IPT Decided One of 2 Patents on Herceptin (trastuzumab) Listed in Green List of KFDA as being Invalid

Roche launched Herceptin for the treatment of HER2-positive metastatic breast cancer in Korea. And Celltrion, a Korean Pharmaceutical company, developed a biosimilar Herzuma to Herceptin (trastuzumab) and obtained marketing approval (MA) for a biosimilar Herzuma (trastuzumab) from KFDA on January 16, 2014. It has been approved for treatment of early and advanced (metastatic) HER2-positive metastatic breast cancer as well as advanced (metastatic) stomach cancer. Roche filed a patent infringement lawsuit against Celltrion.

Under the bifurcated system about patent invalidity challenge and patent infringement litigation, an invalidation trial against one of 2 listed Herceptin patents was filed to the IPT in KIPO rather than a court.  On May 28, 2014, the IPT decided that Korean Patent No. 1,261,749 on Herceptin is invalid due to obviousness. Korean Patent No. 1,261,749 with the expiry date of August 25, 2020 is based on PCT/US2000/023391 claiming the priority on US60/151,018 application.

The losing party, patentee, appealed the IPT decision to the Patent Court. 

Reverse Payment Agreement violates Antitrust Law in Korea: the First case decision by the Korean Supreme Court for GSK v. KFTC case on Feb. 27, 2014

1. Background

GSK owned a Korean patent for ondansetron, antiemetic drug and sold with a tradename as Zofran. Dong-A Pharmaceutical Co. developed a generic version of ondansetron and received a cease and demand letter from GSK. Both parties started lawsuits but soon signed a settlement agreement and withdrew lawsuits.

2. Settlement of Patent Infringement Litigations

By a Sale & Supply Agreement for ondansetron between both parties, GSK granted Dong-A to sell the product to large sized hospitals. Instead, Dong-A shall neither make nor sell any competing medications including ondansetron to Zofran. GSK agreed to pay large amount of money to Dong-A by cash every year for 5 years. Further GSK promised to offer additional significant amount as incentive for high sales performance.

3. KFTC investigation and lawsuits

KFTC investigated GSK/Dong-A patent settlement case and decided that the settlement was a reverse payment agreement that violated the Antitrust Act of Korea. In particular, KFTC found them violating Art. 19 of the Monopoly Regulation and Fair Trade Act (MRFTA) and fined GSK about US$2 million and Dong-A US$1.5 million.

4. The Supreme Court Decision

GSK raised an appeal to KFTC's decision to the Seoul High Court but the court confirmed the KFTC decision. And GSK further appealed the case to the Supreme Court.

GSK argued that the settlement was within the scope of his patent right. As they pointed out, Art.59 of MRFTA (Korean version of antitrust law) has provision that “This Act shall not apply to any act which is deemed as a justifiable exercise of the right under the Copyright Act, the Patent Act, the Utility Model Act, the Design Protection Act or the Trademark Act.”

However, the Supreme Court rejected GSK's argument. The court opined that a settlement with reverse payment violates antitrust law if a patentee may maintain his monopoly by the reverse payment and thus affects adverse effect on fair and free competition in the related market. In the decision, the court suggested several factors in finding any violation or liability. Those can include the amounts of reverse payment to the opposing party and anticipated profit of the patent owner, patent litigation cost, time span and period for non-compete, etc.

On the other hand, the Seoul High Court stated in their decision that when the subject patent is obviously invalid or the competing party has not infringed the patent, any settlement with reverse payment shall be regarded as being anticompetitive and shall be violation of antitrust law.

Korea is scheduled to implement the patent and drug MA linkage system that is a Korean version of the Hatch-Waxman Act system from March 15, 2015. Under the new system, the first generic company may obtain 12-month market exclusivity. Such exclusivity may cause motives or incentives for reverse payments between the patent owner and the first generic. In order to avoid antitrust violation issue, accordingly, it is recommendable to closely review the first decision of the Supreme Court on the reverse payment case.

