First published by Mondaq.
Many years of intensive research and development activities are required to build solid and commercially profitable intellectual property assets. Companies invest substantial time and resources in technologies, design, research, and development to ultimately produce these intangible assets. Such assets are central to companies maintaining and enhancing their market position. Thus, companies adopt a range of measures to protect these intellectual property assets, including declaratory judgments described below.
Declaratory Judgment Actions to Determine Non-infringement
Obtaining a declaratory judgment in which a court determines that infringement has not occurred (“non-infringement determination”) is a key pre-emptive defensive measure for protecting intellectual property. Sector-leading companies invest heavily in developing intellectual property rights. Therefore, it is common for these companies to also become embroiled in patent and trademark litigation wars to protect their investment.
Turkish law allows any interested party to ask the courts for a non-infringement determination against the registered owner of the relevant trademark, patent, or industrial design (the “Right Owner”). The legal framework in Turkey for such actions is outlined separately in the respective legislation relating to trademarks, industrial designs, and patents.
Prior to initiating proceedings, the requesting party will usually send a notice to the Right Owner through a notary public. The notice enables the Right Owner to comment on the requesting party’s manufacturing activities, or manufacturing preparations.
The requesting party is entitled to initiate proceedings to obtain a non-infringement determination if either the Right Owner does not respond within one month of receiving the notice, or the requesting party is not satisfied with the Right Owner’s response.
It is mandatory to seek the Right Owner’s comments in the context of trademarks and industrial designs. Completing this step is a pre-requisite for initiating proceedings to obtain a non-infringement determination. For patents though, parties can directly initiate proceedings seeking non-infringement determinations without first seeking comments from the Right Holder. As a result, patent Right Owners can unexpectedly find themselves as defendants in such actions.
Proceedings seeking a non-infringement determination cannot be initiated against the Right Owner if infringement proceedings have already been initiated with regard to the intellectual property right in question. However, it is possible to initiate proceedings which at the outset jointly claim invalidity, as well as seek a non-infringement determination. When initiating proceedings, all parties noted in the Turkish Patent Institute’s registry must be notified.
Non-infringement Determinations to Protect Pharmaceutical Patents
Proceedings seeking non-infringement determinations are particularly important for pharmaceutical patents, which require lengthy and expensive research and development investments. There are two main types of entity in the context of pharmaceutical research and development:
- Innovator companies which produce original drugs by investing vast amounts of money, time, and resources into development, clinical trials, and manufacturing. Therefore, innovator companies play a significant and influential role in determining market dynamics for the pharmaceutical sector.
- Generic companies which produce generic alternatives to original drugs. Generic drugs are the equivalent of original drugs in dosage form, safety, strength, quality, and performance. They are chemically identical to their reference counterparts (produced by innovator companies). A generic drug contains the same active substance(s) as the original drug. It should be identical in strength and dosage form to treat/heal the same disease(s), as well as being bioequivalent. However, its appearance and packaging can differ from the original drug.
Since innovator companies invest large amounts of time and money into their development activities, it is reasonable that mechanisms should exist which ensure they can reap the benefits of their efforts and be supported in further innovation activities. On the other hand, initiating proceedings for non-infringement determinations help generic companies to avoid being later required to defend themselves in infringement actions.
Innovator companies tend to prevent generic companies from entering the market with a generic copy of their original drug by patent thickets and follow-on patents. An innovator company may register patents in multiple categories, which are entirely identical to the original patent registration. In this way, the innovator company can refresh the basic patent protection by means of secondary or follow-on patents. These are primarily designed to keep competitors (including generic companies) out of the market.
No pharmaceutical product for human use in Turkey may be marketed unless it is authorized by the Ministry of Health. In granting a marketing authorization, the Ministry requires drug producers to submit the results of their pharmaceutical products’ safety and efficacy tests, along with other documents regarding the product. During the data exclusivity period, generic drug producers cannot use or rely on the data gathered by innovator companies to obtain marketing authorization for a generic drug. However, if a patent exists, but no data exclusivity, third parties can apply for a marketing authorization without infringing on the patent (Article 75(f) of the Patent Decree Law). The applicant is not able to actually manufacture the generic drug though, due to the continuing patent protection. However, despite this manufacturing restriction, filing a marketing authorization while the patent is still active will save time.
If neither patent nor data exclusivity protection exist, generic companies are permitted to both manufacture and sell the generic drug in Turkey, provided the company holds marketing authorization.
Therefore, it is possible to create a generic drug without causing patent infringement if:
- The basic data in the marketing authorization application is not protected by patent or data exclusivity mechanisms;
- Both the patent and data exclusivity protection has expired.
- The patent is invalid.
Consequently, generic companies acting defensively may choose to initiate proceedings seeking a non-infringement determination from the court which states that their generic product does not infringe patent rights. Such an action would be initiated after applying for marketing authorization to market and sell the product in Turkey. Under the Turkish Patent Law, generic companies can directly initiate such proceedings without first seeking comments from the related patent Right Holder. Therefore, in Turkey innovator companies can suddenly or unexpectedly be faced with a non-infringement determination action initiated by generic companies.
In case a non-infringement action is initiated against an innovator company since Turkish law requires the data which a marketing authorization application is based on to be kept confidential, irrespective of whether the application relates to an original or generic drug, an innovator company is not permitted to examine the generic applicant’s data to determine whether the data infringes on the innovator company’s rights. In these circumstances, an innovator company has two possible options:
- Settlement Negotiations – Any time before or during court proceeding, the innovator company can contact the generic company seeking to find common ground for a possible settlement. During settlement negotiations, the parties may choose to arrange. On the arranged date, the parties would examine the data, in the presence of their lawyers, and an examination date and ask the Ministry of Health for permission to examine the application data without making copies. If the parties agree on the generic product’s non-infringing status, a settlement protocol would be prepared and signed.
- Court Proceedings – The innovator company may prefer to continue with the court proceedings. During proceedings, the court determines an examination date for the parties and/or an appointed expert body. The application data is examined and then an expert report is prepared. The innovator company would submit its opinion and objections regarding the generic drug. Based on these documents, the court makes its determination about whether the generic drug infringes or not.
Declaratory judgment actions are an important tool for innovator and generic companies for protecting their position in the market. Since both types of companies contribute to supporting public health and play an equally important role in the pharmaceutical sector, a careful balance must be maintained between the rights of both of them.