Pfizer Prevailed in Pregabalin 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 in 2015.

 

Furthermore, in June 2017, the Seoul Central District court awarded Pfizer damage compensations for pregabalin patent infringement. However, the Korean Court did not grant injunction against Korean companies who sell generic products with off-labels.

 

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, the Supreme Court, however, maintained the patent by rejecting non-obviousness challenge.

 

After validity challenge was failed, Korean generic companies restricted indications of their label only to anti-convulgent. They carved out pain killing use from their labels.

 

The patentee argued that the change of label is not enough to avoid patent infringement liability because the sale of generic drugs has slightly dropped or never changed even after the carved-out pain treatment indication from the labels. Accordingly, the generic companies shall be liable for the patent infringement of their continued sale after the label change.

 

The Seoul Central District Court did not agree with the patentee’s argument. The court held that the patent is directed to a second use invention and without indication of the claimed use, there is no patent infringement.

 

The Seoul Central District Court only awarded the patentee damage compensation based on the sale before the label change – carved-out claimed indication from the generic’s labels. Pfizer appealed to the Patent Court and the off-label case of pregabalin is still pending.

 

Patent Cancellation in Korea

Like Japan, Korea adopted a new procedure to cancel patents registered on or after March 1, 2017. A cancellation request may be submitted from the registration of a patent until 6 months from the publication of the patent.

 

Still invalidation actions to patents are available simultaneously. Previously, non-interested parties may file an invalidation trial against a patent within 3 months of the patent registration and interested parties may file an invalidation action at any time.

Under the new law, any party may file a cancellation action against a patent within 6 months of the patent publication date. But non-interested parties may no longer file invalidation actions.

Unlike invalidation trials, grounds for cancellation are limited to (i) lack of novelty or inventive step in view of "written" publications, including patent and non-patent literature (as opposed to public use or knowledge) and (ii) violation of the first-to-file rule. Other grounds of patent invalidity must be asserted at an Invalidation Trial.

In case any claim of the patent is cancelled, the patentee may appeal to the Patent Court within 30 days. However, in case the cancellation request is dismissed or rejected (IPT held the patent valid), the petitioner is not allowed to appeal.

 

 

Arbitration in Korea at KCAB (The Korean Commercial Arbitration Board)

Usually, many license agreements have arbitration clauses. Accordingly IP lawyers have to handle arbitration issues inevitably and we have been assisted and represented our clients regarding arbitration matters.

KCAB (The Korean Commercial Arbitration Board) was established in 1966 and had been duly approved as an official arbitration institution in the Republic of Korea. As international trade and commerce increases, disputes have been arising. In case parties decided to use arbitration, KCAB has been frequently chosen to resolve disputes.

 

There are two kind of dispute resolution systems ensuring enforceability of their decisions; judicial and arbitration proceedings. Due to its strict confidentiality, arbitration is not as well known while it has been used as typical ADR process.

 

Arbitration only handles such disputes related to contracts with arbitration agreement in it or a separate written agreement. For KCAB, a model Arbitration Clause must be included in contracts as follows: “Any disputes, controversies, or difficulties, or differences which may arise between the parties out of, in relation to, or in connection with this contract, or for the breach thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Korean Commercial Arbitration Board and under the Laws of Korea.”

 

KCAB has developed rules and practice to meet users’ high and various demands and then would become a new arbitration hub in northeast Asia. KCAB recognizes the paramount need to be neutral, independent and internationally minded administrator in order to deliver the most reliable, efficient and world class dispute resolution services.

 

Usually litigation in foreign country can be costly, time-consuming. KCAB arbitration can provide fast, impartial and confidential resolution of business disputes, and sometimes cheap compared to litigation.

 

Korea is a signatory state of the U. N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) since 1973. Also KCAB has signed around 50 international cooperation agreements with similar arbitral organizations throughout the world.

In closing, the followings are copied from the website of KCAB:

“In summary, the most significant and attractive features of KCAB arbitration for international parties are:

 

1. Impartiality - The KCAB is independent, neutral and respected arbitral institution.

2. Party autonomy - Parties may choose the arbitrators, place, language and procedure of the arbitration.

3. Finality - Arbitration decisions are final and binding on the parties, enforceable in the courts of the vast majority of countries.

