A patent term may be extended if there is a period during which a patented invention is unable to be worked until a marketing authorization has been granted (For further information, see here). However, there was, until recently, no case law in Japan on the interpretation of the scope of patent with an extended term, and high uncertainty as to patent infringement by generic drugs was a big issue in the pharmaceutical industry. On 20th January, 2017, the IP High Court’s judgment (grand panel) was handed down, answering this issue by establishing three concrete standards. This judgment attracts great attention of generic companies and will boost their marketing of generic drugs because these standards contributed to clear away the uncertainty of patent infringement.
An originator company was selling one cancer drug that was protected under a patent with an extended term. Having found a generic company which launched a similar generic drug, the originator filed a patent infringement lawsuit based on the patent with an extended term. The only difference between the two drugs was regarding one component, which was added to the generic drug as a non-effective component. The generic company won the first instance trial and the originator company appealed to the IP High Court.
Ruling of the court
The IP High Court held that the scope of the patent with an extended term shall cover any “substantially identical product” (See (d) in the below illustration), which is only slightly different from the original drug in terms of component, quantity, usage, dosage, efficacy and result. Furthermore, the court established the following three categories of drugs which shall fall under the scope of patent with an extended term as “substantially identical product“;
(1) Simple addition/replacement of non-effective component
When an original drug is patented for its newly discovered effective component, a generic drug falls under the scope of patent with an extended term even if it includes a commonly known additive as a non-effective component, or it replaces one non-effective component into the other commonly known non-effective component.
(2) Minor modification in composition within the same technical feature and effect
When an original drug is patented for its new “stable combination” of known effective components, or newly developed “form of drug” (e.g. micro-capsule with special coating polymer material), a generic drug having modified composition of (effective and/or non-effective) components falls under the scope of patent with an extended term in so far as it still has the same technical feature and effect
(3) Meaningless modification in quantity, usage and dosage
The following drugs fall under the scope of patent with an extended term;
(i) A drug which has only meaningless difference in quantity, usage and dosage
(ii) A drug which has a different quantity but does not make any difference, taking into account other factors; usage and dosage
Subsequently, the court applied above standards to the case at issue and dismissed the appeal, holding that the generic drug was not a “substantially identical product“. The court recognized the above-mentioned category (2) as the closest one, but did not find it applicable in this case on the ground that the additional component of the generic drug gives a new technical feature and effect.
This IP High Court’s judgment is the first case that clarified the scope of patent with an extended term. With these three concrete standards, the foreseeability for patent infringement by generic drugs is considered to increase in the future. In addition to that, the IP High Court also stated that the concept “substantially identical product”, should be clearly differentiated from the concept of doctrine of equivalents (For further information, see here) because situations behind two concepts are different. It is likely that the judgment will be appealed before the Supreme Court. Accordingly, this development will be followed closely.