Case No: IP High Court 2020 (ne) 10051 (appealed from Tokyo District Court 2019 (wa) 1409)

The above IP High Court case relates to an alleged infringement of a patent claiming a genetically modified virus for gene therapy and highlights a situation that may occur for a patentee of a new gene therapy related drug because of the relationship between the patent system and market approval process.

Patent

The patent at issue, JP Patent No. 421897, derived from WO2002/076216, was filed on March 27, 2002, which means that 20 year expiration date is approaching.

Background

It takes much longer for a patentee of a biological pharmaceutical to obtain a market approval because of the complexity involved in the examination of an application for a market approval of a biological pharmaceutical, particularly relating to a genetic therapy.

There may be a situation where a competing third party who has developed similar drug covered by the patent can be in a position to obtain market approval, and to put its product on the market quicker than the patentee, just after the expiry of the patent.

Facts

The product at issue was a genetically modified HSV-1 virus which can be used for a gene therapy.

In the District Court Judgement (July 2020 judgment), the following facts were identified:

The plaintiff' is the patentee and also the inventor of the patent and is conducting clinical trials for implementation of the invention. The plaintiff alleges that the clinical trial is currently at Phase II. On the other hand, the defendant has already obtained approval in a foreign country (FDA) and has been conducting a bridging test in Japan.

Some of the issues raised:

(a) Reach of the previous Supreme Court decision

(b) Reexamination period

(a) Reach of the previous Supreme Court decision

The plaintiffs argued that the Supreme Court Decision (1998 (jyu) 153) rendered on April 16, 1999 relating to the research exemption for experiments conducted for the purpose of applying market approval of a generic drug, would not extend to clinical trials of new biological pharmaceuticals. In the Supreme Court Case, the experiments conducted for the purpose of applying for market approval of a generic drug were basically pre-clinical trials, and thus a clinical trial for application of a new drug is NOT within the reach of the Supreme Court decision. Hence, a detailed analysis of the interests of the patentee and the interests of the third party is required to determine whether a clinical trial for new biological pharmaceuticals falls within the scope of exempted research or study under Section 69 paragraph 1 of the Patent Law.

(Courts)

In their 1999 decision, the Supreme Court indicated that if it is not possible to produce chemical substances or pharmaceuticals covered by the claim of the patent during the term of the patent right, this would result in the invention being unable to be freely used by a third party for a considerable period of time even after the term of the patent right has expired. This result is said to be contrary to the basis of the patent system that allows any person to freely use the invention after the expiry of the patent term and that ensures widespread benefit to society in general.

The District Court found that, regarding T-VEC, the defendant product, it is necessary to carry out a prescribed test over a certain period of time in advance in order to apply for a market approval. If it is not possible to produce the drug covered by the patent, the invention will not be freely available for a considerable period of time even after the expiry of the patent. This is contrary to the basis of the patent system, as the 1999 Supreme Court had ruled.

The IP High Court agreed with the District Court decision and made it clear that it is irrelevant whether the test is a preclinical or clinical trial.

(b) Re-examination period plays an important role for promoting the development of a biological pharmaceutical

The plaintiff also argues that in the case of generic drugs, a generic manufacturer cannot obtain marketing approval without conducting basic research and clinical trials during the reexamination period. Thus, practically speaking, the reexamination period plays a role as a protection of data produced by an originator. That is, the benefit arising from an exclusive profit during the reexamination period is a due benefit contemplated by the Pharmaceuticals and Medical Devices Act. The above Supreme Court Case relates to a case where the patentee enjoyed benefit from the reexamination period. However, such circumstances would not likely arise for biological pharmaceuticals (regenerative medicine, etc.).

The IP High court found that even if a generic company is restricted from entering the market during the reexamination period, this is only a de facto reflective benefit under the regulations of the Pharmaceuticals and Medical Devices Act. Thus, the Court cannot adopt an interpretation that these reflective effects cause an effect substantially the same as elongating the term of the patent.

Comments:

Reexamination period

This case reminds us that there is certain situation where a competing third party, who is developing a drug covered by a patent and equivalent of a patentee's drug in development, may sometimes be in a position ahead of the patentee in the competition to obtain a market approval, and be able to launch its product on the market quicker than the patentee just after the expiry of the patent. Then, the third party may enjoy the benefit of the reexamination period, that is, data protection.

Furthermore, regarding the role of the reexamination period, the IP High Court also noted as follows:

When a person has obtained approval for manufacturing and marketing a new drug, another person who intends to apply for approval of the drug whose active ingredient, efficacy/effect, dosage, administration, etc. are recognized to be the same as that of the new drug are required to submit materials (data) equivalent to or more than that for the new drug during the reexamination period. That is, market approval cannot be obtained with simplified data as in the case of a generic drug. Therefore, generic drugs have been practically restricted from entering the market during the reexamination period, which is said to play the role of "data protection" for leading drugs. The requirements "drug of which active ingredient, indication, effect, dosage, and administration, etc. are recognized to be the same as that of the approved new drug" appears to be the same as the scope provided by an extended patent term.

Incidentally, the patentee argued in the lower court that since the scope protection of an extension of a patent right for a pharmaceutical product is deemed to extend only to the "product" (pharmaceutical product) of the market approval, that is, a pharmaceutical product specified by the "ingredient, quantity, dosage, administration, indication and effect" stipulated in the market approval, or substantially the same as the pharmaceutical product (in view of the Oxaliplatin case), then even if the term of the patent is extended, the extended patent is likely to have no effect on the defendant's product.

It seems, hence, that while both extended patent term and the reexamination period under the market approval regulations, are effective against a similar target entity, such as a traditional generic manufacturer, its effect on an innovative competitor would be limited if the competitor`s product is not substantially same as patentee’s approved product in terms of active ingredient, indication, effect, dosage, and administration.

While clinical trials for both a generic application and a new drug application fall within the research exemption of the patent law, the effect of PTE and data protection might differ between a generic and a new drug, even though clinical trials are a prerequisite for both PTE and data protection.