ASG Law

Tag: Pharmaceutical Patents

  • Patent Revival and Due Diligence: The Consequences of Negligence in Intellectual Property Rights

    The Supreme Court has ruled that inexcusable negligence in prosecuting a patent application, especially when compounded by significant delays, can lead to the denial of its revival, thereby protecting public interest and third-party rights. This means inventors and their representatives must exercise diligence and promptly respond to communications from the Intellectual Property Office to safeguard their patent rights, balancing private interests against the broader public welfare and the established rights of others in the market. Failure to do so can result in the forfeiture of patent protection, opening the invention to public use.

    Laches and Lost Losartan: Can a Pharmaceutical Patent Be Revived After Years of Neglect?

    E.I. Dupont de Nemours and Company sought to revive a patent application for Angiotensin II Receptor Blocking Imidazole (losartan), a medication used to treat hypertension and congestive heart failure. The original application, filed in 1987, was abandoned due to the negligence of their former counsel, Atty. Nicanor D. Mapili. Years later, after discovering the abandonment and Atty. Mapili’s death, E.I. Dupont Nemours filed a Petition for Revival. This action was opposed by Therapharma, Inc., a local pharmaceutical company already marketing its own losartan product. The ensuing legal battle reached the Supreme Court, which had to decide whether the patent application could be revived despite the significant delay and the potential impact on public health and market competition.

    The Supreme Court considered several critical issues, including the procedural compliance of E.I. Dupont Nemours’ petition, the admissibility of Therapharma, Inc.’s intervention, and the extent of negligence in prosecuting the patent application. Crucially, the Court emphasized the importance of adhering to the statutory deadlines for reviving abandoned applications. According to Section 113 of the 1962 Revised Rules of Practice, an abandoned application may be revived within four months from the date of abandonment. E.I. Dupont Nemours filed its Petition for Revival 13 years after this deadline.

    The Court cited Schuartz v. Court of Appeals, underscoring the principle that a client is bound by the negligence of their counsel. The Court found that E.I. Dupont Nemours had been inexcusably negligent in monitoring the progress of its patent application. Eight years passed before the company even requested a status update from Atty. Mapili. Moreover, even after appointing new counsel, another four years elapsed before any action was taken to inquire about the application’s status. The Court noted:

    No prudent party will leave the fate of his case entirely to his lawyer . . . . It is the duty of a party-litigant to be in contact with his counsel from time to time in order to be informed of the progress of his case.

    This lack of diligence, the Court held, could not be excused. This principle ensures the certainty and finality of legal proceedings. The Court also addressed the issue of Therapharma, Inc.’s intervention, affirming the Court of Appeals’ decision to allow it. While patent application proceedings are typically ex parte, the Court recognized that Therapharma, Inc. had a legitimate interest in the outcome, especially given E.I. Dupont Nemours’ threats of legal action.

    Moreover, the Court acknowledged the public interest concerns surrounding the availability and affordability of losartan, a vital medication for treating hypertension. The entry of Therapharma, Inc. into the market had led to a decrease in the price of losartan products and an increase in the number of units sold, benefiting a significant portion of the Filipino population. Reviving E.I. Dupont Nemours’ patent application, the Court reasoned, could stifle competition and drive up prices, thereby harming public health. The Court underscored:

    The grant of a patent provides protection to the patent holder from the indiscriminate use of the invention. However, its mandatory publication also has the correlative effect of bringing new ideas into the public consciousness.

    Furthermore, the Court clarified that a patent application does not automatically grant property rights to the applicant. A right of priority, stemming from a prior patent application in another country, only becomes relevant when there are conflicting patent applications for the same invention. In this case, the Court emphasized that a right of priority has no bearing in a case for revival of an abandoned patent application.

    Building on this principle, the Intellectual Property Code mandates the publication of patent applications in the IPO Gazette. This requirement ensures transparency and allows interested parties to inspect the application documents, fostering innovation and competition. Absolute secrecy, as advocated by E.I. Dupont Nemours, is not consistent with the objectives of the Intellectual Property Code.

    The Court also addressed E.I. Dupont Nemours’ reliance on the Paris Convention for the Protection of Industrial Property and Section 9 of Republic Act No. 165. The Court emphasized that a right of priority does not automatically grant letters patent to an applicant. Possession of a right of priority does not confer any property rights in the absence of an actual patent. Therefore, E.I. Dupont Nemours’ argument that its prior patent application in the United States removed the invention from the public domain in the Philippines was deemed inaccurate.

