Irides: Weekly patent litigation update

The Irides Weekly Update is our round-up of patent litigation news highlights from around the world. Taking its name from the plural of “iris” - a nod to the ability of Irides to see what’s happening around the world.

Our latest edition - 28 March 2024 - is below:

ITALY

The Italian Supreme Court holds that the Italian Government are entitled to recover damages from Pfizer due to the Italian healthcare service paying an artificially elevated price for latanoprost products, where this elevated price resulted from an abuse of a dominant position

In a decision that has recently been published, the Supreme Court brought to an end a series of Italian disputes around latanoprost products dating back to 2010. These disputes can be separated into a series of Competition Proceedings and The Italian Government’s Action.

A timeline of the grant of Pfizer’s rights over latanoprost is helpful to understanding these disputes:

The Competition Proceedings were concluded with a Council of State decision in 2014, where a fine of EUR 10.6 million by the Italian Competition Authority (ICA) was upheld. In this decision, it was considered to be irrelevant that Pfizer had obtained its IP rights lawfully – it was not deemed permissible to use EP 168, its SPC and paediatric extension to exclude generics from the market when these rights did not lead to a new product being introduced to the market.

On the basis of the Competition Proceedings, the Italian Government sought compensation from Pfizer for the period between the compound parent patent’s (EP 417) loss of exclusivity and generic launch (between September 2009 and May 2010), at which point the reimbursement price of latanoprost products paid by the Italian Healthcare service dropped due to generic competition. Like the Competition Proceedings, conflicting decisions were given on the way to the Supreme Court.

The Supreme Court confirmed the Rome Court of Appeal’s decision. The question of the validity of EP 168 (as determined by the opposition proceedings and appeal at the EPO) was irrelevant to the question of abuse. As an extension of this, the assessment of whether or not generic production was lawful under the Industrial Property Code was also not relevant, as the assessment being made was one of what would have happened if the abusive conduct had been excluded, including the obtaining of EP 168 and its SPC. The long period of delay between the filing of EP 417 and the EP 168 divisional was deemed to be conduct aimed at excluding competitors – the Court described Pfizer’s strategy as one aimed at artificially prolonging the patent protection of the active ingredient. Pfizer were ordered to pay €13,360,464 plus interest, calculated from the difference between the reimbursement price of latanoprost products before and after generic launch, multiplied by the number of packs of Pfizer’s latanoprost products sold in the period between October 2009 and May 2010.

UK

High Court grants interim injunction on rivaroxaban patent ahead of an impending decision on the merits

On 27 March 2024, His Honour Judge Hacon granted Bayer’s request for an interim injunction against a number of generic companies including Teva, STADA, Sandoz, and Hetero on the basis of Bayer’s dosing regimen patent, EP 1 845 961 (EP 961), and in favour of maintaining the status quo until judgment on the merits was handed down the following month.

Bayer’s compound patent protecting rivaroxaban, as extended by an SPC, expires on 1 April 2024. However, Bayer’s patent, EP 961, for a once-a-day dosing regimen of rivaroxaban, expires in January 2026. A number of generics, including the ones referred to above, have sought to invalidate EP 961 and a trial took place in February 2024, also before His Honour Judge Hacon. Judgment is pending. Teva, STADA, Sandoz and Hetero had indicated their intent to start sales after 1 April 2024. Bayer filed this interim injunction application in order to prevent the generics from launching their once-daily dosing generic products pending the final order hearing following judgment.

The issue between the parties concerned the balance of irreparable harm. Bayer argued its case based on a downward price spiral for the drug, which it said would be inevitable if there was market entry by numerous generics (23 MA holders in total, not all parties to this application) and was likely to persist with long-term effects, even if Bayer later regained its monopoly.

The respondents argued that court decisions on similar issues to date have been based on a lack of expert evidence from an economist, whereas in this case such evidence had been provided by Teva and demonstrated that any losses incurred by Bayer could be calculated with reasonable precision, making damages an adequate remedy for Bayer if there was generic entry on the market. The respondents also argued that, on the other hand, it would be difficult to (i) quantity the losses for the generic companies, if they were not allowed to launch and it was subsequently held that such a launch should have been permitted, due to there being no existing figures on which to base likely sales; and (ii) accurately apportion the losses as between the various generic companies.

HHJ Hacon considered the American Cynamid principles along with the case law in Neurim and considered that two key points were applicable. Firstly, where there will be two or more manufacturers competing for the generic market, this commonly results in a downward spiral in price, causing the patentee damage which is difficult to quantify even if the monopoly is subsequently restored by an injunction. Secondly, where both sides are equally likely to suffer damage that could not be adequately compensated, preservation of the status quo assumes importance. Of particular relevance here was that during the hearing, the Judge informed the parties that judgment on the merits would be handed down on or around 9 April 2024, leaving (only) about 9 days between expiry of the SPC and judgment.

Accordingly, HHJ Hacon considered the crucial point in this application was the short timeframe of the interim relief, expressing doubt that any party would suffer a great deal of irreparable harm either way, and agreed that Bayer’s losses would be fairly easy to calculate. However, he considered that the same logic applied to any losses suffered by the generic companies in the same time frame.

An injunction was therefore granted preventing the generic companies from launching, until resolution of the order to be made following HHJ Hacon’s judgment on the merits in April. The usual cross-undertaking was also provided.

Switzerland

Switzerland approves revisions to patent examination and appeals procedures, modernising its Patents Act

On 15 March 2024, the Government approved a bill to revise the Patents Act with a view to adapting the patent system to international standards and making Switzerland more attractive to SMEs and individual inventors in particular. The revisions include key revisions to the examination and appeal procedures, making Swiss patents more transparent and secure.

The updates to the examination procedure aim to make it more flexible and strengthen Swiss patents. Applicants will have the option to request a full examination, with the IPI examining novelty and inventive step, increasing legal certainty for applicants and third parties. Applicants will still be able to obtain a partially examined patent at a low cost if they wish, however fully examined patents will be more difficult to challenge and easier to enforce. The IPI will be obligated to publish a search report regarding the state of the art in the field, regardless of the chosen form of examination. The Swiss examination procedure will therefore offer an equivalent but less expensive alternative to examination at the EPO, and the direct route will be particularly attractive for innovators only looking to protect their invention in Switzerland. The appeal process will also be streamlined, with the previous opposition procedure at the IPI being replaced by expanded options for appeal. Applicants and third parties will able to appeal against IPI decisions and base an appeal on the claim that a patented inventive is not novel or lacks inventive step. Due to the complex technical issues involved the Federal Patent Court will hear such appeals, rather than the Federal Administrative Court. The revised Patents Act will also permit patent applicants to file English documents.