Is Evergreening Unjust Enrichment? Unipharm successfully sues for Sanofi’s profits

Plavix

This ruling is a legal precedent concerning alleged misbehavior of Sanofi in prosecuting a second application for a second polymorph of clopidrogel-bisulphate, where Unipharm accused Sanofi of defrauding the patent office by inadequate disclosure and of unjustly obtaining a priority date that they didn’t deserve and claimed to have been damaged by Sanofi’s actions. Unipharm audaciously sued for Sanofi’s profits from the 15 month period from after the original patent lapsed during which time there was no generic competition due to a second patent application that was eventually abandoned. The charges brought were somewhat tenuous as Sanofi did not threaten Unipharm in any way and the first competing generic medicine in the Israel Market was launched by Teva and not Unipharm. Furthermore, neither the Israel Patent Law 1967 nor the Law of Monopolies grants such a remedy.

However, Professor Grosskopf, the judge presiding over the case, has published widely on Competition Law and is unafraid of judicial legislation. In a carefully reasoned but somewhat long ruling, Judge Grosskopf found Sanofi guilty of defrauding the Israel Patent Office in their second filing, and decided the appropriate legal remedy was to award some or all of Sanofi’s profits to Unipharm whose generic product launch was unsuccessful, despite there being no such remedy in the Israel Patent Law or in the Monopoly Law. This case may have wide repercussions around the world and could trigger similar law-suits where drug developing companies have engaged in practices sometimes referred to as ever-greening, to extend the period of patent protection. It could result in a class action filed on behalf of Plavix users during the period after the drug went off patent but generic competition was dissuaded from at-risk launch. There is a second case pending against Smith Kline Beecham for similar behavior.

The ruling has a rather long background section that covers the chemistry, economics and legal aspects of at-risk product launches. The background is reported fully below, but there are 46 paragraphs of background material spread over 20 pages, and so, as they say in the movie industry, cutting to the chase:

Unipharm filed suit in this and in a second action also on Grounds of the Law Against Unjust Enrichment, as a means of equalizing the balance of threats against the drug development companies. In other words, the sword hanging over the at-risk generic drug launchers should result in a second sword over the drug development companies, preventing them from extending their patent rights over and beyond those legitimately granted, by artificial means known colloquially and collectively as ever-greening.
Unipharm alleges that Sanofi’s second patent application, for a type 2 polymorph, was legally groundless, that was filed whilst concealing critical information from the Commissioner of Patents, that, once disclosed, would have resulted in the patent being voided were it not to have been abandoned. Unipharm believes that the filing was simply to create an artificial barrier against generic competition once the main patent lapsed. This was achieved despite the second patent application never issuing, since it resulted in Unipharm concentrating on the Type 1 polymorph which delayed market entry and resulted in an artificially created 15 month patent exclusion extension term.

Consequently, Unipharm considers the filing of this second application as Unjust Enrichment, as taking unfair advantage of the monopolistic patent rights and as inequitable behavior. Unipharm therefore request full financial accounting records from Sanofi so that they can sue for Sanofi’s profits from this prohibited behavior.

Sanofi denied all charges of inequitable behavior and unjust enrichment and also contended that such charges are insufficient grounds to bring suit. Sanofi considered that their patent application for the type 2 polymorph was legitimate and just, and that had they fought the opposition until its end, they would have attained an enforceable patent. Sanofi also noted that in most countries their patent application for the type 2 polymorph issued and remains valid to this day. They claim that they abandoned the opposed patent out of cool economic reasons, as it was not worth defending.

Sanofi further argued that Unipharm had no standing in this action, not for their losses and certainly not for Sanofi’s profits. Unipharm did not manage to produce a competing product in 2009 and was not the first mover, and Unipharm alone was responsible for not successfully bringing a competing product against Sanofi, Teva and others. Furthermore, there is no legal basis for these creative charges. Patent Law does not recognize Unjust Enrichment and inequitable behavior as the basis of damages and there are no grounds for upsetting the delicate balance of interests in at risk launches by creating a new legal doctrine, beyond that established in Merck. Sanofi Israel and C.T.Z. additionally consider themselves in no way responsible for Sanofi’s behavior and thus not sides in this dispute and asked to be removed from the list of defendants.

BACKGROUND

The issue in question in CZT a pharmaceutical marketed by Sanofi Israel, a subsidiary of Sanofi. The pharmaceutical is Plavix which is taken as a treatment and a preventative measure against heart attacks and strokes in patients deemed high risk. The drug works by preventing blood clotting. The active ingredient, Clopidrogel was discovered at the end of the Eighties, and was considered a breakthrough that resulted in patent protection in any countries including Israel.

Following extensive complex and expensive R&D as is generally the case with new treatments, Plavix has been on the market since 1998 and received its Israel certification that is equivalent to FDA approval back in August 2000. Whilst under patent protection, the blockbuster drug was considered the flagship product of Sanofi and made immense profits. According to an Opinion by Meirav Barry submitted by Unipharm, the 2007 income from the drug was 2.424 Billion Euros, and had the third highest turnover of any drug in Europe. In an article by Ron Winslow in the Wall Street Journal from 30 August 2010, income from the drug in 2009 was estimated at 8.6 Billion Dollars, making it the drug with the second highest turnover.
Plavix was patent protected inter alia, in the US, EU and Israel. The relevant Israel patent IL 85294 was filed in February 1988 and lapsed in February 2008. That patent was a wide patent that protected the active ingredient Clopidrogel in all salts and polymorphs (crystalline forms).

Some chemistry

clopidrogel

Clopidrogel

Clopidrogel is taken in solid crystalline form by creating an appropriate salt of the molecule. This enables the fabrication of tablets and enhances absorption into the blood. The selected anion is effectively non-functional. Many anions and salts are possible, and the lapsed patent relates specifically but not exclusively to the hydrochloride, the hydrogen-sulfate (bisulphate), the hydrobromide and the taurocholate. Then as now, Sanofi uses the hydrogen sulfate and so the chemical name of the drug is Clopidrogel Bisulphate or Clopidrogel Hydrogen Sulfate.

Although many salts exist in different polymorphs, from 1986 until 1997 Sanofi only knew one form wherein the crystal appears white and resembles wet flour. This was the form that received FDA approval and in 1994 Sanofi embarked on a research project to determine and classify other polymorphs without success. However, in the second half of 1997, towards the end of the FDA approval process, Sanofi discovered a second polymorph by chance.

