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IP Newsletter | Summer/Fall 2016
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PATENT
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Pfizer Gets First Generics Ban Under Korea Patent Linkage Law
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In accordance with the Korea-U.S. Free Trade Agreement, Korea adopted a patent-regulatory approval linkage system, similar to the U.S. Orange Book-type patent linkage system, which has been fully implemented since March 2015. Recently, Pfizer Korea successfully obtained a sales stay of a generic product under the system, blocking the generic's market entry. Pfizer also defended its Tygacil patent while obtaining a district court decision finding the generic's infringement.
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This is notable as this is the first case in which a patentee succeeded in preventing the generic launch under the patent-linkage system.
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Kim & Chang represented Pfizer in these matters.
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The First Case
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The drug in question is the injectable antibiotic Tygacil, also known as tigecycline. Pfizer reported $304 million in worldwide Tygacil sales in 2015.
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On December 31, 2014, generic manufacturer Penmix Ltd. filed an invalidation action with the Intellectual Property Trial and Appeal Board ("IPTAB") against Wyeth LLC's formulation patent for Tygacil, which was listed on the Green List. Penmix then filed for generic product approval with the Ministry of Food and Drug Safety ("MFDS") on December 3, 2015 and notified Pfizer Korea, the market approval holder, and the patentee Wyeth. In their notice, Penmix merely stated that the listed formulation patent is invalid without disclosing its own product formulation or indicating when their generic product would be launched. However, considering that Penmix only challenged the formulation patent and not the listed compound patent expiring on May 21, 2016, it was understood that it was planning to launch immediately after the compound patent expires.
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On January 20, Pfizer filed a request for sales stay with the MFDS and simultaneously brought a patent infringement action before the Seoul Central District Court. The MFDS issued a sales stay against Penmix on April 19, meaning that Penmix could not sell their generic products until September 7.
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To remove the sales stay, Penmix strongly argued in the invalidation and infringement actions that the formulation patent should be invalidated for lack of inventiveness. The IPTAB affirmed the validity of Wyeth's formulation patent on May 10, 2016 (Penmix v. Wyeth LLC, Case No. 2014Dang3424). Subsequently, the Seoul Central District Court rendered a decision on July 1, finding that Penmix had infringed the patent (Wyeth v. Penmix, Case No. 2016Kahap503614).
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Penmix has filed appeals against both the IPTAB decision in the invalidation action and the district court decision in the infringement action, which are now pending before the Patent Court.
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Korean Patent-Linkage System
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As one of the first cases involving the new Korean patent linkage system, this dispute serves as a useful guide as to how the system functions, and also answers some questions practitioners have had.
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The Tygacil dispute demonstrates the key elements of the Korean patent-linkage system, which includes (i) patent listing, (ii) generic's obligation to send a notice, (iii) generic stay mechanism and (iv) first generic exclusivity, as summarized below.
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Patent listing
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The market approval holder ("MAH") of an original drug product may apply for patent listing on the Green List of the MFDS within 30 days from the market approval date or patent registration date, whichever is later. In order for the MAH to list the patents, it should obtain a license or consent from the patentee.
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In the U.S. system, while the FDA plays only an administrative role, the MFDS in Korea substantively examines the patent listing applications and selectively lists the applied patents on a claim-by-claim basis after reviewing whether there is a direct relationship between the approved product and the applied patent claims.
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Another difference is that the Korean linkage system covers both chemical and biological products, whereas the U.S. system only includes chemical products.
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Generic Notice
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After the relevant patent is listed, a generic company must notify both the patentee and MAH within 20 days when certifying that the listed patent is invalid or not infringed by its product. However, a notice is not required if (i) an application is filed with the assurance that the generic's sales will begin after the listed patent expires, (ii) there is consent from the patentee and the MAH or (iii) its product indication has no relevance to the listed patent in terms of medical use.
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If a generic fails to notify the patentee and MAH of its application, then the generic product cannot be approved.
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Further, if the generic notice is sent later than 20 days after filing for product approval, then the actual notice filing date will be deemed as the generic application date for purposes of determining the first generic exclusivity.
