CC BY
34
Section 14. Science of law
Nikulina Valeriya Sergeyevna, assistant professor, Civil law and Civil procedure department Russian Academy of National Economy and Public Administration
E-mail: nikulina-vs@ranepa.ru
PROTECTION OF EXCLUSIVE RIGHTS TO PHARMACEUTICALS: RUSSIAN EXPERIENCE IN INTERNATIONAL CONTEXT
Abstract. The article provides an overview of changes in Russian judicial and legislative approaches along with modification of global tendences in estimating the balance between public and private interest in patent-related issues.
Keywords: exclusive rights, patent, pharmaceuticals, generic, bioequivalence, abuse of patent rights.
The right to health as it is deciphered in the resource manual for NGOs by Judith Asher, should not be seen as a right to be healthy. The state cannot be expected to provide people with protection against every possible cause of ill health or disability such as adverse consequences of genetic diseases, individual susceptibility and the exercise of free will by individuals who voluntarily take unnecessary risks, including the adoption of unhealthy lifestyles. Nor should the right to health be seen as a limitless right to receive medical care for any and every illness or disability that may be contracted. Instead, the right to health should be understood as a right to the enjoyment of a variety of facilities and conditions which the state is responsible for providing as being necessary for the attainment and maintenance of good health [6, 27].
The World Health Organization declares in the preamble to its Constitution: "The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition".
Human rights instruments do not exist only for governments, human rights lawyers and UN officials. They are there for anyone who is interested in understanding promoting and protecting the rights of individuals and communities. Human rights instruments are the products of international agreements about how our fundamental rights should be reflected and protected in government legislation, policies and practices [6; 8].
However it is public authorities who stand for the rights of individuals of particular country or nationality in international arena and it's for public authorities to supervise and provide observance by the participants of business practices inside the country of certain international law rules and approaches incorporated in national legislation.
The most acute question arises in connection to the human right to health and the necessity to balance it with private rights to pharmaceuticals as key elements in providing right to health, in particular rights of partent holders in case when the patented object is a pharmaceutical necessary to maintain certain level of health.
It goes even further in finding the deeper reason why maintaining certain standard of health is necessary in a world-wide perspective: "The health of all peoples is fundamental to the attainment of peace and security and is dependent upon the fullest cooperation of individuals and States. The achievement of any State in the promotion and protection of health is of value to all" [2].
As referred to J. Asher, human rights instruments are the products of international agreements about how our fundamental rights should be reflected and protected in government legislation, policies and practices.
As availability ofpharmaceuticals remains in great social need, legal regime for protecting the holders of patents for pharmaceuticals' rights should satisfy not only private but public interest as well. And patenting system is not only meant to promote innovations [7, 10] in pharmaceutical industry but also to make this innovations available to the society [8].
The authors of the manual cited above note that maintaining public interest for this purpose is put to practice through the legal institute of limiting the patentholder's exclusive rights. As internantional law examples they refer to the "flexible approaches" provided by TRIPS agreement and Doha declaration which allow the states to take the steps for protecting people's health.
As the official resource ofWorld Health organization states, WTO Members adopted a special Ministerial Declaration at the WTO Ministerial Conference in Doha to clarify ambiguities between the need for governments to apply the principles of public health and the terms of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In particular, concerns had been growing that patent rules might restrict access to affordable medicines for populations in developing countries in their efforts to control diseases of public health importance, including HIV, tuberculosis and malaria [5].
The authors of the monography on availability of pharmaceuticals from The Institute of Legisla-
tion and Comparative Law under the Government of the Russian Federation summarize the "flexible approaches" allowing governments to take steps in order to protect public health. Those are:
1. possibility for the state-members to exclude certain inventions from patentability, elaborating relevant patentability criteria in its internal legislation;
2. prevention within their territory of the commercial exploitation of which is necessary to protect ordre publicor morality;
3. Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods
for the treatment of humans or animals;
While article 27 of TRIPS Agreement does merely enumerate the "flexible approaches", articles 30 and 31 provide for the possibility of limitation of the patent rights while article 31 as if foreseeing approaching challenges to the existing patent rights regime states that authorization of use without right holder's permission should be considered on its individual merits [1].
For example, the question obviously demanding the answer for decades now is from which moment and to what kind of preparations the generic pharmaceutical manufacturer is entitled while the patent for the original one remains in force.
International law-making practice obviously takes its roots in the national practices of states-parties to international agreements and organizations. Then national practices in its turn base their legislative and judicial approaches on the rules produced by the international law-makers.
There was an attempt to tackle the said problem in 1984 by the USA Court of Appeals for Federal Circuit remanding the judgement of Eastern District Court.
In the litigation between generic pharmaceutical manufacturer "Bolar" and the producer of the original medicine "Roche" the Federal Circuit Court recognized that generic manufacturing of the generic pharmaceutical by "Bolar" company constituted patent infringement. "It is well-established, in particular,
that the use of a patented invention, without either manufacture or sale, is actionable even though Bo-lar's intended "experimental" use solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. //Bolar may intend to perform "experiments," but unlicensed experiments conducted with a view to the adaption of the patented invention to the experimentor's business is a violation of the rights of the patentee to exclude others from using his patented invention. It is obvious here that it is a misnomer to call the intended use de minimis. It is no trifle in its economic effect on the parties even if the quantity used is small. It is no dilettante affair such as Justice Story envisioned. We cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of "scientific inquiry," when that inquiry has definite, cognizable, and not insubstantial commercial purposes" [8].
In the case cited above the court construes the "use" since it hadn't been directly done by the US Congress and comes to a conclusion that preparatory testing would also constitute the "use" that would infringe exclusive rights of the patent holder.
As noted by Pilicheva A. V., the US Congress amended the Hatch - Waxman Act afterwards by actually abolishing the mentioned judicial act, pointing in section 271 Infringement of a patent art. e) 1) that making, use, offering to selling, or selling within the United States or importing into the United States a patented invention solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products will not constitute patent infringement [7, 271].
In Russia the redline case in this respect was the law-suit of Swiss pharma-company Novartis AG against a Russian company which was preparing for the production of anti-tumoral medicine previously patented in Russia by Novartis.
The Russian judicial approach to the same matter seems more natural rights-oriented.
At the point where the Russian company "Pharm-Synthese" with the patented medicine was submutting its invention having similar formula to medical testing and registration with the relevant social health authority in Russia, Swiss holder of the patent for the pharmaceutical with the same main active substance filed a lawsuit against the Russian patent infringer.
The Russian company claimed that mere production of the medicine containing a patented element does not run contrary any provisions of law as it's objective is charitable and not aimed at obtaining profit. Hence, the Swiss right-holder in this case is trying to take unfair advantage of it's exclusive rights by removing any competition.
Taking into consideration the rule of the Patent law in force at that time which prescribed the necessity of the exclusive right holder consent for the use of products with similar formula the courts of three degrees of jurisdiction recognized that the rights of the patentholder were infringed. Therefore Russian generic pharmaceutical manufacturer was enjoined from any actions aimed at testing and presenting the said pharmaceutical on the market which corresponded to the private rights protection approach and utilitarian approach to the intellectual property rights [12].
However the final review of the case by the Supreme Commercial Court of the Russian Federation showed that preliminary medical testing of the pharmaceutical did not exactly constitute use of the contested patented formula in the sense of article 10 of the Patent law in force at the time. While it was estimated as preparation for use upon expiration of the Swiss company's patent. That is the reason why actions of the Russian of the generic pharmaceuticals manufacturer possesing the same basic properties as the patented one was not recognized as infringement under Russian law in force. The Presidium of the Supreme commercial Court also stressed that all the actions of the proposed infringer mentioned above are aimed at protection of public health and provi-
sion of affordability thereof for the people in need. For this reason the production, testing and filing for registration by the Russian company of the medicine with similar formula was never recognized infringement [9].
The said position runs within the global tendency in the jurisprudence of other countries importing the drugs such as India for example.
Similarly the Bombay High Court, while deciding the motion of Novartis for seeking orders against Meher Pharma to restrain Meher from manufacturing, selling, marketing and exporting Veenat (the generic version of Novartis' anti-cancer drug Glivec), showed concern that if an interim injunction were granted to the plaintiff, the manufacturing network of the defendants would be dismantled and, if eventually the plaintiff failed to make the drug available in the required quantity at reasonable prices in India, it would be disastrous to patients [14].
In 2012 Russian ministry of social health held 14 bids for the supply of the antitumoral pharmaceuticals bearing international unpatented name Imatinib. Seven auctions of 14 were were won by an entity offering for supply the pharmaceuticals produced by Russian company Pharm-synthese, mentioned above.
In four of the auctions proceeds won another Russian entity supplying the pharmaceuticle produced by the argentenian Laboratorio Varifarma bearing different name but possessing the same properties.
In three more auction proceeds a participant offered to supply three different pharmaceuticals with the same properties and curing effect of which only 10% were the product of Swiss Novartis who was until April 1, 2013 the holder of exclusive right for the required formula.
Novartis sued all the participants of the said auctions including "Pharm-Synthese" with whom it has already had a dispute resolved by the Highest judicial instance in 2009.
In December 2012 the Swiss manufacturer abandoned the lawsuits against "Pharm-Synthese" and in April 2013 - against all other respondents. So basi-
cally taking into consideration the radical turn in the world practice the claims against all the generic medicines manufacturers were waived [15].
However partial supply under the afore mentioned auctions was performed with original Glivec manufactured by Novartis.
In 2011 while Novartis patent was still in force Glivec was within the three best selling pharmaceuticals and was a leading one within the segment of addicitonal therapeutic remedies. In 2012 the sail of Glivec fell down by 46,6% to 3,3 bln. RUR.
What is important here is to see the difference between generic pharmaceuticals produced in accordance with social health authorities standards which contribute to the realization of the right to health making the medicines affordable to bigger number of consumers due to price reduction, and fake ones. Manufacturing of the latter is under no control of the public or government so there exist a big risk that lack of public obligations and public control will produce a situation in the sphere of public health opposite to the desired one.
The authors of another monography "Russian IP market peculiarities in the context ofWTO membership" make an overview of all spheres of intellectual property objects' regulation. As far as pharmaceuticals are concerned they note that while trading in fake pharmaceuticals is a third most profitable business in the world, Russian along with China and India has become the largest fake-pharmaceuticals producer [16, 37].
Thus distribution of pharmaceuticals however finds itself on the edge of civil regulation of exclusive patent rights and administrative regulation of testing and admission of pharmaceuticals for public distribution.
Obviously after the position of the case-law restricting the monopoly of patent holders was elaborated and introduced to Russian case-law and lawmaking practices the Law governing distribution of pharmaceuticals was adopted which includes a ban on the use of the information on pre-clinical testing
of original pharmaceuticals within the period of 6 years [4, 18, 18].
Thus the interests of the right holders for the original pharmaceutical are balanced and protected against undue pretensions from the generic medicines producers. The term of 6 years preserves the right of original medicine manufacturer so that his efforts as new medical formula inventor are remunerated.
The difference between the status of generic and fake pharmaceuticals is defined in Russian legislation by the special status granted to the generics by the said law [4].
At present patent protection in Russia is governed by Russian Civil Code, part 4 [3] and administrative acts issued by the Supreme Courts within the scope of their authority.
Thus Resolution of the Plenum of the Supreme Court of Russian Federation comprises basic features explaining how legal provisions on patent law should be applied by courts [6].
The process of medical testing and certification for distribution in the market is governed by the Federal law on distribution of pharmaceuticals and medical remedies within the Eurasian economic union mentioned above which provides for two procedures for admission of the medicines to the market: standard - for a newly invented pharmaceutical and expedited - for generics.
The expedited testing procedure for the latter is conditioned by the fact that testing authority already has the original formula to which a generic pharmaceutical is compared. After such admission is granted by the social health authority the generics manufacturer can refer to the properties of the copied original which is confirmed by modern case-law.
Still questions of balancing interests of a patentholder for the original pharmaceutical and the manufacturer of a generic one keep arising and have to be balanced by courts.
One of the recent resolutions of the Intellectual property court of Russian Federation resolves the case where the facts are pretty similar to the Novar-tis - Pharm-Synthese case in 2009.
Two Russia-based entities prepare for circulation of a pharmaceutical with the main active substance previously patented by a global pharmaceutical company Celgene Corporation.
Considering the facts of the case the courts take mostly natural-law and public interest based position desiding that actions taken by the defendant in the case (neither scientific investigations of a pat-entholder's pharmaceutical containing the element, protected by the plaintiff's patent nor registration of a medical form and ceiling price of a pharmaceutical) do not conctitute patent infringement in accordance with article 1359 of Russian Civil code [17].
References:
1. Agreement on Trade Related aspects of Intellectual property rights URL:http://www.tripsagreement. net/trips_files/documents/TRIPS_E.pdf
2. WHO Constitution URL:https://www.who.int/governance/eb/who_constitution_en.pdf
3. Civil Code of the Russian Federation (Federal Law, dated November, 30, No. 51-FZ).
4. Federal Law Governing distribution of pharmaceuticals and medical remedies within the Eurasian economic union, dated 12.04.2010, edited 02.08.2019. No. 61-FZ.
5. URL:https://www.who.int/medicines/areas/policy/doha_declaration/en
6. Supreme Court Plenum Resolution, dated 23.04.2019 No. 10 "Governing application part 4 of the Civil Code of Russian Federation".
7. U. S. Code. Title 35. Patents. Part III. Patents and protection of patent rights, Chapter 28. Infringement of patents.
8. Roche Products Inc. v. Bolar Pharmaceutical Co., 733 F. 2d 858 (Fed. Cir. 04/23/1984). URL: https://biotech.law.lsu.edu/cases/ip/patent/roche_v_bolar.htm
9. Resolution of the Praesidium of the Supreme Commercial Court of the Russian Federation dated June 16, 2009.
10. Resolution of the Court of Intellectual rights, dated 21.09.2018 No. С01-651/2018 (case No. А40-170151/2017).
11. Asher Judith. The right to health: a resource manual for NGOs, Martinus nijhoff publishers - 8 p.
12. Ottolia A. The Public Interest and Intellectual Property Models, Giappichelli, 2010.
13. Putilo N. V., Volkova N. S., Zormatova F. V. and others "The right of people to the provision of pharmaceuticals: Monography", "ИЗиСП", "КОНТРАКТ", 2017. URL:https://online11.consultant. ru/cgi/online.cgi?req=doc&cacheid=624067B97189C4CD340C22095FFB10C1&S0RTTYPE=0& BASEN0DE=32799&ts=15319876690646983007522977&base=CMB&n=18524&rnd=A461DA6 9D36A661710E78A35D659ED90#ubtfd2t5t3
14. Salhotra, Anuradha Patent Rights v. Public Interest: An Indian Perspective URL:http://www.asiaiplaw. com/search/article/1039
15. URL:http://www.arbitr.ru/press-centr/smi/83406.html
16. Mantusov V. B., Yevdokimova T. V. Russian Intellectual Property Market peculiarities in the context of WTO membership, Prospekt,- Moscow, 2015.
17. Resolution of the Court of intellectual rights, dated 21.09.2018. No. С01-651/2018 по делу N А40-170151/2017.
