As readers of this blog probably are aware, a few decades ago it wasn't all that uncommon for countries either to exclude pharmaceuticals from the scope of patent protection altogether, or to require drug patent owners to submit to the compulsory licensing of those patents. Following implementation of the TRIPs Agreement, just about everybody now issues drug patents, and while TRIPs permits countries to engage in compulsory licensing subject to various conditions, compulsory licensing isn't all that common any more, particularly among developed countries. (These days, when governments do invoke or threaten to invoke their power to compel patent licensing, it's more often developing countries such as Brazil or Thailand or India that are involved.) So when Germany's Federal Supreme Court (the Bundesgerichtshof, or BGH) recently affirmed a ruling of the Federal Patent Court (Bundespatentgericht) awarding Merck a preliminary injunction to continue selling the HIV drug raltegravir (trade name Isentress), it's big news. The story has already been covered in other sources including a recent post by Mark Schweizer on IPKat (which also links to this press release, in German, from the BGH, which hasn't yet published its judgment); and discussion of the August 31, 2016 decision of the Federal Patent Court can be found in this post on Kluwer Patent Blog from this past March and this post from Mayer Brown's "All About IP" from this past November. There's also a summary of the Federal Patent Court decision by Dr. Uwe Friedrich in the May 2017 issue of Mitteilungen der deutschen Patentanwälten. But I thought I should add a few observations of my own as well.
First off, before anyone starts jumping to the conclusion that the BGH's recent decision heralds a new era of compulsory licensing in Germany, it's important to note that the underlying facts--as far as I've been able to piece them together so far, albeit without having invested a lot of time into researching the matter--appear to be rather unusual. The Japanese firm Shionogi & Co. applied for a European patent back in August 2002 (with priority dates going back to August 2001), but the patent (EP 1,422,218, "Antiviral Agent") didn't issue until 2012. (The Japanese patent appears to have issued in 2005.) Meanwhile, Merck obtained marketing approval for the drug in the U.S. in 2007 (see here) and in Germany in 2008 (and for all I know, lots of other places too). The FDA's Orange Book lists several U.S. patents under the heading "raltegravir potassium," the earliest of which appear to have been filed by an Italian inventive entity in October 2002, with priority dates going back to October 2001.
Anyway, I haven't yet reviewed the patents very carefully, or looked into whether there are any European Patents corresponding to these U.S. patents--so if anyone has any relevant information on these issues that you'd be willing to share with me, or can point to any errors in my reconstruction of the facts, I'd appreciate it--but based on what I have read I gather that Merck (not Shionogi) has marketed the drug in question Europe since 2008. (I think that Shionogi has been involved in the marketing of other related integrase inhibitor drugs, but not this specific one.) In 2014, Merck and Shionogi entered into negotiations for Merck to take a worldwide license, but that didn't get anywhere, so Shionogi sued Merck for infringement in Germany in 2015. That litigation was stayed pending a German invalidity proceeding which is still ongoing (though the patent survived an opposition proceeding before the EPC). Merck then applied to the German Patent Court for a compulsory license, and moved for a preliminary injunction to allow it to continue marketing the drug, which the court granted--the first time the court has ever granted a preliminary injunction for this purpose. Earlier this month, the BGH affirmed the grant. As discussed in the IPKat post:
§ 24(1) Patent Act allows the grant of a compulsory license if (i) the infringer tried to obtain a license on reasonable terms, and (ii) there is a public interest in the grant of the license. In its Polyferon decision, the BGH had further specified the requirements for a compulsory license in the public interest for medicaments (BGH GRUR 1996, 190 – Interferon-gamma/Polyferon). The BGH ruled that in order for a medicament to fulfill the requirement of public interest, it (a) must treat a serious disease that (b) cannot be treated by a comparable product or (c) can only so with considerable side effects.
Applying the Polyferon criteria, the Federal Patent Court held that HIV-infections were both infectious and lethal, thus a “serious disease”. While there might have indeed been alternative compounds like Dolutegravir on the market the Court appointed experts confirmed that the replacement of Isentress with another drug was not acceptable given potential life-long side effects and disadvantageous drug interaction due to the exchange.
Further, the expert also stated that Raltegravir showed particular advantages in the post-exposure prophylaxis and in the treatment of certain patient groups (e.g. babies, infants, pregnant women and long-term patients). In consequence, as the other pre-requisites of § 24(1) Patent Act were fulfilled, the public interest outweighed Shionogi’s interest in the exclusive exploitation of the patent at issue.
Judging from the media release - the grounds of the decision are not available yet - the Federal Court of Justice fully followed this reasoning, preliminarily permitting Merck to distribute Isentress for the treatment of specific patient groups that could not be treated with other drugs without serious side effects.
Again, I'd like to know more about the underlying facts, which seem quite unusual to me. I am fairly sure, however, that the fact that the allegedly infringing product was on the market for a long time before Shionogi's European patent issued and before the parties entered into negotiations would have strongly weighed against granting Shionogi a preliminary injunction in its infringement lawsuit, had it sought one. In the U.S., delay in filing suit can be a factor weighing against granting a permanent injunction as well, both under the eBay factors and the equitable doctrine of laches. On the other hand, to my knowledge delay in enforcing one's rights wouldn't normally preclude the entry of a permanent injunction in Germany, as long as the action was brought within the relevant statute of limitations; but perhaps in cases like this one the availability of the compulsory licensing option serves much the same purpose as the eBay or laches rules in the U.S. At some point, in other words, even if you think that patents generally should be protected by property rules (injunctions), perhaps the reliance interests of implementers and their customers must take precedence over the interests of a patent owner that has been slow to assert its rights.
Finally, if I understand correctly the amount of the compulsory licensing fee is yet to be determined. I also would assume that, if the preliminary injunction ultimately were to be vacated, Merck would have to reimburse Shionogi for having been wrongly denied the ability to enforce its patents in the interim.