Out-Law / Your Daily Need-To-Know

Compulsory patent licence for HIV drug was legitimate, says Federal Supreme Court in Germany

Out-Law News | 12 Jul 2017 | 2:36 pm | 2 min. read

It was legitimate for a judge in Germany to require the owner of a European patent for a drug compound to allow a major pharmaceutical company to make use of its patent to provide medicines to patients with HIV, the Federal Court of Justice in the country has ruled.

The court rejected an appeal by the patent owner, Shionogi, against a compulsory patent licence order previously issued by Germany's Federal Patent Court in preliminary injunction proceedings.

The Federal Court of Justice ruled that US pharmaceutical giant Merck, which manufactures and sells Isentress, a drug used to treat HIV which, as the only available drug in Germany, comprises the Raltegravir compound for which Shionogi holds the European patent, had made sufficient attempts to agree a patent licence on reasonable commercial terms with the Japanese company before the dispute between the companies came to court.

It also said that there is a public interest in granting a compulsory licence since some patient groups, such as young children, pregnant women, and patients that have already been prescribed Isentress, need to receive Raltegravir as part of their treatment.

Patent law expert Marc L. Holtorf of Pinsent Masons, the law firm behind Out-Law.com, said the granting of compulsory patent licenses is extremely rare in Germany, with only one previous case known to have arisen where such a licence was granted by the courts, although it was subsequently overturned on appeal.

There is a provision for granting a compulsory patent licence within German patent law. Under the legislation, a compulsory licence can be issued if four conditions are met.

First, the licence must concern a patent or a utility model, which is a similar intellectual property right to patents which applies to inventions in some countries. The second condition is that the business looking to obtain the licence must be seeking to use the patent or utility model commercially.

The prospective licensee must also have made serious attempts to agree a licence agreement with the patent owner on reasonable commercial terms prior to seeking a compulsory licence, and further demonstrate that the granting of a compulsory licence is justified in the public interest.

Shionogi and Merck have been embroiled in patent disputes over Raltegravir outside of Germany. Shionogi sued Merck for patent infringement before the High Court in London last year, but the judge ruled that the Japanese company's patent was not valid. The ruling is the subject of an appeal which is due to be heard by the Court of Appeal in February 2018. Holtorf said that, in the meantime, one has to thoroughly analyse the existing decisions as to their potential impact on patent protection in Germany.

Most of the recent legal cases concerning compulsory licenses have been heard by courts in India.

The right to grant a compulsory licence is set out in Article 31 of the TRIPS Agreement, an international agreement to which all members of the World Trade Organisation are party. The provisions are aimed at enabling patents to be put to use without the authorisation of rights holders in certain circumstances, providing conditions aimed at protecting the legitimate interests of the patent holder are met.

Last year, the High Court in London ruled on a case which considered UK and public health grounds for access to patented medicines. The dispute was between rival drugs manufacturers GSK and Wyeth and concerned Wyeth's European patent for a composition of proteins used in the treatment of the Neisseria meningitidis B disease (Men B).

The High Court held that Wyeth's patent was valid and that the Bexsero vaccine that GSK sold infringed all but one of Wyeth's asserted claims in its patent. However, in light of the public health requirement for effective vaccines against Men B, Wyeth did not seek an injunction to prevent GSK from continuing to supply its product.