In the opinion of the EU Commission, the tactics of patent protection strategies have now been overstretched. A large fine of €462.6 million was imposed on the pharmaceutical company Teva for abuse of its dominant market position. One aspect of the case relates to the not entirely unknown behavior of pharmaceutical companies of using various legal instruments to secure or expand their own market position in the last few years before the basic patent for a top-selling active pharmaceutical ingredient expires.
This case concerned Copaxone (glatiramer acetate), a blockbuster for the treatment of multiple sclerosis. Teva was fined because it abused its dominant market position to protect Copaxone from competition for longer. The Commission's investigation found that Teva artificially extended patent protection for Copaxone and systematically disseminated misleading information about a competing product in order to hinder its market entry and market acceptance.
Patents are intended to protect innovations and grant innovators market exclusivity for innovative products for a defined period of time. In return, the patents are disclosed and market competitors are free to develop their own innovative products based on this disclosure, which can be marketed when the patent expires. This mechanism is intended to trigger innovation and maintain competition. Patents can be granted for the active ingredient, pharmaceutical formulations, such as injectable formulations for subcutaneous administration of the drug, but also for dosages under certain conditions.
"Teva's inelegant and unsustainable behavior has brought the patent system into disrepute."
For example, a European patent was granted to a patent family of Teva for a drug with a specific treatment plan with improved tolerability at the injection site. The parent patent (main patent) of this patent family was granted for a medicinal product on one aspect of it. In 2014, the first oppositions were filed by third parties against the grant of the parent patent at the European Patent Office (EPO). Based on the parent patent, Teva filed five divisional applications with the EPO, of which it withdrew one divisional application. All other patents were granted and revoked in subsequent opposition proceedings until 2024.
The Commission already announced in 2021: "Teva's basic patent for glatiramer acetate expired in 2015. The Commission will now investigate whether Teva artificially extended the market exclusivity of Copaxone after the expiry of the patent by filing and withdrawing partial patents for strategic reasons." The Commission also stated: "The market entry of the competing generic product may have been repeatedly delayed because its manufacturer had to initiate new legal proceedings each time. Divisional patents arise from a broader main patent and can cover inventions with substantial overlap with the main patent, which can sometimes multiply the patent barriers to generic market entry for the patent holder."
The procedure is the Commission's "first formal investigation into the abuse of patent procedures and the disparagement of competing products to hinder their market entry in the pharmaceutical industry." In 2022, Margrethe Vestager, Executive Vice-President of the Commission responsible for competition policy, said: "As there is still no cure for the chronic disease multiple sclerosis, innovative medicines can significantly improve patients' quality of life. Such scientific advances require effective protection of the intellectual property concerned. However, we have found that Teva may have abused the patent system to protect itself from competition and that Teva may have disseminated misleading information to discredit its closest competitor to the detriment of patients and public health systems across the EU."
The issue of patent misuse has subsequently occupied European courts in the context of preliminary injunctions in infringement proceedings. In 2023, the Higher Regional Court of Düsseldorf dealt with the question of whether the patent holder can be at fault after the preliminary injunction has been enforced if this patent is subsequently revoked. In principle, it is difficult to prove fault in the case of unjustified action based on property rights and a patent proprietor can usually rely on the continued existence of the patent, especially if it has already been upheld at first instance.
In 2024, the European Court of Justice (C 473/22 - Mylan vs Gilead) ruled that the Directive on the enforcement of intellectual property rights does not preclude national legislation that provides for compensation for damage caused by a provisional measure and that this is based on strict liability of the applicant for the provisional measure. Furthermore, the national court is entitled to adjust the amount of damages taking into account the circumstances of the individual case, including any involvement of the defendant in the realization of the damage.
In conclusion, it can be said that the misuse of the patent system by individual companies triggers case law that confronts honest users of the patent system with incalculable liability issues when enforcing patent-protected innovations. Teva has brought the patent system into disrepute through this inelegant and unsustainable behavior. This seriously undermines the necessary patent protection of innovative developments to the detriment of all users of the patent system.
Tanja Bendele, Patent Attorney, Ruhr-IP Patent Attorneys, Essen
ABOUT THE PERSON
Tanja Bendele is a founding partner of Ruhr-IP Patentanwälte and represents clients in the fields of chemistry, pharmaceuticals, life sciences, medical technology, 3D technology, battery technology and process engineering. She represents international corporations as well as German medium-sized companies. She holds a doctorate in chemistry and is a German Patent Attorney and European Patent Attorney. She studied electrical engineering and information technology. She is also a member of the board of the German Chamber of Patent Attorneys, chairwoman of the Committee for Patent and Utility Model Law of the German Chamber of Patent Attorneys and a member of the board of GRUR Bezirksgruppe West.