As described in an affidavit by Dr Jean Saint-Germain within the file wrapper of the corresponding US patent, one of the batches of Clopidrogel Hydrogen Sulfate from the Orgamol factory in Switzerland that synthesized the material contained an off-white denser material than usual that resembled granulated sugar. They thought it was a factory error and went through the manufacturing process carefully and received the same substance. When reported to Sanofi, the professionals there suspected a second polymorph and various chemical analyses showed this to be the case [MF I suspect that these included XRD which is more a physical analysis than a chemical analysis]. The second polymorph rather complicated matters.

A literary diversion

cat's cradle

At this stage, Judge Grosskopf refers to a 1963 science fiction novel by Kurt Vonnegut, Jr.  called Cat’s Cradle  which relates to an invention called Ice-Nine which is a form of frozen water having a melting point of 100º F (37 º C) instead of 30ºF (OºC). Whilst dismissing the central thesis as a flight of imagination, Judge Grosskopf notes that one polymorph can displace others and refers to a peer-reviewed paper by Jack Dunitz & Joel Bernstein ‘Disappearing Polymorphs’ Acc. Chem. Res. 1995, 28, 193. [MF. Interestingly, Vonnegut was awarded his master’s degree in anthropology for the novel rather than for his thesis which was turned down]. See also Tel Aviv District Court Ruling 2417/00 SmithKline Beecham p.l.c. vs. Unipharm which relates to another disappearing polymorph. The first polymorph is metastable and the second polymorph is precipitated and if seeds of it are present in the equipment.

Regulatory issues

Polymorph

The appearance of the more stable polymorph in 1997 created a regulatory problem for Sanofi since the application for FDA approval was made for the first polymorph and applying for the second polymorph would require correcting the application and delaying market approval of the drug, drastically adversely affecting Sanofi’s income, whereas approval of the first polymorph requires ultra clean equipment to prevent nucleoles of the second polymorph seeding the solution and resulting in the second polymorph being manufactured.

Sanofi solved this by carefully manufacturing and selling the first polymorph whilst applying for regulatory approval of the second polymorph as well and then gradually moving over to manufacturing the more stable form which has three advantages: (i) it is simpler and does not require careful preparation to avoid contamination with type 2 nucleoles, (ii) it is cheaper (iiI) the type 2 polymorph is easier to work with.

Sanofi applied for a second patent for the type 2 molecule the scope of which was limited to Clopidrogel bisulphate form 2. . The primary patent protected all crystalline forms including the besylate and all polymorphs such that the discovery of the second polymorph didn’t challenge the validity of the primary patent. The advantage of the second patent filing is that though generic competitors can choose a different salt other than the bisulphate thereby avoiding infringing the second patent, doing so will, however, require them to undergo lengthy and expensive regulatory approval in some jurisdictions such as the US. Even in other jurisdictions such as Israel and Europe where there is no additionally regulatory burden, there are a couple of disadvantages in the short-term. As the original patent lapses it is much easier to find suppliers of the patented salt than of other salts and the cost of alternatives is initially higher. As the generic competition becomes available, the drug developer can argue that the generic versions are not identical. Indeed, in France, Sanofi embarked on a smear campaign against generic competition.

Should generic competitors fabricate the first biosulphate polymorph, they can avoid these problems but have to take care to avoid fabricating the second polymorph which is still patent protected, thereby increasing costs. Thus the second patent affords Sanofi a commercial advantage – which is, of course, why they filed patent applications for the second polymorph.

In 10 June 1999, Sanofi filed their PCT application PCT/FR99/01371 for the second polymorph which claimed priority from an application describing a second manufacturing technique. There were two examples, one using seeding and the other requiring leaving the solution for three to six months which apparently causes the second polymorph to nucleate and precipitate. In November 2000, Sanofi filed IL 13,9790, a national stage application of PCT/FR99/01371 into Israel, which published for opposition purposes in October 2006. Both Teva and Unipharm filed oppositions which lasted over three years, with both sides blaming the other party for unnecessary delays.

During an opposition proceedings to the second patent, Sanofi canceled Example 1, arguing that the delayed precipitation from the mother liquors was essential, that a mistake had crept into the application and that it was self-evident to persons of the art. Teva and Unipharm objected to this cancellation and a side skirmish on the issue ensued. This was, however, rendered moot as Sanofi abandoned the second patent and both Teva and Unipharm were awarded costs. In summary, the second patent was abandoned in 2010 and the first patent lapsed in 2008 and retroactively from 2008, there was no barrier to generic Plavix in Israel including both polymorphs of Clopidrogel bisulphate.

In Israel, the applicant of a patent, including an allowed but opposed patent, cannot obtain an injunction until the patent issues. However, on issuance, he may claim damages for the period that is termed the ‘at risk launch’, where a competitor sells a generic product on the assumption that the patent application is invalid or will not issue.

Back in February 2008, Sanofi’s Plavix was the second polymorph and was registered for distribution in Israel. Teva’s generic clopidogrel was registered in 2007 and was already available. Unipharm’s generic version Clood was only registered as an approved drug in May 2009. Both Unipharm and Teva applied for type 1 polymorph as the type 2 was patent pending. However, it was only in May 2015, close to Unipharm’s registration date and 15 months after Plavix came off patent, that Teva started selling their generic version in Israel. No explanation for the delay is given. Possibly they were wary of inadvertently making the type 2 and thus launching at risk. This is likely the case since the opposition to the second patent was an expensive and long drawn out process. Teva had already been given regulatory approval for the type 1 polymorph and the 15 month delay was very costly to them. By waiting for Unipharm to enter the market as well, the likelihood of being sued by Sanofi was greatly reduced. Although Teva’s employees were not summoned to give evidence, Unipharm’s assertion that Teva were afraid of fabricating the wrong polymorph is highly plausible. [MF – from a business perspective, there is another possibility that is not raised for obvious reasons, that Sanofi and Teva came to an understanding that Teva would not launch until another competitor entered the ring, allowing Sanofi to continue charging monopolistic prices, which enabled sufficient profits to cut Teva a share. I do not make any such allegations, and have no evidence for this in this case, but such agreements have occurred in the industry in the past, and there is certainly financial incentive for them].

The cost of treatment per patient, based on Ministry of Health extrapolations, was estimated at 250 Shekels per month in 2005-2006, and this dropped to just over 100 Shekels per patient in 2009, and further dropped to 50 Shekels a month in 2011. Sanofi have not revealed their figures, but have acknowledged significant drops in market share. Unipharm never managed to establish themselves in this market as Teva got there first, and later other generic players such as Dexel who sell the Besylate salt entered the fray.