    In analyzing the applicable rules, the Court referenced Republic Act No. 165, which was later amended by Republic Act No. 8293, known as the Intellectual Property Code of the Philippines. Section 7(7.1)(a) of the Intellectual Property Code provides that decisions of the Director-General of the Intellectual Property Office are appealable to the Court of Appeals in accordance with the Rules of Court. Thus, the Court clarified that the Rules of Court, and not the 1962 Revised Rules of Practice, govern the Court of Appeals’ proceedings in appeals from the decisions of the Director-General regarding the revival of patent applications. The Court’s decision hinged on the determination that E.I. Dupont Nemours’ petition for revival was filed far beyond the allowable period and that the company’s negligence could not be excused.

    This approach contrasts with a scenario where an applicant demonstrates excusable negligence and files for revival within the prescribed period. Had E.I. Dupont Nemours acted promptly upon discovering the abandonment, the outcome might have been different. This ruling underscores the need for patent applicants to actively monitor the status of their applications and to respond diligently to any communications from the Intellectual Property Office.

    The decision highlights the delicate balance between protecting intellectual property rights and promoting public welfare. While patent protection incentivizes innovation, it cannot come at the expense of public health and access to essential medicines. The Court’s decision serves as a reminder that intellectual property rights are not absolute and must be exercised responsibly.

    FAQs

    What was the key issue in this case? The key issue was whether E.I. Dupont de Nemours could revive a patent application for losartan after a prolonged period of abandonment due to negligence, and its impact on public interest and competition.
    Why was the patent application initially abandoned? The patent application was abandoned due to the negligence of E.I. Dupont de Nemours’ former counsel, who failed to respond to official notices from the Bureau of Patents, Trademarks, and Technology Transfer within the prescribed time.
    What is the deadline for reviving an abandoned patent application? Under the 1962 Revised Rules of Practice, an abandoned patent application can be revived within four months from the date of abandonment, provided good cause is shown.
    How long did E.I. Dupont de Nemours wait before filing for revival? E.I. Dupont de Nemours waited approximately 13 years after the patent application was deemed abandoned before filing the Petition for Revival.
    Why was Therapharma, Inc. allowed to intervene in the case? Therapharma, Inc. was allowed to intervene because it had a direct and substantial interest in the outcome, as it was already marketing a competing losartan product and faced potential legal action from E.I. Dupont Nemours.
    What is the significance of the Schuartz v. Court of Appeals case? Schuartz v. Court of Appeals established the principle that a client is bound by the negligence of their counsel, which was applied in this case to hold E.I. Dupont de Nemours accountable for the actions of its former attorney.
    How does the public interest factor into patent decisions? The Court considered the public interest in ensuring access to affordable medication for hypertension, noting that competition in the market had led to lower prices and increased availability of losartan.
    What is the difference between a right of priority and a patent? A right of priority, based on an earlier patent application in another country, gives an applicant preference over other applicants for the same invention but does not automatically grant patent rights.
    What impact did Therapharma’s presence have in the market? Therapharma’s product offering caused a 44% increase in the number of losartan units sold within five months of its market entry.

    In conclusion, the Supreme Court’s decision underscores the importance of due diligence in pursuing intellectual property rights and the need to balance private interests with the broader public welfare. The case serves as a cautionary tale for patent applicants, emphasizing the consequences of negligence and delay in protecting their inventions.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: E.I. DUPONT DE NEMOURS AND CO. VS. DIRECTOR EMMA C. FRANCISCO, G.R. No. 174379, August 31, 2016

  • Patent Infringement: When a Permanent Injunction Renders a Preliminary Injunction Moot

    In a patent infringement case, the Supreme Court ruled that when a lower court issues a permanent injunction, any pending questions about a preliminary injunction become irrelevant. This means the court won’t decide on the preliminary injunction’s validity because the permanent injunction already resolves the issue. The decision emphasizes judicial efficiency by avoiding decisions that have no practical effect due to later events. This clarifies the procedural implications when resolving intellectual property disputes involving patents and injunctions, ensuring resources are focused on current and enforceable remedies.

    From Provisional Remedy to Permanent Bar: Did the CA Jump the Gun on the Preliminary Injunction?

    This case, Sahar International Trading, Inc. v. Warner Lambert Co., LLC and Pfizer, Inc. (Philippines), revolves around a dispute over the pharmaceutical substance Atorvastatin. Warner Lambert, the patent holder, and Pfizer, its exclusive licensee in the Philippines, accused Sahar International Trading of infringing on their patents by selling a similar product under the name Atopitar. The legal battle started with Warner Lambert and Pfizer seeking a preliminary injunction to stop Sahar from selling Atopitar while the main case was ongoing. The Regional Trial Court (RTC) initially denied this request, but the Court of Appeals (CA) reversed the decision, granting the preliminary injunction. However, the story doesn’t end there. The RTC eventually dismissed the main case, only for the CA to reverse that decision as well, finding Sahar liable for patent infringement and issuing a permanent injunction. This sequence of events led the Supreme Court to declare the issue of the preliminary injunction moot.

