Intellectual Property

Lack or provisional protection for patents in Argentina and interpretation of experimental use

Name/citation of relevant case/legislation/material

Court of Appeals in Civil and Commercial matters, section III, (Buenos Aires, Argentina), case “Novartis AG v. Laboratorios LKM S.A.”, decision of July 3, 2012, published in LA LEY 2012-F-186.


Single sentence summary

Argentine court rejects patent infringement claim based on lack of provisional protection and allows exception to patent rights for experimental use.

Legal context

Argentine patent law provides protection for any product or process if they are novel, involve an inventive step and are capable of industrial application. The Patent law (Law 24, 481 of May 23, 1995) was enacted in light of Argentina´s adhesion to the TRIPs Agreement. Under Article 35 of the Patent Law, patents are granted for a term of twenty (20) years, counted from the filing date of the application. During prosecution of a patent, there is no provisional protection. Only when the patent is granted, the law allows the right holder to claim the protection of its patent rights.

Facts

According to the decision imatinib is in the public domain.

Novartis obtained in Argentina the patent for the Beta crystalline form of imatinib mesylate (patent AR016351B1). The product is used to treat chronic myelogenous leukemia and some gastrointestinal tumors. During prosecution of the patent (while it was not granted), Laboratorios LKM S.A. (LKM) requested market authorization at the regulatory authority of pharmaceutical products (ANMAT) for the same active principle. After that administrative request, LKM amended the requested authorization for the Alfa crystalline form of imatinib mesylate.

Once the patent was granted by the local PTO (INPI), Novartis filed a complaint against LKM for the infringement of its patent 16351.The complaint requested that LKM cease manufacturing, offering for sale, selling or importing the active principle or the product containing the active principle Beta crystalline form of imatinib mesylate related to the patent 16351.

LKM answered the complaint and requested that it be rejected on the following grounds: (i) the active principle imatinib was at the time patented abroad but not in Argentina, therefore such substance was in the public domain in Argentina; (ii) the patent that Novartis was using as a basis for the lawsuit was requested in Argentina on July 16, 1998 and covered only the Beta polymorph of the imatinib. Thus, according to LKM there are other polymorphs that are not patented and that can be freely used without infringing the patent of the plaintiff like the Alfa polymorph; (iii) on December 13, 2004  LKM requested approval by biosimilarity of its drug Imatinib Martian, based also on the same active principle imatinib mesylate; (iv) after the filing of this regulatory approval at ANMAT, the PTO granted Novartis a patent covering the polymorph Beta of imatinib (December 28, 2006), (v) In July 2007 LKM was granted by ANMAT an authorization to market Imatinib Martian but it never  marketed the product because it learnt of the Novartis patent over the Beta polymorph and to avoid any legal challenge, LKM requested authorization to market only the Alfa polymorph.

The district court rejected Novartis patent claim based on the following grounds:

a) at the time defendant requested regulatory approval to market the product, plaintiff patent on the Beta polymorph was not yet granted by INPI;

b) the product of defendant contained the Alfa crystal form of Imatinib mesylate, which is not covered by the Novartis patent (the patent covered only the Beta crystal form of the active principal ingredient); and,

c) Respondent LKM never sold any product infringing the patent AR016351B1.

On July 3, 2012 the Federal Court of Appeals upheld the first instance ruling in  LKM's favor.

The decision of the Court of Appeals is based on the following conclusions:

a) The use in lab experiments of the patented drug only for purposes of changing the composition of the product and to be able to manufacture a non-infringing product is not illegal. Section 36 of the Patent Act provides expressly that the experimental use of a patented product is not an infringement of the patentee rights.

b) The use of the drug by defendant before the patent was granted is not illegal because under Argentine law there are no enforceable rights awarded to an inventor during  patent prosecution.

c) The defendant did not incur any legal liability because according to an expert report prepared during the litigation it did not manufacture, sale or offer to sale the product after the patent was granted.

d) The owner of a patent does not have a right to forbid the storage of the products because “those acts may only be banned if they are part of a conduct banned by patent law that are only address to avoid manufacturing of infringing products”.

Analysis

The complaint was rejected in both instances. The defense stated that the patent 16351 covers only the Beta crystalline form of imatinib mesylate and that there are other polymorphs of the imatinib mesylate like the Alpha-crystalline variant. The Beta polymorph was the one defendant started to use after having notice of the Novartis patent over the Beta crystalline form in order to avoid any infringement with the Novartis patent.

The court stated  that a distinction has to be made between acts performed during the patent prosecution and acts performed after the patent was granted.

The court then went on to explain that there is no linkage in Argentine law between the approval by the ANMAT and the PTO that grants patents rights (INPI). The court examined the regulation concerning each agency and concluded that they perform different functions and that they act independently.

The court concluded that all the acts performed by defendant before the patent 16351 was granted were thus legal. From the moment the patent was granted on December 2006, Novartis had a valid patent right. But the authorization granted in July 2007 for a drug already patented was a consequence of the request filed at ANMAT on December 2004, when no patent was yet granted to Novartis. It was important for the judges that immediately when defendant learnt of this patent, it made a change of the crystalline form from Beta to Alpha in its product and in the regulatory filing at ANMAT.

Plaintiff contended also that even if defendant did not manufacture the drug after the patent was granted, it made experimental uses of the drug in order to file the market authorization.

The court view was that this experimental use was only to avoid infringement and to change the composition of the product from Beta to Alpha crystalline form. The court concluded that from the moment a patent is granted, its owner can prevent infringement and stop the manufacturing of the protected drug, “but it cannot disallow the use of the Bolar exception”. Argentine patent law –according to the court-, does not grant the exclusive right over storage of the product; such storage can only be banned when its purposes is to be part of an infringing act of commercialize the patented product.

The court concluded that for purposes of mere trial, the “patented formulas” may be used for research, because the Patent Law provides for an exception for the purposes of an intellectual use without infringing. The court quoted section 36 of the Patent Act that provides “The right conferred by a patent shall not produce any effect against: a) A third party that, in a private or academic field and without commercial purposes, effects activities concerning scientific or technological research in a manner purely experimental, of essay or teaching, and to achieve said goal manufactures a product or uses a process equal to the patented one”. The court concluded that the use of the product here was only intellectual.

Practical significance

This case demonstrates that under the Patent Act, there is no provisional patent protection. Only when a patent is granted by INPI the patentee has enforceable rights. During that term, any third party may practice experimental uses with the product to be patented. But until the patent is granted the patentee has only an illusory right. During the prosecution term any third party may experiment with the invention because it is in the public domain due to the fact that under Argentina law an invention is not protected until it is granted. This is a serious gap under Argentina law because since publication the invention is available to the public but no protection is available until granted.

Under Article 35 of the Patent Law, patents are granted for a term of twenty years, counted from the filing date of the application. As a consequence of the increasing number of patent applications filed every year, the PTO has a considerable backlog. Applications may take between four to seven years or even longer to be examined before a decision granting the patent is adopted. There are also no extensions of patent protection for delays in the granting of patents.

In addition, Argentine law does not provide for any coordination or linkage between the patent office (INPI) and the entity in charge of issuing marketing approvals (ANMAT). ANMAT only verifies the efficacy of the product and authorizes the sale of the pharmaceutical product, without any check on the status of the patents rights.

Finally it is worth mentioning that after the Novartis patent was granted in Argentina, the PTO issued new guidelines for pharmaceutical inventions. These new Patent Guidelines now maintain that crystal form patents are excluded from patentability for lack of inventive step. This decision is being challenged by several innovators under section 27 of the TRIPS.


For further information on this topic please contact Pablo A. Palazzi