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May 7, 2024

Patent News

The IP High Court decided that an action for declaratory judgment (“DJ action”) of the absence of a right to demand an injunction during the review of an application for marketing approval (“MA”) of a generic drug lacks actual controversy.

The Tokyo District Court dismissed an action by a company whose application for MA of a generic drug was under review to confirm that the patentee of the original drug did not have the right to demand an injunction or damages against the manufacture, transfer, etc. of the generic drug, and that the generic drug did not fall within the technical scope of the original drug patent, on the grounds that such an action lacked actual controversy. The Intellectual Property High Court (the “IP High Court”) also found the District Court judgment to be appropriate and dismissed the appeal (Tokyo District Court judgment, August 30, 2022 (Case number: 2021 (Wa) 13905), and IP High Court judgment, May 10, 2023 (Case number: 2022 (Ne) 10093)).

Related party

  • Plaintiff in the first instance, Appellant:
    Nipro Corporation ("Nipro"), whose application for MA of a generic version of Halaven® (the "Plaintiff's Drug") is under review.

  • Defendant in the first instance, Respondent:
    Eisai Corporation ("Eisai"), which markets Halaven® (the "Defendant's Drug")
    Eisai R&D Management Inc. ("Eisai RD"), which is a subsidiary of Eisai, holds the patents in question

Background

  1. The law stipulates that the marketing of pharmaceutical products must be approved by the Minister of Health, Labor and Welfare (“MHLW”) for each item.
  2. The regulations stipulate that insurance doctors must not prescribe drugs other than those listed in the NHI (National Health Insurance) Drug Price List to patients.
  3. According to the MHLW's Notice of June 5, 2009 ("MHLW's Notice," Medical Policy and Regulation No. 0605001 / Pharmaceutical Affairs and Food Safety Bureau No. 0605014), in order to ensure a stable supply of pharmaceutical products, (1) it is the Ministry's policy not to approve a generic drug if it cannot be manufactured due to the existence of a patent on the active ingredient of the original drug in the approval review process for a generic drug, (2) if a patent exists on the indication, dosage or administration ("indication, etc.") of the original drug, it is the policy not to approve the generic drug for the indication, etc. for which the patent exists, and (3) for items for which there are concerns regarding patents, the parties concerned are required to coordinate in advance, and only those items for which stable supply is expected are required to go through the NHI price listing process.
  4. In general, a company which intends to market a pharmaceutical product applies for an MA, undergoes a GMP conformity survey, etc., obtains an MA from the MHLW, and after the approved drug is listed in the NHI Drug Price List, the drug is marketed.
  5. In this case, Nipro applied for MA of its drug but it seems the MHLW denied approval for the reason that the patents in question exist. Nipro filed this lawsuit so that they can show the MHLW that the Plaintiff’s Drug do not fall within the technical scope of the patents.

Matters Plaintiffs Sought for Declaratory Judgment
1. Primary request
(1) That Eisai RD does not have the right to demand an injunction against the production, transfer, etc. of the Plaintiff's Drug based on the patent right in question.
(2) That Eisai et al. do not have the right to claim damages for infringement of the patent right in connection with the production and transfer of the Plaintiff's Drug.
2. Preliminary request 1
(1) In the event that the Plaintiff's Drug is listed in the NHI Drug Price List, that Eisai RD does not have the right to demand an injunction against the production, transfer, etc. of the Plaintiff's Drug.
(2) In the event that the Plaintiff's Drug is listed in the NHI Drug Price List, Eisai, et al. shall not have the right to claim damages for infringement of the patent right in connection with the production and transfer of the Plaintiff's Drug.
3. Preliminary request 2
(1) That the Plaintiff's Drug does not fall within the technical scope of the Eisai RD ’s invention.

Point of dispute

  • Is there any real interest in the DJ action of non-existence of the right in the primary request and the preliminary request 1?
  • Is there any real interest in the DJ action that the Plaintiff's Drug does not fall within the technical scope of the invention in preliminary request 2?

