CADE rules in Eli Lilly Sham Litigation

CADE rules in Eli Lilly Sham Litigation

Jeremy   September 07, 2015   No comments:

Here's a guest post from our Brazilian friend Magda Voltolini, on the topic of what is termed "sham litigation" -- and which can be explained as a form of litigation which appears to be objectively unjustifiable in terms of protection of one's intellectual property. This is how she explains the topic:

Does anti-competitive conduct mean “don’t breach loyalty and diligence and don’t abuse your litigation rights”? 

Following an extensive investigation involving administrative and legal proceedings, leading to the assessment of serious harmful effects on competition, the Brazilian Competition Authority (CADE)’s answer is “yes”. In light of doctrine, legal opinions and jurisprudence, Reporting Commissioner Ana Razao held that Eli Lilly infringed competition rules by unduly obtaining a monopoly to commercialize Gemzar and by distorting market prices for gemcitabine hydrochloride. 

Eli Lilly, who had argued that the antitrust authority had no power to replace the judiciary or to recognize that there was an error in judgment and/or that the judge was wrong (see CADE ruling at [379]), will now apparently file an appeal to overturn CADE’s findings. 

This was the first time that CADE held a company liable on the ground of sham litigation in Brazil (Administrative Proceeding (AP) N.  08012.011508/2007-91), imposing a BRL 36.6 million fine on Eli Lilly calculated according to criteria established in Article 45 of Law 12.529 of 30 November 2011. The Advocate General still can examine consumer damages. 

Background and sham litigation analysis 

Eli Lilly filed patent application PI 9302434-7 in 1993 for the process of preparing gemcitabine hydrochloride, the active ingredient of cancer treatment medicine Gemzar, before the National Institute of Industrial Property (INPI); this application did not however relate to Gemzar itself.  In 1996, Eli Lilly presented the first request to examine the merit of its patent application on the basis of TRIPS, but INPI rejected this request on the basis that TRIPS was inapplicable.  Eli Lilly then filed a lawsuit, in result of which, in 2004, the 2nd Region Federal Regional Tribunal (TRF-2) set aside INPI’s decision. In December 1996 INPI published the continuation of its analysis of the patent concerning the process. This lawsuit was not considered sham litigation, as explained by the Reporting Commissioner Ana Razao at [252]. 

After INPI again rejected the patent application on the ground of the lack of inventive step, Eli Lilly provided technical opinions from university professors and added a new request, including claim 14 concerning the patent process. INPI denied this request in its technical opinion on the basis of lack of inventive step of claim 14.  In response Eli Lilly filed an administrative appeal before INPI, seeking to amend its second technical report concerning claim 14, and presenting two more claims -- 15 and 16: these dealt with the product gemcitabine hydrochloride, thus effectively changing the application from a process to a product. 

Additionally, in 2005, Eli Lilly had brought action N. 2005.51.01.506948-1 before the 39th Federal Court of Rio de Janeiro to overturn INPI’s opinion and validate the patent application, including claim 14; the court was also asked to assess claims 15 and 16 and to stay the INPI administrative proceedings in the INPI, seeking an order that the court to stay the INPI examination of claim 14 for inventive step until the issuance of the court decision. A stay of the administrative proceedings was ordered. 

Concerning the examinations of claims 15 and 16, INPI finally presented its conclusions to the court, explaining that claims 15 and 16 had not been subjected to its examination since the administrative proceedings had been stayed, and adding that the scope of the patent application could not be enlarged to include claims 15 and 16 since they concerned a product, not a process as initially disclosed. Consequently, the Court held that only INPI’s opinion concerning the analysis of the first 14 claims were the object of its judgment. 

Eli Lilly then filed an interlocutory appeal before the TRF-2, seeking inclusion in its judgment of claims 15 and 16, as if they had been part of INPI’s opinion concerning claim 14.  At this point, ProGenéricos joined the battle on INPI’s side. In 2007 the TRF-2 made its final decision on the Interlocutory Appeal and upheld refusal of the patent. The Federal Judge of the 39th Federal Court then refused to deal with claims 15 and 16. An expert nominated by that Court therefore only examined the requirements for patentability of the 14 process claims, finally determining the possibility of the grant of the patent as such. Claims 15 and 16 relating to product were not analyzed, following the TRF-2’s decision. 

