The plaintiff, an individual and the patentee of an invention whose title is "viruses and their use in therapy", filed a lawsuit against the defendant Amgen K.K. who was conducting clinical trials using a virus that falls within the technical scope of the patented invention, alleging that the clinical trials constituted the working of the patented invention of the plaintiff's patent right and infringed the plaintiff's patent right. The Intellectual Property High Court (hereinafter referred to as the "IP High Court") maintained the original judgment of the first trial (Tokyo District Court, Case No. 2019 (wa) 1409, judgment issued on July 22, 2020), which dismissed the plaintiff's claims on the grounds that the clinical trials constituted “the working of the patented invention for experimental or research purposes" under Article 69(1) of the Patent Act (IP High Court, Case No. 2020 (ne) 10051, judgment issued on February 9, 2021).
1. Background
The plaintiff is the inventor and patentee of the patent (Patent No. 4212897), the title of which is "viruses and their use in therapy".
Claim 1 of the patent recites "herpes simplex virus comprising a deletion within a BstEII-EcoNI fragment of a BamHI x fragment of the virus " (hereinafter referred to as the “Invention"), and according to paragraph [0016] of the patent specification, "some of the viruses are herpes simplex viruses that contain inactivating mutations in the ICP47 locus". As a specific example of the virus, the specification discloses G47Δ, which is a herpes simplex virus that "contains a deletion in the γ34.5 gene, an inactivating insertion in the ICP6 gene, and a deletion of 312 base pairs in the ICP47 gene" (paragraph [0021]). The plaintiff has been conducting clinical trials (Phase II trials) since around 2015 with the aim of commercializing it.
The defendant is a Japanese subsidiary of Amgen, and is a stock company whose main business is research, development, manufacturing, sales, and importation of pharmaceuticals, quasi-pharmaceuticals, and medical devices.
The parent company of the defendant received FDA (U.S. Food and Drug Administration) approval in October 2015 and EMA (European Medicines Agency) approval in December 2015 for T-VEC (generic name: talimogene laherparepvec) as a drug for malignant melanoma. Since around March 2017, the defendant has been conducting clinical trials of T-VEC for the indication of malignant melanoma. (hereinafter referred to as "Defendant’s Clinical Trials") in Japan.
There is no dispute between the parties that T-VEC is a therapeutic drug using herpes simplex viruses weakened by functional deletion of two genes, ICP34.5 (γ34.5) and ICP47, and that it falls within the technical scope of the patented invention.
The following two issues were in dispute, but only issue (1) was decided by the court. Therefore, this paper deals only with issue (1).
(1) Whether the Defendant’s Clinical Trials constitute "the working of the patented invention for experimental or research purposes" under Article 69(1) of the Patent Act.
(2) Whether the defendant has a non-exclusive license for the invention.
With respect to issue (1), the defendant argued that, in light of the Supreme Court Judgement in 1999 below, which decided that clinical trials for applying for a market approval of a generic drug constituted "the working of the patented invention for experimental or research purposes" under Article 69(1) of the Patent Act, clinical trials for applying for a market approval of an original biopharmaceutical (the Defendant’s Clinical Trials also fall under such clinical trials) also constituted " the working of the patented invention for experimental or research purposes”.
The Supreme Court judgement of April 16, 1999 (hereinafter referred to as "the Supreme Court Judgement of 1999")
Where a person has a patent right for a chemical substance or a drug containing the same as an active ingredient, and a third party applies for approval under Article 14 of the Pharmaceutical Affairs Act to manufacture and sell a drug containing the same active ingredient as a drug produced by the patented invention (hereinafter referred to as a "generic drug") after the expiration of the term of the patent right, the third party may, during the term of the patent right, produce and use a chemical substance or a drug that falls within the technical scope of the patented invention to conduct tests necessary to obtain materials to be attached to the application. In such a case, the production and the use of such chemical substance or drug constitute "the working of the patented invention for experimental or research purposes" under Article 69(1) of the Patent Act, and are not infringement of the patent right.
As reasons for this decision, the Supreme Court stated as follows
1 The patent system encourages inventions by granting exclusive rights to those who disclose their inventions for a certain period of time, and it also provides third parties with opportunities to use the disclosed inventions, thereby contributing to the development of the industry. In view of this, it can be said that one of the fundamentals of the patent system is to allow any person to freely use the invention after the term of the patent right has expired, thereby benefiting society in general.
2 The Pharmaceutical Affairs Act stipulates that the manufacture of pharmaceutical products must be approved in advance by the Minister of Health and Welfare in order to ensure their safety. In order to apply for approval, various tests (including clinical trials) must be conducted and materials related to the test results must be attached to the application. The same applies to generic drugs, in that in order to apply for a market approval, a certain period of time is required to conduct the prescribed tests in advance, and for these tests, it is necessary to produce and use chemical substances or drugs that fall within the technical scope of the patentee's patented invention. If it is interpreted that these tests do not constitute "experiment" under Article 69(1) of the Patent Act and that the production cannot be carried out during the term of the patent right, it would result in third parties not being able to freely use the invention for a considerable period of time even after the term of the patent right has expired. This result is contrary to the fundamental of the patent system described above.
