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Timestamp: 2019-03-25 05:44:14
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sevelamer Archives | FPC Review
Tag: sevelamer
Case No. 4A_415/2018 (Supreme Court) ¦ Decision of 7 December 2018, on appeal against O2017_016 (FPC) ¦ Decision of 12 June 2018
The setup of this case is pretty simple:
Salmon Pharma as the defendant in SPC infringement proceedings neither disputed validity of the basic patent EP 0 716 606 B1 of Genzyme Corporation, nor that the subject-matter of the SPC C00716606/01 is actually covered by the basic patent or that the attacked embodiment (sevelamer carbonate) is covered by the SPC. Rather, the defendant (only) alleged that the SPC was invalid because the IPI wrongfully allowed re-establishment of rights (Art. 47 PatA) with respect to the time limit for filing the SPC application under Art. 140f PatA.
Following-up on a decision granting interim injunctive relief (see the detailed report on this Blog here), the FPC had confirmed with a decision in main proceedings that the list of grounds for nullity of an SPC as set forth in Art. 140k PatA is exhaustive; the allegedly wrongful reinstatement was thus held to be no valid ground of nullity (see this Blog here).
The question as to whether the lists of grounds for nullity in Art. 26 and Art. 140k PatA are exhaustive had indeed not yet been explicitly decided by the Supreme Court before. However, the present judgment refers to an indication in 4A_52/2008, ¶2.2, according to which the grounds for invalidity for the certificate are listed in Art. 140k PatA. Furthermore, in application of the Patent Act of 1888, the Federal Supreme Court had already held that the grounds for invalidity of patents were exhaustively listed therein (28 II 309, ¶5). I just love to read such old decisions. Amazingly straight to the point; and the type face is so stylish:
Decision 28 II 309 of 2 May 1902 (snapshot)
Unsurprisingly, the Supreme Court takes the case-law of the Court of Justice of the European Union (ECJ) on Art. 15 of Regulation (EC) No 469/2009 (or Regulation (EEC) No 1768/92) into account, in view of the legislator’s explicit intent to bring the Swiss rules into line with European law.
However, the Supreme Court could not infer anything from the ECJ’s case-law in support of Salmon’s position. Rather, the Supreme Court confirms the FPC’s reasoning: The ECJ only affirmed the nullity of certificates due to the non-observance of standards which are not explicitly mentioned in Art. 15 of Regulation No 1768/92 by referring to Art. 15 as interpreted in view of Art. 3.
For example, in C-127/00 — Hässle ./. Ratiopharm, the ECJ held that failure to comply with the transitional regime of Art. 19 of Regulation No 1768/92 may result in the certificate being invalid. The requirement under Art. 19 is to be understood as an implicit substantive requirement additional to the conditions laid down in Art. 3 of the Regulation. A certificate which was granted even though an initial marketing authorisation had already been granted before the date laid down in Article 19 of the Regulation is therefore null and void; ¶¶84-92).
Likewise, in C-195/09 — Synthon ./. Merz Pharma, the ECJ held that Art. 3 of Regulation No 1768/92 necessarily referred to a product falling within the scope of that regulation within the meaning of Art. 2 thereof. A certificate granted for a product falling outside the material scope of the Regulation should be considered null and void; ¶56.
It cannot be inferred from these judgments that the list of grounds for nullity in accordance with Art. 15 of the Regulation is not to be understood as exhaustive. On the contrary, the ECJ stated that it could not be inferred from either the wording or the history of Art. 15 of the Regulation that the list of grounds for nullity of the certificate referred to therein was not exhaustive (Synthon, ¶55; Hässle, ¶¶90-91).
The Supreme Court thus held that the lists of grounds for invalidity of both Art. 26 and Art. 140k PatA cannot be supplemented. Consequently, in the context of a patent nullity action or a nullity action relating to an SPC, only the grounds provided for in these provisions may be invoked. The Supreme Court notes in passing that legal certainty demands for this, too.
Angesichts dessen, dass es sich bei der Nichtigkeit eines Patents bzw. Zertifikats um eine schwerwiegende Folge handelt, entspricht dies dem Gebot der Rechtssicherheit.
Next, the Supreme Court assessed whether non-compliance with the deadline for filing the request pursuant to Art. 140f PatA or wrongful reinstatement pursuant to Art. 47 PatA, could be subsumed under a ground for invalidity pursuant to Art. 140k PatA. However, this is neither apparent nor does it result from the relevant case-law of the ECJ.
Finally, the Supreme Court notes that SPCs and patents are granted by order of the IGE (144 III 285, ¶3.2). Nullity under Art. 26 and Art. 140k PatA is not to be mixed up with the administrative contestability or nullity of the dispositions of the IPI on which the grant of a patent or SPC is based. In other words, the fact that the catalogues of grounds for invalidity under the PatA are exhaustive does not mean that these dispositions cannot be contestable or void, which must be assessed according to general principles of administrative law.
Dass die Kataloge der patentrechtlichen Nichtigkeitsgründe abschliessend sind, bedeutet […] nicht, dass diese Verfügungen nicht anfechtbar bzw. nichtig sein können, was nach allgemeinen verwaltungsrechtlichen Grundsätzen zu beurteilen ist.