Eli Lilly then filed another action before the Federal Justice of the Federal District against INPI, to reverse the TRF-2 decision, seeking a declaration that claims 15 and16 fulfilled all the requirements for patentability on the basis that there had been no change in the initially disclosed matter. 

The CADE investigation 

The CADE considered that Eli Lilly practised anti-competitive conduct by enlarging the patent’s scope to include matter which had not been disclosed at the time of the original patent application, and by submitting new matter after INPI had confirmed its refusal to register the patent in its administrative appeal, on the basis of Art. 32 of Law 9.279/96 which allow only changes in the patent application in relation to matter which is clear or already known before the final assessment of the patent registration [277].  Accordingly Eli Lilly acted strategically by adding claims 15 and 16. However, the CADE decided not to deem such conduct as sham litigation in light of the principle of in dubio pro reo (when in doubt, hold for the accused) [285]. Reciting that Art.70.9 TRIPS only admits grant of Exclusive Marketing Rights (EMRs) for patented products, not for patented processes, CADE found that the conduct in seeking to enlarge the scope of the patent was the first strategic step to obtain an undue degree commercialization of Gemzar in Brazil [286]. 

In Brazil, proceedings to obtain EMRs are less rigid than the process of obtaining a patent grant, in the sense that EMRs are based on a pending patent application request: the grant of exclusive rights stems purely from an expectation of rights, which is what Eli Lilly sought to obtain. 

The CADE decision also reports that in 2006 Eli Lilly brought a lawsuit before the Federal Justice of the Federal District against the National Health Surveillance Agency (ANVISA) to obtain EMRs for the product Gemzar on the basis of Article 70.9 TRIPS, affirming the patent was for a product but omitting pertinent information.  Eli Lilly disclosed that proceedings were stayed but not that claims 15 and 16 had been excluded from the patent’s scope. Indeed, it omitted pertinent information concerning the action before the 39th Federal Court, the TRF-2 and concerning the INPI opinion. In any event, the Federal Justice dismissed the case. 

However, an appeal was made before the TRF-1 asking for a preliminary injunction, which it obtained. This decision ordered ANVISA to refrain, until the end of proceedings, from granting EMRs for commercialization of a product similar to GEMZAR while INPI had not examined the object of the patent application, including those relating to the second amendment (claims 15 and 16). This action before the Federal Justice was deemed sham litigation. CADE took into account the abuse of the right to petition, considering that Eli Lilly demonstrated lack of good faith and diligence [345], based on the diversion of the purpose of the law, identified from the breach of duty of care and of objective good faith [348]. 

Sandoz intervened in the case to inform the TRF-1 of the TRF-2 decision of 2007, which had rejected the addition of claims 15 and 16 to the patent’s scope and to request the revocation of the preliminary injunction granted by the TRF-1. Importantly, the TRF-1 decision had authorized Eli Lilly to sell GEMZAR but exclusively for the treatment of cancer in Brazil. Subsequently, the Supreme Tribunal of Justice suspended the preliminary injunction considering there to be a distortion of market prices. Also, Sandoz brought a lawsuit before the Court of Sao Paulo requesting that Eli Lilly discontinue the fake accusations concerning the cancellation of its rights to commercialize the drug GEMCIT and indemnify Sandoz for incurred damages. However, for a period of three months the Sao Paulo Court prevented the commercialization of GEMCIT, which served to treat any type of cancer, on the basis of Eli Lilly’s responses. In December 2007 though, it overruled its decision on the basis of an acknowledgement of the TRF-1 judgment.

Against this background, CADE considered as sham litigation the filing of other lawsuits in different jurisdictions with the goal to circumvent the unfavourable decisions given earlier on.

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It's a new day, it's a new month, it's a new fee...and the feeling is

It's a new day, it's a new month, it's a new fee...and the feeling is

Patricia Covarrubia   August 31, 2015   No comments:

birds flying high, you know how I feel...

From the Virgin Island we received a follow up piece regarding the forthcoming increase in trade mark registration fees.

