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);

(c) the
experimental use defence under article 52.1.b of the Spanish Patent Act may
apply; and

(c) in any
event, the Bolar defence applied.

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.’