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Patent as a Weapon Against Competitors

29.01.2018

Irina Kirichenko, Lawyer, Patent Attorney of Ukraine

Source: Apteka

Ukraine has almost finished the implementation of the requirements of TRIPS Agreement, as well as of the requirements of the EU law, into the Ukrainian legislation, but the so-called “rakes” (translator’s note: “a trap into which one may run more than once”) remain in place: the quantity of the patents has transformed into their “quality” and total violation of intellectual property rights has been replaced by “patent trolling”. Is there any antidote? How do one needs to fight it? We have turned for the comments to Ms Irina Kirichenko, the Lawyer at Ilyashev & Partners Law Firm, who is a Patent Attorney of Ukraine and a well-known court practitioner in the field of protection of intellectual property rights.

As one on Pushkin’s characters figured out: “Inspiration is not for sale, but you can sell a manuscript”, because hunger is a pure companion of Musa.

The best competitive environment is not to have any competitive environment at all: to establish monopoly in the market it is not necessary to create an innovative product or a service – the main thing is to timely take out a patent to one’s own “lamp-post” and register its designation as an industrial sample.

Yes, sure, I have not had a slip of the tongue – one may currently take out a patent to everything: a wheel, a lamp-post and other person’s trademark.

For me everything started from a “match” , but my mockery about Malevich’s painting “Black Square” remains inappropriate:

– firstly, it disobliging – one must not take on the classics: a street in Kyiv (former name – V. Bozhenka Street) was named after K. Malevich in commemoration of 165-th birth anniversary of the world-known Kyiv avant-garde artist, one of the founder of new movements in the abstract art, with the aim of breeding the feeling of pride for the famous Ukrainians in the younger generation.

– secondly, who stood on my way to registration of a match myself? At the end of the day, nobody called off the motto from the 90s “Be the first to take out the patent (and strike your competitors!) – and be the last to speak”.

Putting it shortly, “for with much wisdom comes much sorrow”, and, thus, many wishes breed many possibilities.

«TAKE OUT A PATENT» TO A BRAND NAME: TRICKS OF THE TRADE

For those who hold a degree in law and may boast of good manners I would like to make a reservation: I deliberately avoid saying a word “patenting” but has already been working on myself – it is difficult to find a more concise term describing activities on acquisition of rights to the common “stool” and other person’s brand name – so, all that is left for the “fellow craftsmen”, who are burdened with the knowledge of the patentability criteria and ethical rules, is to train pronouncing it with stones in the mouth (for better pronunciation).

It is especially relevant to the pharmaceutical field because it is evident that all the new molecules have already been invented and patented, the patents are “biting the dust”, and no one will provide five additional billions for new innovations.

So, the entrepreneurial personalities are left to “patent” the objects which are not subject to patenting: register patents to utility models (pharmaceutical composition on the basis of that same non-steroid anti-inflammatory agents) and industrial samples – packages of pharmaceutical drugs labeled by other company’s brand name (as it recently was with a sorbent called “Carbowhite”).

The Ministry of Economic Development and Trade of Ukraine developed a ( draft Law on Introduction of Amendments to Certain Legislative Acts of Ukraine Regarding the Improvement of Protection of Inventions and Useful Models), called to somehow stem the tide of “patenting” in Ukraine.

In such way, for the declarative patents (which are essentially represented by the patents to useful models) pertaining to such innovative areas as pharmaceutics, medicine and biotechnology it is proposed to withdraw the process, as such, from the list of patented objects – the object of a useful model shall be represented by a device only.

Also, pursuant to the draft Law, the following objects will also be withdrawn from under the legal protection: surgical or therapeutic methods of treatment of people or animals; ways of health diagnostics; processes of human cloning; use of human embryos for industrial or commercial purposes etc.

Of particular importance for the pharmaceutical field will be withdrawal from the list of patentable objects of the new forms of a well-known medicinal agent which has become a part of the invention background including, salts, simple and compound ethers, compositions, combinations and other derivatives, polymorphs, metabolites, pure forms, particle sizes, isomers, new dosages or any property or new use of a well-known medicinal agent except for those leading to considerable improvement of therapeutic effectiveness of a medicinal agent which shall be confirmed by the research results.

As regards the disclamation of isomers and polymorphs from legal protection, I believe it to be a step backwards, since the polymorphism and stereoisomerism mainly depend on the method used to obtain this or that substance, and for the complex molecule the difference in its spatial arrangement, as well as the shape of the substance crystals, determine its basic properties, namely, the efficiency and, most importantly, the safety (it is because of the thalidomide tragedy in 1960s, caused by the “wrong” stereoisomer of the drug, that the complex study of the stereoisomers’ properties began, and the pharmacovigilance became systematic).

Regarding the use of a well-known medicinal product for a new purpose: the example of sildenafil acetate has become a classic, – and a global brand Viagra.

It should be noted that certain countries imposed a prohibition on patenting the diagnostic and treatment methods: pursuant to Article 27(3) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the member countries may prohibit the patenting of diagnostic, therapeutic and surgical modalities used for the treatment of humans or animals.