Economic aspects

Judge Grosskopf notes that drug developers can charge monopolistic prices before generic competition results in a competitive market and the prices drop. The entry of a generic player causes a drop in prices and improves the consumers state at the expense of the drug developer. Consequently, drug developers will do whatever they can to discourage generic competition whilst the Ministry of Health, the health funds, insurance and the public have a common interest in generic competition. The market player who spearheads the competition is the generic drug developers.

The generic player weighs up the risks and benefits of entering a market. First movers can still make high profits before the market becomes truly competitive. In a market with few players, there are still profits to be made, but the loss to the drug developer is more than the profit to the generic player. Once there are a number of players and anyone else can enter the market, profit levels are driven down to those of other industries. Once there are no longer any grounds for being sued, the small manufacturing profits of a small market share in a competitive market are sufficient for a company to enter that market. However, for an at-risk launch or where there is a patent in place, the generic manufacturer requires substantial potential profit to justify taking risks, on top of the real risk of having their market share and profit margin cut by further competition.

Since the profits from a small market share where there are competitors are low, even a low threat of being sued is a real barrier against market entry. Judge Grosskopf therefore perceived a market failure in that ethical drug companies are encouraged to file dodgy secondary patents and generic drug companies are discouraged from at risk launches. He sees this as the theoretical justification for the Drug Price and Patent term Restoration Act 1984 (the Hatch-Waxman Act) in the US, with a six month advantage for first movers to challenge the validity of a patent. There is no comparative Israel Law. See Michael Herman, “The Stay Dilemma: Examining Brand and Generic Incentives for Delaying the Resolution of Pharmaceutical Patent Litigation” 111 Colum. L. Rev. 1788 (2011).

Unjust Enrichment

Sanofi’s defense included factual arguments that there was insufficient evidence of malpractice and a legal defense that this was beyond the statement of case. Judge Grosskopf first related to the charges of widening the allegations beyond the statement of case. He then went on to examine the factual issues and to look at the legal arguments where there was sufficient facts to base a case.

As to widening beyond the statement of case, Judge Grosskopf considered that prior to the statement of case being corrected, it related to inequitable behavior in managing the patent application. Thus he rejected the widening argument. The core issue is apparently that if the First Experiment produces the second polymorph, it was known when the first application was filed and should have been disclosed. [MF note in Israel there is no formal obligation for disclosing the best mode, but a patent must be enabled. The question, therefore, is whether a person of the art following the instructions of the first example would arrive at the second polymorph or the first one?] In Judge Grosskopf’s opinion, Sanofi’s defense amounts to fraud on their customers and is thus a case where court involvement is reasonable. Allegations of the case being brought too late were rejected as the timeline is, according to Judge Grosskopf, from the at-risk launch date when the first patent had lapsed and not from when the second patent was filed.

The Factual Dispute

According to Judge Grosskopf, the submissions by the parties can be distilled into four factual disputes:
Is the second application what Unipharm’s expert witness would call a “weak patent” – a patent application with a very low chance of issuing?

  • Did Sanofi know when filing, that this was a “weak patent”? or did they believe in it?
  • Did Sanofi conceal data when filing and prosecuting the second patent and during the opposition thereto?
  • Did Sanofi’s behavior create a real problem for Unipharm, or was Unipharm’s failed generic product launch attrible to other causes.
  • Did the Second Application have a Chance of Flying?

Judge Grosskopf does not consider that Unipharm proved that the second application was a weak patent and thus did not prove that Sanofi willingly and knowingly filed a weak patent. Judge Grosskopf considered that the weight of evidence submitted in the opposition tended towards Teva and Unipharm’s position that the patent was invalid. He does not consider the second polymorph (Clopidrogel bisulphate form 2) as correctly being considered an invention, but rather a discovery, and if it is indeed correctly considered an invention, it is one that lacks ‘inventive step’, since it is merely the outcome of crystallization of the same solution over time. It is thus unlikely that Form 2 can be considered an invention and is more a discovery of a natural polymorph. Judge Grosskopf considers that it being the result of a manufacturing problem is convincing evidence that it is not a patentable invention.

In 8802/06 Smith Kline Beecham PLC vs. Unipharm (18 May 2011) a patent for a new material was granted, and not just for the method and for its characterization, but this was after ‘research activity and real development’ (Paragraph 48), and this is not the case here. Judge Grosskopf considers the analysis and the production method trivial.

us flag

Judge Grosskopf related to SmithKline Beecham Corp. v. Apotex Corp. 403 F.3d 1331 (Fed. Cir., 2005, henceforth Apotex, where the Court of Appeals of the Federal Circuit ruled that a polymorph of the anti-depressent “Paxil” (sold in Israel as seroxate) should not be considered patentable in a a case similar to this. 8802/06 Smith Kline Beecham PLC vs. Unipharm relates to the same case but the US litigation went through some additional hoops that are of interest.

Specifically, it was deemed impossible for Apotex to fabricate the early polymorph, then off patent, without at least some of the new polymorph being fabricated. Judge Richard Posner [MF – a prolific author and something of an authority in economic aspects of the law, particularly or IP] in the court of first instance ruled that accidental inclusion of minor amounts of the second polymorph should not be considered infringement, or that the SKB were responsible for the creation of the second polymorph which is the contaminant. A third argument was put forward, that on equitable grounds, it would be inappropriate to find in Smith Kline’s favor.

On appeal, Judges Rader and Bryson considered that the second patent be considered as free-standing and forbidding use of the second polymorph, whether in commercial quantities or otherwise. However, they upheld the decision arguing that consequently, the second patent was inherent in the first patent and therefore invalid as “anticipated by inherency”. Judge Gajarsa, the third judge, considered that the new polymorph that was spontaneously generated by phase transformation was not a synthetic invention but rather a natural phenomenon and thus invalid.