    The central legal question before the Supreme Court was whether the CA was correct in issuing a preliminary injunction against Sahar. However, the subsequent issuance of a permanent injunction by the CA in the main case significantly altered the landscape. The Supreme Court, in its resolution, focused on the principle of mootness. A case becomes moot when it no longer presents a justiciable controversy due to supervening events. In such instances, any court ruling would lack practical value or legal effect. This principle is deeply rooted in the Philippine legal system, aiming to prevent the courts from engaging in academic exercises that do not resolve actual disputes. The Supreme Court cited Peñafrancia Sugar Mill, Inc. v. Sugar Regulatory Administration to support this principle, explaining that a moot case ceases to present a justiciable controversy, rendering any adjudication practically useless.

    Applying this principle, the Supreme Court determined that the CA’s decision to make the preliminary injunction permanent rendered the question of its initial issuance moot. The Court reasoned that since the patent infringement case had already been resolved on appeal with a permanent injunction in place, deciding whether the preliminary injunction was initially justified would be a purely academic exercise. The practical effect of the permanent injunction superseded any prior debate over the preliminary one. To further clarify, the Supreme Court emphasized that the main issue was resolved in the appeal, making any decision on the preliminary injunction unnecessary and irrelevant. The legal discussion pivoted to the procedural implications of the supervening event, rendering the original question academic. Here is the applicable excerpt from the decision:

    A case or issue is considered moot and academic when it ceases to present a justiciable controversy by virtue of supervening events, so that an adjudication of the case or a declaration on the issue would be of no practical value or use. In such instance, there is no actual substantial relief which a petitioner would be entitled to, and which would be negated by the dismissal of the petition. Courts generally decline jurisdiction over such case or dismiss it on the ground of mootness. This is because the judgment will not serve any useful purpose or have any practical legal effect because, in the nature of things, it cannot be enforced.

    The procedural history of the case is crucial to understanding the Supreme Court’s decision. Warner Lambert, as the registered owner of the patents for Atorvastatin, possessed the legal right to protect its intellectual property. Under Section 76 of the Intellectual Property Code (RA 8293), patent infringement occurs when someone makes, uses, sells, or imports a patented product without the patentee’s authorization. To reinforce this point, consider the explicit wording of the law:

    Sec. 76. Civil Action for Infringement. –
    76.1. The making, using, offering for sale, selling, or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee constitutes patent infringement.

    Pfizer, as the exclusive licensee, shared this right within the Philippines. When they discovered Sahar was selling Atopitar, containing Atorvastatin Calcium, they initiated legal action to protect their interests. The application for a preliminary injunction was a tactical move to prevent further potential damages pending the final resolution of the case. The RTC’s initial denial was based on the reasoning that granting the injunction would prematurely dispose of the main case. The CA disagreed, emphasizing that a preliminary injunction is meant to preserve the status quo and prevent irreparable injury. Ultimately, the CA’s grant of the preliminary injunction was aimed to provide immediate relief while the court determined the facts of the case.

    The twist came with the RTC’s dismissal of the main case, followed by the CA’s reversal and finding of patent infringement. With the CA’s subsequent decision, the question of a preliminary injunction was rendered moot. The permanent injunction provided the ultimate relief sought, rendering any decision on the preliminary injunction a mere academic exercise. The Supreme Court’s decision underscores the importance of judicial economy and the principle that courts should only decide live controversies. Furthermore, it highlights the provisional nature of preliminary injunctions. These are temporary measures designed to maintain the status quo, pending a full determination of the merits of a case. Once a final judgment is rendered, the need for a preliminary injunction disappears. With that being said, here’s a final, critical element of the Supreme Court’s decision:

    The Supreme Court explicitly stated that it would be premature to delve into the merits of the CA’s decision finding Sahar liable for patent infringement. This was because the appeal before it concerned only the preliminary injunction, not the substantive issues of patent infringement. The Supreme Court’s decision to dismiss the petition on the ground of mootness leaves the CA’s ruling on patent infringement undisturbed. The final decision of the Court of Appeals making the writ of preliminary injunction permanent was the determining factor.

