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PHARMACEUTICAL PATENTS IN RUSSIA

By: Kirill Osipov

Introduction

The pharmaceutical industry is one of the most important and crucial businesses in the world. Russian is not an exclusion here. Realizing the federal programme “Pharma-2020” and developing the next “Pharma-2030”, Russian officials have tried improving the pharmaceutical and healthcare industry in the country and seem to have succeeded in this. In addition, the Russian market remains attractive for foreign business too. In 2017 the pharmaceutical industry became a leader in encouraging foreign manufacturing investment. The protection of pharmaceutical inventions is currently therefore a hotly discussed topic in Russia.

Some Statistics

According to the Russian Federal Service for Intellectual Property (Rospatent), about 15,000 pharmaceutical patents (IPC A61K) are presently valid in Russia. The ratio of such patents owned by non-Russian vs. Russian patentees is approximately 7900 to 6800; thus, more than half of Russian pharmaceutical patents belong to non-Russian entities.

Besides Russian patents, patents granted by the Eurasian Patent Office (EAPO) may be in force in Russia. Based on 2017 EAPO data, every fifth patent application filed relates to pharmaceuticals.

Patentable and Non-Patentable Subject Matter

The most popular pharmaceutical subject matter that may be protected by a patent granted under Russian law and Eurasian patent legislation includes:

• a substance having a certain biological activity and that can be used as an active agent of a medicament,
• a pharmaceutical composition comprising at least one active agent supplemented with a pharmaceutically acceptable excipient,
• a dosage form,
• a method for preparing any of the above products,
• a method for preventing or treating a disease by using any of the above products,
• use of a compound or pharmaceutical composition for a certain purpose.

It is worth noting that there has been a boom in patenting inventions based on antibodies and therapeutic uses thereof in recent years.

However, patent protection cannot be provided to, in particular, methods of cloning a human being or a clone thereof, methods of modification of the genetic integrity of cells of the embryonic line of a human being, and use of human embryos for industrial and commercial purposes.

Patent Evergreening

Besides subject matter that is non-patentable by law, another issue concerning patent protection in Russia is evergreening, which is a particularly acute problem in the field of drug patents. Although there is no legal definition for what patents shall be deemed “evergreen”, the fight against such patents is now gathering momentum in Russia. The initiator of the fight is the Federal Antimonopoly Service of the Russian Federation, which proposed prohibiting patent grants on a selective invention (an individual chemical compound), a new dosage form of a known substance, second or further medical use, and a method for treatment. This proposal of the Service has been suspended; however, the Rospatent has started developing a stricter approach to substantive examination of patent applications directed to inventions that are merely a slight modification of the “first” invention and are aimed at extension of the patent monopoly.

For example, amendments have been introduced into Russian patent legislation, according to which pharmaceutical compositions cannot be defined in claims of patent applications with features not relating directly to compositions. Such features include conditions and a regimen to use a composition in a method, a technical effect being achieved when a composition is prepared or used, and features defining a method for treatment. It is worth noting that the same restriction to define a composition in claims is already envisaged by Eurasian patent legislation; amended Russian patent law has been aligned with Eurasian law governing Eurasian patents that are valid in Russia.

Compulsory Licenses

The possibility to have a compulsory license granted to an invention has existed in Russia since 1992, when the first version of the Patent Act of the Russian Federation came into effect, although Soviet legal acts also contained provisions relating to compulsory license. Under Russian law, a compulsory license to an invention may be granted only in two cases:

(i) If an invention fails to be used or is insufficiently used by the patentee during four years from the patent grant date, which leads to insufficient offer of respective goods, works or services on the market, any person willing and ready to use such invention, given the patentee’s refusal to conclude with such a person a license contract on terms corresponding to common practice, shall have the right to initiate legal proceedings against the patentee for the grant of a compulsory simple (non-exclusive) license for the use of the invention. If the patentee does not prove that nonuse or insufficient use of the invention is based on a valid excuse, the court shall rule the grant of the compulsory license.

(ii) If a patentee cannot use his invention without infringing thereby the rights of a holder of another patent (the first patent) to an invention who has refused to conclude a license contract on terms corresponding to common practice, the patentee (i.e. the holder of the second (dependent) patent) may initiate legal proceedings against the holder of the first patent for the grant of a compulsory simple (non-exclusive) license for the use of the invention owned by the holder of the first patent. If the patentee of the dependent invention proves that it is an important technical achievement and has a significant economic advantage over the invention of the first patent, the court shall rule the grant of the compulsory license. In this case, the holder of the first patent may also obtain a simple (non-exclusive) license for the use of the dependent invention.

The first attempt to have a compulsory license to a pharmaceutical invention granted was made by TEVA in a patent dispute with DEBIOPHARM S.A. in 2011 (court case # А40-83104/2011); however, the lawsuit was withdrawn by TEVA soon thereafter. The next attempt occurred in 2017 in a patent infringement case initiated by CELGENE CORPORATION against the Russian generic company NATIVA (court case # А41-22139/2017). In that case, NATIVA filed a counterclaim requesting a compulsory license to CELGENE’s patented invention. However, the judge decided that consideration of CELGENE’s claim and NATIVA’s counterclaim within the same case was not reasonable, and, as a result, the counterclaim was returned to the Russian company.

Not having given up, NATIVA and a co-owner thereof Mr. Oleg Mikhailov submitted the demand for a compulsory license as a new lawsuit (court case # A40-71471/2017).In this new case # A40-71471/2017, NATIVA and Mr. Mikhailov requested the court to recognize Mr. Mikhailov’s patented invention (a specific crystalline form of lenalidomide; later Mr. Mikhailov sold his patent to NATIVA) as being dependent with regard to CELGENE’s invention (covers, inter alia, lenalidomide as such) and having significant technical and economic advantages over the latter, and to therefore grant the compulsory license, because CELGENE had ignored an invitation prior to the legal proceedings to license its invention to NATIVA. CELGENE agreed that Mr. Mikhailov’s/NATIVA’s invention was dependent and could not be used without CELGENE’s invention. The Russian company, NATIVA, also managed to prove that its invention had significant technical advantages over CELGENE’s invention, such as enhancing the product yield, decreasing a defective product level, and achieving the desired particle-size distribution of the product without having to perform additional steps, which technical advantages resulted in reducing the product unit cost, i.e. an economic advantage. As CELGENE did not present license terms that the court deemed suitable, the court granted a compulsory license to CELGENE’s invention on the terms proposed by NATIVA.

Thus, case # A40-71471/2017 is the first instance of a grant of a compulsory license in Russia; however, during proceedings at a Court of cassation the case was settled by CELGENE and NATIVA with no grant of the compulsory license due to cancellation of NATIVA’s patent, which keeps the compulsory license issue open.

Conclusion

The imposition of sanctions by Western countries has affected Russia’s economy and compelled Russian officials to support domestic manufactures to promote their products. Nevertheless, Intellectual Property rights are respected in modern Russia, which results in an incessant search for an optimal balance of interests.