3. On the other hand, it should be understood that it is not permissible for a third party, during the term of the patent right, to produce a generic drug to be transferred after the end of the term, or to produce or use a chemical substance pertaining to the patented invention as an ingredient thereof, beyond the extent necessary for testing for the application for a market approval under the Pharmaceutical Affairs Act, as an infringement of the patent right. As long as it is understood in this way, the patentee can secure the benefit of exclusive working of the patented invention during the term of the patent right. If it were to be interpreted that the production for the purpose of tests necessary for applying for a marketing approval of a generic drug could be excluded during the term of the patent, the result would be the same as extending the term of the patent right for a considerable period of time, which is beyond what is envisioned by the Patent Act as a benefit that should be granted to the patentee.
2. Original Judgement
The original judgment dismissed the plaintiff's claim on the ground that the Supreme Court Judgment of 1999 could be applied to the Defendant’s Clinical Trials, and that the Defendant’s Clinical Trials constitute “the working of the patented invention for experimental or research purposes" under Article 69(1) of the Patent Act.
The plaintiff appealed to the IP High Court for reversal of the original judgment.
3. Judgement
The IP High Court maintained the original judgment. The IP High Court judgment and the original judgment held as follows in summary.
First of all, the court stated the purpose of Article 69(1) of the Patent Act and the criteria for judging whether the Defendant’s Clinical Trials constitute “the working of the patented invention for experimental or research purposes" as follows.
The purpose of Article 69(1) of the Patent Act is that in order to "contribute to the development of industry by encouraging inventions through the protection and utilization of inventions" as stipulated in Article 1 of the Patent Act, it is necessary to protect the interests of the patentee who invented the invention. On the other hand, if the patent right is extended to the working of the patented invention for experimental or research purposes, it would eventually damage the development of the industry. Therefore, from the viewpoint of industrial policy, it is understood that the patent right is not extended to the working of the patented invention for experimental or research purposes, thereby harmonizing the interests of the patentee and the general public.
Whether or not the Defendant’s Clinical Trials constitute "the working of the patented invention for experimental or research purposes" should be judged from the perspective of reconciling the interests of the patentee with those of the general public, taking into consideration the purpose of Article 1 of the Patent Act, the legislative intent of Article 69(1) of the Patent Act, the purpose and discipline under the Pharmaceutical and Medical Devices Law, the purpose and content of the Defendant’s Clinical Trials, the nature of the drugs used in the Defendant’s Clinical Trials, and the consistency with the system for extending the term of patent right, etc.
Then, the court stated that the Supreme Court Judgment of 1999 should be applied to the Defendant’s Clinical Trials, and stated the reasons as follows.
a. In order to apply for market approval of T-VEC which is an original biopharmaceutical, as well as generic drugs, it is necessary to conduct prescribed tests over a certain period of time in advance, and for these tests, it is necessary to produce and use drugs and the like that fall within the technical scope of the invention.
b. Therefore, if the production and the like of drugs that fall within the technical scope of the invention cannot be carried out during the term of the patent right, the invention cannot be freely used for a considerable period of time even after the term of the patent right has expired. This result is contrary to the fundamental of the patent system, as the Supreme Court Judgement in 1999 held.
c. Although the defendant is conducting Phase I clinical trials in accordance with the provisions of the Pharmaceutical and Medical Devices Act, there is no evidence that the defendant is producing or is likely to produce T-VEC during the term of this patent right beyond the extent necessary for trials for applying for a market approval of T-VEC under the said Act. Therefore, the opportunity for the plaintiff, the patentee, to profit from the exclusive working during the term of the patent is secured. Nevertheless, if it is interpreted that the production for the trials necessary for applying for a market approval of T-VEC is not allowed during the term of this patent right, it would be the same as extending the term of the patent right for a considerable period of time. However, as the Supreme Court Judgement of 1999 held, it is beyond what is envisioned by the Patent Act as a benefit that should be granted to the patentee.
Based on the above, this judgement decided that the Defendant’s Clinical Trials constitute “the working of the patented invention for experimental or research purposes" under Article 69(1) of the Patent Act.
4.Comments
The court clarified that the Supreme Court Judgment of 1999 could be applied to clinical trials for applying for a marketing approval of original biopharmaceuticals, after indicating the purpose of Article 69(1) of the Patent Act and the criteria for judgment.
The plaintiff strongly argued the difference between conventional drug (small molecule drug) patents and biopharmaceutical patents, and between generic drugs and original biopharmaceuticals (new drugs). However, in judging the applicability of Article 69(1) of the Patent Act, the court clarified that biopharmaceutical patents were no exception.
As the plaintiff argued, it cannot be denied that, in general, biopharmaceuticals are characterized by a longer development period and higher costs compared to small molecule drugs. However, since the Patent Act stipulates a uniform term of patent right regardless of the type of invention or the size of its technical value, it is difficult to make a judgment that would be the same as extending the term of the patent right for a considerable period of time only for biopharmaceutical patents.
According to the Supreme Court Judgment of 1999 and this judgment, if the plaintiff could prove that the Defendant’s Clinical Trials are for the purpose of commencing to manufacture and sell T-VEC during the term of the patent right, it might be judged that it was not for "experiment" under Article 69(1) of the Patent Act. However, it would be quite difficult to prove such a case against an alleged infringer who is conducting clinical trials.
Written by: Mr. Masafumi Nakano (Attorney at Law)