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Petroiu, Marius --- "Report on a Recent Romanian Pharmaceutical Patent Case" [2002] MurdochUeJlLaw 11; (2002) 9(2) Murdoch University Electronic Journal of Law

Report on a Recent Romanian Pharmaceutical Patent Case

Author: Marius Petroiu
Attorney at Law
Issue: Volume 9, Number 2 (June 2002)

This article represents only the author's point of view regarding the legal problems below mentioned and not that of his firm. As to the information provided, the author acknowledges that it has been obtained from different public sources, as mentioned herein.[1]


Contents

Report on a Recent Romanian Pharmaceutical Patent Case

    1. Introduction

  1. Pursuant to the 1989 political changes, the Romanian economy faced enormous challenges, based on new principles such as free trade, the insurance of a free market economy or compliance with new requirements imposed by Romanian customers.

  2. From a point of view, the process of trade liberalization implied not only an increased demand for goods produced outside the "ex-communist markets",[2] but also more imports carried out without paying attention to the quality and legal standards of the European Union.

  3. In this respect, pursuant to the Association Treaty signed with the European Communities in 1993 the Romanian Government agreed to restructure and harmonize the national patent law with the applicable European Union law (the "aquis communautaire").[3]

  4. Furthermore, as part of the Convention for the settlement of the World Trade Organization[4] Romania also agreed to comply with the provisions of Addendum 1C to the Convention, referring to "Trade related aspects of intellectual property rights"("TRIPS").[5]

  5. Moreover, the Romanian Government and the European Patents Organization signed in 1994 in Bucharest a "Memorandum of Understanding", settling forth the principles for further cooperation.[6] Presently, Romania has been officially invited by the European Patent Office to adhere to the European Patent Convention, as part of the process of European Union integration.[7]

    2. Applicable Laws

  6. Romanian law in patents, as restructured, relates to the application of Law no. 64/1991 on national patents (hereinafter "Law no. 64")[8] and implementation Rules no. 152/ 1992[9] and Law no. 93/ 1998 on transitory protection of foreign patents (hereinafter "Law no. 93")[10] and implementation Rules no. 211/1998 (hereinafter "Rules no. 211/ 1998").[11]

  7. With reference to biotechnological patents, several laws were enacted: Law no. 75/ 1995 regarding the manufacture and registration of seeds and agricultural plants,[12] Law no. 255/ 1998 regarding the protection of new species of plants[13] and the implementation Rules no. 200/ 2000.[14]

  8. Furthermore, in order to strengthen the role of the Romanian Customs Authorities in protecting the intellectual property rights recognized under Romanian regulation, Law no. 202/ 2000 on certain measures for compliance of customs operations with the recognized intellectual property rights[15] and implementation Rules no. 301/ 2001[16] were ratified.

  9. All patent registration procedures shall be carried out before the State Office for Patents and Trademarks (hereinafter "OSIM"), a national authority, headquartered in Bucharest.[17]

    3. Facts

  10. In the aftermath of 1990, several foreign pharmaceutical companies succeeded in occupying an important place on the Romanian market, against the local competitors, due to quality standards and advanced technologies.[18]

  11. After 1993, Pfizer Ltd. UK, a subsidiary of Pfizer Inc. USA (hereinafter the "plaintiff" or "Pfizer"), decided to open a Romanian branch, in order to promote its products, including "Norvasc" (hereinafter "Norvasc"), a pharmaceutical product containing "amlodipine", a substance related to the control of blood pressure and heart activities (hereinafter "amlodipine"). Norvasc has been produced in the basis of the European patent certificate no. 0089167, issued in UK on March 8, 1983 for the product "amlodipine" and valid until March 8, 2003.[19]

  12. Since 1995, Dr. Reddy's Laboratories Ltd. India (hereinafter sometimes referred to as the "defendant" or "Dr. Reddy's") started a large promotion campaign on the Romanian market for "Stamlo", a pharmaceutical product also based on "amlodipine" and having the same medical destination as Norvasc (hereinafter "Stamlo"). From the legal point of view, the production of Stamlo was granted on a patent issued abroad for a specific method of obtaining "amlodipine".

