Hungary – Six parallel preliminary injunctions in a pharmaceutical patent infringement proceeding

Source: eplawpatentblog

With the heaviest wave of interim measures ever seen in the history of
pharmaceutical patent litigation in Hungary, the Metropolitan Court of Budapest
granted six preliminary injunctions in June 2012 at the same time against
pharmaceutical companies and wholesalers due to the likely infringement of the
patentee’s medical use patent related to a blockbuster product.

The patentee’ first generation product patent covering the subject compound
expired in June 2011, after which several generic competitors launched their
own products in Hungary, even though the patentee still had a further pending
patent application for a second medical use. Their hopes for the refusal of this
application must have been turned down by the grant of this use patent in April
2012, after an extremely long examination period of 18 years, leaving barely two
years of market exclusivity for the patentee.

The patentee wasted no time after the grant of the patent and filed well prepared
preliminary injunction requests within less than a month against generic
importers and manufacturers as well as major wholesalers. Needless to say,
fierce debates have commenced both in and out of court regarding the validity of
the just granted patent, as well as the interpretation of the main claim which is a
so-called Swiss-type claim, as some of the defendants took the view that such
type of claim can only cover manufacturing activity but not the product as such.
Regarding the balance of benefits and detriments to be caused by the injunction,
the defendants took the view that being forced to stop distribution and to
withdraw the products from the market would not only be detrimental to their
business but would also harm the legal interests of patients who had already
began to take one of the generic pills – a question that has gained special
significance in recent preliminary injunction cases (see previous post). It was
also raised that with the original product having a large number of illegal
counterfeit copies on the black market, the ban of cheaper, legal generic products
would increase the consume of such illegal copies and substitutes. Some of the
defendants also raised the issue that the patentee was able to recover its
investments while enjoying market exclusivity ensured by the earlier expired
basic product patent, thus it should not be able to successfully refer to
investments related to the second medical use patent in the context of the
preliminary injunction proceeding.

In the recent history of pharmaceutical patent litigation in Hungary, this was the
first time that wholesalers were also sued separately. They have rather strategic
role in the pharmaceutical distribution chain as approximately 90 per cent of
wholesale distribution is covered by three companies. Wholesalers have argued
heavily against their involvement in the proceeding, considering themselves as
mere intermediates between the manufacturer/importer of the generic products
and the pharmacies without any capability or reasonable expectation to take
part in patent disputes.

After several exchanges of detailed submissions by each party involved, the
Metropolitan Court rendered its injunctive decisions in each proceeding within
approximately a month from the filing of the preliminary injunction requests. In
each case the court granted the requested injunctive relief, prohibiting importers
and manufacturers as well as wholesalers from the distribution of the respective
products and also ordered the seizure of them and their withdrawal from the
pharmacies. The court, however, required the patentee to deposit a security
bond in order to put the preliminary injunctions in effect.

As explained in the motivation of the decisions, the court had no doubt that each
of the generic products in suit fell within the scope of the patent, based on the
interpretation of the subject Swiss type claim, as each product contained the
given active ingredient with the patented therapeutic indication described in the
respective package information leaflet. The court also recognized the patentee’s
situation regarding the extreme length of the patent examination and that it had
not been able to act earlier due to the absence of final patent protection. Staying
consistent in the principle of bifurcation, the court disregarded invalidity
arguments and referrals to foreign validity-related proceedings, arguing that
these concerns do not go beyond the normal uncertainty factor of similar cases.

The court rejected the argument of the wholesalers in which they denied having
independent liability for patent infringement. The court referred to the acts of
exploitation in the Patent Act against which, if performed without the patentee’s
authorization, the patentee may proceed. The activity of wholesale distributors
falls in the categories explicitly listed in the Patent Act, and the court found extra
circumstances irrelevant.

Regarding the interests of the patients, the court took into account that the
concerned products are so called “lifestyle products” which are taken by patients
occasionally and belong to a higher price category even in their generic versions,
which makes the price difference between the original and generic counterparts
relative. Furthermore, the court saw no danger of the patient’s interest as they
would be able to obtain the same active ingredient they are used to by changing
to the products of the patentee.

The patentee paid the bond in due time, so all preliminary injunctions entered
into effect. All opposing parties appealed against the decisions and the dispute
continued at second instance with the result yet to come. Nevertheless, during
the appeal proceeding the preliminary injunctions are enforceable.

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