Patent Marketing Approval Linkage

The FTA between Korea and USA includes provisions regarding the patent drug market approval (MA) linkage. Pursuant to the KORUS FTA, Korea has to fully implement patent drug market approval linkage from March 15, 2015. The key changes are summarized below.

1. Green List – the Korean version of Orange Book

When a company of a new drug application (NDA) has obtained a drug market approval (MA) from KFDA, the NDA holder must list patent information in the patent list (“Green List”) of KFDA. The Green List is similar to the Orange Book in the U.S., but is not the same. The deadline to list is 30 days from the receipt date of MA.

Unlike the Orange Book in the U.S., a NDA holder must list patents with the claim-by-claim basis in the Green List. Therefore, an applicant must specify every claim that covers the approved drug product and further an applicant must submit detailed explanation between each claim and the approved drug to KFDA.

2. ANDA Applicant’s Certification regarding Listed Patents

Like the HWA, an applicant of a generic drug application (ANDA) must submit a certification regarding listed patents of Green List to KFDA. The patent certification is similar to those of HWA. For example, an ANDA applicant must file a Para. IV certification if he wants to launch a generic drug before the expiry date of listed patents. In such a certification, the generic drug applicant must provide a detailed statement demonstrating that the listed patent is invalid or that the generic drug does not infringe the listed patent.

3. Notice to an NDA holder and a Patentee

Like the HWA, an ANDA applicant with Para. IV certification must notify the fact that an application for generic drug approval has been filed and the filing date of the application to the product approval holder and patent owner within 7 days of the application filing date. The obligation to notice will apply to an ANDA applicant who will launch their product before the expiry date of term of the listed patent. Otherwise, this provision does not apply to generic applicants who intend to launch their drug after the expiration of the listed patent.

4. 12-Month Stay on Generic Drug Entry

Within 45 days from the receipt date of the notice, the Patentee may file: a patent infringement action or a scope confirmation trial before the Korea Intellectual Property Tribunal (KIPT) against the generic drug. Further, the patentee/NDA holder may request KFDA to take an action stay generic drug entry for 12 months from the receipt date of the notice from an ANDA applicant. Such stay shall y apply only once to each generic applicant.

5. First Generic's 12-Month Marketing Exclusivity

The first applicant may obtain first generic marketing exclusivity for 12 months over other generics. The first applicant for this marketing exclusivity means : (a) to be the first filer of ANDA application or skinny (paper) NDA applications that are similar to 505(b)(2) applications in USA; and (b) to be successful in obtaining an IPT decision or a court decision from challenging actions against listed patents including a scope confirmation trial or invalidation action. The actions must be filed before filing a generic approval application.

6. Forfeiture of 12-Month Marketing Exclusivity

The first generic's marketing exclusivity shall be forfeited if the ANDA applicant failed to obtain MA within 12 months from the filing date; or failed to launch generic within 2 months from the date that the generic may be marketed.

7. Substantial Differences from the HWA system of USA

The patent MA linkage system in Korea may share basic principle with the HWA system of the U.S. Upon reviewing the Bill to the Drug Act and the draft of KFDA regulations, however, we can find that many details will be quite different from those of HWA. In order to grasp practical implications, it is better to compare two systems in detail after the Korean version has been fixed. The FTA of Korea and U.S. set the deadline to implement a full system of patent MA linkage in Korea: March 15, 2015. Therefore, we will certainly have final versions of law provisions and regulations within this year. We will provide you with them when they are available.

Denied Patent Term Extension for Novartis' Exelon® Patch in Korea

Novartis' Exelon® Patch has been used to treat mild to moderate dementia of the Alzheimer's type and mild to moderate dementia associated with Parkinson's disease. The active ingredient is rivastigmine.