In addition, the draft law provides for the limitation of the patent validity period (for a medicinal product it could previously be extended to 25 years): the validity period of the intellectual property rights to invention is 20 years from the filing date of the application (convention priority). Thus, it virtually cancels the “privilege” for a “pharmaceutical” patent protection prolongation for another 5 years, attributable to the long procedure of medicine study, unless the marketing authorization is issued 5 years after the filing date of the patent application, in which case this time will be duly compensated for the patent holder.

For instance, the period of additional protection equals the period between the filing date of the patent application and the date of receipt by the patent holder of the first permit from the competent authority, reduced by 5 years. The period of additional protection shall not be more than 5 years. It is only the active substance of the medicinal products for pediatric use for which the period of additional protection may be increased by 6 months.

At the same time the provision is made for the possibility to invalidate a patent for the invention (utility model) not only under the judicial, but also under the administrative procedure (by the Chamber of Appeals of the patent authority):

First of all it is enshrined in the draft law that “The patent for a utility model shall be issued under the responsibility of its holder for the compliance of a utility model with the patentability criteria”.

Secondly, it is planned to amend the law by adding Articles 33-1 and 33-2.

Article 33-1. Recognition of the rights to invention (utility model) as invalid by the Chamber of Appeals:

Any person may submit to the Chamber of Appeals a substantiated application for recognition of the rights to invention (utility model) as invalid in whole or in part for non-compliance of the invention (utility model) with the patentability criteria provided for in the law (within 9 months from the date of publication of the information on the invention state registration).

The application for recognition of rights to utility model as invalid may be submitted to the Chamber of Appeals throughout the period of validity of the property rights to the utility model and after termination thereof.

It is a very significant addition, since the patent holder of, let us say, the “lemonade” might have prohibited the producers from using its formula (which is, by the way, provided for in Soviet GOSTs) for more than 10 years and demanded the recovery of damages and compensation. After the patent protection expires, such claims cannot be filed, but the conscientious manufacturers rarely apply to court for the recognition of a declarative patent as invalid from the moment of its issue and, thus, are deprived of the opportunity to compensate for their losses incurred because of the “patented” formula. The rights to invention (useful model), invalidated by the Chamber of Appeals, shall be deemed to ineffective from the date following the date of the state registration of the invention (useful model).

It should be noted that now there is also a possibility to submit a motivated petition to conduct an examination of a utility model for its compliance with the patentability criteria.

The patent authority conclusion on the non-compliance of the patented object with the patentability criteria does not entail any legal consequences; however, it can be used as serious evidence in litigation for cancellation of such legal protection.

Pursuant to the draft law such conclusion may be used by the person who lodged a petition when applying to court or the Chamber of Appeal to recognize the rights to the utility model as invalid.

As usual, the explanatory note to the draft law states that most of its provisions are aimed at harmonizing the Ukrainian national legislation with the EU laws.

PATENT: WHAT IS IT FOR?

The “real” patents (for an active substance or method for obtaining a new active ingredient), as well as the certificates of trademark (TM) registration, are self-sufficient and protect their own innovative component behind.

However, as exemplified by “Carbowhite”, a well-known and recognized brand in Ukraine, any TM may be registered as an industrial design, having been granted a patent for the “labeling” with all the desired brands, logos and designs.

As long as such a patent is effective, its holder can freely use another person’s design, mark and, accordingly, the goodwill of their owner in their own activities aimed at gaining the competitive advantages.

However, one can go further and, having patented the composition of the generic — auxiliary substances of a pharmaceutical composition composed of a well-known generic non-steroid anti-inflammatory drugs — as a “useful model”, add such patent to the Customs Registry of Intellectual Property Rights, thus prohibiting or at least making more difficult for the competitors to engage into foreign economic activities.

This violation of a patent for the method of obtaining an innovative medicine is difficult to trace when checking the customs declaration.

The patent for industrial design of a “match” or a utility model “medicinal product” (composition of the “paracetamol tablets”) is obvious — the appearance of the match and the composition of the drug are evident.

It should be mentioned that the explanatory note to the draft law recognizes that a useful model, the intellectual property rights to which are obtained through a simplified procedure, provides the bad faith applicants with an opportunity to circumvent – without any consent – the inventions patented by the third parties, and also provides an opportunity for the bad faith holders to prohibit third persons from using obvious technical solutions.

However, the adoption of this law promises better tomorrow.

As before, the only effective way to fight against such “patenting” is to appeal to the court. Of course, not all market participants can afford judicial procedures requiring time-consuming examinations, yet facing the possibility of the defendant to appeal (and not execute) the decision.

It seems that many issues could have been resolved by agreement, if the general legal culture of our society had allowed for the possibility of applying ethical sanctions to the patent trolls.

However, judging from experience, when a conditional patent holder of the exclusive right to a match or the paracetamol begins a patent war against his closest competitor, other producers of the same goods silently view the happenings.

Anyway, if the era of such “patenting” continues, the well-known question: “Who are you with, the masters of culture?” will be discarded as useless, since if there is no culture, there will be no “masters”.

 
© 2018 Ilyashev & Partners / Veebilehe mobiilversioon