Unipharm, an Israel ‘Branded Generic’ supplier has a long history of successfully opposing and canceling pharmaceutical patents.
In this instance, they successfully opposed IL 164925 titled “Pharmaceutical Compositions and Kits Comprising Combinations of Valsartan, Amlodipine and Hydrochlorothiazide” to Novartis which led to the application being abandoned. If an Opposer wins an Opposition proceeding, the opposer is entitled to claim real costs. In this instance, Unipharm, represented by their CEO Dr Zebulun Tomer, filed a Notice of Opposition and statement of case directly (without using the services of Adv Adi Levit). The opposition resulted in Novartis abandoning Israel Application No. IL 164925 titled “”. As he did not use legal counsel, Dr Tomer asked for an assessment of costs based on the quantity weight of material filed and the number of references that had to be learned, rather than real and actual costs incurred.
Novartis sees things differently. They believe that Unipharm have failed to show any additional work beyond what they usually do regarding every patent application in Israel, and, citing Regulation 516a of the Civil Procedural Law 1984 and various Israel Patent Office Decisions, argued that no costs should be awarded.
Deputy Commissioner, Ms Jacqueline Bracha noted that both sides concede that were Unipharm to have engaged professional counsel they would be entitled to real costs incurred provided that they were considered realistic and necessarily incurred in the opposition until the point where it ceased. The argument is simply a question of whether a Do It Yourself Opposition conducted by Unipharm’s management entitled them to some sort of compensation for the time spent and work performed on the opposition where they chose not to engage outside counsel.
In this instance, Ms Bracha noted that without any paper work to go on such as an affidavit from the CEO or the firm’s accountant indicating how many hours were spent by staff and what their time was worth, it is difficult to estimate costs, and even ‘estimate costs’ have to be anchored to something.
Unipharm claim that examination of the Statement of Case which was the last filing before the application was abandoned, is self-evident. In IL 143088 where Unipharm killed Glaxosmithkline LLC’s patent, Unipharm were awarded 2500 Shekels including the fee for filing the opposition – which was clearly incurred in this instance as well.
Meanwhile, Novartis note that in IL 166621 Unipharm successfully opposed an application filed by Neurocrie Bionsenses Inc. and requested 110,000 Shekels costs. The Commissioner assessed the costs and noted that the work by the CEO was not proven. Furthermore, in other precedents, the Patent Office has ruled that employees time that was within the course of the daily work, should not be considered as being a legal expense. In that instance, the Commissioner ruled costs of 6000 Shekels by way of estimate – in that case, the application was abandoned after evidence was filed.
Costs are not a punishment for the loser, but are compensation for the winner. That said, the opposer is providing a public service [in causing the canceling of a patent application that should not issue on its merits due to lack of novelty, obviousness, etc]. This is very different from most civil cases where the decision only affect the parties concerned. Ms Bracha considers the public service of more significance than the significance to the opposer.
In 248/95 Fabio Perini SPA vs. Industrie Meccanishe Alberto Consani SPA, president Winograd considered the opposer as being a ‘soldier of the commissioner’. This public good aspect was recognized in Opposition to IL 200343 Tzori Naaman Victor LTD vs. Ronen Aharon Cohen, 23 March 2015. MS Bracha then drew a parallel between the Opposer and someone bringing a class-action who is entitled to compensation for the public duty performed.
Weighing up all the above (and, I suspect rolling the dice), costs of 3500 Shekels were awarded to Unipharm.
IL 164925 to Nvartis, Opposed by Unipharm, Ruling re Costs by Jacqueline Bracha, 5 May 2015
I should issue a health warning. It is highly inadvisable to file patent opposition procedures without professional counsel. It is highly inadvisable to go up against one of Israel’s larger Patent firms, representing a multinational company that is ranked by Forbes as the third largest healthcare company worldwide among other rankings that Novartis is proud of.
The thing is that Dr Tomer has handled more patent oppositions than the vast majority of patent attorneys or attorneys-in-law in Israel. Furthermore, he has handled more than the majority of Israeli attorneys-in-law specializing in IP.
As to the issue of whether compensation is deserved, one could regard Tomer as saving Novartis real lawyers fees. Certainly Tomer’s time has some value. That said, I think there is an assumption on Ms Bracha’s part, that the result of the patent application being abandoned means that there is merit in Unipharm’s opposition. This may well be the case. They have an impressive track record killing pharma patents as readers of this blog will be aware. But herein lies the rub.
You see, Novartis and others have come to realize that it may be strategically sensible to abandon patents that are opposed by Unipharm rather than to fight for them. The Israel market is small. If Unipharm present their evidence and arguments, the patent could be invalidated worldwide. This has happened to Smithkline, Lundbeck and others that Unipharm have taken on in recent years.
If Unipharm has not had to win their opposition on its merits, there may be no prima facie basis for assuming that the patent is actually invalid. Indeed, I opposed a patent on behalf of a Govt. Ministry against a subcontractor, and the subcontractor explicitly denied all my points but stated that rather than fight the govt. they would abandon the patent. In that case I am fairly sure that we had good arguments. In this instance, who knows?
Cheaper medicine is generally considered as being in the public interest. However, so is pharma research, and companies like Novartis need sales revenue to be able to develop new drugs.
I suspect that the pharma lobby will be unhappy with this decision, and those that see Unipharm as a Robin Hood pharmacist will applaud it.
That as may be, I suspect that neither side will appeal as the costs in so doing will be totally out of proportion to the possible financial benefits.