    FAQs

    What was the key issue in this case? The main issue was whether the Court of Appeals (CA) was correct in issuing a preliminary injunction to stop Sahar International Trading from selling a product that allegedly infringed on Warner Lambert’s patent. However, the Supreme Court dismissed the petition because the CA later issued a permanent injunction, making the issue of the preliminary injunction moot.
    What does "mootness" mean in this context? Mootness means that the issue is no longer a live controversy. Since the CA issued a permanent injunction, the question of whether a preliminary injunction should have been issued became irrelevant.
    What is a preliminary injunction? A preliminary injunction is a temporary court order that prevents a party from taking certain actions while a case is ongoing. It is designed to preserve the status quo and prevent irreparable harm until the court can make a final decision on the merits of the case.
    What is a permanent injunction? A permanent injunction is a final court order that permanently prohibits a party from taking certain actions. It is issued after a full trial on the merits and is intended to provide a long-term remedy for a legal wrong.
    What is patent infringement? Patent infringement occurs when someone makes, uses, sells, or imports a patented invention without the permission of the patent holder. Patent law protects inventors by giving them exclusive rights to their inventions for a certain period of time.
    What was the product in question in this case? The product in question was Atorvastatin, a pharmaceutical substance used to lower cholesterol. Warner Lambert held patents for Atorvastatin and its calcium form, which were marketed under the brand name Lipitor.
    Why did the Supreme Court dismiss the petition? The Supreme Court dismissed the petition because the CA’s subsequent issuance of a permanent injunction rendered the issue of the preliminary injunction moot and academic. This is because the permanent injunction already provided the relief sought by Warner Lambert and Pfizer.
    What is the significance of the CA’s decision in CA-G.R. CV No. 97495? The CA’s decision in CA-G.R. CV No. 97495 was significant because it reversed the RTC’s decision and found Sahar liable for patent infringement. It also made the preliminary injunction permanent, effectively resolving the dispute in favor of Warner Lambert and Pfizer.

    In conclusion, the Supreme Court’s decision in this case underscores the importance of mootness in judicial proceedings. It serves as a reminder that courts should focus on resolving live controversies and avoid issuing rulings that have no practical effect. The dismissal of the petition regarding the preliminary injunction reflects the principle that provisional remedies are superseded by final judgments. This approach ensures that judicial resources are used efficiently and that legal decisions have a tangible impact on the parties involved.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Sahar International Trading, Inc. vs. Warner Lambert Co., LLC and Pfizer, Inc. (Philippines), G.R. No. 194872, June 09, 2014

  • Compulsory Licensing of Patents: Balancing Innovation and Public Access in the Philippines

    When Can the Government Force You to License Your Patent?

    G.R. No. 121867, July 24, 1997, SMITH KLINE & FRENCH LABORATORIES, LTD., PETITIONER, VS. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER AND DOCTORS PHARMACEUTICALS, INC. RESPONDENTS.

    Imagine investing years and millions of pesos into developing a life-saving drug, only to be told that another company can manufacture and sell it too. This is the reality of compulsory licensing, a legal mechanism that allows the government to authorize third parties to use a patented invention without the patent holder’s consent. While it might seem unfair, it’s a tool designed to balance the rights of inventors with the needs of public health and economic development. The case of Smith Kline & French Laboratories, Ltd. v. Court of Appeals delves into the complexities of this system, specifically concerning pharmaceutical patents in the Philippines. The central question: Under what circumstances can the government compel a patent holder to license their invention to another party?

    Understanding Compulsory Licensing in the Philippines

    Compulsory licensing is governed primarily by Republic Act No. 165, also known as the Patent Law, as amended. Section 34 of this law outlines the grounds for compulsory licensing, providing a framework for when the government can step in and override a patent holder’s exclusive rights.

    Several key legal principles underpin the concept of compulsory licensing:

    • Public Interest: The overriding principle is that the public’s welfare takes precedence over individual patent rights.
    • Abuse Prevention: Compulsory licensing aims to prevent patent holders from abusing their monopoly power, such as by failing to work the patent or charging exorbitant prices.
    • Economic Development: It promotes the development of local industries by allowing them to utilize patented inventions, particularly in sectors like medicine and food.

    Section 34 of R.A. No. 165 explicitly states the grounds for compulsory licensing:

    “SEC. 34. Grounds for Compulsory Licensing. — (1) Any person may apply to the Director for the grant of a license under a particular patent at any time after the expiration of two years from the date of the grant of the patent, under any of the following circumstances:
    (e) If the patented invention or article relates to food or medicine or manufactured products or substances which can be used as food or medicine, or is necessary for public health or public safety.”

    This provision is particularly relevant to the Smith Kline case, as it directly addresses patents related to medicine. The law balances patent protection and public access to essential goods like medicine.

