Russia's 150 million citizens spend about $40 million each day on medicines. The government, as well as individuals, purchases pharmaceuticals. The government does so via a centralised system which uses federal funds, for example for the treatment of patients suffering from seven high-cost indications (seven nosologies), covering 23 medicines, as well as for some other special-purpose programmes.
A manufacturer who wants to enter the Russian pharmaceutical market, either directly or indirectly, needs to take three steps: i) register a trade mark; ii) assess the risk of patent infringement; and iii) obtain marketing authorisation.
Until recently this system worked predictably. However, the government programme "Pharma 2020," initiated in 2009 and having progressive effect, disrupted the status quo. Entering the market with a medicine covered by a third party's pending patent suddenly became a very big issue.
According to the legislation, a marketing authorisation grants permission for the manufacture, sale and use of a medicinal product. A naïve player can forget about the existence of possible patent protection of a medicine. Alternatively, he may be aware of the existence of patents, but believe that his activities will not infringe them. Russian legislation does not provide for declarations of non-infringement. Therefore the only option was to enter the market, and then find out whether there had been an infringement in court.
The process of drug authorisation envisages that the applicant should state that third parties' intellectual property rights are not infringed. However this requirement hardly helps to prevent invalid authorisations, because at this stage it is not actually clear to the applicant if a specific patent will be infringed.
Patent legislation and legislation regulating drug circulation appeared unable to handle the issue. The emergence of domestic pharmaceutical companies made the question of inconsistency of laws involved in drug circulation very topical. The Federal Antimonopoly Service was given the task of resolving the situation and set up a committee, involving six governmental agencies with responsibility for drug circulation, to settle the matter.
The Federal Antimonopoly Service launched several initiatives. The Patent Office was charged with revising its rules on patentability and its practice of granting patents relating to methods of use of known molecules. The Public Health Ministry was charged with improving the system of drug registration, in particular relating to the patient information leaflets provided in medical packages. The Courts were invited to develop a compulsory licence regime.
The Federal Antimonopoly Service analysed the patents granted with respect to glatiromer acetate (RU2388764, EA 019998, RU2161489, RU2198900), rituximab (RU2326127, RU2358762, EA 4107, RU2139731), bevasizumab (RU2519669) and imatinibe (RU2304436, RU2125992), which fall under the seven nosologies list. The pending patents provide extended protection to medicaments for which the term of the original patent has already expired, and relate either to methods for production, or to new uses. The Federal Antimonopoly Service insisted that these patents do not contribute to the state of the art but merely extend the term of protection. The Russian Patent Office insisted that all these patents comply with all patentability criteria, and the Chamber for Patent Disputes supported their validity.
The Russian Patent Office said it did not believe that the existence of patents for new uses would exclude manufacturers from the market, and proposed that non-patentees should omit the newly patented indications in the patient information leaflets provided with medicines; these leaflets must be registered with the Ministry of Health.
This proposal is helpful only at first glance, because first of all there are no appropriate regulations or court decisions which would confirm that omitting an indication from the patient information leaflets guarantees that a patent is not infringed. Secondly, the Federal Antimonopoly Service applied to the Ministry of Health and requested that patient information leaflets relating to medicaments having the same active ingredient be made uniform. This related to the indication of side effects; however, the question about therapeutic indications remains open and very sensitive. The Federal Antimonopoly Service referred to a number of medicaments having different instructions which are actually analogues, such as Olitid, Regast, Mabthera, Disaverox and Meronem.
To resolve this question with respect to the manufacture of strategically important drugs in the territory of Russia, the Federal Antimonopoly Service also proposed the development of a compulsory licensing system. The possibility of compulsory licensing has been present in Russian legislation since 2003, but no licence has been granted to date. At present, a compulsory licence can be granted if an invention is not used or used insufficiently after four years from the date of grant of a patent (article 1362 of the Civil Law).
In March 2016, the scheme of compulsory licensing was enhanced, and put forward for consideration by the legislature. The criteria for compulsory licensing includes: inadequate supply of a particular drug on the market (e.g. the patentee refuses to manufacture and supply the drug, or is unable to do so for some reasons); or high price (e.g. for anti-HIV medicaments). Compulsory licensing will most probably be implemented with respect to drugs included in governmental programmes, such as those mentioned above. The applicant requesting such a licence could be either a company which is ready to produce, or the Federal Antimonopoly Service. According to public information, in April 2016 the Russian government rejected the proposals. However, the process is not finalised yet.
National Civil law now also permits the use of a patented product or process without the approval of the patentee for reasons of national security. The Federal Antimonopoly Service has proposed the inclusion of an additional reason for such use, namely a threat to a person or a threat to the right to medical treatment.
