Brinkhof. Defendant s Objection to the Application for Provisional Measures. Merva. Pentapharm

Transcription

1 Brinkhof Unified Patent Court Local Division Milan [Address] Action number: [ ] Date oral hearing: 20 September 2016 Date submission: 6 September 2016 Defendant s Objection to the Application for Provisional Measures In the case between: Merva (Claimant) V Pentapharm (Defendant) Claimant is represented by Kather Augenstein & Plesner (messrs. Dr. Chr. Augenstein and P.U. Plesner) Defendant is represented by Brinkhof & Bristows (Ms. A. Merelle Ward and Mr. M.G.R. van Gardingen) 1

2 Defendant, hereinafter: Pentapharm, respectfully submits the following in response to the Request for granting a preliminary injunction of 31 August 2016 filed behalf of Claimant, hereinafter: Merva. Preliminary Objection under R.19.1(a) and request to stay proceedings 1. Pentapharm submits the following preliminary objections concerning the jurisdiction and competence of the Court, and makes to following requests for referral to the CJEU and stay of the proceedings: Request 1 - Pentapharm requests that the Court: o declares that it is the court second seised of the issue of validity of the patents in suit and o declines jurisdiction under Art 31, alternatively 29 or 30 Regulation (EU) 1215/2012 (Brussels 1). Request 2 - Alternatively, Pentapharm requests that the Court refers the question of the application of Arts and 71c Brussels 1 to the CJEU and stays its proceedings, including the application for a preliminary injunction pending the decision of the CJEU. Request 3 - Alternatively, Pentapharm requests that the Court stays its proceedings pursuant to R295(j) to give effect to Union law, in particular the above-mentioned provisions of Brussels 1. Request 4 - Alternatively, Pentapharm requests that the Court stays its proceedings pursuant to R295(a) in respect of the 310 patent. Request 5 Alternatively, Pentapharm requests that the Court refers to the CJEU the question of the interpretation of Arts 3(2) and 9.1(a) of Directive 2004/48 and its effects in this case by reason of the grant of what is in effect a pan-european injunction. 2. The Grounds for the requests 1-4 are as follows (request 5 is justified at paragraph 32 below): 2

3 a. Pursuant to Art 71c, para 2, Brussels 1, Arts 29 to 32 Brussels 1 apply when actions are brought before the UPC and a court (or courts) of a Member State which is a party to the UPC during the UPC transitional period; b. In this case, actions for revocation have been brought before the current UPC action as follows: i. 987 patent actions in Germany, and France involving third parties which are completed; action in the UK involving a third party which is pending; action in Italy between the same parties (Pentapharm is Claimant in that action) which is pending; ii. 310 action in Italy between the same parties (Pentapharm is Claimant in that action) which is pending. c. Accordingly, the provisions of Art 71c apply to at least the Italian proceedings, and the Italian Court is first seized of the issue of validity of both patents in suit. Whilst it is noted that the Italian proceedings relate only to the Italian parts of the patents, it is not possible for the Court to proceed with the action in respect of any other parts of the patents as the Court is a Unified Court and Art 34 UPCA specifically states that decisions of the Court shall cover the territory of those Contracting Member States for which the European Patent has effect, which includes Italy. Any decision of the Court therefore necessarily applies to all Contracting Member States. The same arguments apply mutatis mutandis to at least the action pending in the UK at least insofar as this was brought during the UPC transitional period. d. Validity is in issue in the current UPC proceedings. In its application for a preliminary injunction, Merva has asserted that its patents are valid, as it is obliged to do when seeking to show that the there is a sufficient degree of certainty that the patents are valid. e. Additionally, Pentapharm will be putting validity in issue by way of defence. Pentapharm cannot be deprived of the right to defend itself including by attacking the validity of the patents. f. In these circumstances, Art 71c applies. g. Art 31 mandatorily requires (see use of word shall ) the court second seised (the UPC) to decline jurisdiction as the actions for revocation are within the 3

