Can A Patent Term Extension be further Extended?

Toviaz

Pfizer, represented by Luzzatto, requested to amend the period of Patent Term Extension granted for IL 139110, under Section 170 of the Law which authorizes the Commissioner to adjust the Patent Register.

The original patent was due to lapse on 11 May 2019, twenty years from filing. A Patent Term Extension of 710 days was granted, until 20 April 2021. The Extension was based on the drug Toviaz which contains the active ingredient Fesoterodine Fumarate, and which was registered in the drug registry in 2008. (Fesoterodine is an antimuscarinic drug that is used to treat overactive bladder syndrome – MF).

When the Patent Term Extension request was submitted on 23 December 2008, and in further correspondence during its examination, the Applicant reported that the first marketing approval for Toviaz was granted by the European Union on 20 April 2007. The relevant marketing approval document was translated into English and labeled as Commission Decision of 20 IV 2007. Based on this information, the Patent Term Extension was calculated and the decision to grant a 710 day extension under Section 64(v)(c) was published in the June 2014 Patent Office Journal for Opposition purposes. Since no Oppositions were filed, the Patent Term Extension issued as published.

Keith S. Ruddock, the Senior Patent Attorney in Pfizer ltd, which is a daughter company of Pfizer Inc. submitted an Affidavit to the effect that the marketing approval was indeed dated 20 April 2007, but they only received a copy on 24 April 2007, four days later.

four days

Pfizer now requests an additional four days of exclusivity until 24 April 2021, due to the change in the way that the European legislation is interpreted and following a Tel Aviv District Court Ruling that related to a similar issue. The correction is allegedly justified under Section 170 of the Patent Law 1967 and Section 15 of the Law of Interpretation 1981.

Background

The Patent Term Extension period is based on Section 64(J)2 of the Law which states:

(2) the total of the term of the patent and of the term of the extension order, in the aggregate – for a material, for its production process, for its use, for the medical preparation that incorporates it, for the process of its production or for the medical equipment under the basic patent and under an extension order together – shall end no later than 14 years after the earliest date on which a license was received in one of the recognized states;

 

The Seattle Ruling

SAeattle

On 6 October 2015, in C-471/14 Seattle Genetics v. Österreichisches Patentamt, the Court of Justice of the European Union (CJEU) ruled that the period for which the Patent Term Extension is calculated is from when the ruling reached the Applicant and not the date that the Authority issued the ruling.

Generally, the decision reaches the Applicant a few days after it issues, and the CJEU explained the Law in terms of when the marketing approval was received, and not when it was given, providing a few extra days of protection.

The Incyte Ruling

Insightt

A further ruling issued on 20 December 2017, concerning C-492/16 Incyte Corporation v. Szellemi Tulajdon Nemzeti Hivatala, which discussed whether the interpretation was applicable to Supplementary Patent Term Certificates (SPCs) i.e. Patent Term Extension orders that had already issued, and not only to new rulings.

In their decision, the Court considered the ex-ante correction of an SPC issued by the Hungarian Patent Office. The Court ruled that previously issued but still current SPCs should be recalculated.

The Court noted that the purpose for SPCs is to compensate the patentee for the time lost due to the long time required to obtain regulatory approval for the product based on the basic patent. Consequently the court considered that when considering additional periods of protection, the certainty issue was less significant than other relevant considerations.

It is noted that in re Incyte, the fact that the Patent Extension Period itself is open to appeal under Section 17 of the Regulation (EC) No 1610/96 of the European Parliament and of the Council of 23 July 1996 concerning the creation of a supplementary protection certificate for plant protection products was considered relevant. Nevertheless, these regulations related to plant-related products that are eligible for patent term extensions, which is not something available in Israel. Similarly, the ruling was based on other arrangements available in Europe that deal with the retroactive applicability of CJEU rulings.