In December 2015 the Federal Antimonopoly Service proved the seriousness of its intent by imposing a fine of $6 million on Israeli company Teva simply for refusing to supply the medicament Copaxone (for the treatment of multiple sclerosis) through a Russian company (case A40-14800/2014). The case is now on appeal at the Supreme Court.
While these new mechanisms are emerging, several relevant legal provisions and court rulings are already influencing the sector. These are reviewed below.
From 2009 it was determined by the courts that manufacturing a medicament for the purpose of obtaining marketing authorisation does not constitute an infringement of a patent (the so-called Bolar provision): "Registration process of a generic medicament and fact of registration itself are not considered as acts of patent infringement". This was a case involving Novartis relating to myeloleukemia medicament imatinibe (case A40-65668/08). The final ruling was made by the Supreme Court, and was supported in a 2010 ruling relating to GlaxoSmithKline's hypoglicemic medicament rosiglitazone (case A40-56217/2008). It seems that the established rule will not be amended in the near future.
In 2015 the courts heard a case involving a generic drug that was registered before the expiry of the six-year period from the date of registration of the original drug (case A40-188378/14). Again Novartis was involved, with its treatment for multiple sclerosis, fingolimod. This six-year period was believed to be a data exclusivity term included in Russian legislation since August 21 2012.
In the case in question, the court of third instance ruled that the contested registration was valid because the owner of the first registration could not prove that its data was used, except for that which was publically available. In these circumstances the meaning of the six-year term in the legislation became unclear. It seems that even officials believed that only "use" of data relating to original drug was prohibited, whilst "reference" to it was permissible. However, "use" of data in support of an application to the regulatory authority in Russia is impossible a priori because such data is confidential. Note also that from 2014 a four-year period is included in the law in addition to this six-year period. According to this amendment, generic companies can submit their request for registration only four years after the first registration took place. This effectively appears to reduce the term of data exclusivity from six to four years. Moreover, the legislation replaced the term "original drug" with "reference drug", and we expect to learn the reason why this was done.
Methods for treatment
Claims to methods for treatment are admissible both in Russian and Eurasian Patent Offices (a Eurasian patent covers Russia).
The question of how a patent for a medical use would be interpreted in Russia has always been of interest. In 2010, manufacture of a medicament was held to be an infringement of a patent relating to "use a compound as antianginal agent for treatment …" in the court of second instance (A41-31159/09). For several years this remained the only case relating to use for treatment; two local companies were involved.
The general view was that Eurasian patents would be handled more favourably with respect to methods for treatment because the wording of Eurasian legislation relating to methods is easy to interpret to make a finding of infringement. This prognosis proved to be wrong. A specific method for treatment with Rituximab was protected by a Eurasian patent (EA 4107), but a company which began to produce Rituximab in 2015 was not deemed to be an infringer (case A40-32877/15). It was stated that the manufacturer does not treat anybody. The decision was made by the court of the first instance and, despite the fact that it was not appealed, there is a possibility that it is not the final ruling.
However, taking into account recent trends to prevent extended protection for drug molecules and the presence of a large number of granted patents which relate to medical uses, it is possible that the scope of protection provided by such patents will be interpreted in courts narrowly, and that manufacture will be permitted.
In 2009 a court held that the existence of a patent allowed the patentee to produce a protected product which infringed the patent of a third party. In several infringement cases where both parties had their own patents, the patent claims were compared rather than the product and the patents deemed infringed. This situation when both parties have patents was corrected by an amendment to the Civil Law in 2014 which now specifies the later patent as "dependent," and precludes infringement of the earlier patent.
The doctrine of estoppels was not applied in Russia for a long time. Invalidation and infringement procedures are not combined in one court case in Russia, and a patentee was able to argue for a narrower interpretation of claims in the Chamber for Patent Disputes during invalidation, but for a broader construction in infringement proceedings. The most notable case was in 2009, where a tea, which had been on sale for 10 years, did not destroy the novelty of a patent, yet was considered as infringing the same patent with help of "equivalence" of features (A40-62219/06).
This situation changed in 2012 in a case involving the Serum Institute of India relating to anti-HBV vaccines. The vaccine had also been sold for 10 years before the Russian patent was granted and the patent was deemed to be infringed. The question here related to the specific bacterial strain used. The court was ready to acknowledge infringement by enlarging the scope of the patent to any strain. The Chamber for Patent Disputes refused to invalidate the patent because the specific strain mentioned in the claims made, in its opinion, the invention novel and non-obvious. The case underwent a number of appeals before the Supreme Court ruled that if a patent is granted this must mean that the subject matter defined thereby is novel, and therefore the patent cannot be used to prohibit the production of a product which has been known long before (case A40-66073/2009). This was the first case where validity of a patent was assessed together with infringement.