Novartis obtained the first MA for Exelon® Capsule and the second MA for Exelon® Patch in Korea. Exelon® Patch uses a new formulation that allows rivastigmine to be administered in a transdermal therapeutic system (TTS).

Novartis listed two patents in the Green List (http://medipatent.kfda.go.kr) of KFDA pursuant to the linkage system of patent and market approval. The first patent is Korean Patent No. 133,686 that claims chemical compounds including rivastigmine, its pharmaceutical use. The term of the compound patent expired on December 23, 2012. The second patent is Korean Patent No. 569,051 that claims inventions of TTS formulation. The second patent will expire on January 8, 2019.

Novartis has another patent in issue that claims rivastigmine compound for transdermal administration and compositions for them. The patent in issue is Korean Patent No. 121,596 that has actually lmost the same scope of protection that of the basic compound patent of Korean Patent No. 133,686. The background between two patents is somewhat complicated because Korean Patent No. 121,596 stems from transient measure in 1987.

The Patentee and NDA holder, Novartis filed a petition for patent term extension of the basic compound patent on April 23, 2012. In Korea, the patent term extension system was first introduced on July 1, 1987. Under the 1987 Act that applied to the patent in issue, a petition for patent term extension may be filed only during the last three (3) years of the original term of the patent. Upon filing a PTE request, the term of the subject patent shall be extended automatically and shall be terminated on the expiry date retroactively in case the petition has been denied.

KIPO denied Novartis’ petition. Novartis appealed to the Seoul Administrative Court. On September 26, 2013, the court rejected Novartis’ arguments and denied PTE for Exelon Patch patent. The Patentee and NDA holder, Novartis appealed the lower court decision to the Seoul High Court again. The current PTE system has been based on 1990 amendment and the first PTE regulations of 1987 are quite different from those of the current PTE regulations. The PTE regulations of 1987 that must applied to Exelon Patch case had much more narrow scope than those of the current regulations in subject patents and gourds for PTE. Exelon Patch falls in such unfortunate cases during transient period between 1987 and 1990.

Patent Term Extension (PTE) Based on MA for Drug Inventions in Korea

1. History of Changes

The patent term extension system was first introduced in Korea on July 1, 1987. Under the 1987 Act, a petition for patent term extension may be filed only during the last three (3) years of the original term of the patent. Under the new 1990 Act, however, a petition for patent term extension may be filed within three (3) months from the date of the approval and six (6) months prior to the expiration date. The current law is basically the same as that of 1990.

Some Changes to the current patent term extension system went into effect on April 3, 2013. The key change to the current system is limiting the number of PTE instances from multiple available chances to only one. Under the current PTE system in Korea, PTE may be available only to the "first" regulatory approval for "a new chemical entity."

2. Subject Patent and Procedures

A patent is eligible for term extension if the patent is related to an approved medicinal or agricultural product, if the patent was unable to be practiced after grant due to pharmaceutical or agricultural regulatory approval requirements. Such a patent should claim a compound, composition indicating use, process of manufacturing, formulation for (1) an invention relating to a drug which requires a product approval under the Pharmaceutical Affairs Act ("PAA"); or (2) an invention relating to an agrochemical which must be registered under the Agrochemical Management Act ("AMA"),

Only registered patentee may apply for patent term extension to KIPO. If the patent right is jointly owned, all the patentees must jointly apply for an extension of the term.

An application for patent term extension must be submitted within three months from the date of the approval under the PAA or from the date of the registration under the AMA. The application, however, may not be submitted less than six months prior to the expiration of the original patent term. Also, a petition for patent term extension may not be filed after the expiration of the patent term. An application for patent term extension should be supported with evidence to show the reason for the extension.

3. Period and Number of Patent Term Extensions

The term of a patent can be extended only once. In case a product approval (or registration) is sought for multiple patents, the term is extended for each patent. However, in case multiple product approvals (or registrations) are sought for a single patent, the term is extended only for the first approval (or registration).

