Taiwan’s Legal System

Just as in the States, patent evergreening is also a common tactic in Taiwan.

Similarly by adjusting a patent’s method of delivery, intended use or even new combination, these measures can effectively prolong the effect of its “progenitor” patent.

For example, in the case of Sanofi（安萬特）v. TTY Biopharm（東洋）¹¹⁹ , the patent holder has the patent on Taxol and in 1981, patent holder further apply for ‘394 patent of Taxane. Since Taxol is not very soluble, it will need ethanol and other soluble agent to be better applicable in a clinical setting. Consequently, the patent holder applied for another patent, ‘742, making Taxol more easily applicable with a soluble agent. Generic companies, produced its own version of soluble form of Taxol and applied for patent,

‘471 in 2006 which is a mixture of Taxol with anti-gelling agent and soluble fluid.

Unlike its branded counterpart, this generic version offers more solubility and is clinically more easy to use than patent holder’s ‘742 patent and its considered as more innovative than its predecessor. The generic company subsequently prevails in this lawsuit.

In the second stage of litigation battle, where patent holder is able to file claims for damages, or petition to stop or prevent further infringement. Damages are usually calculated based on the losses due the infringement. Stop infringement is usually done by taking the alleged infringed product off the market; in other incident, court may

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stop infringement by issuing injunction to stop production of alleged product all together. This stage can be further divided into two sub-stages, the first stage is filing for preliminary injunction against the infringed party and the second stage is the actual litigation itself. In order to warrant for preliminary injunction, the mover usually need to persuade the court there is a “severe and imminent threat” posed by the infringing party.

Since such order is potentially disastrous to the other party is issued lightly, court will usually pose a substantial bond as the perquisite of granting injunction. For example, in the case of Takeda（武田）v. Genovate Biotechnology（健亞） , when the litigation erupts, the generic company ,which is Genovate in this case, has already passed the market review procedure and was on the eve of being awarded the market license.

Brand name company moves quickly to petition for preliminary injunction against the generic, alleging patent infringement on patent drug’s formula. Since court only has a very limited time to review petition for preliminary injunction, its judgment was hasty in this case and brand name’s petition of preliminary junction was granted and issue notice to ministry of health to stop its review for generic’s market license. The injunction was finally lifted after 4 years when the generic prevails in the lawsuit and was found non-infringing.

In another incident¹²⁰ , where generic has already obtained market license but the brand name petitions for preliminary injunction, brand name also alleges infringement on its formula, patent on metabolite, and copyright infringement on its package inserts against the generic. However, after several appeals, the Court is persuaded by the generic company to lift the preliminary injunction by providing bonds. In exchange, generic is also to continue to sell its drug on the market.

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The battle over preliminary injunction is often time merely the prelude to actual infringement proceeding. Two main issues in a typical infringement proceeding are: 1) the patentability of the patent in question 2) whether such patent is infringed by the defendant. In order for a patent to be eligible in other words patentable, such patent must satisfy three criteria, they are: novel, non-obvious and useful. In the case of pharmaceuticals, to qualified for usefulness is rather easy. Usually as long such pharmaceutical product is able to be produced with present technology, it will satisfy this criteria. As for non-obviousness, a commonly seen dispute arises when combining two known products together to form a new one. Whether such new product can satisfy the non-obvious requirement is often a subject of much debate. In practice; however, a commonly used examination criteria is whether such combination needs to conduct experiment in order to achieve it. If not, then it will not satisfy the novelty requirement.

Measurement use in a patentability dispute is to raise patent invalidation in Intellectual Property Office (IPO) or allege patent invalidity in the intellectual property court. In the case of Alendroid Acid used in the treatment of Osteoporosis, this patent of this drug is later found to be invalid. The patent invalidation actions were filed to both IPO and Intellectual Property Court. The main difference between filing in the Court and IPO was that if the patent was found invalid, such patent will no longer be effective;

while, patent that found in invalid in the court, this decision is only binding to the opposing parties.

In the matter of infringement, infringement can be further categorized as “direct infringement” and “indirect infringement.” As in the case of Takeda v. CCPC¹²¹ , brand

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name alleged its patents on combination drugs and metabolite were infringed by the generic competitor i.e. CCPC. Regarding the combination drug infringement, brand name alleged generic can makes reference from its package insert to know about the drug combination this indirectly infringed upon brand name’s patent. Branded company also alleged against doctors for prescribing a generic drug with another drug, such prescription of combining two drugs together, is an direct infringement against brand name’s patent. On the issue of infringement of metabolite, brand name alleged when generic drug was metabolized by a patient, the metabolite resulted was patent-protected;

therefore, such act constituted as a direct infringement against brand name and generic company constituted as contributory infringement by helping patient to engage in the infringing act. The court; however, did not accept such argument. The court held that brand name did not state a valid ground in direct infringement. Regarding indirect infringement, even though such reasoning was recognized by U.S. legislature; however, there are no corresponding regulations in Taiwan. Additionally, Taiwan’s patent act also offers protection for drugs to prescribe combination of different drugs. Therefore, brand name’s case of indirect infringement was also dismissed.

As mentioned previously, copyrightablity of package insert has surprisingly become another battleground for struggle between brand name and generic company.

In Taiwan, the term "generic drug”, as stipulated in the "Guideline for Drug Review and Register¹²² " Article 4 paragraph 2, generic drug is defined as pharmaceutical compound that has the same active ingredient, reagent, dosage and curative effect as the domestically approved Innovator drug. Such drug is a generic drug

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of its branded counterpart. Taiwan's pharmaceutical industries, like most of other countries in the world, engage mostly in manufacturing and developing generic drugs.

The development of generic drug industry is important for many reasons, one of the most important ones being: there are only a few countries in the world that is capable of independently researching a new drug. The discovery of an effective new drug is costly and lengthy business that few governments, let alone private enterprises, are able to afford. "The estimated average out-of-pocket cost per new drug is US$ 403 million.”

Consequently, by allowing the production of generic drug, local manufacturers can bypass the burden of high research costs and time, and provides general public with an effective drug which in turn may also foster the growth and development of domestic pharmaceutical industries. Furthermore, for country such as Taiwan where up to 98%

of her citizens are covered under National Health Insurance, the incentive for lowering drug price is even greater. Since generic drug manufacturers incur less costs in making these drugs; therefore, it is easier for them to maintain profitability while continue to provide drugs reasonably affordable by the masses.

In recent years as will elaborate below, local manufacturers are increasingly facing more and more litigations from brand name manufacturers who allege copyright infringement on their package insert by generic competitors.