Katherine Van Deusen Hely writes as follows:

Beginning September 1st, 2015, the British Virgin Islands will welcome its modern new trademark regime. Along with the new laws will come new (and much increased) fees. Previously charging some of the most modest official fees in the Caribbean region, the new trademark fees will go up significantly once the new laws go into effect. For example, the new official fees for single class registrations will range from $200-250 as compared to the current fees of $15-64. Likewise, the fees for renewal will be raised from $10-40 per mark to $250 for the first class and $150 for each additional class in a multi-class registration.

Katherine Van Deusen Hely, founder of Caribbean IP, is available for any comments or questions regarding these changes. Her contact information is below:

Caribbean IP
Katherine Van Deusen Hely, P.L.L.C.
224 Datura Street, Suite 513
West Palm Beach, FL 33401
T: (561) 283-1800
E: Katherine@Caribbean-IP.com
W: www.Caribbean-IP.com

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Protección judicial a la Denominación de Origen “Champagne” en Colombia

Protección judicial a la Denominación de Origen “Champagne” en Colombia

Gilberto Macias (@gmaciasb)   August 20, 2015   No comments:

En el que es el primer caso judicial en la historia de Colombia relacionado con la infracción de una Denominación de Origen protegida (DOP), la Superintendencia de Industria y Comercio (SIC) ha concluido, preliminarmente, que el utilizar expresiones como “Champaña” y “sabor artificial de Champaña”, en productos que no provengan de la provincia francesa de Champagne (Terroir Champagne), es un acto que infringe los derechos de propiedad industrial derivados de la DOP “Champagne”.

El caso en cuestión deriva de una solicitud de medidas cautelares instaurada por el Comité Interprofessionnel Du Vin de Champagne en contra de la empresa colombiana Vinos de la Corte por el uso no autorizado de la DOP “Champagne”.

Los vinos espumosos identificados por la demandante con la denominación ‘Champaña’ provienen del municipio colombiano de Santander de Quilichao (Cauca) y no de Francia.

De momento la SIC ha ordenado a la demandada, como medida cautelar, abstenerse inmediatamente de utilizar expresiones como “Champagne”, “Champaña”, o “sabor artificial Champaña”, así como a retirar inmediatamente cualquier aviso, publicidad o comunicación pública de dichas expresiones en sus productos.  

Hecho que, viendo la página web de la demandada, aún no se ha cumplido.

Estaremos siguiendo de cerca este  asunto pues el mismo resulta muy interesante y relevante para ver cómo se protegen, y respetan, las indicaciones geográficas y denominaciones de origen protegidas de terceros países.

Más información directamente en el comunicado publicado por la Superintendencia aquí.

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Cut & Paste: plagiarism in the faith

Cut & Paste: plagiarism in the faith

Patricia Covarrubia   August 19, 2015   No comments:

Reading one of the main Peruvian newspaper ‘El Comercio’ I became aware of a debate among religious, academics, newspapers, blogs and the like that is occurring in the country. The debate is around copyright and the idea/expression dichotomy regarding teaching a religious faith.

Background

A proper cardinal: are you talking to me?

Several times Lima's Roman Catholic archbishop, Cardinal Juan Luis Cipriani has written a column in the newspaper ‘El Comercio’. Last week a blog called ‘utero.pe’, which is about religious experience, noted that Cardinal Cipriani has plagiarized his writings in the newspaper. The allegation was that Lima's archbishop included six paragraphs from the book Communio by Cardinal Joseph Ratzinger (Pope Benedict). When this accusation was published the readers started a wish hunt! And many has taken the trouble to go through the Cardinals’ newspaper writings and placed into the google search box…and …yep…the results have shown several writings (whole paragraphs) that have been taken from other sources and have not being properly attributed to their authors (screen shots can be seen here).

