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19 November 2012
Within the space of a few months the Italian government has intervened twice on the sensitive issue of patent linkage for generic drugs, through two opposing decrees. In January 2012 Decree Law 1/2012, which was prompted by an EU infringement procedure,(1) aligned Italian law with EU legislation, stating that a marketing authorisation application for a generic drug protected by a patent or a supplementary protection certificate (SPC) can be filed more than one year before the expiry date of the patent or SPC, since only the manufacture, import or sale of the product could be considered an infringement.
However, taking the opposing position to Decree Law 1/2012, in September 2012 Decree Law 158/2012 was published, stating that generic drugs cannot be reimbursed by the National Health Service (thus making them uncompetitive) until the relevant patent or SPC expires, regardless of whether the generic drug falls within the scope of protection of the patent or SPC and the patent or SPC is valid. Although this decree has been heavily criticised – including by the Competition Authority – nonetheless Parliament has given it final approval. Therefore, Italy may once again face infringement proceedings, since the decree clearly conflicts with the principles derived from Article 10 of EU Directive 83/2001/EC, as amended by EU Directive 27/2004/EC (which transposed the Bolar clause into EU law), and is constitutionally illegitimate because of its inequality of treatment.
Italy implemented the directive in 2005, with the approval of the Code of Industrial Property (Legislative Decree 30/2005), which introduced a rule equivalent to Article 10 of the directive. Although it did not expressly include the filing of a marketing authorisation application among the practices that could be considered legal, its underlying rationale made this clear, since the EU rules introduced in 2004 were clearly intended to allow generic drug companies to manufacture or import and sell equivalent drugs protected by a valid patent immediately after the expiry of the patent or the relevant SPC. However, the code still included a rule, introduced in 2002, which allowed generic drug manufacturers to "start the registration procedure of the product containing the active substance one year earlier than its Complementary Protection Certificates expiry date". This clause stemmed from an anomaly in Italian law, so-called 'complementary protection certificates' (CPCs). These were granted pursuant to Law 349/1991, which was approved before the corresponding EU regulation on SPCs came into force (replacing Law 349/1991), but that law remained in force for CPCs that had already been granted; the Italian CPCs had a much longer validity – at least five years and sometimes up to 13 years – than SPCs and were granted even in circumstances where an SPC could not be. Before the Bolar clause was introduced into EU law, in 2002 the Italian authorities had tried to remedy this anomaly, at least in part, with a compromise solution, including the following:
The provision remained in the Code of Industrial Property as Article 68(1bis), which also mentioned the expiry date of patents and SPCs.(2)
However, the Italian courts did not interpret the law consistently. On the one hand, the Court of Milan(3) found that the reference to the period of "one year before the expiry" of the patent or SPC was not limiting for two reasons:
On the other hand, other judges(4) considered the filing of a marketing authorisation application more than one year before the patent or SPC expiry date to be illegal, in case the generic drug fell within its scope of protection. This fact prompted the European Commission to file an infringement procedure against Italy;(5) as a consequence, the Italian authorities intervened by abrogating Article 68(1bis). As a result, only the general provision is still in force, expressly excluding from the exclusive rights granted by a patent any:
"studies and testing aimed at getting, even abroad, an authorization for launching/selling a drug and the consequent practical fulfillments, including preparation and use of pharmacologically active raw materials strictly necessary to it/the purpose."
Therefore, since at EU level it is undisputed that not only testing but also the requesting and granting of marketing authorisations must be considered to be non-infringing activities, this must now also be established in Italy, even if, in light of the judgments discussed above (which considered the filing of a marketing authorisation application more than one year before patent expiration to be illegitimate), it would be preferable to repeal not Article 68(1bis) as a whole, but rather only its reference to the one-year limit. However, it is clear that the underlying principle of the amendment (ie, conforming with EU law) and the fact that the European Court of Justice has upheld the permissibility of the simple marketing authorisation application since 1997(6) do not allow for different interpretations.
