[Ip-health] FT: Roche/Amgen case could signal shift in courts regarding compulsory licenses

[Judit Rius Sanjuan]

Finantial Times
Source: http://www.ft.com/cms/s/2/2e46ebe8-587a-11dd-a093-000077b07658,dwp_=
uuid=3De8477cc4-c820-11db-b0dc-000b5df10621.html
Roche/Amgen case could signal shift in courts regarding compulsory
licenses
By Marc Longpre in New York
Published: July 23 2008

This article is provided to FT.com readers by Pharmawire=97a news
service focused on providing insight into the most price sensitive
issues in the global pharmaceutical market. www.pharmawire.com
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The willingness of a federal judge in Massachusetts to consider
issuing a compulsory license instead of a permanent injunction against
Roche=92s Mircera could have wide-ranging implications in pharmaceutical
patent cases, industry attorneys told Pharmawire.

Attorneys interviewed by this news service said they believe it is now
only a matter of time until a permanent injunction is refused and a
compulsory license is handed down by an American judge in a case
involving pharmaceutical companies.

In Massachusetts earlier this year, Judge William Young asked for more
time to consider the issue of a permanent injunction for Roche=92s
Mircera after the drug was found to infringe upon patents owned by
Amgen. Young said he may set out a compulsory license, which would
allow Mircera on the market if Roche pays Amgen a 22.5% royalty.

While attorneys interviewed by this news service believe the judge
will eventually issue an injunction in this case, they outlined a
number of scenarios in which a compulsory license could be issued in
the near future.

Abbott Laboratories=92 case against ImClone Systems was cited by Ted
Pitcher, a partner at Goodwin Procter, as a prime candidate to feel
the influence of the Amgen case. Abbott=92s suit relates to a technology
used to produce ImClone=92s blockbuster Erbitux. Pitcher said he
believes the parties will settle, but in the event ImClone was found
to be infringing on Abbott=92s patent, a judge might have reason to
reject an injunction on the sale of Erbitux.

Pitcher said a related case involving Repligen and ImClone would have
also fit into this category, but the two parties settled late last
year. The cases fit a scenario where Pitcher could envision a judge
refusing to grant a permanent injunction because neither Repligen nor
Abbott use the technology in question specifically to manufacture a
drug to compete with Erbitux. Forcing ImClone to stop selling its drug
would not only have disastrous effects for the company, but would
needlessly endanger lives, Pitcher said.

Other attorneys interviewed echoed Pitcher=92s view that it was only a
matter of time before the first compulsory license is issued in the
wake of the Supreme Court decision in eBay vs. MercExchange. That
opinion essentially did away with the automatic issuing of a permanent
injunction once a patent is found to be infringed. The court said
public interest must be taken into account.

=93I think it=92s not that difficult to imagine the circumstances where
that=92s going to come up,=94 said Philip Segrest, patent attorney and
principal at Welsh & Katz, of the chances a compulsory license would
eventually be issued by an American judge. =93Where there=92s a lot of
public interest and attention, something like an AIDS drug or a cancer
drug.=94

Segrest said there may be cases where demand is beyond the capacity of
one manufacturer to meet, and a judge could decide to allow a
competitor onto the market. He also pointed out that a type of
compulsory licensing already exists, albeit in unusual situations. If
a patented product is used as part of a government contract, the
patent holder is only able to get compensation, without an injunction
being imposed.

In the eBay case, the patent holder was not a competitor, a situation
that is extremely rare in pharmaceutical patent litigation. To some
extent, the exclusivity granted by a patent is more valuable in
pharmaceuticals than in other areas of patent law, said James J.
Foster, a patent litigator at Wolf Greenfield.

=93What=92s different in this case, and it may happen in other
pharmaceutical cases, these are situations where the royalty is much
less than what the patent owner would make. They don=92t want the
compensation, they want the monopoly,=94 said Foster. Foster said he
wasn=92t sure you=92d ever see a true compulsory license in one of these
cases, =93but you=92ll see situations where judges stick their nose in the
middle where the parties accept it.=94

In the case of Amgen, a compulsory license would be devastating,
Pitcher said, citing the judge=92s royalty proposal as not nearly enough
to make up for a potential loss in revenue. Analysts have projected
combined sales of Epogen and Aranesp to kidney disease to total USD
2.9bn next year.

=93Some countries do have compulsory licensing and I think that=92s
starting to creep into some people=92s thinking in the United States,=94
said Scott Rothenberger, partner at Dorsey & Whitney. Rothenberger
said he believed the ultimate outcome of the shift would be to squelch
innovation, and that the lack of compulsory licensing was a major
reason the US is home to so much pharmaceutical research.



Judit Rius Sanjuan
Attorney
Knowledge Ecology International / Essential Information
www.keionline.org / www.cptech.org
Phone: +1.202.332.2670, x18