Wednesday, 2 July 2008

Kenya: Tribunal finds Pfizer’s Azithromycin dihydrate patent infringed

The Industrial Property Tribunal (Tribunal) handed down a ruling in Pfizer Inc v Cosmos Limited, Case No. 49 of 2006, finding Cosmos Limited to have infringed Pfizer’s ARIPO patent number AP44 relating to Azithromycin Dihydate. Accordingly it granted an injunction restraining the respondent from infringing the patent for the remaining term of its existence and ordered destruction of the remaining stock of infringing products. Afro IP notes that the ruling is dated 25th April 2008 and the patent expired on 15th June 2008.

Pfizer filed the infringement proceedings with the Tribunal under Section 106 of the Industrial Property Act (“the Act”) alleging that Cosmos was selling, without its authority Azithromycin dihydrate under the trade mark “Zithrox”. The patent is applicable in Kenya by virtue of Section 59 of the Act (which provides that a patent granted by ARIPO under the Harare Protocol has the same effect as a patent granted under the Act).

Validity

First, the Tribunal had to deal with the issue of the validity of the patent at the time the respondent allegedly committed the infringing activities. Notably, the argument on validity of the patent centred on procedural rather than substantive issues such as novelty and inventive step. First, the respondent contended that the patent had expired due to non-payment or late of renewal fees and relied on the case of Sanitam (E.A.) Ltd v Rentokil (K) Ltd [2006] eKLR in which the Court of Appeal held that there could be no infringement of a non-existing patent. However the Tribunal, and rightly so, distinguished the two cases, pointing out that Sanitam sought to enforce a patent application and not a patent.

The responded also argued that the patent in Kenya was not valid since the equivalent patent in United States of America (from which priority was claimed) had expired. In rejecting such a notion the Tribunal observed that “patents are territorial and the expiration of the patent in that country does not affect its validity in Kenya”.

On the issue of late payment of renewal fees, the Tribunal found itself in a situation reminiscent of the Board of Appeal ruling in Sanitam v ARIPO in which the Board blamed ARIPO for removing the Sanitam patent from the register without following the right procedure. It had to determine whether the patent had lapsed because the applicant had remitted some renewal fees after the 6 months grace period allowed under the Harare Protocol.

Noting that the Protocol places an obligation upon ARIPO to send notifications to patent holders reminding them to pay annual fees, there was no evidence before it that this was done and neither was evidence presented to show that the patent was removed from the register. The Tribunal had no option but to conclude that the “patent was at all material times maintained in the …register and was therefore in force”.

Infringement

Having found that the patent was valid, the next question was whether the responded had infringed on the patent. In support of its case, Pfizer produced laboratory tests confirming presence of the Azithromycin dihydrate in the respondent’s product bought in the market. The respondent admitted to have imported, manufactured and sold drugs containing the product in 2005 but stopped doing so after receiving a cease and desist letter from the applicant. However, the respondent denied infringing the patent citing a raft of issues (well... some bordering on comedy!).

It was argued that the provisions of the Act and the TRIPS agreement allowed the respondent to deal with the product without seeking consent from the patentee. The respondent also sought to demonstrate that the product was readily available in Kenya by producing other medicines containing the patented product having being imported from India, Bangladesh and China (presumably by other players not before the tribunal).

The argument on TRIPS agreement was rejected on the basis that its provisions notably the flexibilities and exceptions are contained in the Act. The Tribunal also pointed out the various provisions in the Act such as voluntary and compulsory licences, which the respondent could have pursued in order to exploit the patented invention.

The respondent also tried without success the parallel importation defence provision under section 58 (2) of the Act. However, the Tribunal was of the opinion that “the section does not give a blanket protection to third parties to exploit a patent except in the circumstances provided for by the Act”.

In mitigation, the responded argued that it had no intention of infringing the patent and it had stopped dealing with the product apart from fulfilling contractual obligation with the government. The Tribunal was of the view that “intention is not an ingredient in considering whether there has been infringement or not.”


3 comments:

Asiimwe Paul said...

Njuguna,

This is an interesting ruling. Please send me a copy. I think if an inventory was made, one would find that many of the ARIPO Patents have defaulted heavily in terms of paying annuities. Vigilance should be excercised on both sides but when push comes to shove, the Patent owner suffers if infringement occours.

Njuguna said...

At the moment i only have a hard copy of the ruling but i will send you one if i manage to get a soft copy or if the ruling is posted on the Kenya Law Reports web at www.kenlii.org

Njuguna said...

Paul,
You can get a copy of the case here
http://www.wakili.com/Pfizer%20and%20Cosmos%20Case%20Patents.pdf