Prior to the current law, even an approval for a combination product whose components had been previously approved by KFDA could be the basis for PTE. In addition, the approval for a second use of an approved drug could also be the basis for PTE, since the approval was regarded as the "first" approval for the new use. Further, in some cases, even an approval for a new formulation comprising an approved active ingredient could be the basis for PTE, if the new formulation was not simply different in the dose of the active ingredient but was a different administration form compared to the previously approved drug (e.g., injection vs. tablet). However, under the current PTE regulation, PTE may be available only to the "first" regulatory approval for "a new chemical entity."

The period of PTE shall be the total length of non-working time to obtain authorization or registration under provisions of the PAA or AMA to work a patented invention. For example, for drugs, the period commencing from either the approval of a protocol for clinical testing from the government authority after obtaining a conditional approval to manufacture for clinical testing or the date the patent is registered, whichever is later; to the date that the final approval to market.

The maximum patent term extension obtainable is five (5) years regardless of whether the actual period of non-working caused by the statutory requirements under the relevant Act exceeds five years.

4. Appeal to the IPT and the Patent Court

If an examiner of KIPO rejects the petition or application for patent term extension, the applicant or petitioner may appeal to the IPT of KIPO. The appeal must be filed within thirty days from the date a certified copy of the rejection is served to the applicant or his agent. On the other hand, a 3rd party may challenge PTE through Invalidation Trial at the IPT of KIPO. If a losing party in the IPT proceedings wants to appeal against the decision of IPT, the party may bring a lawsuit to revoke the IPT decision to the Patent Court within thirty days from the date of receiving the decision.

Patent and Drug Market Approval Linkage in Korea

The FTA between Korea and USA includes provisions regarding the patent drug market approval (MA) linkage. Pursuant to the KORUS FTA, Korea already amended the Drug Act and is preparing enactments of further necessary provisions in the Drug Act and the Patent Act in order to fully implement the FTA. The full system for patent drug market approval linkage will be implemented on March 15, 2015.

1. Green List – the Korean version of Orange Book

When a company of a new drug application (NDA) has obtained a drug market approval (MA) from KFDA, the NDA holder must list patent information in the patent list (“Green List”) of KFDA. The Green List is similar to the Orange Book in the U.S., but is not the same. The deadline to list is 30 days from the receipt date of MA.

Unlike the Orange Book in the U.S., a NDA holder must list patents with the claim-by-claim basis in the Green List. Therefore, an applicant must specify every claim that covers the approved drug product and further an applicant must submit detailed explanation between each claim and the approved drug to KFDA.

2. ANDA Applicant’s Certification on Listed Patents

Like the HWA, an applicant of a generic drug application (ANDA) must submit a certification regarding listed patents of Green List to KFDA. The patent certification is similar to those of HWA. For example, an ANDA applicant must file a Para. IV certification if he wants to launch a generic drug before the expiry date of listed patents. In such a certification, the generic drug applicant must provide a detailed statement demonstrating that the listed patent is invalid or that the generic drug does not infringe the listed patent.

3. Notice to the NDA holder and the Patentee

Like the HWA, an ANDA applicant with Para. IV certification must notify the fact that an application for generic drug approval has been filed and the filing date of the application to the product approval holder and patent owner within 7 days of the application filing date. The obligation to notice will apply to an ANDA applicant who will launch their product before the expiry date of term of the listed patent. Otherwise, this provision does not apply to generic applicants who intend to launch their drug after the expiration of the listed patent.

4. Others to be Decided this year

The patent MA linkage system in Korea may be similar to the HWA system of the U.S. We envision that details will be quite different from those of HWA. However, we don’t have concrete information yet because the current law just has portions of necessary provisions. The FTA of Korea and U.S. set the deadline to implement a whole system of patent MA linkage in Korea: March 15, 2015. Therefore, with certainty, we will have details for remaining items within this year. We will immediately post them when they are available.