  13. Statistically, Stamlo occupied in a short period of time an important place on the wholesale and retail market of pharmaceutical products related to blood pressure and heart activities. On the contrary, the sales of Norvasc diminished dramatically, due to its price being twice as high.

  14. On July 2, 1998 Pfizer filed an application before OSIM under Law no. 93, asking for the official recognition of European patent certificate no. 0089167, by way of issuing a Romanian transitory patent, valid until the date of expiration of the foreign patent (March 8, 2003).

  15. The application has been published in the Intellectual Property Official Gazette - the Patents Section issue no. 9 of September 30, 1998.

  16. Following the examination, OSIM approved the Pfizer application, issuing Decision no. 2/2 of July 31, 1999 for the promulgation of the transitory patent certificate no. 2002 T, published in the Intellectual Property Official Gazette - the Patents Section issue no. 8 of August 30, 1999.

  17. In October 1999, based on Law 93 and transitory patent no. 2002T, Pfizer, as plaintiff, filed against Dr. Reddy's Laboratories Ltd. India, as defendant, two types of legal actions:

  18. On March 2000 the injunction order was granted by the Bucharest Tribunal and was also upheld by the Bucharest Court of Appeal. The second appeal initiated by the defendant before Romanian Supreme Court was finally dismissed in October 2001.

  19. On January 21 2002, the Bucharest Tribunal issued Court Decision no. 43 constraining the defendant:

  20. Based on the interim injunction order issued by the Bucharest Tribunal, the defendant has been forced to withdraw Stamlo from the market.

  21. With reference to the legal action for damages, as Court Decision no. 43/2002 shall be subject to the Romanian three stage judicial circuit (first instance court, appeal and second appeal), in case of the defendant's appeal, only a final decision in the second appeal shall be considered definitive and irrevocable.[23]

    4. The provisions of Law no. 93

    4.1. Conditions to be met by a foreign patent

  22. According to the provisions of Law no. 93, any foreign patent complying with certain conditions regarding substance matter and form shall be subject to a recognition procedure on Romanian territory.

  23. In this respect, under the provisions of article 1 and article 3 of Law no. 93, a foreign patent shall become officially registered on Romanian territory if the following conditions regarding the substance matter are met:

    1. Date of issuance: the patent should have been issued prior to January 21, 1991 and should be in force as of the date of application;
    2. Country of issuance: the patent should be officially registered in a member country of the Intellectual Property Union of Paris[24] or in a member country of the World Trade Organization;
    3. Specific object:

      • The patent should be particularly related to one of the following fields: substances obtained by nuclear or chemical methods, pharmaceutical products, medical care methods or treatments, foods, species of plants, types of animals;
      • The object of the patent has not been officially registered in Romania before OSIM;
      • The products manufactured under the patent have not been traded within Romania prior to December 31, 1993;

  24. As for the conditions regarding the form of the patent, article 2, article 4 and article 5 par.2 of Law no. 93 focus on the following:

    1. The applicant must put forward an official request.

      • The owner of the foreign patent is entitled to benefit from the rights granted by Law no. 93 only by request;
      • The request shall be made by way of a written official application, to be submitted in Romanian;
      • The application shall be filed with OSIM, during the 6 months period following the date of entry into force of Law no. 93 (May 20, 1998-November 20, 1998);

    2. The application shall be drafted in accordance with the mandatory provisions of article 4 of Law no. 93, which include: references to the official request for transitory protection on Romanian territory, denomination and headquarters of the applicant, number, object, validity period and country of issuance of the foreign patent.[25] Only signed applications will be considered.[26]
    3. Attachments. The applicant shall provide the following documents:

      • The power of attorney of the applicant's representative.[27]
      • A copy of the foreign patent, accompanied also by official translation into Romanian;
      • A document proving the validation of the patent issued by the corresponding intellectual property state institution;
      • An authenticated statement of the proprietor of the patent attesting that products made in accordance with the patent had not been commercialized within Romania prior to December 31, 1993.[28]
    4. All relevant taxes shall be paid the two months following the date of registration of the application at OSIM.

    4.2. Procedures

  25. Law 64 refers to the registration procedures of a national patent. Additionally, Law 64 designates all intellectual property rights to be granted to the owner of a patent certificate and set forth the judicial procedures to be followed for overseeing such rights.