Without ruling on whether the US doctrines in Apotex should be imported into Israel Law, Judge Grosskopf contented himself with a few observations:

  • Judge Groskopf noted that in Apotex there was real R&D, unlike the present case.
  • Judge Groskopf considered that in Apotex, SKB acted more aggressively than Sanofi, and even argued ‘Gastrointestinal Infringement’, i.e. that there is a phase transformation within the body and that in itself should result in the generic versions using the second polymorph being considered as contributory infringement [MF – I am not entirely happy with Israel importing the doctrine of contributory infringement in the Srori vs. Negba sink case, but can’t argue that it is valid binding case-law as it was upheld by the Supreme Court]. Indeed, Sanofi did not threaten the generics with any court action, although prior to the second patent issuing, they didn’t have legal grounds to issue such threats.
  • Judge Grosskopf opined that in some cases, secondary patents provide far more stopping power than they should and this adversely affects the balance between the patent providing an incentive to research (which, in this case is irrelevant since the discovery was by chance) and the public good. In this regard, he refers the reader to Anthony Kronman, “Mistake, Information, Disclosure and the Law of Contracts” 7 J. Legal Stud. 1 (1978).
  • All four US judges, i.e. Judge Posner in the Court of First Instance and the three judges at the Appeal Tribunal, concluded for different reasons that a new polymorph was not sufficient grounds for a new patent that starts the clock again, providing the drug development company with an extended period of protection.
  • merchantFinally, Judge Grosskopf once again goes into a literary digression, this time relating to Shakespeare’s classic “the Merchant of Venice” in order to emphasize the difference between the Court of First Instance and the Appeal Court. Portia, who judged between Shylock and Antonio, was required to enforce the penalty clause of the contract and award Shylock his pound of flesh if the debt wasn’t paid off in a timely manner. From a legal perspective, there are a number of ways of relating to such a demand. One could rule an exception to the penalty clause from reasons of Justice and give financial compensation [MF this is actually what the Rabbis do regarding the Biblical Eye-for-an-eye Exodus 21:24, which was transformed into financial compensation. See Baba Kama 83b-84a. Ironically, Islam applied this literally based on the Q’uran citing the Hebrew Bible]. One could also cancel the contract as contradicting public morality and then grant compensation under the Laws of Unjust Enrichment. Portia, however, rules that the contract should be kept, but literally, enabling Shylock to receive his pound of flesh, but not a drop of blood. Consequently, Shylock is unable to enforce the contract and is unable to get his loan back. The judge refers the reader to an article by Nili Cohen “Justice and Theatre – the Merchant of Venice and the Accident, HaPraklit 51 : 407.

The Court of First Instance in Apotex attempted to reach a balanced verdict, upholding the patent whilst preventing its enforcement. Portia, however, upholds Shylock’s contract whilst practically not giving him any way to collect the loan as she empties the contract from being enforceable. Practicably, the results are the same. The Judge’s point is that attempting to collect more than one is entitled to can lead to one being prevented to obtain what one is entitled to.

Judge Grosskopf considers that the second patent should either be voided or upheld but deemed unenforceable. [MF – in my opinion, in Patent Law this means it should have been a patent of addition, giving additional levels of protection but not extending the patent protection period. However, the issue before him is the strength of the patent application whilst pending, and the assumptions made by Sanofi when the application was filed, and not the bottom line of the Opposition proceeding. In this regard, he did not think that the Plaintiff had proved their case.

Regardless of his belief that the patent application should have been rejected, Judge Grosskopf did not think that there is evidence to conclude with any degree of certainty that this would have happened. He rejected the charges that this was a “weak patent”, i.e. one being unlikely to issue. Indeed, the question of a “weak patent” is difficult, and the applicant is correct that it is difficult to define this. Indeed, even the expert for the plaintiff did not manage to define this term that she coined. As far as the present case is concerned, any patent application with a proper chance of success is legitimate, and considering this a “weak patent” is thus rejected.

In this instance, the opposition proceedings was never concluded but reached a stage where both parties had to restate their positions and submit new evidence, thus the case was not clear-cut to the effect that Sanofi’s application would not have matured into a patent. The evidence submitted in this instance made an interesting case but did not prove that the patent application was baseless. Certainly the economic analysis went beyond whether or not the patent was valid.

As Sanofi pointed out, the corresponding patent did in fact issue in the great majority of other jurisdictions where it was filed. True, in may such cases no opposition was filed, but the allowance is itself an indication of validity albeit only partial. Indeed, in South Korea the case was allowed after successfully overcoming an opposition. Judge Grosskopf opined that this field is dynamic and the legal doctrines lag behind technology and so even if there are grounds to challenge the patent at this time, that does not imply that filing, prosecuting and defending the patent application on allowance are indicative of bad faith.

Since according to Judge Grosskopf, Unipharm did not succeed in establishing that the patent was weak [MF – I think I’d choose the term frivolous], a fortiori they failed to establish that Sanofi knowingly filed and prosecuted a ‘weak patent’ [application] that was unlikely to issue. There was no evidence that when filing or at any time afterwards, Sanofi acted in bad faith by filing, prosecuting and defending the opposition against the patent application. They may have known that the patent application would be difficult to prosecute but that is not the same as knowingly filing or prosecuting a patent application that is hopeless. Even the decision to abandon the application in 2010 is not indicative of them believing that the application was hopeless. As Sanofi pointed out, the value of the patent issuing at that stage was different from the value when the application was filed and it is certainly possible that it was such economic considerations that resulted in the allowed patent being abandoned, and not in an analysis that Sanofi would lose the opposition proceedings.

Thus as far as the chances of a patent issuing were concerned, Judge Grosskopf concluded that Unipharm had not proven their case, and this renders moot the question of whether filing an application in such circumstances to dissuade genetic competition is an actionable offence. Instead, he went on to relate to a different, related issue.

Misleading the Patent Office In Prosecuting the Patent Application

fraud squad

Unipharm alleged that Sanofi concealed essential facts from the Commissioner of Patents which would have affected the prosecution of the patent. Specifically, Unipharm listed eight facts that have disappeared. Sanofi however counter-claimed that they fulfilled all their obligations of disclosure under Section 18 of the Law and did not conceal anything they were legally obliged to disclose. They acknowledged that a mistake occurred in the first example but denied misleading and claimed that it was an error.

Judge Grosskopf ruled that at a level of certainty beyond that required in civil procedures the evidence before him taught that Sanofi did mislead the patent office when filing the application by including the first Example and by claiming priority whilst knowing that the first Example did not produce the claimed result and that there was no second Example in the priority application. Furthermore Sanofi did not reveal how Form 2 was discovered and its relationship to Form 1 [MF – Israel does NOT have a duty of disclosure of best mode, but does have a duty of enabling disclosure]. According to Judge Grosskopf, the effect of Sanofi misleading the Israel Patent Office not disclosing this was that the patent was allowed and issued for opposition purposes, and the generic companies had to oppose the patent issuing. The Opposition had to contend with an incomplete and contradictory disclosure and this ‘fog’ served Sanofi’s interest as it increased the chances of them prevailing and completed the opposition process.

