First Ever Preliminary Injunction Issued by Chinese Court in Pharmaceutical Patent Case
The Beijing IP Court has issued a preliminary injunction against a patent infringer in a pharmaceutical case earlier this year. As far as we know, this is the first time that such an injunction is ordered by a Chinese court in a pharmaceutical patent case. As we briefly discuss below, the case will have huge implications for not only the pharmaceutical industry, but patent protection and enforcement in general in China.
A clear indication of the importance of the case is that the Beijing IP Court has just named the case as one of the court’s 15 Exemplary Cases of 2019, ranking it as number one on the list. Also, the Supreme People’s Court, in its just published annual white paper, specifically identifies the case as a “new type” and “difficult and complex” case.
The patentee and petitioner in the case is Astellas Pharma (“Astellas”), a major Japanese pharmaceutical company. The infringer and respondent is Zhejiang Hisun Pharmaceutical Co., Ltd. (“Hisun”), a major Chinese pharmaceutical company publicly traded on the Shanghai Stock Exchange.
Astellas is the owner of a Chinese patent entitled “Stabilized Pharmaceutical Composition in Lyophilized Form,” which covers Micafungin sodium for antifungal treatment. The relevant drug, under the trade name Mycamine in some countries, has been approved in Japan, the U.S. and Europe. It is also approved in China since 2006.
Astellas noticed that Hisun applied for regulatory approval in China for a generic version of the drug in 2013. After China’s FDA approved the application in April 2018, Astellas, working with attorneys and other professionals at China Sinda, gathered relevant information and evidence in an effort to stop the infringement.
Considering the relatively short time left on the patent term and the time it would take to finish a patent infringement case, Astellas, at the advice of China Sinda, decided to petition the Beijing IP Court for a preliminary injunction (technically called “a pre-suit action preservation”). It is usually very difficult for Chinese courts to approve such a petition. Also, as far as we know, no Chinese court has issued such a petition in a pharmaceutical patent case before.
Sinda attorneys went to work and prepared thorough and comprehensive evidence and arguments related to, among others, likelihood of success, irreparable harm, enforcement issues, potential harm to the respondent, public interests, and impact on the pharmaceutical industry in China.
After several informal talks with both parties and receiving further submissions of evidence, the Beijing IP Court granted the petition in December 2019, after asking Astellas to post a bond. Hisun requested the court for review, but was denied. Therefore, the Beijing IP Court’s preliminary injunction order became final and effective in January 2020.
The court’s decision has major implications for not only the pharmaceutical industry in China, but also patent protection and enforcement in general in China. Many pharmaceutical companies have encountered difficulties in the Chinese market due to lack of a patent-link system or other effective means to stop generic drug makers in China. Although bring patent infringement cases remains a tool and can be effective in certain situations, the time such cases takes and the amount of damages often make bring such cases not worthwhile. Patent owners in other industries also face similar situations. Although a petition for preliminary injunction has always been on many patent owners’ minds, the Chinese courts, due to a number of factors, have been very reluctant in granting such petitions.
The Beijing IP Court, created in 2014, has been taking a more active role in its handling of many patent and other IP cases. We hope that this decision will be another indication of the court’s direction. Further, with the creation, since early 2019, of the Supreme People’s Court’s IP Court, which serves as the Second Instance Court for cases appealed from the Beijing IP Court and other first instance patent courts, the Chinese patent judicial system now has a single appeals court for patent cases nationwide, with a more streamline process and more experienced judges.
The Beijing IP Court, in its April 23, 2020 press conference reviewing the court’s work in 2019, has named the case as one of the court’s 15 Exemplary Cases of 2019, ranking it as number one on the list. Six of the fifteen cases are patent related cases. This clearly reflects the importance of the case as viewed by the court. The case is also specifically mentioned in “Intellectual Property Protection by Chinese Courts (2019),” published on April 21, 2020 by the Supreme People’s Court of China. This is an annual white paper released by the court that reviews important aspects of IP protection by Chinese courts in the previous year. The paper specifically identifies the preliminary injunction order in the case in praising the Beijing IP Court’s handling of a “difficult and complicated” and “new type” of case.
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