Cardinal Cipriani then took the time to apologise for not having mentioned his sources but continue to say that popes do not have intellectual property rights over their words since they are part of the “heritage of the faith”. Here is where the debate has been quite heated because of this idea/dichotomy that exist in copyright. Ideas as such are not protected and thus the teaching by popes are indeed part of the heritage of the faith. Giving an example, my teaching comes part of the legacy of the alumni and they are free to use those teaching – teaching is a learning tool. However, another matter and quite contrary to what has been claimed in this debate is that there is not property right on the teaching. In my example as said, the teaching is a learning tool but another issue would be to record the teaching (audio or verbatim) and copy it and pass it as if it were coming as their own. The latter is what happen in the newspaper column. What Cardinal Cipraini was doing was not using the idea but the expression of it – indeed a copyright infringement. For example:

Art 42 of the Peruvian Copyright Law says “Lectures given either in public or in private by the lecturers of universities, higher institutes of learning and colleges may be annotated and collected in any form by those to whom they are addressed, provided that no person may disclose them or reproduce them in either a complete or a partial collection without the prior written consent of the authors.”

Cardinal Cipriani even suggested that because of the type of column he was writing, there was not space for indicating the source. And this misconception is followed by others that have taking the social media to say that because it is different when you write a book, or academic paper, or a column in a newspaper Cardinal was right not to acknowledge the sources. There is indeed exception to quotations for copyrighted material such as reviewing or criticism. However in the present case the Cardinal used the quotations to impart a teaching – the quotes were neither reviewed nor criticised. And even in this legal exception such quotes need to be fairly used.

Art 44 of the Peruvian Copyright Law says “It shall be permissible to make quotations from lawfully disclosed works without the author’s consent or payment of remuneration, subject to the obligation to state the name of the author and the source, and to the condition that such quotations are made in accordance with proper practice and only to the extent justified by the aim pursued.”

However note that there is another exception that can be thought of which is enclosed in Art 43 Copyright Law as follows:

 “With regard to works that have already been lawfully disclosed, the following shall be permitted without the author’s consent:(a) reproduction by reprographic means, for teaching or the holding of examinations at educational institutions, provided that there is no gainful intent and to the extent justified by the aim pursued, of articles or brief extracts from lawfully published works, on condition that the use made of them is consistent with proper practice, involves no sale or other transaction for consideration and has no direct or indirect profit-making purpose;”

Indeed, imparting the info disclosed by the Cardinal may have not needed ‘authorization by the author or payment of any remuneration’ (even though he was not imparting the teaching in an educational institution) BUT it was not exempt from the obligation to state the name of the author and the source. Even in the 'space' given in the column there was still the need to accommodate the paragraph with ‘quotations’ marks and to put in brackets the author for example Pope VI or Pope Benedict.

Finally, an issue that has not been debated is the issue of moral rights which the Peruvian law also regulates under Chapter II of the Copyright Law. In this case the right infringed was the ‘rights of authorship’ also known as the ‘paternity right’.


Due to this debate and the assertion by the Cardinal that he did use the writings of former popes without attributing them, the newspaper El Comercio made the decision to delete two articles by the cardinal and said it would not publish him again. This measure could have been taken due to the fact that Art 218 (c) of the Criminal Code establishes a penalty of either imprisonment or a fine when knowing that the copy or reproduction is illicit, it still distributes the said copy/reproduction to the public by any medium, or stores it.

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'I decide, I respect': educating younger generations to appreciate IP

'I decide, I respect': educating younger generations to appreciate IP

Patricia Covarrubia   August 17, 2015   No comments:

The Peruvian IP Office (INDECOPI) reports than during 2013 and 2014, “a total of 50,000 students from various public and private schools of Peru received didactic training on the protection of copyright thanks to the educational program ‘I decide, I respect: rejection to smuggling and respect for intellectual property’”.

The program
The educational program is dedicated to students in their 4th and 5th year of secondary school. It aims to teach teenagers to appreciate, value and respect intellectual property and thus, reject piracy. By raising awareness the talks covers “the scope of copyright and the contribution of creativity and cultural industries to the country’s economic development.”

The program is supported by INDECOPI, as part of the Commission to Combat Piracy and Customs Crimes (CLCDAP). It involves designating key speakers who participate in the educational talks. Therefore, as INDECOPI has seen a success of this program, it has decided that by 2015 it would continue to impart more talks to more than 30,000 students nationwide. In fulfilling this goal, it reports that “during the first half of this year has managed to train 14,162 students, accounting for 47.20% of projections.”