The present issue is similar to that considered by the CJEU in re Incyte, and is whether a Patent Term Extension issued in Israel on the basis of a SPC in Europe should be based on when the SPC issued or when it was known to the Applicants.

The present issue is similar to that considered by the CJEU in re Incyte, and is whether a Patent Term Extension issued in Israel on the basis of a SPC in Europe should be based on when the SPC issued or when it was known to the Applicants.

The Influence of the Seattle Ruling on Patent Term Extensions in Israel

Following the Seattle decision, the Israel Patent Office allowed Applicants for Patent Term Extensions in Israel to be based on the date of receipt of the SPC by the patentee where it could be proven to be later than the date it issued.

This arrangement was adopted by the most recent amendment to the Patent Regulations 1988, in Regulation 2(c)(3) which states that to prove the date of receipt of the SPC, the Patentee must provide additional documentation than the SPC itself:

(3) a copy of the first Regulatory Approval in a recognized country and a copy of another official document regarding the date of the Approval, if there is such a document.

 

See Patent Term Extensions – Procedures for Applicants, Oppositions and Cancellations, Amendment of 5 November 2017.

It is noted that despite providing the possibility to submit evidence regarding when marketing approval issued, the determination of when the period starts is left to the judgment of the Commissioner of Patents (see the protocol of the Committee for Constitution, Legislation and Justice no 435, (1 July 2017, pages 6-9 and the page 457 of the protocol of 9 July 2017, pages 4-6.

In addition, and before the Seattle ruling issued, The Israel Commissioner of Patents considered a request to recalculate the Patent Term Extension period, based on the date of the European approval being when it was received. The then Commissioner Asa Kling rejected the request to recalculate (see request for Patent Term Extension for IL 160693 Bristol Myers Squibb Company, 16 September 2015).

After the Seattle decision issued, the Applicant requested reconsideration of the IL 160693 ruling, but this was refused. Justification for refusing to reconsider included the need to be very careful when retroactively applying a decision from Europe and when applying changing policy regarding Patent Term Extensions.

The application was refused for reasons that included the fact that the original decision had published for the period prior to that ruled in re Seattle, and the period of Opposition had passed. Furthermore, changing the Patent Term Extension would imply retroactively applying changes made following the CJEU decision.

The Applicant appealed the rejection to the Tel Aviv District Court (Appeal 3231-10-16 Bristol Myers Squibb Holdings Ireland vs. Commissioner of Patents, 16 December 2017.

The District Court accepted the Appeal and ordered recalculation of the Patent Term Extension based on re Seattle, so that the period of regulatory approval in one of the recognized countries would be the date that the decision is received by Applicant and not the date that it issues. The Court justified this by arguing that the purpose of the Patent Term Extension was to compensate the patentee for actual lost patent protection sales period and that this interest over-ruled the interest of certainty regarding publications in the Patent Office Journal. The court based itself on the Supreme Court Ruling in Appeal 8127/15 Association of Israeli Industrialists vs. Merck Sharp and Dohme Corp. 15 June 2016.

To complete the picture, it is noted that in Re Merck, the Supreme Court ruled that a Patent Term Extension, once issued, could be shortened. In the circumstances, the Patent Term Extension already issued to Merck under the third amendment to the Law was shortened based on the 7th amendment, despite it already having issued.

The rules regarding applying the 7th amendment stated that it would apply to previously issued extensions, and the ruling related to whether issued extensions could be shortened based on extensions given abroad AFTER the Israel ruling was given, and also on whether the transitional arrangement of the 7th amendment was constitutional; Merck claimed that this was retroactive legislation that damaged their (quasi) constitutional property rights.

The application was refused for reasons that included the fact that the original decision had published for the period prior to that ruled in re Seattle, and the period of Opposition had passed. Furthermore, changing the Patent Term Extension would imply retroactively applying changes made following the CJEU decision.

The Applicant appealed the rejection to the Tel Aviv District Court (Appeal 3231-10-16 Bristol Myers Squibb Holdings Ireland vs. Commissioner of Patents, 16 December 2017.