In a situation where something is on sale and a patent is granted which might be interpreted broadly to cover the product on sale, one option is to apply the prior use provisions envisaged by Russian legislation. This might relate to an imported product as well, as was supported in a rather old decision of 2001 in the court of first instance (case A56-8882/01).
Patent term extension
Supplementary protection of use patents was previously not allowed by the Russian Patent Office. In 2012 this practice was contested (BAC-3927/2012). However, from January 2016 new rules for patent term extension came into force which envisage the grant of supplementary patents. Only compounds and composition claims are mentioned in the rules, and therefore it seems that it will not be possible to extend a use patent, especially taking into account the trend against extending protection of known molecules.
Close attention is now paid to the marketing authorisation in respect of the product which is the subject of supplementary protection. If the authorisation is not the first, the extension can be challenged in the Court (A40-85716/2010). It seems that if the patent encompasses two active molecules, only the earlier authorisation will be considered as "the first" (SIP-155/2014).
An interesting case arose where a company managed to obtain an extension of a patent (RU2458932) which was, in accordance with the legislation, newly granted after the original patent was partially invalidated. Since an extension can be applied for within six months after the grant of a patent, this term was considered met and the term of the newly granted patent was extended (October 2012).
In the above mentioned case (SIP-155/2014), extension of the newly granted patent was forbidden because the authorisation was not considered as the "first". While the first authorisation for the first molecule was obtained when patent extension was not possible, the authorisation for the second molecule was not taken into account. It was decided that this should be considered as the second possible extension of the same patent (despite the newly granted status), which was not permitted (December 2014).
A number of important court cases relating to infringement of patents for pharmaceuticals have recently been handed down (see table). In each of them, preliminary injunctions were requested, and in each of them, the requests were rejected.
Only one case ended with a finding of infringement, and in half of the cases the patents were invalidated. The rulings suggest that it is not easy to win an infringement case in Russia now. Infringement is usually established in court with the help of experts. Very often the only question which is put to the expert is: "does the contested pharmaceutical include all features of claim 1?". After an affirmative or negative response is obtained, the trial can be considered finished, and there is no place for further debate. However, as the table shows, the possibility of invalidation also increases. This contrasts with the practice that existed five or more years ago, especially if a local company is a party to the proceedings.
The risk of patent infringement has two sides. Every player should bear in mind that he can be found an infringer from one side, while from the other side a third party can enter the same market ignoring his patents. Those who obtain registration for an original drug can apply for at least four years' data exclusivity. Those who register generic drugs should move swiftly because only the first three applicants can use an accelerated procedure. Game playing with patient information leaflets during registration is questionable because of possible amendments to legislation. The possibility of parallel import of medicaments also exists, and can be sanctioned by the Federal Antimonopoly service. However, imports must be approved by the Ministry of Drug Health, which remains reluctant to do so.
The situation in the Russian pharmaceutical market has changed due to the emergence of several big pharmaceutical companies in Russia. The country still welcomes foreign players, but from now on Russia will set the rules.
|Recent Russian pharmaceutical cases
||Infringement case started
||Date of final decision
No rights (expired)
|Drospirenone + ethinyl estradiol
No rights (invalidated)
No rights (invalidated; expired)
No rights (invalidated)
||ViiV Healthcare EA1809
No rights (invalidated)
No rights (invalidated)
||Mikhail Khmara is a partner and head of the patent practice at ARS-Patent. He is a registered Russian and Eurasian patent attorney with almost 20 years’ experience in IP, focused on technology areas such as physics of solid state and metallurgy. His other responsibilities include licensing and cession agreements, and handling patent oppositions from their filing to presenting cases in court hearings. He graduated from St Petersburg State Technical University, earning an MSc with distinction in physics. He has served in the Appeals Commission of the Russian Patent and Trademark Office and been listed several times in the publication Russia’s Best Lawyers. He is a member of FICPI, AIPPI and the Russian Patent Attorneys Association, and frequently lectures and publishes articles on patent developments and practice.
||Yana Lipatova is a patent attorney at ARS-Patent. Her practice focuses on representing pharmaceutical and biotech companies before the Russian and Eurasian patent offices, including counseling and litigating in the field of pharmaceuticals. Yana has more than 20 years’ experience in working with big pharmaceutical companies and with start-up biotech companies, both domestic and foreign. She has written a number of articles, including two for Managing IP. Yana has spoken on Russia’s patent system at several international conferences, including the Life Sciences Invest forum in St Petersburg, ASPI in Paris and CIPA in London. She was also involved in developing new legislation relating to the protection of pharmaceuticals for the Russian Patent Office.