    The Smith Kline Case: A Battle Over Cimetidine

    The story begins with Smith Kline & French Laboratories, a foreign corporation that held a Philippine patent for Cimetidine, a drug used to treat ulcers. Doctors Pharmaceuticals, Inc., a local pharmaceutical company, sought a compulsory license to manufacture its own version of the drug. This request was based on the argument that Cimetidine was a medicine necessary for public health, and thus subject to compulsory licensing under R.A. No. 165.

    Smith Kline opposed the petition, arguing that Doctors Pharmaceuticals lacked the capability to properly manufacture the drug and that granting the license would violate international law and constitute an invalid exercise of police power. They also challenged the royalty rate set by the Bureau of Patents, Trademarks and Technology Transfer (BPTTT).

    Here’s a breakdown of the case’s journey:

    1. BPTTT Decision: The BPTTT granted Doctors Pharmaceuticals a non-exclusive, non-transferable license to manufacture, use, and sell Cimetidine in the Philippines, subject to a 2.5% royalty on net sales.
    2. Court of Appeals Appeal: Smith Kline appealed to the Court of Appeals, arguing that the BPTTT’s decision violated international law, constituted an invalid exercise of police power, and amounted to expropriation without just compensation.
    3. Supreme Court Review: The Court of Appeals affirmed the BPTTT’s decision, prompting Smith Kline to elevate the case to the Supreme Court.

    The Supreme Court ultimately upheld the decision to grant the compulsory license. The Court reasoned that R.A. No. 165 was consistent with the Paris Convention for the Protection of Industrial Property, which allows member countries to implement compulsory licensing to prevent abuses of patent rights. The Court also emphasized the importance of public access to medicine and the government’s police power to promote public health.

    Key quotes from the Supreme Court’s decision:

    “It is thus clear that Section A(2) of Article 5 above unequivocally and explicitly respects the right of member countries to adopt legislative measures to provide for the grant of compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent.”

    “[T]he legislative intent in the grant of a compulsory license was not only to afford others an opportunity to provide the public with the quantity of the patented product, but also to prevent the growth of monopolies.”

    What This Means for Patent Holders and the Public

    The Smith Kline case reaffirms the Philippine government’s power to grant compulsory licenses for pharmaceutical patents when it serves the public interest. This decision has significant implications for both patent holders and the public:

    • Reduced Monopoly Power: Pharmaceutical companies must be aware that their patent rights are not absolute and can be limited in the interest of public health.
    • Increased Access to Medicine: The decision can lead to lower drug prices and greater availability of essential medicines.
    • Local Industry Development: It encourages the growth of local pharmaceutical companies by allowing them to manufacture and sell patented drugs under license.

    Key Lessons

    • Understand the Limits of Patent Protection: Patent rights are not absolute and can be subject to compulsory licensing under certain circumstances.
    • Be Prepared to Justify Pricing and Availability: Patent holders must be able to demonstrate that they are meeting the public’s needs for their patented products at reasonable prices.
    • Comply with Philippine Laws and Regulations: Foreign patent holders must be aware of and comply with Philippine laws governing patents and compulsory licensing.

    Frequently Asked Questions

    Q: What is a compulsory license?

    A: A compulsory license is a government authorization that allows a third party to use a patented invention without the patent holder’s consent, typically in exchange for a royalty payment.

    Q: When can a compulsory license be granted in the Philippines?

    A: Under R.A. No. 165, a compulsory license can be granted after two years from the date of the patent grant if the patented invention is not being worked in the Philippines, the demand for the patented article is not being met, or if the invention relates to food or medicine and is necessary for public health.

    Q: How much royalty is typically paid to the patent holder in a compulsory licensing situation?

    A: The royalty rate is determined by the Director of Patents, but it cannot exceed 5% of the net wholesale price of the products manufactured under the license. In the Smith Kline case, the royalty rate was set at 2.5%.

    Q: Can a compulsory license be transferred to another company?

    A: No, compulsory licenses are generally non-transferable, meaning the licensee cannot assign or sublicense the license to another party.

    Q: What if the patent holder believes the royalty rate is too low?

    A: The patent holder can petition the Director of Patents for an increase in the royalty rate if local sales of the licensed product increase.

    Q: Does the Philippines follow international laws on compulsory licensing?

    A: Yes, the Philippine Patent Law is consistent with international agreements like the Paris Convention for the Protection of Industrial Property, which allows member countries to grant compulsory licenses under certain conditions.

    ASG Law specializes in intellectual property law and patent litigation. Contact us or email hello@asglawpartners.com to schedule a consultation.