English translation of the Supreme Court decision of April 16, 1999
on the issue of experimental use exemption and generic drugs
Handed down on April 16, 1999
The Second Petty Bench of the Supreme Court
Case No. 1998(ju)153
Translated by Dr. Shoichi Okuyama
Ono Pharmaceutials Co., Ltd. v. Kyoto Pharmaceutical Industries, Ltd.
Against the decision the Osaka High Court rendered on May 13, 1998 in a case involving a request for an injunction on pharmaceutical products (Case No. 1997(ne)1476) between the above-mentioned parties, an appeal has been filed by the Appellant. Therefore, this court decides as follows:
DECISION
The present appeal is rejected.
The cost of this appeal is to be borne by the Appellant.
OPINION
Concerning the reasons for requesting the acceptance of the appeal set forth by the attorneys for the Appellant, Keizo TAKASAKA, Yoichiro NATSUZUMI, Hanroku TORIYAMA, Yasuaki IWAMOTO, Hirofumi ATA, and Yoichi TANABE:
1. In the present lawsuit, the Appellant, who owns a patent on chemical substances and drugs which contain them as effective components, has demanded an injunction against the sale of the Appellee's drugs and a damages award because the manufacture and use of drugs which are the same as the patented drugs in terms of their effective components, dosages, usage, quantities, indications, efficacy, etc. during the patent term for the purpose of obtaining data that accompany an application for the approval of manufacture under Section 14 of the Pharmaceutical Affairs Law constitute infringement on the patent. The Appellee, on the other hand, has argued that it did not infringe on the patent owned by the Appellant because, for example, the above-mentioned acts would qualify for "the working of the patented invention for experiment and research" under Section 69(1) of the Patent Law.
2. When someone has a patent on chemical substances or drugs which contain such chemical substances as effective components, even if a third party carries out the necessary experiments for obtaining data to be filed accompanying an application for the approval of manufacture provided under Section 14 of the Pharmaceutical Affairs Law by making and using chemical substances or drugs belonging to the technical scope of the patented invention during the patent term for the purpose of manufacturing and selling drugs which have the same effective components, etc. as the patented drugs (referred to as "generic drugs" hereinafter) after the patent term has ended, such acts are the "working of the patented invention for experiment and research" provided in Section 69(1) of the Patent Law and should not therefore be considered to constitute patent infringement. The reason for this is as follows:
1) The patent system is to encourage inventive activities by providing those who disclose inventions with monopolizing rights for the use of the inventions during a certain period of time, and give third parties opportunities to use the disclosed inventions, so that it contributes to the development of industries. In consideration of this, it is one of the bases of the patent system that after the patent term expires, anyone should be able to freely use the inventions, so that the society in general would benefit.
2) The Pharmaceutical Affairs Law stipulates that a prior approval by the Minister of Health and Welfare is to be obtained for the manufacture of drugs for ensuring safety, etc., and that upon carrying out various experiments, data, etc. on the experimental results must accompany an application when requesting such an approval. It is the same with generic drugs that certain experiments need to be carried out spending a certain period of time on them before requesting an approval on their manufacture. For such experiments, it is necessary to manufacture and use chemical substances or drugs that fall under the technical scope of the patented invention owned by the patentee. If under the Patent Law, such experiments are not to be interpreted as "experiments" stipulated in Section 69(1) of the Patent Law and therefore such manufacture, etc. are not possible during the patent term, the third party cannot, as a result, freely exploit the invention for a substantial period of time even after the term of the patent expires. This result is against the basis of the patent system mentioned above.
3) On the other hand, it is considered to be unallowable as patent infringement during the patent term for a third party to manufacture generic drugs to be assigned after the expiration of the patent term or to make or use chemical substances of the patented invention to be used as components of such drugs beyond the extent that is necessary for experiments to be carried out in order to file for the approval of manufacture under Section 14 of the Pharmaceutical Affairs Law. As far as such consideration is applicable, the patentee enjoys the benefits of monopoly over the patented invention during the patent term. If it is possible to exclude others from carrying out manufacture, etc. for the experiments required in applying for the approval of manufacture of generic drugs during the said term, it would be the same as extending the patent term for a substantial period of time. Such extension of the patent term goes beyond what is expected under the Patent Law as benefits to be given to the patentee.
3. In view of the above, under the facts lawfully established during the original proceedings, the acts of the Appellee discussed above should be considered to fall under "the working of the patented invention for experiment and research" provided in Section 69(1) of the Patent Law and do not constitute infringement on the patent owned by the Appellant. The judgement of the original court is justifiable in its conclusion. The gist of the arguments made by the attorneys for the Appellant is based on their own views to attack the original decision, and cannot be accepted.
Thus, with an unanimously agreed opinion among all the judges, we decide as set forth in the section of Decision.
Presiding Judge:
Shinichi KAWAI
Judges:
Hiroshi FUKUDA
Koji KITAGAWA
Tsuguo KAMEYAMA
(c) Shoichi OKUYAMA, 1999
April 25, 1999