October 29, 2021 [ IP News-Patent/Utility Model ]
Does conducting clinical trials of new drugs constitute patent infringement?

Pharmaceutical manufacturers are required to conduct prescribed tests, such as clinical trials, in order to apply for marketing approval for their pharmaceuticals.

In a past decision of the Supreme Court (see Section 2 below), the Court held that the act of producing and using a pharmaceutical that falls within the technical scope of a patent invention for the purpose of obtaining approval for marketing a "generic drug" is deemed to be "experiment or research" under Article 69, paragraph (1) of the Patent Act* and, thus, does not constitute patent infringement.

However, this past decision of the Supreme Court only determines that conducting tests necessary for obtaining marketing approval for a "generic drug" is deemed to be "experiment or research", but does not state whether the range of this decision covers pharmaceuticals other than generic drugs (e.g., a new drug).

Recently, the IP High Court has rendered a decision (No. 2020 (ne) 10051) stating that the interpretation of the decision of the Supreme Court also applies to the case of a new drug: conducting tests necessary for obtaining marketing approval for a "new drug" is also deemed to be "experiment or research" under Article 69, paragraph (1) of the Patent Act and, thus, does not constitute patent infringement.

In the following sections, we would like to introduce the recent decision of the IP High Court. We hope that this information will be helpful in developing marketing strategies for your company's pharmaceuticals.

First, let us briefly introduce the past decision of the Supreme Court.

In the past decision, the Supreme Court determines that conducting tests necessary for obtaining marketing approval for a generic drug is deemed to be "experiment or research" under Article 69, paragraph (1) of the Patent Act. The reasoning for the decision is as follows.

In order to apply for approval for producing a generic drug, it is necessary to conduct in advance prescribed tests, which require a certain amount of time, and in order to conduct such tests, it is necessary to produce and use chemical substances or pharmaceuticals which fall within the technical scope of the patentee's patented invention. If a third party is not allowed to produce or otherwise handle such chemical substances or pharmaceuticals which fall within the technical scope of the patentee's patented invention during the term of the patent right, the third party would be unable to use the patented invention freely for a considerable period of time even after the term of the patent right expires. Such consequence is contrary to the foundation of the patent system, which is designed to enable any person to use a patented invention freely after the term of the patent right expires, thereby widely benefiting society in general.

In comparison with the case in the past decision of the Supreme Court, the case in the recent decision of the IP High Court has different backgrounds in the following aspects.

(3) The target act involves producing or otherwise handling of a pharmaceutical for the purpose of performing a bridging study (which is a clinical trial to verify whether foreign clinical data can be reproduced with Japanese patients).

Despite the circumstances mentioned above, it is determined in the recent decision that conducting tests necessary for obtaining marketing approval for a new drug is deemed to be "experiment or research" under Article 69, paragraph (1) of the Patent Act as in the case of a generic drug. Specifically, in the recent decision the determination that clinical trials necessary for obtaining marketing approval for a new drug is deemed to be "experiment or research" under Article 69, paragraph (1) of the Patent Act is made as in No. 4, 1. (2) of the "Facts and reasons" section of the original judgement.

In No. 4, 1. (2) in the "Facts and reasons" section of the original judgement (judgement in the first trial), the following determinations are made.

· In order to apply for marketing approval for a new drug, it is necessary, as in the case of a generic drug, to conduct in advance the prescribed tests, which require a certain amount of time, and in order to conduct such tests, it is necessary to produce and use pharmaceuticals etc. that fall within the technical scope of the present invention.

· Since it is necessary to conduct the prescribed tests, which require a certain amount of time, to apply for marketing approval, if producing or otherwise handling of pharmaceuticals that fall within the technical scope of the present patent invention is not allowed during the term of the present patent right, this would have consequences that the present patent invention cannot be freely used for a considerable period of time even after the term of the patent right expires, which is contrary to the foundation of the patent system.

· There is no evidence suggesting that the Defendant performs or is likely to perform the production or otherwise handling of a new drug during the term of the present patent right beyond the extent necessary for conducting tests for the purpose of obtaining marketing approval, in anticipation of a transfer etc. of the new drug after the expiration of the term of the present patent right.

The IP High Court ruled, for the same intention as in the case of a generic drug, that conducting tests necessary for applying marketing approval for a new drug is also deemed to be "experiment or research" under Article 69, paragraph (1) of the Patent Act and, thus, does not constitute patent infringement.

In our opinion, pharmaceutical manufacturers, nevertheless, should bear in mind, as stated in the recent decision of the IP High Court, that the act of performing illegitimate production or otherwise handling of a new drug that falls within the technical scope of a patented invention beyond the extent of tests necessary for applying marketing approval is deemed to infringe a patent right.

We believe that the information in this newsletter will be helpful in planning your marketing strategies in Japan. We hope that you will make good use of it in your corporate activities.

We have patent and trademark attorneys who are well versed in the pharmaceutical affairs system in Japan. Please consult with us about specific cases concerning your company’s marketing strategies in Japan. We will be pleased to give you appropriate advice.