The District Court accepted the Appeal and ordered recalculation of the Patent Term Extension based on re Seattle, so that the period of regulatory approval in one of the recognized countries would be the date that the decision is received by Applicant and not the date that it issues. The Court justified this by arguing that the purpose of the Patent Term Extension was to compensate the patentee for actual lost patent protection sales period and that this interest over-ruled the interest of certainty regarding publications in the Patent Office Journal. The court based itself on the Supreme Court Ruling in Appeal 8127/15 Association of Israeli Industrialists vs. Merck Sharp and Dohme Corp. 15 June 2016.

To complete the picture, it is noted that in Re Merck, the Supreme Court ruled that a Patent Term Extension, once issued, could be shortened. In the circumstances, the Patent Term Extension already issued to Merck under the third amendment to the Law was shortened based on the 7th amendment, despite it already having issued.

The rules regarding applying the 7th amendment stated that it would apply to previously issued extensions, and the ruling related to whether issued extensions could be shortened based on extensions given abroad AFTER the Israel ruling was given, and also on whether the transitional arrangement of the 7th amendment was constitutional; Merck claimed that this was retroactive legislation that damaged their (quasi) constitutional property rights.

 

Applicant’s Claims

Calculating receipt

The Applicant requests recalculation of the Patent Term Extension from when the European decision reached the Applicant, adding four days. This is in accordance with the Seattle and Incyte rulings and Bristol Myers Squibb rulings, and is in accordance with the purpose of the Law, to provide compensation for lost sales during the period prior to regulatory approval.

The Applicant emphasizes that in the Bristol Myers Squibb ruling, the District Court ruled that certainty is only a secondary consideration, and the main purpose of the extension is to compensate the Applicant. The Applicant further claims that the German and UK policy is to provide extensions based on the Incyte ruling (but did not provide evidence). Furthermore, they noted an intention to request further extensions based on the Spanish, French and Italian rulings.

The Bristol Myers Squibb ruling was the first time that an Israeli Court had upheld the calculation from receipt of the decision ruled in re Seattle.

Furthermore, the Applicant claims that changing the period of protection was simply a correction of an administrative decision by application of Section 15 of the Law of interpretation. They argued that there was nothing preventing correcting the extension, since it had not entered into operative effect, so this was simply applying the new law and was neither retroactive or retrospective. Furthermore, even if it was a retroactive application of the Seattle ruling, it should be applied since new rules could be retrospective or prospective. Since the extension was only of a further four days, third parties relying on the issued ruling would not be adversely affected.

Discussion and Ruling

Before relating to the substance, the Commissioner notes that when the pendency period of a Patent Term Extension is calculated on the basis of a recognized country in Europe, it seems correct to follow the European interpretation that the date of receipt of the certificate of Patent Extension is the relevant date, and not the date that the decision was reached.

Conform

This principle accords with the desire to conform the protection period in Israel with that granted by the recognized country.  Indeed, the Israel Patent Office started to apply this after the Seattle ruling issued, and was adopted by the Patent Term Extension regulations which stated that the extension period in Israel is calculated by the date of receipt of the extension order of the relied upon patent extension.

However, this is not the current issue. The question before the Commissioner is whether an already issued Patent Term Extension can be corrected.

The Commissioner’s Authority to correct the Patent Register is given in Section 170(a) of the Law:

On application by an interested person, to be submitted in the prescribed manner and form, the Registrar may correct an entry in the Register and in every document issued by him or submitted to the Office if, in his opinion, the Register or document does not reflect the facts, and that when no other way of making the correction is provided by this Law.

 

Since there is no arrangement that relates to the correcting the period of a Patent Term Extension under Section 64 of the Law, one should consider whether registering the Patent Term Extension and the relevant period no longer reflects the facts on which the extension was based.

