Low Dose Entecavir Formulation in Korean Patent held as being Obvious by the IPT of KIPO

Entecavir is the active ingredient in Baraclude tablets of BMS. The drug has been sold for the treatment of chronic hepatitis B virus infection in Korea. When Korean generic companies noticed that a US district court found that entecavir would have been obvious in light of the prior art, they filed an invalidity trial to challenge the validity of the corresponding Korean compound patent, too. The invalidity case is pending in the IPT of KIPO.

On the other hand, Baraclude is covered by another patent for low dose formulation of entecavir. Several companies including those want to launch generic versions of Baraclude after expiry of extecavir compound patent, filed separate proceedings to challenge non-obviousness of law dose formulation over the prior art. The subject Korean patent is No. 757,155 that claims low dose entecavir formulations of 0.5mg or 1.0 mg for the treatment of chronic hepatitis B virus infection. The prior art discloses enetcavir compound, its use, a range of doses and animal test data, but did not disclose claimed doses.

On April 30, 2013, the IPT held that low dose entecavir formulations of 0.5mg or 1.0 mg should be regarded being obvious over the prior art. To the IPT decision, the patentee BMS appealed to the Patent Court and argued that a person of ordinary skill could have neither anticipated nor determined the claimed low dose formulations of 0.5mg or 1.0 mg entecavir from the prior art. Oral hearings were held two days for expert witness examination and BMS’s expert argued at the Patent Court that determining specific doses for human required numerous trials. The panel of 3 judges in the Patent Court will decide the case on March 14, 2014.

Canon v. Baiksan OPC – Patent Owner Canon Awarded US$14 million Damage for Patent Infringement in Korea

The patentee Canon filed many lawsuits against Korean companies. Canon alleged that local companies’ manufacturing and marketing of several printer cartridges for use in Canon and other branded printers infringed Canon’s patents. While local companies challenged validities of Canon’s patents, Canon saved their patented claims from invalidity challenges finally.

On June 7, 2013, the district court of Seoul Central District held that Canon’s patents were infringed and ordered that the defendant, Baiksan OPC must stop manufacturing and selling cartridges and further destroy infringing finished or half finished products. Further, the court awarded Canon about US$14 million as damage compensation.

There are 3 ways to compute damage amount under Article 128 of the Korean Patent Act. Among 3 ways of lost profit of the patent owner, infringer’s unjust profit and a reasonable royalty, the court applied the second method based on infringer’s unjust profit for Canon’s damage compensation.

According to Article 128, paragraph 2, it is possible for a patentee to seek damages based on the profit of infringer. The profit of infringer in the provision should be the actual profit that is the amount of money in which all costs are subtracted from the total sales. The cartridges were exported to foreign markets and the customs had records of sales. The patentee may obtain such data or real records through a court order. Accordingly, the only issue for computing damages in canon case is profit ratio of infringing goods.

In principle, a plaintiff can proves the profit with account data of an infringer. However, it is not easy to figure out accurate data because the infringer does not have a single item and thus can reduce the profit by allocating costs to the subject item. Sometimes the data produced by an infringer are not reliable, too.

Usually the patentee has used the balance sheets of infringers. However, the profit computed by such balance sheets cannot be accurate because the balance sheet of a company reflects final outcome of total business activities rather than a single subject product. As an alternative option, a patentee may use an official statistic number of the government. The tax department of the Korean government noticed an official data regarding an average profit ratio per each business area every year.

According to the official notices, average profits for periods of infringements were 10% for computer printer fields. Under the Korean patent law, courts have discretion to determine a moderate amount of damage to prevent non-compensation to a patentee even though the infringement is found but no sufficient evidence to prove an amount of damage exists. It eases the patentee’s burden of proof. Based on the provision, the district court computed damage of Canon’s patent infringement through the total sales of infringement x 10%. The total amount of US$14 million is a quite big number in the history of patent infringement litigation in Korea.

False Patent Marking

Many companies mark their products as patented by the patent number on the product or its packaging. Often they mark their products as patented by the patent application number on the product or its packaging before obtaining granted patent. It is false patent marking. More often many companies continue to mark their products as patented by the patent number on the product or its packaging after the expiry of the patent. That is false patent marking, too.