This does not imply that the holder of the patent or SPC must wait until the equivalent drug is put on market before taking legal action. With respect to preliminary injunctions, Legislative Decree 140/2006, implementing the EU IP Rights Enforcement Directive (48/2004/EC), amended Article 131 of the Code of Industrial Property to allow an IP rights holder to obtain a preliminary injunction in case of "any imminent infringement" of the asserted right. Therefore, the early filing of an marketing authorisation application, even if it does not represent a preparatory act aimed at the marketing of an equivalent drug before the expiry of the relevant patent or SPC, is a significant clue in that direction, particularly when taken together with other elements that can be assumed by the applicant's previous behaviour or lack of response to a request not to manufacture, import and sell the equivalent drug before the expiry of the relevant patent or SPC. All this can support the issue of a preliminary injunction or at least a description order (ie, a protective measure intended to check whether the manufacturer has already started manufacturing or importing the generic drug). This should allow the judge to determine whether such application precludes early marketing and thus grant the preliminary injunction if the patent is valid and the product is actually infringing – this cannot always be taken for granted, since even bioequivalence per se is not a synonym of infringement.(7)
In such a situation, it could be advisable to make use of the mechanism provided by Article 129(1) of the code, as amended by the 2010 IP Reform Bill, which relates only to petitions for seizure, but is clearly applicable to injunctions as well as it results from coordination with Articles 129(4) and 132 of the code. This mechanism allows the request of a preliminary injunction alongside the description order, with the injunction to be decided on later according to the result of the description order. In such circumstances, the result will be evaluated during the preliminary injunction proceedings, when a court expert may be appointed to check the validity and infringement of the patent at issue (Article 131(5) of the code, as amended by the 2010 IP Reform Bill).
In turn, if the patent is deemed to be invalid or not infringed, the generic drug manufacturer may resort to a preliminary declaration of non-infringement, as provided by the amended code. The manufacturer can use this mechanism if there are elements indicating that the originator wants to take legal action against it (eg, warnings or legal actions taken abroad against other manufacturers of the same generic drug).
Furthermore, since October 2010 the Italian Drug Agency has published a monthly list of the active substances for which marketing authorisation applications have been filed,(8) although it does not include applicants' names.(9) However, a recent judgment of the administrative court has stated that the rights holder may access to these names through the administrative procedure for access to files provided by Article 22(4) of Law 241/1990 in order to:
"write to the [marketing authorisation] applicants a letter which communicated [to] them the expiry date of the SPC on the active substance and reminded them that the market entry of generics cannot be earlier than the day after the aforesaid expiry date."(10)
In case of refusal by or a negative reply from the generic drug manufacturer, it can be assumed that any further data necessary to determine the actual infringement may be required through the description procedure.
Article 11 of Decree Law 158/2012 abolished the main problem for originators arising from the marketing of the generic drug – namely, the reduction of the drug redemption price by the National Health Service – as it now states that drugs equivalent to those whose patent or SPC is near to expiry cannot qualify as drugs paid by the Italian National Health Service before the expiry of the patent or SPC. Nonetheless, the clear illegitimacy of this provision means that it is unlikely to remain in force for long. Thus, it is even more advisable to take timely action using the means offered by Italian IP law, which has now reached a significant level of efficiency.
(1) For further details please see "European Commission challenges Italy on marketing authorisation rule".
"companies which want to manufacture pharmaceutical products beyond patent coverage may start the application for registration of the product containing the active substance one year before the expiration of the complementary protection certificate or, without it, the expiration of the patent cover of the active substance, given any possible extension."
(7) See Galli-Bogni, "L'ambito di protezione del brevetto", in Galli, Gambino, Codice commentato della proprietà industriale e intellettuale, Torino, 2011, pp 650-652 and in the case law of the Court of Turin, April 11 2011.
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