The program goes in line with several campaigns brought by the INDECOPI in regards to the protection of intellectual property in general. Indeed, there is no point to have legislations in place when the society is not aware of what actually is protected, what and why it is wrong. I remember several years ago, in the era of hiring DVDs [cannot remember if I actually watched it on cinemas], a very powerful advertising called “You wouldn't steal a car...You wouldn't steal a handbag... Piracy. It's a crime.” The advertising indeed was making the audience aware of not just the issue (downloading movies) but actually what the crime was and comparing it to more visual situations such as stealing a car or a bag. Particularly I believe that the culture of a country plays a crucial role.

In previous posts I have indicated my astonishment when wanting to purchase a CD in my country and could not do so. In 2013 while visiting family members in Venezuela I wanted to bring back some CDs with traditional music and the only music shop that I could find (in a very nice shopping mall) was someone with a table placed in a corridor selling well presented CDs with covers but were actually not original. Of course, the streets are full of the so-called ‘informal marketplace’, fitted tight with tents and tables selling textiles, pirated music and films, electronics and all the likes. How do you combat piracy, when it appears to be the ‘normal’ economy of a country? I strongly believe that a well-educated society (in all aspect of life) is fundamental. SO well done Peru! every little helps.

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MOVISTAR demanda por el "vomistar" de WOM

MOVISTAR demanda por el "vomistar" de WOM

Rodrigo Ramirez Herrera @ramahr   August 14, 2015   No comments:

En marketing dicen que no hay publicidad mala, lo importante es que hablen de ti. Y eso parece ser que está pasando con WOM.

Movistar Chile interpuso una demanda en contra de la empresa de telecomunicaciones WOM (Nextel S.A.), a quien acusa de competencia desleal y trato peyorativo a su marca y al resto de la industria.

La demanda interpuesta por Telefónica Móviles Chile S.A. (Movistar) en el 16º Juzgado Civil de Santiago de Chile (rol C-14687) se basa en que la demandada en su campaña para entrar al mercado chileno ha hecho referencia directa a algunos de sus competidores en el mercado de la telefonía móvil utilizando slogans y frases publicitarias de fácil recordación que, o deforman las marcas de los competidores para ridiculizarlos, denigrarlos o desprestigiarlos, o utilizan estas marcas para hacer juegos de palabras, o como dice la demanda, "parafrasean frases usadas en campañas que alguna vez fueron desplegadas por otras empresas del sector".

En ese contexto general, Movistar basa su demanda en que la publicidad utilizada por WOM utiliza la siguiente frase (considerada como acto material público y notorio):

"Que al navegar no te den ganas de vomistar. Prepárate. WOM".

La demanda agrega que WOM está tratando de “desviar clientes sin tener que realizar inversiones, innovación ni esfuerzo comercial alguno, como corresponde a una libre y sana competencia […] Los nuevos inversionistas que tomaron el control de la compañía demandada, no previeron que llegaban a un país serio, dotado de legislaciones e instituciones que resguardan el correcto y sano funcionamiento de los mercados, y en el que no se permiten atentados a la libre competencia ni a la necesaria lealtad y buena fe que debe informar las relaciones entre competidores”.

Movistar funda su demanda en el artículo quinto de la ley 20.169 ejerciendo las cuatro acciones que dispone la norma: cesación o prohibición del acto, declaración del acto como competencia desleal, remoción de los efectos e indemnización de perjuicios por daño moral o extra patrimonial por 40.000 UF ( 1.500.000 euros aproximadamente).

Las frases usadas en la campaña de entrada que tuvo WOM en Chile hace un par de meses geneneraron además una demanda de Claro y también Movistar, en el Tribunal del Consejo de Autorregulación de Ética Publicitaria (Conar).

Por su parte, Wom en su contestación estimó “inconcebible” la deslealtad concurrencial pues no se puede pensar en ser competencia de Movistar, debido a la alta concentración de tres actores (Movistar, Entel y Claro), quienes poseen más del 90% del mercado actual. Al que le quepa el sayo que se lo ponga.

Fuente: www.pjud.cl (rol C-14687/ 16º JL Civil Santiago)

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