BMS sued Korean pharmaceutical companies alleging patent infringement of entecavir compound patent and low dose formulation patent

Baraclude tablets are a blockbuster drug of BMS that has been sold for the treatment of chronic hepatitis B virus infection in Korea. BMS listed 2 patents in Green List of KFDA that is a local version of the Orange Book of US FDA. Entecavir compound is the active ingredient of Baraclude.

Korean generic companies obtained MA for generic versions to Baraclude and are ready to launch their generic products to the local market. BMS filed patent infringement lawsuits against Korean pharmaceutical companies recently.

Before BMS patent infringement lawsuits, local companies filed invalidity trials to challenge the validity of the corresponding Korean entecavir compound patent. Also, they filed trials to confirm the scope of patent right about the corresponding Korean low dose formulation patent. The invalidity case of the compound patent is pending in the IPT of KIPO. But the IPT decided that generic products do not infringe the scope of the low dose formulation patent. In appeal, the Patent Court upheld the IPT decision that low dose entecavir formulations of 0.5mg or 1.0 mg should be regarded being obvious over the prior art and that generic drug do not infringe the subject patent.

Korea has the bifurcated system that allocates decision power to separate authorities. Patent infringement issue and patent invalidity issue must be decided by two separate and independent courts. Patent infringement and invalidity challenge may occur simultaneously but two proceedings are correlated.

In the patent infringement lawsuits, defendants Korean companies will raise an affirmative defense about invalidity of entecavir compound patent. Such invalidity defense is allowed and the court may stay the infringement lawsuit proceeding on its discretion until the IPT of KIPO decides validity issue.

On the other hand, defendants are quite safe from patent infringement liability of low dose formulation patent because they had prior decisions from the IPT and the Patent Court that their products are out of the scope of the patent claims in issue.

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. 

Remicade v. Remsima - Trademark Dispute between J&J and Celltrion

Remicade is a monoclonal antibody to treat RA. This blockbuster biopharmaceutical product was developed and has been sold by Centocor that is one of J&J groups.

A Korean company Celltrion developed a biosimilar product to Remicade and obtained a Market Approval (MA) from KFDA in 2013. Further Celltrion filed an application on their biosimilar product to EMA and has been trying to obtain MA, too.

On the other hand, Celltrion filed Remsima as their trademark with KIPO. J&J opposed to the TM application but failed in opposition. And Celltrion succeeded to register Remsima as their trademark for their new biosimilar products.

J&J filed an invalidation trial to Remsima TM registration before the IPT within KIPO. But Celltrion prevailed on the IPT proceeding. The losing party J&J appealed against the IPT decision to the Korean Patent Court. The two subject trademarks in dispute are shown below.

On August 18, 2014, the Patent Court rejected J&J's appeal finally. The Patent Court held that Remsima TM registration shall be valid because Remsima is not similar to Remicade in their sounds, shapes and meanings. The losing party J&J may appeal to the Supreme Court again.

Statistics on New IP Applications Filed to KIPO in 2013

KIPO published the annual report of 2013 that includes statistics of filing numbers.

In 2013, KIPO received 204,589 new patent applications that is 8.3% increase to 2012 year; 10,968 new utility model applications that is 11.7% decrease to 2012; 66,940 new design applications that is 6.0% increase; and 147,667 new trademark applications that is 11.4% increase to 2012. 

In total, KIPO received 430,164 new applications with an 8.4% growth compared to the total number of 2012. 

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.