Judge Ma Yunpeng (Judge of the Beijing Intellectual Property Court) recently published an article in China Patents & Trademarks No. 2, 2015, pp. 42-47, titled Analysis of Substantive Factors in Pre-trial Act Preservation against Patent Infringement, discussing a case in which Shanghai Novartis Trading Co. (Novartis Co.) sought a preliminary injunction (a/k/a "act preservation") against Jiangsu Haosen Pharmaceutical Co. (Haosen) and Beijing Jewim Pharmaceutical Science and Technology Co. (Jewim). According to the article, the patent in suit "is directed to a method for preparing a medicament defined by use, namely a second medical use patent," specifically the use of a compound known as imatinib (which is marketed under the brand name GLEEVEC) "or a pharmaceutically acceptable sale thereof for the manufacture of pharmaceutical compositions for use in the treatment of gastrointestinal stromal tumours," or GIST. The respondent Haosen makes and sells a generic drug called XINWEI, which Jewim resells. According to Novartis, the instructions for the use of XINWEI would induce doctors or patients to infringe the patent in suit.
The Beijing No. 2. Intermediate Court court granted the injunction, concluding first that Novartis Co. had a right to file the application, based on evidence showing that Novatis AG (the Swiss drug company that is a coowner of the patent in suit) had "signed a Patent Exploitation License Agreement with the other three patent co-owners acting as assignors to allow its Chinese subsidiary to solely exploit and maintain the patent right," thus satisfying the requirements under Chinese law that the applicant be an interested party (p.43). Second, according to the article, "the applicant is required to prove that the patent in suit is legitimate and valid and in a stable state" (p.44). If I understand correctly, this means that, for a patent for a new invention (as here) "the applicant is required to provide prosecution history of the patent and relevant materials in patent invalidation proceedings (if any) before application," whereas for utility models and design patents (the patents the author refers to as "less stable") "the applicant is required to provide an evaluation report, and references provided by both parties and defences made by the respondent using prior art (design) shall be carefully scrutinized" (id.) The author also notes, however, that because China bifurcates infringement and validity determinations, "[t]he court's opinions on status of the patent in suit only serve as a reference for decision making," and "[i]n principle a court for hearing infringement cases can presume a patent valid before the patent in suit is determined invalid by an effective administrative decision" (p.44). I would note that the same is true in Germany, where infringement and validity are bifurcated but courts hearing applications for preliminary injunctions normally will consider whether the patent is likely to be valid (see, e.g., this post from this past February).
Third, the court concluded that the respondents' conduct likely constituted an act of infringement. According to the author, on an application for a preliminary injunction courts "should not be over-strict" in demanding proof of infringement, and "[i]t is unnecessary to reach an extent to which 'infringement certainly exists', and a high likelihood thereof would suffice" (p.44). Here, the evidence indicated that the active ingredient of XINWEI is a pharmaceutically acceptable salt of imatinib, that that ingredient is used for the manufacture of the pharmaceutical composition XINWEI, and that the instructions inform how use XINWEI to treat GIST. Thus, "it is highly likely that the information included in the instructions . . . falls within the protection scope of the patent in suit" (p.45).
Fourth, the court concluded that the conduct threatened Novartis Co. with irreparable harm. According to the author, irreparable harm means harm that "can hardly be converted into money" and "involves property loss, as well as loss in competitive advantage, market share of a product and potential commercial reputation" (p.45). Here, irreparable harm was present because XINWEI was sold "at a sharp price advantage," the "current medicare medication list in some areas usually records only generic names of active substances of medications," "imatinib can be found in the medicare medication list in some areas," XINWEI "is in fact in the circulation process," and its sales have "greatly influenced the sales of" GLEEVEC.
Fifth, the court considered the balance of rights and interests including the public interest. The court concluded that the requested injunction would not prevent the respondents from marketing XINWEI for its first medical use, and thus would not drive them out of business, and also would not be detrimental to the public interest, despite the price differential.
Finally, Novartis provided a guaranty of 10 million RMB, which the court concluded would cover the respondents' loss from a wrongly issued injunction (and could be supplemented if necessary).