  26. Law no. 93 regarding the recognition of certain foreign-issued patents by way of issuance of a "transitory patent", at the holder's request, refers to Law no. 64 with regard on procedures and intellectual property rights subject to be granted.

  27. Both laws require the completion of an administrative procedure before OSIM for the issuance of a patent/ transitory patent. All procedures shall be conducted in Romanian.

  28. As to the validity period, in case of a patent issued in accordance with the provisions of Law no. 64 the rights of the owner subsist 20 years as of the application date. In case of a transitory patent issued in accordance with Law no. 93, the rights granted to the owner lasts until the date of expiration of the foreign patent.

  29. According to Law no. 93, an application complying with all conditions regarding form and substance matter, shall be registered at OSIM. As a result of the positive examination of the application, OSIM shall proceed with the publication of the transitory protection granted to the applicant. The date of publication shall be the date of issuance of the Intellectual Property Official Gazette - the Patents Section issue. Based on this publication, OSIM shall deliver to the applicant an official decision granting the transitory patent certificate.

    4.3. Rights to be granted to the applicant

  30. The specificity of Law no. 93 consists in the two dimensions of the notion of "transitory" protection:

  31. As to the intellectual property rights provided by Law no. 64, article 2 and 34 refer:

  32. According to article 35 of Law no. 64, the moment when the applicant is entitled to claim protection of its intellectual property rights shall be the moment of the publication of its patent application in the Intellectual Property Official Gazette - the Patents Section issue.

  33. From this moment on, the applicant is entitled to claim temporarily all rights granted by law, during the period of time between the date of registration of the application and the date at which the validity of the patent expires. Once the patent is issued, such protection shall become definitive.

    5. Comments on Decision no. 43 of January 21, 2002 of the Bucharest Tribunal

  34. As indicated above, September 30 1998 is the date of publication of the Pfizer application for the recognition of European patent certificate no. 0089167.[29] Pursuant to such publication, Pfizer was entitled to claim in the Courts the recognition of its intellectual property rights on the Stamlo ingredient "amlodipine".

  35. However, Pfizer decided to base its request for the recognition of its intellectual property rights on a definitive and enforceable title as transitory patent certificate no. 2002T. The transitory patent has been issued according to the OSIM Decision, published in August 30, 1999.[30]

  36. In this respect, two months later, Pfizer made a claim in the Romanian Courts for the recovery of all estimated damages, by way of a legal action for damages. Pfizer also decided to ask for the prohibition of all non-authorized activities regarding the commercialization of Stamlo on the Romanian market, until the final settlement of the legal action for damages, as the name of the company and the brand name of its product, Norvasc, had been seriously damaged.

  37. As for the estimation of the level of damages, the Court considered various reports from independent auditors, regarding the quantities of Stamlo that had been sold in the previous years. In addition to that, for the estimation of damages, the Court took into consideration the benefits Pfizer could have been obtained by using Norvasc as the sole pharmaceutical product of its kind on the market of blood pressure process and heart activities drugs.

  38. As to the Court's decision to order the defendant the immediate withdrawal of Stamlo from the market, it should be noted that the Court estimated such an obligation should become more effective as the defendant shall comply with the payment USD 5,000 for each day of delay. Comparing the level of damages awarded, the decision may be considered an important step forward, as in case of non-compliance the daily profit of the defendants shall be seriously diminished.

  39. With reference to the obligation of the defendant to determine the publication of the Court Decision in 5 daily newspapers, designated by the plaintiff, certain remarks should be made.

  40. The damages incurred to the plaintiff as result of the non-authorized commercialization of Stamlo were also of a moral nature. Pfizer suffered not only great material losses, but also a diminution of its company name and of the Norvasc image. Furthermore, the consumer's confidence in other well-known products of Pfizer has been also diminished.

  41. In this respect, a decision was made to inform the Romanian public opinion, including all interested customers, that Pfizer, being a responsible company, takes the opportunity granted under Romanian law to preserve intellectual property rights against any non-authorized third party.

  42. The plaintiff's option to designate the name of the daily newspapers to be chosen for the publication of the Court Decision, was motivated by the fact that only specific Romanian journals are at this moment capable to send properly an economic and business related message.