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Generic Stay Mechanism
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Unlike the U.S. system, the Korean linkage system does not stay the approval process of the generic product. Rather, the generic product may be approved with a condition with a stay on sales. The sales ban ends if the patent expires, or if it is invalidated or there is a finding that the generic is noninfringing.
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In order to request a sales stay against the generic product, the patentee must (i) file a patent infringement or scope confirmation action against the generic or (ii) respond to a scope confirmation action filed by the generic in connection with the listed patent. If the MFDS grants the sales stay request, then the generic product sales will be prohibited for nine months from the patentee's receipt date of the generic notice.
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The patent holder requesting a stay is entitled to it as a matter of right after filing a patent infringement action. However, if the patent holder responds to a scope confirmation action filed by the generic company, then the MFDS grants the sales stay only after reviewing whether the compared product specified by the generic company is identical to the one applied for generic product approval
before the MFDS.
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If the patentee loses in the infringement action or scope confirmation action, then the sales stay will be lifted.
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First Generic Exclusivity
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A generic company may be awarded with nine months of market exclusivity if it: (i) filed the first generic approval application; (ii) brought an invalidation or scope confirmation action at the IPTAB before filing its generic approval application and received a favorable decision within nine months of its generic notification being received; and (iii) proved that the trial in (ii) above was the first trial filed or was otherwise filed within 14 days of the first trial, or received a favorable decision before any earlier-filed trials.
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Giving Guidance
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As noted above, this is the first case since the Korean patent linkage system has been introduced, where the patentee has successfully prevented a generic launch by obtaining a sales stay from the MFDS followed by favorable decisions both in the invalidation and infringement actions.
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After the new patent linkage system was introduced, a number of legal issues have been raised among Korean patent litigators.
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One issue was whether it would be considered frivolous if the patentee initiated an infringement action without any evidence of infringement. If the listed patent is directed to a compound and use invention, then it is obvious that the generic product falls within the scope of the patent. However, if the patent is directed to a formulation, polymorph, particle size distribution and the like, then the generic information remains confidential until the generic discloses such information in the product insert.
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Another key issue was whether a court would find infringement and give injunctive relief even if the generic product has not yet been launched. This is because under the Korean patent law, the generic's acts of conducting clinical trials and obtaining a product approval do not constitute patent infringement. As such, a patentee generally initiates an infringement action after or immediately before the generic product is approved. This is not an issue in most regular infringement actions since the generic products were often approved by the time the infringement court renders a decision.
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However, under the new patent linkage system, the district court may feel obligated to decide the infringement action as soon as possible since: (i) from the patentee's perspective, the sales stay is only effective for nine months from receipt of the generic notice and (ii) from the generic's perspective, a favorable decision in the infringement action is required to remove the sales ban.
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In this case, Pfizer and Wyeth asserted that it simply had no choice but to file the infringement action without knowing Penmix's formulation, in order to meet the requirement for requesting sales stay under the patent linkage system. Pfizer also argued that either Penmix or the MFDS must disclose the generic formulation since it is impossible to know it otherwise.
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The Seoul Central District Court was persuaded by these arguments and urged Penmix to clarify whether their generic product falls within the scope of the formulation patent. If Penmix refused, then the court indicated that they will ask the MFDS to produce the relevant information. Thus, Penmix admitted that their product falls within the claim scope of Wyeth's patent. As a result, the court granted an injunctive relief ordering Penmix not to manufacture, sell, etc. their generic products and to discard any intermediate products that may be used to manufacture the generic products.
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Now that a new precedent has been put in place through this landmark decision, original drug manufacturers will have a clear avenue in prohibiting generic entry into the market under the Korean patent linkage system.
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This article first appeared on Bloomberg BNA (BBNA) in September 2016. For further information, please visit www.bna.com.
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Reproduced with permission from Copyright 2016 The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.
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If you have any questions regarding this article, please contact:
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For more information, please visit our website: www.ip.kimchang.com
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