Judge Grosskopf concludes that in 1999 Sanofi was aware that Example 1 would result in the first polymorph under sterile conditions and would only result in the second polymorph if seeded with second polymorph contaminants. However, only a year later in November 2000, the application was filed in Israel. Sanofi should therefore have corrected the application on filing the national phase and also should have disclaimed the priority date since the priority document only included the first example as a method of fabricating form 2, and not the second example. This was considered to be the result of legal advice and not a mistake since Sanofi had legal counsel. The matter is critical and were this to be the result of a mistake and not intentional, in the circumstances Sanofi would have had to provide a full explanation of how the mistake occurred. However, in the affidavit by Prof. Bertrand Castro, one of the inventors, he stated that he could not explain how this mistake occurred. In the circumstances, one can only conclude that Sanofi knowingly defrauded the patent office. Furthermore, this falsification was not unique to Israel, but similar omissions occurred in national phase applications world-wide. Even in France, knowing that the priority document was invalid, the priority claim was not abandoned. Furthermore, in some corresponding applications this issue was raised and priority was cancelled, however Sanofi did not consequently withdraw the priority claim in other jurisdictions.

Even during the opposition proceeding, Sanofi did not choose to clarify these issues but rather challenged the validity of assertions made by Unipharm and Teva. In their response to the Opposition, Sanofi did not admit to the chain of events that led to the Example 1 being included and preferred to argue that the stage of allowing the mother liquors to rest for 3 to 6 months was inadvertently missed out and that ‘persons of the art would appreciate this’. Since, however, Sanofi’s scientists did not appreciate this waiting period when the priority application was filed and did not correct it subsequently, the excuse of inadvertently leaving this out is not persuasive and certainly it isn’t something that persons of the art would readily identify.

Thus the application is missing material that should have been disclosed to the patent office regarding how the second polymorph was discovered and that in its presence one cannot fabricate the first polymorph. This has direct bearing on the validity of the patent for the second polymorph which Sanofi claims to have only been aware of this since an Opposition proceeding was filed in the US in 2007. In other words, Sanofi admits to having known this in 2007 but argues that they were not obliged to disclose this in Israel since it isn’t prior art and thus is beyond the prior art disclosure requirements of Section 18 of the Israel Patent Law.

Judge Grosskopf does not accept this interpretation of the disclosure obligations for two reasons:

  1. This information is actually prior art since the method of fabricating the first polymorph which is cited in the first application is certainly prior art and Sanofi should have explained the difference required to create the second polymorph.
  2. Citing Intellectual Property Law and Practice in Israel, Dan Adin and Eran Liss, 51-54, (2012) Judge Groskopf argued that this is not the be-all and end-all of the duty of disclosure.

In 14/92 Plason Maagan Michael Factories vs. Preint, August 1993, Judge Ginat stated the following regarding the duty of disclosure:

In the US there is a wide duty of disclosure vis-a-vis the Patent Office, the failure of which, by judicial legislation, is grounds for cancelling the patent”. Failure to disclose or inequitable behavior with respect to the Patent Office may result in the sanction of cancelling the patent, even if the non-disclosed information would not have influenced the decision to award the patent…The duty of equitable behavior on behalf of the patentee is equally applicable here [MF – in Israel] in that Equitable Behavior as per Section 61b of the Law of Contracts, has been understood to apply in all other fields , and this is certainly the case where a party attempts to obtain a monopoly in a specific filed for an invention for which he applies for a patent.

This was endorsed by the Supreme Court in 7623/10 Hydro-Na vs. San Hi-Tech LTD from January 2014 (see paragraph 18 there) https://blog.ipfactor.co.il/2014/01/14/israel-supreme-court-upholds-ruling-of-non-infringement-of-breaking-entering-patent-but-does-not-invalidate-it/ and Judge Grosskopf affirms. Furthermore, misleading as explicitly mentioned in Section 15 of the Law of Contracts applies to other cases as per Section 61b. Additionally, In 164/97 Contram vs. the Ministry of the Economy P.D. 52(1) 289, 1990, there is a duty of candour when requesting something from government offices and this certainly applies to patent proceedings. See also 2643/97 Ganz vs. British Colonial Company LTD P.D. 47(2) 385 (2003).

duty of disclosure

Whilst it is not clear that a full disclosure by Sanofi would have prevented them obtaining a patent, it is fair to say that the opposition would have been simpler and less arduous and this might have affected the decision not to make an at-risk launch once the main patent had lapsed, despite pendency of the second application, whether by marketing the second form or the first form at an earlier stage despite the ‘risk’ of the second form inadvertently resulting. In the circumstances, it is reasonable to conclude that Sanofli’s misleading behavior complicated generic competition from entering the market.

The legal chain of events

Unipharm has claimed that the second patent application delayed their development of a generic product in two ways:

  1. Since the second patent application related to the second polymorph, Unipharm decided to launch a product based on the off-patent first polymorph., despite the fact that the fabrication of the second polymorph is easier and cheaper. Indeed, as Unipharm applied for authorization to market the first polymorph they still suffer from this effect.
  2. The development of the generic equivalent took longer than expected and required more investment than is usually the case due to fear of the first polymorph transitioning into the second polymorph and threatening future law suits, should the application for the second polymorph eventually have been allowed. Eventually Unipharm succeeded but this required investment and energy that would have been avoided were it not for the pending application.

Concealing evidence from the Commissioner of Patents

The patent application does not reveal relevant information regarding how the second polymorph was discovered and that in its presence, the first polymorph is not precipitated. This information, which Judge Grosskopf considered has direct relevance on whether the Second Polymorph is patentable, was only revealed by Sanofi during the Opposition proceeding in the US in 2007. Sanofi does not deny not revealing this information but they do not consider it prior art having a duty of disclosure under section 18 of the Patent Law, however Judge Grosskopf does not accept this position for two reasons:

  1. There is a causal relationship
  2. Unipharm maintains that the second patent caused delays in their genetic release

Misleading during prosecution

As described earlier, the evidence before the court reveals that the Sanofi’s behavior before the Patent Office was misleading both actively and through omission. The question remaining is whether this omission gives Unipharm, a generic competitor who suffered in consequence of this misleading, legal grounds to sue for all or part of Sanofi’s profits?
To complete the picture, in the original statement of case, Unipharm sued for her losses but was unable to provide adequate evidence to assess those losses, and abandoned the request for compensation in her summary. Consequently the rest of this ruling relates to possible Unipharm’s rights to Sanofi’s profits, and not to her right for compensation for losses, which Judge Grosskopf considers a totally different question.