Judgment

  • The IP High Court ruled that each of the complaints in this case should be dismissed because they lacked actual controversy.

1. Primary request
  • A DJ action is permissible only when there is actual controversy, i.e., when it is necessary and appropriate to obtain a declaratory judgment against the defendant in order to resolve a legal dispute concerning the legal relationship, etc., and to eliminate the danger or uncertainty that currently exists in the plaintiff's rights or legal position.
  • There is no high probability that the Plaintiff's Drug will be approved for marketing and listed in the NHI Drug Price List in the near future, nor is there a high probability that the Plaintiff's Drug will be marketed in the near future.
  • Eisai has not asserted, and has no intention of ever asserting, any claim based on this patent right with respect to the manufacture of the Plaintiff's Drug for the purpose of applying for MA, etc. In addition, currently, Eisai, et al. assert that they have suffered no damages.
  • Even if, according to the operation based on the MHLW’s Notice, etc., it is a problem for Nipro that the MHLW does not approve the MA of the Plaintiff's Drug because of the existence of the patent in question, it is a dispute under public law between Nipro and the MHLW (the government). It cannot be understood that it is necessary and appropriate to obtain a declaratory judgment in this lawsuit because Nipro can seek relief through legal means such as filing an action to confirm the illegality of inaction or an appeal to the MHLW.
  • The danger or insecurity of Nipro's right or legal status that "the Plaintiff's Drug is not approved by the MHLW as a pharmaceutical product" is a matter between Nipro and the MHLW, and not a "legal dispute concerning the existence or nonexistence of a claim" between Nipro and Eisai,et al..

2. Preliminary request 1
  • Future legal relationships do not exist as current legal relationships and therefore there can be no legal disputes concerning them. Even if there is a legal doubt as to whether or not a certain legal relationship will be established in the future and there is a possibility of a dispute in the future, the occurrence of such a dispute is not always certain. Moreover, it is not necessary to allow a DJ action in order to solve a legal problem in the abstract, with respect to a legal relationship that has not yet arisen, in order to prepare for the occurrence of a dispute in advance; rather, it is sufficient that a DJ action of the existence or nonexistence of the current legal relationship can be filed after an actual dispute has arisen.
  • At this point in time, there is no reason to believe that there is any danger or uncertainty regarding Nipro's rights or legal status.
  • (In response to the argument that the MHLW's current practice of approval review based on the MHLW’s Notice, which mechanically processes whether or not a product falls within the technical scope that should be determined by a court, is contrary to the rule of law and violates the constitutional rights of generic drug manufacturers, such as the right to a trial and freedom of business), Nipro, in this case, is seeking confirmation of the legal relationship between Nipro and Eisai, et al. Even if there is a problem in the approval review practice as pointed out by Nipro, it does not mean that Nipro has interest of confirmation of the above-mentioned legal relationship.

3. Preliminary request 2
  • The judgment as to whether or not the Plaintiff's Drug falls within the technical scope of the invention is a factual judgment and is not intended to confirm rights or legal relationships.
  • In order to resolve the legal disputes that may arise between Nipro and Eisai, et al., it is necessary and sufficient to file a suit for injunction, etc. due to the patent right in question, a suit for damages in tort for infringement of the patent right in question, a suit for restitution of unjust enrichment, and if there is a benefit to be determined immediately, a DJ action of non-existence of claims in relation to these.

Comments

  • A DJ action is allowed only when there is actual controversy, and Nipro's action, which did not meet this requirement, was dismissed.