There is no disagreement that at the time the extension was calculated and when it issued in 2014, the calculation was based on facts supplied by the Applicant and no miscalculations occurred.

The Commissioner considers that the phrase “if he considers that the register or document does not reflect the facts” does not relate only to where the initial state of affairs that were the basis of the registration were wrong, but the true facts subsequently came to light, but also to cases where the facts changed after the registration such that the registration requires correction. So the Commissioner considers that in principle he has the authority to make the amendment and the question is whether using this discretionary power is appropriate in this instance.

In re Wyeth, then Commissioner Kling determined that the right to a Patent Term Extension was an administrative right that finishes when it is issued, although it comes into effect later. Similarly, Y Zamir considered that generally administrative decisions go into effect on being reached, generally with the decision being stamped by the administrative authority. In general, the stamp indicates that the authority has finished its work (Zamir “Administrative Authority Vol. 2 Edition 2, Nevo 2011, pages 1341 and 1342.

In the Bristol Myers Squibb case that the Applicant relied on, when the request for reconsideration was submitted to the Commissioner, there had been an announcement in the Patent Office journal of an intention to issue an Extension, but it hadn’t actually issued yet. In this instance, we are considering a more advanced stage, when the issuance of the Patent Term Extension had been announced four years earlier. Due to this difference, the Commissioner sees himself as not obliged to consider whether Bristol Myers Squibb was a new law, and whether it was retroactive, retrospective or prospective.

The Commissioner considers that in this instance, there is more importance in when the extension was granted than when it comes into effect, since reliance by third parties on when the patent will finally lapse are based on the Patent Term Extension as issued, and not when it comes into effect. In this regard, it should be noted that one of the purposes of the law was to provide early notification to competitors and to the public regarding when the extension order would lapse. (see the proposed version of the seventh amendment to the patent law from 5 July 2005, pages 1002 and 1006 and the thirteenth amendment from 7 May 2012, page 792 and 794.

As to the issue of certainty, the Applicant claims, based on the references cited in re Merck and re Bristol, that this consideration is less important and does not prevent reconsideration of previously issued extensions.

The Commissioner is not convinced that re Merck is applicable to the present issue. In re Merck, the Supreme Court considered the certainty and reliance of the patentee on the extension, and not the public interest and that of third parties, regarding when the extension period would lapse. All the cases discussed in re Merck related to whether shortening the protection period should be allowed, whereas this case relates to extending the protection period, and the Commissioner considers this distinction significant.

The basis of the Merck ruling was that the legislators were correct to sacrifice certainty of the rights owner in favour of other interests, such as ensuring that the extension Israel Patent does not last longer than the shortest of the extensions granted by a recognized country (see Page 11 of re Merck):

Either way, the case was not brought to make a ruling regarding interpretation, but to complain, to cast doubt on the logic under which the Legislators prefer certainty over conforming the Patent Term Extension to the shortest term granted by a recognized country.

 

Thus, shortening a Patent Term Extension is not analogous to lengthening it, even if the lengthening is by a mere four days. The Commissioner emphasizes that even though there are procedures for shortening the period of protection under the Law, due to developments subsequent to the issuance of the extension, the Law does NOT include any procedure for lengthening a period of protection, as is requested in the present issue.

Requests to adjust the period of a Patent Term Extension due to changes in the Law have been dealt with in the past. See for example, then Commissioner Dr Meir Noam’s ruling rejecting an Application to extend the Patent Term Extension concerning IL 97612 to Sanofi Sythelabo from 27 July 2005:

“Legislation, from its nature, undergoes amendments over time. Similarly, the case-law changes over time. I consider that a Patent Term Extension, once issued, should not be adjusted since the public at large relies on the date of lapsing in the Journal, whether soon or in the distant future. The date should only be amended if there was a miscalculation…

 

There is no doubt that the Commissioner has the authority to change an issued Patent Term Extension. The issue is not one of authority or of “justice” but rather one of policy. Should the Commissioner have to reconsider and retroactively amend all issued patent term extensions in light of changes in the written law or the case law? I think not, as the net effect will be that the patent world will be like a tempestuous sea with unclear boundaries, widening and narrowing with the changing waves.