4. Efficiency - Disputes are resolved both quickly and expertly, saving time and cost.

5. Privacy - Proceedings are closed to the public and the award is confidential.”

 

Arbitration Procedures at KCAB in Korea

1.       Arbitration Agreement

 

Parties may file a Request for Arbitration where the contract in dispute contains an effective arbitration agreement or when the parties agree in writing to resolve their disputes by arbitration. Where a case is “international” (i.e., where one party has its place of business outside of Korea or the place of arbitration is outside Korea), the International Arbitration Rules will apply by default, unless the parties agree otherwise.

 

2.      Request for Arbitration (payment of filing fee and advance of costs)

 

Claimant shall pay a fixed filing fee when submitting its Request for Arbitration. Upon receiving the Request, the Secretariat notifies Respondent, who has 30 days to submit an Answer. The Secretariat will provide a pre-estimate of the arbitration expenses (including administrative and arbitrator fees) which the parties shall pay in equal shares prior to the commencement of proceedings. This advance will be re-calculated once proceedings are brought to a close.

 

3.      Submission of Answer (Filing Counterclaims)

 

When submitting the Answer, Respondent may also file a Counterclaim, which may be consolidated with the existing claim and the amount in dispute shall be the sum of both claims. The Respondent will be charged a separate filing fee for its Counterclaim. If the Respondent disputes the jurisdiction of an arbitral tribunal or otherwise believes there is no basis upon which the arbitration may be conducted, they may make this submission in the Answer.

 

4.      Arbitral Tribunal

 

In principle, the disputes under the International Rules shall be decided by a sole arbitrator chosen by the parties, unless the parties agree otherwise. When asked by the parties, the Secretariat shall provide a list of arbitrators with the necessary expertise and impartiality. If the parties are unable or unwilling to appoint an arbitrator, the Secretariat will make the appointment on their behalf. To this end, the KCAB may consult the International Arbitration Committee (IAC), which will assist in the appointment of a tribunal. In the event of a challenge by one party to the appointment of an arbitrator, the Secretariat will decide on the challenge, having first consulted the IAC.

 

5.      Oral Hearing

 

The Tribunal is fully in charge of hearings. Unless and until the Tribunal directs otherwise, all communications, written or verbal, shall take place directly between parties or between each party and the Tribunal.

 

6.      Delivery of an Award

 

Once hearings have concluded, an Award is rendered by the tribunal. When all outstanding arbitration expenses have been paid, the Secretariat shall deliver the Award to the parties.

 

7.       Enforcement of an Award

 

An Award rendered by the Tribunal is binding upon the parties. The Secretariat shall deliver to the competent court the Award and a copy of the document proving that the Award has been delivered to the parties. Parties may obtain a writ of execution based on the arbitration Award either in a Korean Court or abroad.

 

-          Source : KCAB website –

 

 

 

 

 

 

Criminal Procedures in Korea

The following are a copied version of the webpage from the Korean Prosecutors Office.

1.      Initiation

Investigation is initiated upon discovery of the possibility that a crime may have been committed. The ultimate responsibility in all investigative procedures is in the hands of the prosecutor. Based on evidence collected by prosecutors (or police officers under the prosecutors' direction), prosecutors assess the validity of the judgment that a crime has occurred, and take appropriate measures upon this ascertainment.

2.     Booking, Arrest & Detention

Booking denotes the formation of a criminal case after initiation. An individual subject to investigation becomes a criminal suspect once a criminal charge has been determined by the investigation agency. In principle, prosecutors or police officers must obtain a warrant issued by a judge to arrest a suspect; however, there exist exceptions to these warrant requirements in cases that necessitate "Emergency Arrest" and "Arrest of Flagrant Offender". The prosecutor may detain the arrested suspect with a warrant of detention issued by the judge upon request by the prosecutor within 48 hours from the time of arrest. A suspect may request a preliminary hearing prior to detention, and an arrested or detained suspect may request a review of legality to the court. Through such process, the suspect may be released.

3.     Prosecution

Suspects are indicted in cases when there is a prosecutor’s decision that such suspects must stand trial. On the other hand, prosecutors may dismiss a case without indictment. The ground such as ambiguous location of the suspect, in which case further proceedings are unfeasible, will lead to a stay of prosecution.

4.     Trial and Sentencing

A judge hears trial upon motions filed by prosecutors. Sentencing occurs when defendants are found guilty of their charges. The punishment may include death penalty, imprisonment, fine, etc.