Spanish Appellate Court applies Bolar while denying interim injunction in Finasteride decision

Merck Sharp & Dohme DE Espana S.A. v Bexal Farmaceutica, S.A; Provincial High Court of Madrid (00089/2006)

Copyright Friday, June 2, 2006 Duncan Bucknell Company

On 5 May 2006 the Provincial High Court of Madrid handed down ruling 89/2006 in Merck Sharp & Dohme DE Espana S.A. v Bexal Farmaceutica, S.A.

Take home

Contrary to concern by many over Spain’s slow implementation, the Bolar Provision under Article 10.6 of Directive 2004/27/EC of the Community Code is alive and well in Spain. This result is a win for generic pharmaceutical firms who until now had not known where they stood on this issue in Spain.

Comment

(Thanks to David for passing this on to me.)

Presumption of infringement in process patent cases

Before applying the presumption of infringement in process patent cases in Spain there must at least be a finding of fact that the defendant is offering a product with the same features as those of the product which results from patented process. This was not the case in Merck v Bexal, for several reasons, including that there had been no ‘offer’ by virtue of the operation of the Bolar defence.

(A similar presumption exists in other jurisdictions, for example Japan.)

Pharmaceutical industry ‘tug-of-war’

In explaining its ruling, the Court made the following interesting comments:

‘In the context of this struggle [between generic and innovator companies], the courts must only take strict action to grant interim injunctions when there is an action that unequivocally infringes the patent… to ensure observance of the exclusive right granted, temporarily and subject to certain restrictions, to the party that carried out the research and development, but they should not be used to aid attempts at the exaggerated exercising of rights that would lead to a restriction on free competition between companies that should benefit consumers.’

Generic pharmaceutical companies will clearly take comfort from these comments which will only increase the difficulty of obtaining interim injunctions in Spain.

The European Bolar Provsion

Article 10.6 of Directive 2004/27/EC of the Community Code states:

“6. Conducting the necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products.”

Background

The Merck v Bexal dispute

This was an appeal from a judgment of Madrid Commercial Court Number 1 of 4 November 2005, which rejected the interim injunction sought by Merck in relation to Bexal’s application to market a Finasteride pharmaceutical product (to treat benign prostatic hyperplasia and androgenetic alopecia). (Bexal is a subsidiary of German based Hexal AG.)

Merck brought the injunction application based on infringement allegations in respect of four patents: ES 540 745 (synthetic process); ES 2 052 476 (synthetic process), ES 2 072 848 (synthetic process) and ES 2 105 774 (use to treat androgenetic alopecia with 5-alpha reductase inhibitors). Merck’s injunction application was denied at first instance.

On appeal Merck argued (amongst other things) that the presumption of infringement (Article 50.1.C of the Spanish Patent Act) should have been applied with the result that the injunction should have been granted. The Provincial High Court rejected this argument as inapplicable as there was no relevant conduct since:

(a) no samples had been submitted to the Regulatory Authority;

(b) even if samples had been submitted, a previous ruling by Division 15 of the Provincial High Court of Barcelona on 21 July 2005 applied (which held in effect that such merely ‘administrative’ actions do not constitute infringement);

Text of the ruling

‘We reject the appeal brought by the representatives of MERCK & CO., INC and MERCK SHARP & DOHME DE ESPAÑA SA against the judgement laid down on 4 November 2005 by Madrid Commercial Court number 1, in proceedings number 370/2005 from which this case arises, awarding the costs of the appeal against the appellant.’