Court of Appeal of The Hague, Decision of 2 November 2010

The Court of Appeal of The Hague rendered a decision in Glaxo Group Limited (Glaxo) v. Pharmachemie B.V. (Pharmachemie) relating to the meaning of the term "offer" under the Dutch Patent Act 1995 (DPA 1995).

Glaxo is the proprietor of a European patent which protects, in essence, its product Zofran (active ingredient Ondansetron). In view of the forthcoming expiry of Glaxo's patent, Pharmachemie, a subsidiary of the Teva Group, applied for a market authorization for its generic product Ondansetron. After obtaining the market authorization, Pharmachemie had included its product in "G-Standard", a database for pharmaceutical products published by Z-index (a subsidiary of the Royal Dutch Association for Advancement of Pharmacy). "G-Standard" was published before the expiry of Glaxo's patent. Also, at the request of Pharmachemie, a so-called Taxe letter was sent to all the users of "G-Standard" which included a disclaimer stating that Pharmachemie would not sell Ondansetron before the expiry date of the patent.

Glaxo brought proceedings against Pharmachemie before the District Court of The Hague, seeking a declaration that Pharmachemie had infringed its patent by offering generic Ondansetron before the expiry date of the patent.

The parties agreed that "G-Standard" plays a crucial role with regard to the marketing of medicines: in principle, every medicine available in the Netherlands is included in the database and it is used by all public and hospital pharmacists, general practitioners, health care insurers, pharmaceutical wholesale companies, medical-pharmaceutical companies, the Dutch government and several schools, universities and research institutes.

Pursuant to article 53 (1) (b) DPA 1995, the patentee has the exclusive right "to use the patented process in or for his business or to use, put on the market, or resell, hire out or deliver the product obtained directly as a result of the use of the patented process, or otherwise deal in it in or for his business, or to offer, import or stock it for any of those purposes."

At first instance, the District Court of The Hague held that the mere publication of the generic product Ondansetron in "G-Standard" did not constitute a patent infringement. The insertion of the generic drug in "G-Standard" was not intended to be an "offer (...) for one of those purposes" pursuant to article 53 (1) DPA 1995, but Pharmachemie was forced to do so in order to be able to market its generic Ondansetron product immediately after Glaxo's patent expiry. For this purpose, it did not make any difference that Pharmachemie had sent the Taxe letter.

The Court of Appeal of The Hague overruled this decision. It said that the term "offer" in article 53 (1) DPA 1995 should be interpreted in view of the European Patents Convention, i.e. in a broad sense and meaning "offering in general", regardless of the grounds and what the person the product in question is offered to might do with it in the future. Thus, article 53 (1) DPA 1995 intended to prohibit the offering of patented products in the broadest sense.

Furthermore, the court considered the purpose of a publication in "G-Standard" to inform the market about generic products sold in the near future. The announcement in the Taxe letter, i.e. the disclaimer that the product would only be for sale after the expiry of the patent, could not alter this. To the contrary, by way of this announcement users of "G-standard" would take notice of the generic product soon to be marketed. Given that it was well known that generic drugs are significantly cheaper then branded products, it was likely that the market behavior would be affected by the publication.

The Court of Appeal of The Hague concluded that the disclosure of a generic pharmaceutical product in "G-Standard" constituted an "offer (...) for one of those purposes" pursuant to article 53(1) (b) DPA 1995. Since Glaxo did not grant permission to Pharmachemie to offer its generic pharmaceutical products, the publication of Ondansetron in "G-Standard" constituted an infringement. Although it agreed with Pharmachemie that this meant that (former) patentees could still profit from their monopoly position notwithstanding the expiry of their patents, the Court of Appeal of The Hague considered this to be an interest justified by law.