Patent marking may create consumer goodwill by suggesting that the product is innovative and further deter competitors to enter market with the same product. Even before patent granted, manufacturers may try to achieve similar effect through marking product with a patent application number. On the other hand, continued listing of an expired patent would continue to benefit the manufacturer, too.

In Korea, false patent marking can be charged as a crime. The person or company who did such false patent marking shall be imprisoned not more that 3 years or fined not more than KRW20million (about US$22,000). Several cases law show around US$5,000 fines for false marking.

The Korean Patent Act provides a cause of action against those who falsely claim that their products are patented. A company that falsely marks or advertises a product as patented can be held liable. However, it usually is not a cause of action for civil lawsuit including damage compensation. Without exceptional circumstances, false patent marking is within criminal sanction in Korea. Furthermore, under the Korean patent law, it does not require to falsely mark “for the purpose of deceiving the public” as like in the U.S. The intent or knowledge on false marking is enough.

Basically patent marking is not required by the Korean patent law. Without patent marking, a patentee may obtain a preliminary or permanent injunction against infringers. Unlike the injunction remedy, however, the patentee must prove the intent or negligence of infringers in order to obtain damage compensation from the infringers. Marking is an effective and convenient method to prove it and has been used ordinarily in practice.

Expedited Examination for Green Technology Patent Application

KIPO provided accelerated examination system for green technology patent application. It is to examine green technology patent application more expeditiously than normal track examination as well as accelerated track for other technology patent applications.

Korea enacted the Low-Carbon Green Growth Basic Act to promote new developments with low carbon and green growth. Under the new law, the government issues certification of green tech or financial aid to companies who are involved in green technology. Any inventions generated by such projects are eligible for the expedited examination. These include solar, wind, geothermal, tidal, wave energy, biofuels, energy storage technologies such as advanced batteries, other renewable energy techs. Also, it includes carbon capture and storage technologies, LED lighting, etc.

According to KIPO, an application may obtain examination result as the first office action within Ione (1) month from the request. It is really short time while it takes about 17 months on average to have the first OA for an ordinary application. In case an application is finally rejected and an applicant has appealed, the case will be processed as an accelerated appeal proceeding as well. The outcome of appeal will be provided within four months. Under normal appeal trials, it takes about ten months to be decided.

In order to request such expedited examination for green tech patent application, an applicant must submit a search report to KIPO. The prior art search report should be made from one of the official prior art search organizations designated by KIPO that includes Korea Institute of Patent Information, WIPS and IP Solution.

So far, examination results have been given within one month in all but a few cases that failed to satisfy the super-accelerated examination prerequisites. The fastest case to date took only 11 days from application to registration.

Pfizer’s Victory in Lyrica® Patent Infringement Lawsuit in Korea

Based on Pfizer’s Lyrica patent, Korean courts granted preliminary injunctions for patent infringement against two Korean pharmaceutical companies. The local companies launched a generic version of Lyrica last year. The active ingredient of Lyrica is pregabalin that is a known chemical compound and a derivative of GABA (gamma-aminobutyirc acid). Further, the pharmacological effect of pregabalin is known as a depressive neurotransmitter and has been sold as an anti-convulgent drug for a long time. Pfizer discovered a new medicinal use of pregabalin. The subject Korean Patent No. 491282 is directed to a new use of pregabalin for treating pain. It is a second use invention that is one of the main indications of Lyrica.

Korean companies challenged validity of the subject patent on the ground that the new use of pregabalin for treating pain can be anticipated or is obvious over the prior art. They alleged that the pain killing effect might be in the scope of anticipation of an ordinary skilled person because the prior art discloses the compound and its neurotransmitter depressing effect. Also, the blocking of certain neurotransmitter flow may be correlated with anti-pain effect. The IPT of KIPO and the Patent Court, however, maintained the patent by rejecting non-obviousness challenge. The invalidity proceeding has been reviewed by a separate authority rather than a civil court under bifurcation system and is pending before the Supreme Court as a final stage now.

In the meantime, the patentee brought lawsuit for seeking preliminary injunctions against generic companies before the Seoul Central District Court. Recently Pfizer won the cases and was successful in blocking selling generic version of Lyrica in Korea.