  • In Japan, in order to ensure a stable supply of generic drugs (i.e., to avoid being prevented from continuing to market a generic drug after its launch due to patent infringement), the approval review of generic drugs is conducted in such a way that a generic drug is not approved if a patent exists on the active ingredient of the brand-name drug, and for indications, etc. for which a patent exists (“patent linkage system”). Here, the MHLW determines whether or not the active ingredients or indications, etc. of the generic drug for which approval is sought fall within the technical scope of patents relating to the active ingredients or indications, etc. of the brand name drug in the Patent Information Report submitted by the party that has obtained marketing approval for the brand name drug (the "brand name drug company").
  • Generic drugs that are judged by the MHLW to fall within the technical scope of a patent relating to active ingredients or indications, etc. are not approved during the life of the patent in question.

  • This case is believed to be a lawsuit filed by Nipro to show the MHLW, in order to avoid the MHLW's judgment that the Plaintiff's Drug is within the technical scope of the patent and thus not approved, that Eisai etc. did not have the right to demand an injunction, and that the plaintiff drug was not within the technical scope of the invention (in other words, that it would not be enjoined after the product was launched and that a stable supply of the drug could be ensured).
  • There have been cases where generic drugs have been approved despite the fact that the brand name drug company thought that patent linkage system was at work and that the generic drug would not be approved, and cases where companies that have applied for MA of a generic drug have not received approval despite the fact that they thought there were no patent issues, leading to doubts whether the patent linkage system was working efficiently.

  • The judgment states that instead of the DJ action in this case, "relief should be sought through legal means, such as filing a DJ action of the illegality of inaction against the application for an MA or filing an appeal to the MHLW, etc." However, it would be difficult in reality for a pharmaceutical company that has filed an application for MA of a drug and plans to file an application for MA of another drug in the future to file an action against the MHLW (the government) in Japan.

  • It may be too much to say that the current practice of reviewing generic drug MAs is "contrary to the rule of law," as Nipro claims, and "also violates the constitutional rights of generic drug companies, such as the right to a trial and freedom of business”. However, it is doubtful whether the MHLW has enough resource to determine whether or not a generic drug falls within the technical scope of a patent that should ultimately be determined by a court.

  • Nipro may have filed this claim because it was concerned that the MHLW would not make a proper decision.
  • If a generic drug is not approved due to the MHLW's misjudgment of the technical scope, the company that applied for MA of the generic drug will not be able to obtain the benefits that should have been obtained by bringing the intended generic drug to market, and from the standpoint of patients, they will be unable to use the generic drug at a lower drug price, which should have been available earlier. On the other hand, if the MHLW approves a generic drug due to a misjudgment of the technical scope, it will lead to an injunction against the generic drug by a patent infringement suit, thus defeating the purpose of the patent linkage system, which is to ensure a stable supply of generic drugs, and the brand name drug company will suffer significant damage due to the entry of generic drugs.
  • Since the impact of the decision on whether a generic drug falls within the technical scope is significant, it is necessary to carefully determine whether the drug falls within the technical scope or not. However, this is a difficult task for the MHLW, which does not have patent experts and also considering the approximately one-year period for the approval review of generic drugs., A mechanism for appropriate decisions, such as involving the judicial authorities in this process, may be necessary.

  • In addition, there are many unclear matters regarding the patent linkage system in Japan.
  • There are no laws, cabinet orders, or ministerial ordinances governing patent linkage system in Japan, and the system is based on solely the MHLW’s Notice. For example, if an invalidation decision is issued by JPO for a patent relating to the active ingredient or indication, etc. of a brand name drug, it is not clear whether the generic drug is approved even before the invalidation is finalized, or whether the generic drug is not approved until the invalidation is finalized. Although a patent is valid until invalidation becomes final, there have been cases where a generic drug has been approved after JPO’s invalidation decision has been issued but before the invalidation becomes final. It is not uncommon to see revocation of JPO’s invalidation decisions for patents related to brand name drugs, and from the perspective of ensuring a stable supply of generic drugs, it would be better not to approve a generic drug until the invalidation of the patent has become final and binding.

  • The whole procedure of the Japanese patent linkage system may need to be more clear and a mechanism to appropriately determine whether a generic drug falls within the technical scope of a patent should be established.


Written by: Ms. Emiko Yano (Patent Attorney)