can lessen the symptoms if taken shortly after they first appear. Roche, which acquired rights to the drug from Gilead Sciences Inc. in 1996, had initially said it did not intend to let other drug companies manufacture the drugs but has now agreed to meet four generic manufacturers willing to increase production of the drug in preparation for a possible bird flu pandemic.
As nations began building stockpiles of Tamiflu, there were calls for countries to sidestep patents on the drug and to make their own generic versions. Last year, forty nations began stockpiling Tamiflu after being urged to do so by the World Health Organization (WHO). According to a spokesperson for the WHO, although Roche has increased production eight-fold in the past two years, it is estimated that it will take ten years to make enough of the drug to cover 20% of the world’s population. This made it necessary for sub-licensing to be considered. Roche initially resisted these calls which led to critics questioning their intentions with claims that they were benefiting from a global health crisis.
Roche later agreed to meet Teva Pharmaceutical Industries, Barr Pharmaceuticals, Mylan Laboratories and Ranbaxy Laboratories as soon as possible to discuss possible sub-licensing. Though some experts have cautioned that it would be difficult for generic companies to manufacture Tamiflu, the four generic makers, however, believe they could be producing the drug within a month with Roche’s cooperation. The decision on which companies get the licenses will be made in consultation with the US government.
Roche has subsequently donated 3 million courses of the drug to the WHO and a small amount to Romania, one of the countries where the bird flu virus has been detected.
It is worth noting that under Article 31 of the TRIPS Agreement, countries can issue compulsory licenses to disregard patent rights but only after negotiating with the patent owners and paying them adequate compensation. If they declare a public health emergency, governments can skip the negotiating step.
Roche has also recently settled their dispute with Gilead over production and royalties. Gilead had sought to regain the rights to Tamiflu, as it had sold the exclusive worldwide rights to Roche 10 years ago, saying the Swiss company had failed to promote the drug adequately. Under the settlement, Gilead will get a greater say in plans to increase production of the drug by farming out parts of the process to third-party producers such as generic drug makers.
8. European Telecommunications Standards Institute Reviews its IPR Policy to Prevent Patent Ambushes
The European Telecommunications Standards Institute (ETSI) is an independent standardisation body responsible for setting standards for information and communication technologies. It has around 700 members, including manufacturers, network operators, administrations, service providers and research bodies. ETSI has created a set of rules to govern the adoption of new technical standards that also includes a policy on intellectual property rights (IPR). The IPR policy contains provisions concerning the disclosure of IPR by ETSI’s members.
The European Commission launched an investigation into ETSI as it was concerned that the ETSI’s IPR policy did not adequately prevent “patent ambushes”, whereby technology companies participate in the standard-setting process or propose a particular standard without disclosing that their present or potential IPR covers the standard. Thus, once the standard is set, they disclose their rights and demand license fees from manufacturers that manufacture their products in compliance with the standards based on the patented technology. Such an ambush has two negative effects on competition: firstly, it unfairly eliminates the possibility of considering an alternative to the patented technology during the standard-setting discussions; and secondly, it seriously impairs the effort to reduce costs in the industry.
These concerns were not unfounded as ETSI members, including T-Mobile, Telecom Italia and Vodafone, had raised the issue of licensing fees during the November 2005 General Assembly. Even in October, the European Commission received formal complaints from Nokia, Ericsson, NEC and other mobile phone makers against US chipmaker Qualcomm that it was charging too much for licensing its technology used in third-generation standards. Thus, the resolution of the issue was of critical importance for the industry due to its effect on future standard-setting and licensing deals for technologies used in telecoms standards.
In response to these concerns and the European Commission’s investigation, ETSI has reviewed its IPR policy. Its new policy, proposed in November 2005, enjoins its members to make reasonable endeavours to disclose such IPR on timely basis. However, ETSI has clarified that this obligation does not require its members to conduct IPR searches before making disclosures. In response, the European Commission has found the review satisfactory and has closed its investigation.
However, ETSI rejected the opportunity to address the issue of soaring licence fees, another major concern of the industry. It failed to provide any guidelines for calculating such fees on “fair, reasonable and non-discriminatory” basis.
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