In this regard, Judge Grosskopf referred the reader to a paper by Professor Daniel Freidman titled “Restitution for Wrongs – The Basis of Liability” in Restitution: Past, Present and Future: Essays in Honor of Gareth Jones (1998) 133, and a second paper titled (in Hebrew) Enrichment from taking another’s property, the Book of Daniel – Academic Enquiries of Professor Daniel Friedman 761, 767-768.

In this regard, Judge Grosskopf notes that Unipharm never owned or claimed to own legal rights that were trampled on by Sanofi. Unipharm did not have legal rights or obligatory rights that were compromised, and Sanofi did not even prevent or sabotage Unipharm’s rights to compete in the market place as per 280/73 Pliamport vs. Geigi and Grosskopf’s treatise on “Defending Competition by the Law of Unjust Enrichment 91-93, and it is fair to say that the plaintiff’s claim is not based on rights but rather on a prevention of competition.

Elsewhere, Judge Grosskopf has explained the difference between rights and competition states and the academic and practical ramifications of this distinction, and refers to his book “Defending Competition Chapters 1-6“. As far as this ruling is concerned, it is important to appreciate the plaintiff’s charges and the relevant legal framework.

The plaintiff considers that Sanofi acted illegally as explained previously, and managed to provide evidence that this was the case. In and of itself, this is not sufficient to give Unipharm standing to sue Sanofi, and even less, rights to their profits. In this area of private law, it is necessary to prove that Sanofi were not entitled to these profits and Unipharm are. That means to say, that it is reasonable to transfer Sanofi’s profits to Unipharm.

In many instances where a plaintiff claims damages, his right to compensation and the obligation of the defendant to pay those damages are two sides of the same coin. The law requires the trespasser to provide compensation or to pay fair rent for use for using the property of the other, and the landlord can claim compensation or rent for himself, as his rights were abrogated. In this instance, the justice in obliging payment and the justice in receiving compensation are not so clearly linked. The right to cause Sanofi to pay is due to the need to warn against disrupting fair competition, and the right to compensation comes from wanting to grant Unipharm standing as a plaintiff to ensure fair completion.
Counsel for Plaintiff considers that Unipharm are entitled to Sanofi’s profits under Patent Law, Under The Law to Prevent Monopolies and under the Law of Unjust Enrichment.

Patent Law

patent law

The Applicant is obliged to provide a full disclosure and this is important to the Patent Office but also to third parties who rely on the information on record. The examination of the patent application and the determining of patentability is based largely on information disclosed by the Applicant, as are Opposers’ considerations whether or not to challenge a patent application issuing by filing an opposition. Since inaccurate or missing information supplied by the Applicant can result in a monopoly arising where it shouldn’t, such omissions and errors are taken very seriously.

It will be noted that late disclosure of information does not repair the damage of incomplete disclosure and certainly does not fully compensate for this since the application as filed affects the functioning of the market and serves as a warning sign to competitors who have to consider the application when making their plans, regardless of whether or not the final ruling on the validity or otherwise of the patent does rely on such information.

For these reasons it is correct to be strict in regards to such omissions regarding fair and timely disclosure of information, even where such omissions are due to incompetence and how much more so where they result from intentionally withholding information.

Section 18 details sanctions for failure of the duty of disclosure, which include not allowing the patent to issue or cancelling a patent, providing free license to third parties and shortening the patent term. The commissioner and the courts can apply such sanctions. Under Section 61(a) 1 of the Law of punishments, fines may also be issued, up to those equivalent to six months in jail.

However, even before the Israel Patent Law 1967, such as in Plason, it was considered reasonable to cancel a patent or limit its application where the patent office was misled. There is no reason why this civil punishment cannot be applied today, including where this punishment does not fit into the rubric of Sections 18c.

Judge Grosskopf considers it obvious that the Patent Office or the Court could cancel a patent or refuse to allow it in circumstances where the application was inadequate and not just where an inadequate response was filed to an office action, See pages 9-11 of Opposition to IL 117035 from 2009 where the Israel Patent Office refused Smithkline Beecham’s Patent application for a Metastable Polymorph and the ruling concerning 219586 from March 2015.

Apart from these sanctions which relate to criminal behaviour and to recognizing the patent, the Israel Patent Law does not include additional sanctions for misleading the Israel Patent Office. Is this a negative arrangement such that the lack of such sanctions prevents such behaviour being punishable or is a lacuna? Judge Grosskopf considered it a lacuna.

According to Judge Grosskopf, the listed sanctions are insufficient to discourage concealment and misleading behaviour, particularly in cases where the patent issuing is not that likely anyway: the fine is minimal and canceling or limiting the application of a patent is only of value where the patent application is strong. If these were the only sanctions, inadequate disclosure of relevant information would be widespread, particularly where applicants know that the chance of a patent issuing were they to provide full and adequate disclosure of all matters. This is not a tolerable state of affairs.

Furthermore, the Israel Law does recognize that misleading the authorities can result in competitors filing civil actions, and it is inconceivable to conclude that patents are an exception, since the value of a patent is not that it allows the patentee to operate but that it prevents others from so doing.

Sanofi argued that the sanctions listed are an exclusive list and cited re Merck. They reason that re Merck that since a drug developer cannot sue a generic competitor under grounds other than Patent Law, neither should a generic company be able to sue the drug developer if there is no arrangement for so doing explicitly written into the Israel Patent Law. Judge Grosskopf considered this logic untenable. Merck prevents enforcement of pending applications, including the application of the Law of Unjust Enrichment as means for preventing generic competition. The reason for this is that until a patent issues, there is no presumption of validity, no basis for the applicant’s monopoly and no reason to give him sanctions against competitors. He reasoned that even Sanofi would accept that on the patent issuing, the patentee does have retroactive rights under the Doctrine of Unjust Enrichment to compensation for profits made by competitors whilst the patent is pending. The Merck decision prevents applying the patent before it is allowed, and this is a question of policy. One cannot make deductions from it regarding the rights of generic competitor to file for Unjust Enrichment, even before the patent issues, since the purpose of the Law of Unjust Enrichment is to encourage competition and not to restrict it. In summary, patent law prevents widening the monopoly to the pre-grant period and lists sanctions against the Applicant. It does not relate to the competitors rights regarding misleading behavior by the patentee and cannot be seen as limiting the competitors right of redress ex silencio.

