Sara Pelaz August 8 2011 Commercial Court dismisses Novartis patent infringement action Grau & Angulo | Intellectual Property - Spain Sara Pelaz Intellectual Property BackgroundDecisionCommentBackground On December 12 2008 Novartis sued Medis EHF, Laboratorios Stada, SL and ratiopharm España, SA for alleged infringement of its EP948320 patent on pharmaceutical compositions for the sustained release of fluvastatin (for further details please see "Novartis's endeavours to obtain interim injunctions come to naught"). In the lawsuit, Novartis asserted the patent as amended during opposition proceedings at the European Patent Office (EPO). Teva had sought to intervene as co-defendant in the proceedings as the new holder of Medis's marketing authorisations.During the proceedings, Teva and Medis's main defence argument was that the patent in amended form as asserted by Novartis did not exist and was never legally effective in Spain. In support of this argument, Teva and Medis referred to the following points. During opposition proceedings at the EPO, Novartis defended a new amended version of the patent. An Opposition Division decision, issued on June 8 2007, maintained the patent in amended form. This decision was appealed by ratiopharm, with another company, Actavis, joining the appeal as an intervener. In August 2008, in view of new documentation submitted by the appellants, Novartis asked the EPO Board of Appeal to remand the file to the Opposition Division in order to have access to the lower instances, thereby setting aside the previous decision that had maintained the patent in amended form. Subsequently, Novartis filed infringement action against Medis, Stada and ratiopharm, asserting the amended set of claims. The EPO Board of Appeal - at Novartis's request - annulled the Opposition Division's June 2007 decision maintaining the patent in amended form by an order dated February 3 2009. The defendants argued that the set of amended claims was never legally effective, as ratiopharm's appeal had suspensive effect. Thus, the amended patent was never published or subsequently validated in Spain with the publication of a corresponding Spanish translation, and could not be asserted and enforced against third parties in court. As a subsidiary argument, the defendants also claimed that in any case, the patent was invalid for lack of novelty, lack of inventive step and insufficiency of disclosure. Novartis replied to the alleged invalidity of its patent and, in view of Teva and Medis's main argument, held that the version of the patent asserted in its infringement action was not the amended version as argued by the defendants, but rather the patent as originally granted and published in Spain. Meanwhile, the EPO Opposition Division revoked the patent in its entirety by means of a decision dated May 3 2010. Novartis's appeal against this decision is still pending. Decision On July 4 2011 Madrid Commercial Court Number 3 issued its first instance judgment dismissing Novartis's infringement action; it upheld Teva and Medis's main argument and awarded court costs in favour of the defendants. The court based its decision on the fact that the content of the patent claims put forth by Novartis in its infringement action matched neither the terms by which the patent was originally granted nor its Spanish translation (published as ES2197369). Novartis tried to change its infringement action by arguing that, from the outset of the proceedings, the asserted version of the patent was the version in force - that is, the version initially granted by the EPO and validated in Spain. However, it was clear from Novartis's initial infringement action writ and from the expert statements attached thereto that the version asserted in the infringement action was nothing other than an amended version of the patent. Comment The infringement action was dismissed because it was based explicitly on a non-effective version of the patent. The court also upheld the defendants' allegation regarding the lack of legal standing to sue of Novartis's Spanish subsidiary (Novartis Farmacéutica SA). In this regard, the court stated that according to the Patents Act, a mere non-exclusive licensee of the patent is not entitled to bring an infringement action – not even in conjunction with the patentee. In turn, the court also dismissed the invalidity allegations developed by Medis, Stada and ratiopharm based on lack of novelty, lack of inventive step and insufficiency of disclosure. Novartis, ratiopharm and Stada have announced their intention to appeal.For further information on this topic please contact Sara Pelaz at Grau & Angulo by telephone (+34 93 202 34 56), fax (+34 93 240 53 83) or email ([email protected]).