4 exclusive jurisdiction of both the UPC and the national courts see Art 24(4) Brussels 1 and Arts 32 (d) & (e) UPCA. h. Alternatively, Art 29 Brussels 1 mandatorily requires (see use of word shall ) the court second seised (the UPC) to decline jurisdiction as the actions in Italy and the UPC involve the same cause of action (revocation of the Italian parts of the patents) and the same parties. i. Alternatively, in respect of the UK action, Art 30 Brussels 1 provides the UPC with discretion to stay the current proceedings as the actions are related (involving the same cause of action (revocation of the UK parts of the patents). j. With regard to the alternative request 4 that the Court stays the case pending the decision of the TBA in the case of the 310 patent, it is noted that a decision of the TBA is expected within seven months. This satisfies the criterion of a decision which may be expected to be given rapidly pursuant to R 295 (a). In the context of UPC proceedings which are expected to be concluded within about 12 months, a period of less than 12 months is plainly rapid. In this regard it is noted that the injunction requested by the Claimant can have effect in France only pursuant to the 310 patent (since the 987 patent has been revoked for France). Therefore a stay in respect of France is important. Response to Claimant s requests for granting a preliminary injunction 3. Pentapharm will further respond to Merva s requests for granting a preliminary injunction discussing the following issues: 1. Burden of proof ( sufficient degree of certainty ) 2. Merits on infringement 3. Merits on validity 4. Balancing of potential harm 5. Unreasonable delay 6. Proportionality of the remedy sought and failure to seek alternative measures 7. Cross-undertaking as to damages 4

5 Burden of proof ( sufficient degree of certainty ) 4. Art 54 UPCA states unequivocally that the burden of proof of facts shall lie on the party relying on those facts (subject only to Art 55 which is not applicable in this case). The same principle must apply to arguments as to facts. Hence, it is for the Merva to satisfy the Court of the matters in issue. 5. Specifically relating to the current application, it is noted that Art 62 (4) UPCA jo. R permits the Court to require that the Merva provides reasonable evidence to satisfy the Court with a sufficient degree of certainty that the patents in question are valid and infringed. 6. Pentapharm submits that a sufficient degree of certainty implies a substantial burden upon Merva, and that any reasonable doubt would justify the Court in declining to grant relief. In this regard Pentapharm submits that the Court should take into account the extreme nature of the relief being sought, which is to keep Pentapharm off a market spanning 11 EU countries, i.e. pan-european injunction (See also Proportionality of the remedy). Merits on infringement 7. Pentapharm does not contest that it intends to launch a product as described in the Outline of Facts, in accordance with its MA. Pentapharm, however, denies that the launch of this product, or preparation of this product, constitutes an infringement of the claims asserted by Merva in these proceedings. At least, Merva has not met the burden proof, i.e. satisfied with a sufficient degree of certainty that there exits an (imminent) infringement for the requested injunctions to be granted. 8. Merva has asserted that Pentapharm infringes claim 1 of the 310 patent and claim 1 of the 987 patent. (NB. Merva has not asserted, let alone substantiated, infringement of claims 2 5 of the 310 patent. Infringement of those claims are therefore not subject of the current procedure, and cannot be subsequently relied upon by Merva). 9. Claim 1 of the EP 310 patent reads (underlining added counsel): A stable liquid pharmaceutical formulation comprising a soluble form of the anti-tnf antibody rantracept and a ph buffered solution containing a buffer, sodium chloride, a stabilizer and water. 5

6 10. Claim 1 of the EP 987 patent reads (underlining added counsel) Use of the anti-tnf antibody rantracept a. in the manufacture of a medicament for the use in a method for treating a human patient diagnosed with rheumatoid arthritis, b. said method comprising the steps of c. administering subcutaneously to the patient an initial loading of 60 mg/kg of the anti-tnf antibody, and d. administering subcutaneously to the patient a plurality of subsequent doses of the antibody in an amount that is 30 mg/kg every other week. 11. Both claims thus concern the anti-tnf antibody rantracept. Pentapharm s product to be launched does not contain the anti-tnf antibody rantracept (claim 1 of the 310 patent), and Pentapharm does not use the rantracept antibody in the manufacture of its product (claim 1 of the 987 patent). Pentapharm therefore does not infringe the asserted claims: neither literally (direct infringement) nor by way of equivalence. No (in)direct infringement 12. In its Request for granting a preliminary injunction, Merva states (when discussing claim feature 2 of the 310 patent): The active ingredient in AMR101 is the anti-tnf antibody rantracept biosimilar. Merva subsequently argues that the rantracept biosimilar is highly similar to, and therefore might be slightly different from, the reference product as it is impossible to produce an identical copy of any biologic medicine. 13. Merva is correct to acknowledge that it is impossible to produce an identical copy of a biological: AMR101 is not identical to rantracept (at least, aside from its acknowledgement of the contrary, Merva has not substantiated it is identical). Merva s subsequent conclusion that this does not lead to an exclusion from the scope of [the 310 patent] is incorrect. It does lead to such exclusion: the claims are limited to the anti-tnf antibody rantracept and do not cover an antibody which is not (the same as) rantracept. There can therefore be no direct (or literal) infringement of the claims (or indirect infringement, in which case rantracept is still not part of 6

7 Pentapharm s product). Merva has not met its burden of proof and its request based on (in)direct infringement should therefore be dismissed. 14. For the same reasons Merva s assertion that Pentapharm infringes claim 1 of the 987 patent should already be dismissed: Pentapharm does not use the anti-tnf antibody rantracept in the manufacture of a medicament, but AMR101. This is maybe a (bio)similar antibody, but it is not the same antibody. No Equivalence 15. At best Merva could argue infringement by way of equivalence, i.e. that AMR101 is equivalent to rantracept (as included in the asserted claims). That is exactly what Merva does already when arguing direct infringement, using the slightly different and highly similar wording, and concluding that it is obvious for the skilled person that the patent claim refers to the protein that blocks the activity of the tumour necrosis factor (TNF) and that a biosimilar has not clinically meaningful differences. (cf. Application for provisional measures, p. 9, 1 st paragraph). 16. When Merva actually asserts infringement under the doctrine of equivalents, it repeats this line of argumentation (cf. Application for provisional measures, p. 9, 3 rd paragraph, sub bb)). Merva considers that AMR101 is approved based on a showing that it is highly similar to the reference product and has no meaningful differences in terms of safety and effectiveness, and therefore achieves the effect of the invention and the claimed rantracept anti-tnf antibody. Merva as before concludes (underling added counsel): It was obvious for the person skilled in the art at the priority date that all biosimilars would have the same effect. 17. First, regulatory approval of a biosimilar and related qualifications as highly similar an having no meaningful differences in safety and clinical effectiveness is not (automatically) the same as patent-equivalence (i.e. the biosimilar (a) has substantially the same function, (b) works in substantially the same way, and (c) yields substantially the same result as the claimed antibody). Even, if AMR101 has the same function, and, as Merva argues, achieves the same effect as rantracept, then is not given that AMR101 works in substantially the same way. The burden of proof, which rests on Merva, has not been met in this regard. 18. Second, even if a biosimilar of rantracept (i.c. AMR101) could be considered technically equivalent, then legal certainty should prevent Merva from asserting the 7

8 claims of the 310 and the 987 patent against third parties (i.c. Pentapharm) under the doctrine of equivalents. Merva has stated in its Request for granting a preloiminary injunction that is was foreseeable ( obvious ) for the skilled person at the priority date that all rantracept biosimilars would have the same effects. Nevertheless, Meva has only claimed (the use of) the anti-tnf antibody rantracept and not those equivalents (biosimilars) which were foreseeable. 19. In such case it is reasonable for third parties to assume that Merva apparently (consciously) limited the claims to the specific rantracept antibody. Merva should have (also) claimed those biosimilars to put them under the scope of protection; Merva did not, and now cannot do so by way of equivalence. Conclusion 20. Pentapharm has not directly, indirectly or by way of equivalence infringed (or infringes) the asserted claims of the 310 and 987 patent. At least, Meva has not provided sufficient reasonable evidence to satisfy with a sufficient degree of certainty that Pentapharm infringed Merva s patent rights, or that such infringement is imminent. Merits on validity 21. Pentapharm had to invest a huge amount in research and development (approximately 130,000,000,-) to develop a biosimilar (AMR101) with a similar effect (e.g. improvement of symptoms) as the rantracept antibody claimed in the 310 and 987 patent. In other words, to reproduce a biosimilar of the antibody featured in the claims, Pentapharm had to embark on a very costly research and development program. If, despite the above arguments to the contrary, it would be concluded that AMR101 falls within the scope of claim 1 of the 310 and 987 patent, then Pentapharm submits that it can be reasonably doubted that claims are valid due to insufficiency. In such case there is no sufficient degree of certainty that the patents are valid (or that they are infringed, since invalid patents cannot be infringed). Previous and pending revocation proceedings 22. The 987 patent was revoked in France (which has erga omnes effect). While the first instance revocations actions in Germany and the UK were dismissed, the UK decision 8

