This article is provided to FT.com readers by Pharmawire—a news service focused on providing insight into the most price sensitive issues in the global pharmaceutical market. www.pharmawire.com
--------------------------------------------------------------------------------------------------------

The willingness of a federal judge in Massachusetts to consider issuing a compulsory license instead of a permanent injunction against Roche’s Mircera could have wide-ranging implications in pharmaceutical patent cases, industry attorneys told Pharmawire.

Attorneys interviewed by this news service said they believe it is now only a matter of time until a permanent injunction is refused and a compulsory license is handed down by an American judge in a case involving pharmaceutical companies.

In Massachusetts earlier this year, Judge William Young asked for more time to consider the issue of a permanent injunction for Roche’s Mircera after the drug was found to infringe upon patents owned by Amgen. Young said he may set out a compulsory license, which would allow Mircera on the market if Roche pays Amgen a 22.5% royalty.

While attorneys interviewed by this news service believe the judge will eventually issue an injunction in this case, they outlined a number of scenarios in which a compulsory license could be issued in the near future.

Abbott Laboratories’ case against ImClone Systems was cited by Ted Pitcher, a partner at Goodwin Procter, as a prime candidate to feel the influence of the Amgen case. Abbott’s suit relates to a technology used to produce ImClone’s blockbuster Erbitux. Pitcher said he believes the parties will settle, but in the event ImClone was found to be infringing on Abbott’s patent, a judge might have reason to reject an injunction on the sale of Erbitux.

Pitcher said a related case involving Repligen and ImClone would have also fit into this category, but the two parties settled late last year. The cases fit a scenario where Pitcher could envision a judge refusing to grant a permanent injunction because neither Repligen nor Abbott use the technology in question specifically to manufacture a drug to compete with Erbitux. Forcing ImClone to stop selling its drug would not only have disastrous effects for the company, but would needlessly endanger lives, Pitcher said.

Other attorneys interviewed echoed Pitcher’s view that it was only a matter of time before the first compulsory license is issued in the wake of the Supreme Court decision in eBay vs. MercExchange. That opinion essentially did away with the automatic issuing of a permanent injunction once a patent is found to be infringed. The court said public interest must be taken into account.

“I think it’s not that difficult to imagine the circumstances where that’s going to come up,” said Philip Segrest, patent attorney and principal at Welsh & Katz, of the chances a compulsory license would eventually be issued by an American judge. “Where there’s a lot of public interest and attention, something like an AIDS drug or a cancer drug.”

Segrest said there may be cases where demand is beyond the capacity of one manufacturer to meet, and a judge could decide to allow a competitor onto the market. He also pointed out that a type of compulsory licensing already exists, albeit in unusual situations. If a patented product is used as part of a government contract, the patent holder is only able to get compensation, without an injunction being imposed.

In the eBay case, the patent holder was not a competitor, a situation that is extremely rare in pharmaceutical patent litigation. To some extent, the exclusivity granted by a patent is more valuable in pharmaceuticals than in other areas of patent law, said James J. Foster, a patent litigator at Wolf Greenfield.

“What’s different in this case, and it may happen in other pharmaceutical cases, these are situations where the royalty is much less than what the patent owner would make. They don’t want the compensation, they want the monopoly,” said Foster. Foster said he wasn’t sure you’d ever see a true compulsory license in one of these cases, “but you’ll see situations where judges stick their nose in the middle where the parties accept it.”

In the case of Amgen, a compulsory license would be devastating, Pitcher said, citing the judge’s royalty proposal as not nearly enough to make up for a potential loss in revenue. Analysts have projected combined sales of Epogen and Aranesp to kidney disease to total USD 2.9bn next year.

“Some countries do have compulsory licensing and I think that’s starting to creep into some people’s thinking in the United States,” said Scott Rothenberger, partner at Dorsey & Whitney. Rothenberger said he believed the ultimate outcome of the shift would be to squelch innovation, and that the lack of compulsory licensing was a major reason the US is home to so much pharmaceutical research.

--------------------------------------------------------------------------------------------------------

For more information or to inquire about a trial please email sales@pharmawire.com or call Americas: +1 212-500-1384 or Europe: + 44 (0)20 7059 6251