 

This contravenes the Patent Law, and its general principle of certainty, providing a defined period of monopolistic rights, after which the public (including generic manufacturers) can use the known information to drive technology. In the drug field, when knowledge enters the public domain, there is a noticeable drop in prices and the public waits for this to happen. What happens to the interest of those who rely on the date, such that when the date of the original extension passes, they make plans to manufacture, and now the patent is retroactively extended…”  

 

The Present Commissioner concurs with Former Commissioner Noam, and that the present situation does not justify him using his authority to change the issued ruling, even though were the case to have come up today, it would probably have been ruled differently.

In this regard, it is worth considering the Supreme Court ruling Bagatz 4492/92 Dr Yelena Shinkranko vs. the General Manager of the Ministry of Health, p.d. 47, 861 paragraph 5:

“However, the considerations that are relevant when cancelling a ruling are different from those when making the initial ruling. When cancelling, one has to balance the Public Interest reflected by the cancellation with the damage to the interest of the individual that the change may cause, whilst considering the grounds for the cancellation, for example, ultra vires, technical error, change of policy or wrong application of the ministerial policy (See words of Judge Bach in Appeal 433/80 IBM Israel Properties ltd vs. the Director of Property Gains Tax and Compensation Funds, Tel Aviv [4] page 351 for a discussion on how these considerations can be applied when considering the discretion of an Authority to cancel its rulings.

In summary, the Commissioner does not see that the Patentee’s interest to receive a few more days’ compensation for lost time waiting for regulatory approval overcomes the public interest of stability in Patent Office decisions, reliance of the public and third parties on the termination date which was published a long time previously.

In the Ruling concerning Patent Term Extensions re IL 83148 Roche Diagnostics, from 13 June 2007, then Commissioner Noam emphasized the importance of certainty regarding rights recorded in the register:

“… the Commissioner of Patents is not an Authority that simply registers existing IP rights in the register, but is primarily an examination Authority that issues IP rights based on the results of its examination, whilst balancing the rights of the Applicant with those of the public. In Appeal 5768/94 A.Sh.I.R. Import Export and Distribution vs. Forum for Accessories and Consumer Goods ltd., p.d. 43(4) 289, 340, Judge Cheshin related to the unique character of Intellectual Property, in that it was based on general principles and a balance of interests.

When an administrative decision affects third parties, one has to be extremely wary, and only in cases of extreme changes in circumstances is it warranted to change such decisions.

The Application is rejected.

Reconsideration of Patent Term Extension of IL 139110, ruling by Ofir Alon, 4 July 2018

COMMENT

The public reliance on the Register is, of course, somewhat of a fiction. If the relevant public could get used to Patent Term Extensions changing the rules of the game, they could, theoretically get used to changes in such Extensions coming into affect. Patent protection per se is only a presumptive, and an issued patent can be voided due to the discovery of prior art, for example.

In general, the deal providing a patent as a monopoly to an inventor for disclosing his invention, and requiring renewal to keep the monopoly in force, is a rough and ready system that seems to work. Patent Term Extensions are an attempt to tweak the system that seems to get ever more complicated, in an attempt at fairness. The costs in litigation are horrific.

On balance, I prefer finality and clarity to fairness. In real terms, no two pharmaceutical patents reflect the same degree of inventiveness. Nor is the public interest the same in all cases.

Meanwhile, copyright is provided automatically for very long periods for every creative work, regardless of intrinsic value.



Categories: Intellectual Property, Israel IP, Israel Patent, Israel Patent Office Rulings, Patent Term Extension, SPC, Uncategorized, החלטת רשות הפטנטים, פטנט, פטנטים

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