9 is currently pending appeal (the fact that permission to appeal was granted means that the English threshold test that there was a real prospect of success or some other compelling reason has been satisfied). One reputable merits court has thus already found the 987 patent invalid, and another reputable merits Court will reconsider the validity of the patent. In view of these facts the Court in the current (provisional) proceedings should not be satisfied with a sufficient degree of certainty that the 987 patent is valid, or that the grant of a preliminary injunction is justified. Merva, when discussing validity of the 987 patent, makes no mention of the revocation in France or the pending appeal before the UK CoA. 23. Although the 310 patent has survived EPO opposition, this is only at first instance: the TBA hearing will be in seven months at which moment the TBA can and in Pentapharm s view: will revoke the 310 patent for all designated states. Merva has in the current proceedings not put forward any reasonable evidence to satisfy the Court of the validity of the patent. Merva has stated that because the patent survived opposition that there is a very strong presumption for the validity. On the contrary: statistical evidence shows that about 50% of all appeals to the TBA are successful. Therefore there is, on a statistical basis only a 50% chance that the patent will be upheld in its present form. Pentapharm submits that this not a sufficient degree of certainty that the claim asserted in the current proceedings, which forms the basis for a pan-european injunction, will be held valid by the TBA. Under these circumstances the Court should not grant the requested injunction. Balancing of potential harm 24. Merva puts forward that the refusal of granting an injunction, and there with the continuation of Pentapharm s activities, would cause a price depression of about 25%. 25. Pentapharm doubts that a price depression of such magnitude will occur. Such depression can occur in cases of small molecules when several generic manufacturers with identical products will compete on the price (which can lead to a downward price spiral). Competition between biologicals is not comparable: the R&D costs are enormous (i.c. 130,000,000,-), and there can thus be no comparable competition on price (aside from there not being the same kind of (fierce) competition, i.c. Pentapharm would be the first). Pentapharm s biosimilar will be just 10% under the price of Merva s PENLEXA. The harm to the Merva of Pentapharm s product launch will therefore not be so dramatic as Merva makes it look. 9

10 26. Compared with Merva s potential harm, the consequences for Pentapharm (which is a start-up) may be fatal to the company: if it cannot launch, it may not survive to claim compensation, especially if investors do not have the security of knowing that a bond in a certain amount prescribed by the Court will be potentially payable to Pentapharm. 27. When weighing the interests of the parties, Pentapharm submits that the potential harm for Pentapharm of granting an injunction outweighs Merva s interest in granting the injunction (cf. R211 (3)). Unreasonable delay 28. Merva says that it has not delayed unreasonably, but it must (or certainly should) have known of the MA in July. Why has the Claimant delayed in even writing to Pentapharm until mid-august and not served its application until the end of August? If the matter was urgent, Merva should have reacted earlier. Proportionality of the remedy sought and failure to seek alternative measures 29. As already mentioned, the remedy sought a pan-european injunction - is extreme. Under Art 3(1) and (2) of Directive EU 48/2004 (Enforcement Directive), remedies shall be fair and proportionate. What is more, Art 9(a) Enforcement Directive contemplates an alternative remedy that Claimants can seek which is to make continuance (of the alleged infringement) subject to the lodging of guarantees intended to ensure the compensation of the rightholder. It is notable that the Merva does not seek such a remedy even in the alternative as it clearly could have done, but instead (says section 3(b) on page 13 of its Request for granting a preliminary injunction) that it is very questionable whether [Pentapharm] is capable of paying damages. Seeking a guarantee would have been a more proportionate remedy and is the limit of what would be appropriate in such a case, especially bearing in mind the flimsy case on validity of the patents. 30. Pentapharms alternative request 5 requests that the Court refers to the CJEU the question of interpretation of the above-mentioned provisions of the Enforcement Directive. This is especially justifiable since the UPC is a new development since the passage of the Directive. The remedy of a pan-european injunction can be severe and disproportionate, and should not lightly be granted on a preliminary basis. 10

11 Cross-undertaking as to damages 31. Merva declines to offer a cross-undertaking in damages, let alone offers to provide a bond or guarantee to Pentapharm (section 3(c), page 14 of Merva s Request). It is normal in many Member States for the Claimant to have to offer a bond or guarantee, and the attempt to avoid one in these proceedings is very worrying for Pentapharm. If it is subject to an injunction and there is no guarantee available for investors to give them reassurance, then these investors are much more likely to withdraw their support and cause the company to fail. In this circumstance, Merva will have knocked out its only competitor by this application. What is more, the reluctance of the Merva to support its case with an offer of a cross-undertaking suggests a lack of confidence in the merits of its case at a full oral hearing. Why else would they not positively offer such a cross-undertaking? Conclusion 32. Pentapharm requests, in view of the above, that the Court denies Merva s claims, and/or decides in accordance with its requests set forth in this Objection, which Pentapharm will further elaborate upon during the Oral Hearing. Counsel: Ms. A. Merelle Ward Mr. M.G.R. van Gardingen 11