Interestingly, the Supreme Court explicitly left the question open whether the decision of grant of the SPC (or the earlier decision of 4 April 2005 concerning reinstatement) could have been challenged by the appellant, as the FPC had assumed: Any relevant time limit had expired since long, anyway. On the other hand, the nullity of a decision must be observed by all authorities applying the law at all times (137 I 273, ¶3.1; 133 II 366, ¶¶3.1-3.2; 132 II 342, ¶2.1; 129 I 361, ¶2; each with further references to case-law).
Incorrect administrative acts are usually not null and void, but only contestable; and they become legally effective when not challenged. Invalidity, i.e. absolute ineffectiveness, of an order is only accepted if it is afflicted with a profound and substantial defect, if this serious defect is obvious or at least easily recognisable and if the legal certainty is not seriously jeopardised by the acceptance of invalidity. Deficiencies in content only rarely result in the nullity of an order, in exceptional cases; this requires an extraordinarily serious deficiency. The main grounds for invalidity are the functional and factual lack of competence of an authority and serious procedural irregularities (such as the fact that the person concerned did not have the opportunity to participate in the proceedings). If an order is not legally binding in this sense, any authority dealing with the matter must comply with it at all times and ex officio (see, inter alia, 138_II_501, ¶3.1; 137 I 273, ¶3.1; 136_II_489, ¶3.3).
Salmon had argued that reinstatement was granted ‘arbitrarily and contrary to the clear and decades-long practice’ of the IPI. Again, the Supreme Court left undecided whether the IPI indeed wrongly allowed reinstatement because the alleged misjudgment could not be a defect that leads to the nullity of the decision. In particular, the Supreme Court held that any such deficiency would be neither obvious nor easily recognisable: By definition, reinstatement is a remedy when something went wrong, i.e. in the event that a time limit prescribed by the law was not observed.
Finally, in simple terms, the Supreme Court notes: The IPI had come to the conclusion that the conditions for reinstatement pursuant to Art. 47 PatA were met. The appellant may not share this view, but the administrative act is still not null and void.
Das IGE ist zum Schluss gekommen, dass die Voraussetzungen für die Wiedereinsetzung gemäss Art. 47 PatG gegeben waren. Die Beschwerdeführerin mag diese Einschätzung nicht teilen; ein nichtiger Verwaltungsakt liegt jedoch nicht vor.
Representative(s) of Salmon Pharma:
Representative(s) of Genzyme, Sanofi-Aventis:
On appeal against decision O2017_016 of 12 June 2018:
4A_415/2018 7 December 2018
Main proceedings, following up on decision S2016_009 of 4 July 2017:
O2017_016 12 June 2018
Summary proceedings:
S2016_009 4 July 2017
Case No. O2017_016 ¦ Decision of 12 June 2018 ¦ “Verletzung Ergänzendes Schutzzertifikat; Sevelamer”
Following-up on a decision granting interim injunctive relief (reported here), the present decision in main proceedings now confirms this outcome. I have reported about the hearing in main proceedings on this Blog here.
As indicated earlier, the defendant neither disputed validity of the basic patent EP 0 716 606 B1 of Genzyme Corporation, nor that the subject-matter of the SPC C00716606/01 is covered by the basic patent or that the attacked embodiment (sevelamer carbonate) is covered by the SPC. Rather, the defendant (only) alleged that the SPC is invalid because the office wrongfully granted re-establishment of rights (Art. 47 PatA) with respect to the time limit for filing the SPC application under Art. 140f PatA.
The FPC now confirms that the list of grounds for nullity of an SPC as set forth in Art. 140k PatA is exhaustive. The alleged wrongful reinstatement is thus no valid ground of nullity. In particular, the decision refers to the dispatch of the Federal Council when the SPCs had been enacted, i.e. the note that Art. 140k is to define the grounds for nullity:
Artikel 140k Nichtigkeit: Absatz 1: Neben dem Erlöschen bzw. der Sistierung des Zertifikats müssen auch die Gründe festgelegt werden, sie seine Nichtigkeit herbeiführen.
CJEU’s logo
Further, the decision reviews the CJEU’s case law and notes that the grounds for nullity according to Art. 15 of the EU SPC Regulation 469/2009 have never been held to be an open list. Rather, the CJEU only interpreted Art. 3, violation of which is referred to as a ground for nullity in Art. 15 of the EU SPC Regulation.
The FPC notes that the defendant could have appealed the decision of reinstatement (Art. 48 ff APA in the version of 09 December 2003), together with the decision of grant of the SPC – but failed to do so. The decision is thus formally final, and the defendant has to live with it.
If there is a take away message for practitioners in this decision, then it is surely to watch out for fresh grants (not only of SPCs, but also patents, trademarks, designs, etc.), to not miss the 30 days(!) time limit for an appeal; Art. 50(1) APA. This will be the only chance to fight against e.g. a wrongful reinstatement — which is more than you will ever get e.g. at the EPO where there is no such chance at all; but still, you need to act quickly.
Yet another interesting aspect of the decision is the assessment of the value in dispute. The parties heavily disagreed. Plaintiffs had considered it to be CHF 5m, while the defendant only estimated it to be CHF 500k. The FPC had thus to decide on this issue, too; Art. 91(2) CPC. Towards this end, it relied on some interesting rules of thumb:
one third of the turnover of the originator’s product is replaced by the generic within about 2 years;
the profit margin of a generic is 50%.
Based on these rules of thumb, and the plaintiffs’ own statement of an annual turnover in Switzerland of CHF 2.25m p.a., the FPC considered the the value in dispute as CHF 750k, for the roughly two years of protection at stake before the SPC will finally lapse in February 2019.
UPDATE 18 July 2018: