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New strategies in pharma patent litigation in Russia

It is known that, in the past, permanent injunctions were granted by Russian courts in patent disputes only upon actual commercialisation of the infringing product. Combined with the rare grants of preliminary injunctions by Russian courts, it resulted in plaintiff's inflexibility in patent litigation and, in particular, in pharma patent litigation where early launch of infringing generic may dramatically affect market position of the innovator's pharma product. This inflexibility has been successfully overcome in Novartis v. Nativa precedent case handled in 2017/2018 by Hogan Lovells Life Sciences team in Russia.

In Novartis v. Nativa case, generic producer started taking steps for obtaining a marketing authorisation and maximum manufacturer's price registration for its generic product more than five years before Novartis' patent expiration. The innovator did not tolerate this and chose to base the case on a concept of threat of patent infringement, without waiting for generic sales to happen.

In the claim Novartis stated that Novartis' patent for nilotinib is used in Nativa's generic drug Nilotinib-nativ. This argument was evidenced by out-of-court expert opinions conducted by specialists in chemistry and patent law. The experts appointed by the court came to the same conclusion. Further, Novartis stated that obtaining a marketing authorisation and registration of maximum manufacturer's price for Nilotinib-nativ more than five years before the patent's expiry date makes no sense unless Nativa intends to introduce Nilotinib-nativ into civil circulation before the patent's expiry date (i.e. commit patent infringement).

The Russian court of first instance recognised use of Novartis' patent in the original drug Tasigna and the generic drug Nilotinib-nativ, confirmed that the chain of consecutive actions by the generic producer (including conducting bioequivalence study, obtaining marketing authorisation for pharmaceutical product and state registration of wholesale price) proved the threat of patent infringement and granted a permanent injunction in this case before the generic producer started sales.

The Russian court of appeal as well as the Russian specialised Intellectual Property Court (acting as a court of second appeal) carefully checked and entirely confirmed the position of the court of first instance.

Novartis' success has inspired a number of innovators to take pro-active actions based on threat of patent infringement in cases of inappropriately early launch of generic products by Nativa. While the cases are currently pending before the Russian courts, the local generic producer started elaborating and testing in courts new defense strategies.

Firstly, the generic producer tried to argue that early obtaining of marketing authorization and maximum manufacturer's price registration was necessary as the process for obtaining these regulatory approvals in Russia was lengthy. The argument did not convince the Russian judges, however, not least due to the fact that the generic producer did not actually experience any material delay with the regulatory approvals.

Secondly and interestingly, the generic producer did not apply a traditional defence strategy and did not try to challenge validity of innovator´s patent. This may have had various reasons including strength of innovator´s patent and unwillingness of generic producer to open a way to generic producers-competitors at its own cost. Instead of that as a second defence route the generic producer claimed that it had its own Russian patent covering its generic product which was used in the generic instead of innovator´s patent.

Lastly, in addition to the above own patent use argument used in the patent infringement proceedings brought by innovator producers, Nativa initiated parallel proceedings aimed at obtaining from innovators compulsory licences for their patents. Contradictory to the above argument on non-use of innovator´s patent, in these parallel proceedings Nativa raised that its own patent was dependent on innovator´s patent and Nativa needed a compulsory licence for use of innovator´s patent to be granted by court. Clearly, providing contradictory statements on facts in parallel proceedings is not supported by the Russian procedural law and serves as a basis for application of procedural estoppel and consequent dismissal of proceedings. The latter is currently being sought by innovators before the Russian courts.

On balance, Novartis v. Nativa case proves the ability of Russian court system to demonstrate international standards for injunctive relief in pharma patent litigation and confirms that successful patent enforcement is possible in Russia. It is vital that other Russian courts and, in particular, the Russian Intellectual Property Court further contribute to an environment that fosters respect for IP rights and fair application of this approach to both domestic and international innovators. The innovators should, in their turn, take a proactive approach in patent rights enforcement in cases where threat of patent infringement is evident and be prepared to respond to generic companies defence strategies.