Anti Trust laws

Monopoly

Since Sanofi had an effective monopoly that was based on a lapsed patent and a pending patent, there are grounds to see monopolistic behaviour. This is not necessary the case in other instances of fraud on the Patent Office and this would be inappropriate for cases where no patent has issued, for example. The charges of anti-trust behaviour serve to add levels of seriousness to Sanofi’s actions. Thus in addition to defrauding the Israel Patent Office, Sanofi have created a de facto monopoly beyond the date that the issued patent terminated which they did not deserve. In other words Unipharm allege that sanofi’s actions are wrong under both patent law and anti-trust law(!) – but the appropriate compensation requested in one and the same, all or some of Sanofi’s profits.

Judge Grosskopf notes that both US Antitrust Law and European Competition Law provide for finding the Monopoly holder liable for providing false information to the Patent Office, although the two legal systems are different.
In the US, the law derives from a Supreme Court ruling in Walker Process Equipment, Inc. v. Food Machinery and Chemical Corp., 382 U.S. 172 (1965) where ‘knowingly and willfully misrepresenting facts to the Patent Office’ can result in removing the patent defense against Antitrust actions of Sec. 2 of the Sherman Act, and can result in a liability for triple damages. See John Carney “Misrepresentation Before the Patent Office: Antitrust and Other Legal Effects” Boston College Ind. & Comm. L. Rev. 1005 (1971). Thus the US law is based on fraud. To apply the deceit on the patent Office by third parties requires proving deceptive intent. See also NobelPharma AB v. Implant Innovations, Inc. 141 F.3d 1059, 1066 – 1071 (Fed. Cir., 1998).

As stated in Walker:

To hold, as we do, that private suits may be instituted under § 4 of the Clayton Act to recover damages for Sherman Act monopolization knowingly practiced under the guise of a patent procured by deliberate fraud, cannot well be thought to impinge upon the policy of the patent laws to encourage inventions and their disclosure. Hence, as to this class of improper patent monopolies, antitrust remedies should be allowed room for full play. On the other hand, to hold, as we do not, that private antitrust suits might also reach monopolies practiced under patents that for one reason or another may turn out to be voidable under one or more of the numerous technicalities attending the issuance of a patent, might well chill the disclosure of inventions through the obtaining of a patent because of fear of the vexations or punitive consequences of treble damage suits. Hence, this private antitrust remedy should not be deemed available to reach § 2 monopolies carried on under a non-fraudulently procured patent.

European law

In contrast, in Europe, Article 82 of the European Treaty prohibits misuse of a monopolistic position:

Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States.

Scenarios where a lapsed patent is misused to provide a monopoly are discussed in T- 321/05 AstraZeneca v. Commission where an Appeal was dismissed in December 2012. This case related to Losec, an anti-acid treatment, where apparently Astra Zeneca misled a number of European countries regarding a Patent Extension Certificate that was not given, and benefited from 5 years patent term extension (the European law is similar to Sections 64a-64p of the Israel Patent Law). The European Commission eventually found AstraZeneca of abusing their market position and fined them 54 Million Euros.
It seems that European law is stricter in this regard that the US Antitrust law and does not depend on intent, but rather on the result of affecting competition.

Such conduct is not in keeping with the special responsibility of an undertaking in a dominant position not to impair, by conduct falling outside the scope of competition on the merits, genuine non-distorted competition in the common market.
Thus the filing of misleading submissions is grounds for compensation regardless of whether patent term extensions resulted. It does not require the company misleading the authorities to put competitors on notice. It is only necessary to show that the actions were ant-competitive and not that they actually prevented competition.

In the present case, Plaintiff’s counsel refer to Section 29a of the Law Against Limiting Business 1988 that simply states that:

A dominant player must not misuse his market status to reduce competition or to act against the public interest.

Judge Grosskopf notes that the trend in Israel is to follow the European Law and not the US [mf-this is certainly the case in Patent Law, although personally, I prefer the Common Law to the Continental Law approaches and think that much of the legal revolution of 1980 under Barak was unfortunate].

On its merits, Grosskopf prefers the European Law to the US law in this case. Actions by the dominant player to strengthen his hold on the market by misleading the authorities or the public cannot be considered fair competition in normal instances and certainly not where the monopoly is the result of a patent. The balance between the relative rights of the various players that is created by the legislative is based on equitable behavior by the various parties and cannot be considered adequate where one party deceives. It does not matter when the deception was revealed, but this can and does affect the damage caused and the appropriate compensation.

In the present case Grosskopf believes that the plaintiff adequately showed that Sanofi deceived the Patent Office with intent, and even were this not the case, Grosskopf considers that applying section 29a of the Law Against Limiting Business 1988 is appropriate. The deception is significant. It cannot be considered a scribal error (a typo) as Sanofi claimed. In such cases where the standard does not require deceptive intent, it is appropriate to apply the law even in cases where the error is the result of serious incompetence.

The fact that the patent did not issue and was abandoned in 2010 does not help Sanofi, because it is clear that Sanofi’s motivation for filing the second application was to discourage generic competition and apparently Sanofi benefited from their action for at least 15 months. We cannot tell what would have happened had Sanofi not tried to deceive the patent office but this lack of clarity is Sanofi’s making, and they should bear the financial consequences thereof. See Ariel Porat and Alex Stein in Iyunei Mishpat 21 191, and Ariel Porat and Alex Stein, The Doctrine of Evidentiary Damage, Response and Criticism, Laws 30, 329. Judge Grosskopf reasoned that were the deception on the USPTO, it would not have mattered whether it was intentional or not and in such cases the US law is stricter.

Thus, since Sanofi enjoys a market domination, Unipharm are entitled to sanctions under the section 29a of the Law of Monopolies. These do not, however, give Unipharm a lien on Sanofi’s profits. Such a sanction is not within the ambit of the Law of Monopolies. Not to customers and not to competitors. However, Grosskopf does not see this as an ex silencio limitation. Whether or not such a sanction is an entitlement from the Law of Unjust Enrichment or by widening the Law of Monopolies is moot. The Israel law recognizes that laws are sometimes inadequate and the law of damages provides for sanctions for failing to meet legal obligations. Furthermore, in other cases where the written law is unclear, the courts have ruled that profits are forfeit. See for example, Adres and Telran vs. Charlton.

Unjust Enrichment

unjust enrichment

The appropriate legal doctrine for granting a share of the profits to damaged parties is the Law of Unjust Enrichment. This may be applied by third parties in cases of patent fraud and in cases of abuse of monopolies since although those laws don’t themselves specify a share of the profits, they do not rule it out either.

The Law of Unjust Enrichment is applied in Israel in varied scenarios. It may be used to widen or create rights, see for example 8483/02 Oloniel vs. McDonalds PD 48(4) (2004), and it is sometimes used to create a competitive framework (see 4437/99 A.D.I. Stereo Systems and Vehicle Alarms vs. April Traklin PD 45(2) 232 (2000). In such instances, the Law of Unjust Enrichment defines the general order based on other laws, whether competitive or right’s based, and gives when sanctions infringed. In other cases, the law of Unjust Enrichment is a tort in and of itself, see for example, Adres. In such cases the law of Unjust Enricmhnet provides restitution where the existing laws do not. See Barak’s analysis in 5768/94 A.Sh.I.R. Import Manufacturing and Export vs. Accessories Forum, and Groskopf in The Vulture and the Princesses, Pages 220-229.

According to Judge Groskopf, the current case where Sanofi has acted inequitably and created a de facto monopoly by defrauding the Patent Office, third parties may be able to claim unjust enrichment. Were Unipharm not to be competing against Sanofi, Judge Groskopf considers that there would still be grounds for judicial legislation based on inequitable behavior, on not fulfilling a legal obligation and under the Law of Unjust Enrichment, see Groskopf Defending Competition pages 233-268. One can reach this position from studying two competition principles in Israel law.

Section 2 of the Fair Trade Laws is titled ‘Inaccurate Representation’ and Section 31(a)1 of ‘the Law for Defending Customers 1981’ enable tradesmen who are damaged in the course of their trade to sue, not just customers, and thus regulates the behavior of tradesmen in and among themselves. Thus it is unacceptable for one tradesman to prevail over another by deceiving the customer.

Section 3 of the Law of Trade Related Torts 1999 is subtitled ‘Inappropriate Interference’ and states that:
One cannot prevent busness or make such business more difficult in an illegitimate manner, by approaching the customers, agents or workers of a business, property or service of a third-party.

According to Judge Groskopf, misleading the Patent Office does not fall into any of these frameworks but it is somewhat similar to each [MF – Judge Groskopf is creating a general rule from two specific ones בנין אב משתי כתובים – using classic rabbinical hermeneutics]. As with deceiving a customer, it relates to a third-party that suffers a result of the deception. Consequently, even without applying the Law of Monopolies one can conclude that deceiving the patent office effectively deceives competitors.

Mere non-competitive behavior does not create a situation for applying the Law of Unjust Enrichment, but in this case, the de facto patent term extension entitles third parties to more than compensation as per the Law of Monopolies and torts law, but also entitles third parties to the profits.

There are a number of reasons why application of the Law of Unjust Enrichment is appropriate:

  1. It is required as a sanction to prevent additional abuse because the losses of third parties is never close enough to the profits of the patentee for the threat to have to cover such losses to be sufficient to guarantee equitable behavior. This is why treble damages are required for antitrust activities in the US.
  2. Without allowing the generic players to sue for the patentees illicit profits, it is unlikely that they will have a sufficient economic behavior to sue (we note that Teva didn’t sue in this matter).
  3. In 347/90 Soda-Gal vs. Spilman, the principle of applying Unjust Enrichment for interfering with access to customers was recognized.
  4. The pharmaceutical industry is a special market fraught with problems, that has resulted in the European Commission’s “Pharmaceutical sector Inquiry” of 2009, and in what is generally considered as ever-greening.

Sanofi has raised two reasonable counter arguments that are worth considering, although are insufficient to reverse this finding:

  1. The above legal construction encourages generic players to file suit and not to embark on at-risk drug launches. This is not a spurious argument but it is based on an understanding that At Risk product launches are sufficient to prevent ‘evergreening’ and defrauding the patent office, and this is manifestly not the case.
  2. The second mover was Teva and not Unipharm, and so Unipharm does not have standing.

Judge Groskopf once again cites his own academic writings and concludes that all wounded parties can sue, but those who suffer the most are first in line. Although Teva was the first to gain regulatory approval it is not clear that they have suffered more than Unipharm:

  • Unipharm have proved their loss
  • Unipharm opposed the second patent as actively as Teva did
  • Unipharm entered the market a mere month after Teva
  • Were Teva to have filed this suit in parallel with Unipharm it might have made sense to combine the two cases and to divide the profits gained by Sanofi between them. The fact that Teva did not file suit and did not undertake the costly and risky legal procedures is no reason to prevent Unipharm from benefiting from successfully bringing and fighting this case. Indeed, were Teva and Unipharm strategic partners, they could each independently file suit. Thus when faced with the dilemma of accepting Unipharm as a plaintiff or letting Sanofi get away with it, there is little doubt that it is preferable to see Unipharm as having standing.
  • At this stage, it is too early to fix the award to Unipharm and the court requests that Sanofi provide full accounting records. Unipharm have limited themselves to 2.6 million shekels by the fee they paid when filing their case and it is possible that Sanofi may prefer to pay this rather than to disclose their profits. The second and third parties are struck from the case as Sanofi has effectively assumed responsibility by fighting the case.

The rest of the ruling settles the time periods for providing financial data and for summarizing arguments, etc. Professor Groskopf thanks both parties for their enlightening summations.

COMMENTS

big head

The name Grosskopf means big-head. In Israel the Hebrew equivalent Rosh Gadol ראש גדול does not mean big-headed in the sense of conceited, but rather means willing to take responsibility and contrasts with Rosh Katan ראש קטן, a term often used to describe those who prefer to take things easy.

This ruling is ground-breaking. It seems very solid and well-reasoned, but will no doubt be appealed. It also seems to be the direct result of the choice of judge. This is, however often the case.

I am in awe of the audacity of the charges brought. Unipharm represented by Adv. Adi Levit and his team seem to win one major patent case a year and I had noted that the last few months were quiet.

The ruling discusses abuses of the patent system, specifically ever-greening, but also has relevance to the behavior of non practicing entities (sometimes called trolls) in the US courts. What is important is that it shifts the focus to abuses of the legal system and away from the business nature of the party making the abuse. I see this as a healthy development. We should not get carried away however. It is worth asking if every opposition to a pharmaceutical patent is based on solid arguments, or if sometimes patents are opposed or litigation ensues for economic reasons where the legal arguments are spurious? In other words, are all oppositions filed in good faith? I note that recently Unipharm’s filing of oppositions in Israel has causes big pharma to surrender the relatively small Israel market rather than risk having their patents canceled in Israel and then elsewhere by a knock on effect. I don’t accuse Unipharm of filing frivolous oppositions – too often in the past they’ve convincingly demolished the patents protecting blockbuster drugs, but there is a risk of abuse by challengers not only by patentees.

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