  43. As to the number of "five" daily newspapers chosen to inform Romanian customers about the applicable sanctions, such estimation complies with the task of insuring a proper coverage over the clients of the drug's market.

    6. Final conclusions

  44. The Romanian patent legal system, as restructured, provided the owner of a foreign patent with the possibility to claim the recognition of its rights on Romanian territory and their protection according to all domestic standards in force.

  45. In this respect, Pfizer succeeded promoting an interim injunction, based on its European patent recognized under Law no. 93. The object of the order was to bar all non-authorized activities of Dr. Reddy's Laboratories Ltd. India on Romanian soil with reference to the Stamlo pharmaceutical product or any other pharmaceutical versions of it. At this moment, Stamlo has been withdrawn from Romanian market.

  46. Concomitantly, Pfizer successfully filed a legal action for damages against Dr. Reddy's Laboratories Ltd. India, stating that damage in the amount of USD 536,203 had been done by way of non-authorized commercialization of Stamlo pharmaceutical product. As result, the Court Decision forced the defendant to pay all existing damages, to cease the commercialization of Stamlo on the Romanian market and to inform the customers by way of publication in certain daily newspapers.

  47. However, Romanian Civil Procedural Law provides for three judicial stages: the first instance court, before the Bucharest Tribunal; the appeal, before the Bucharest Court of Appeal and the second appeal, before the Supreme Court. In our case, only a decision issued by the Supreme Court shall be considered as definitive and irrevocable.

  48. A few words should also be said about the time related litigation issue. Readers will notice that the application for the interim injunction order was filed in October 1999 and released by the first instance court in March 2000. The solution has been definitive and irrevocable confirmed by the Supreme Court in October 2001. Yet, according to the law, the order has been enforced after settlement of the first instance court (March 2000).

  49. As to the legal action for damages, which was also initiated in October 1999, the decision in the first stage was issued in January 2002. On the contrary, the Pfizer European patent shall expire on March 8, 2003, entitling Pfizer to claim the recovery of damages made until that date, at maximum.

  50. As a final conclusion, the above-mentioned case represents an important step forward for the Romanian patent legal system and also for Romanian jurisprudence. At this point, the case is a leading source of information for legal practitioners as to the interpretation and application of the system of Law no. 93 and Law no. 64. On the other hand, Romanian judges have the possibility to assist and implement the protection of foreign intellectual property rights on Romanian territory.

  51. Last but not least, it is worth mentioning the role and the importance of customers. The source of the above-mentioned Court Decision has been represented by the influence of Romanian customers had on the sales of Stamlo against Norvasc. The importance of the Romanian customers lies also in the fact that the content of the Court Decision targeted also the public, in order to point out the need to provide good information on reliable products.

  52. Additionally, the fact that presently Norvasc is the leading pharmaceutical product of its kind on the market of blood pressure process and heart activities drugs suggests that, in some cases, a intellectual property legal battle can be successfully handled in Romania.

Notes

[1] The sources used for the present article are represented by 1) Intellectual Property Official Gazettes-the Patents Section issue, 2) Romanian daily newspapers as "Ziarul Financiar", "Adevarul", "Curentul", 3) Romanian Legislation, 4) OSIM official web site (http://www.osim.ro), 5) Court registers, 6) official statistic reports (for further details, see supra-note from 2 to 30).

[2] Before 1990, the East European communist regimes, together with the USSR, formed a unique economic market for products and services, as a counterweight to the Economic European Union (known as "The Council for Mutual Economic Aid" or "CAER"). However, CAER finally collapsed pursuant to the fall of East European political regimes in late 1989, and to the split of the USSR in late 1991.

[3] The Treaty was signed in Brussels on February 1, 1993 and was ratified by the Romanian Parliament by Law no. 20/ 1993, published in the Official Gazette no. 73 of April 12, 1993.

[4] The Convention was signed in Marrakech on April 15, 1994 by the representatives of 110 states, including Romania, where Law no. 133/1994, published in the Official Gazette no. 360 of December 27, 1994, ratified it.

[5] TRIPS have been published in the Official Gazette no. 360 bis of December 27, 1994. Pursuant to the provisions of article 11 of the Romanian Constitution, any ratified international treaty shall be part of the Romanian legislation. Accordingly, TRIPS provisions are applicable as part of Romanian law since January 1, 2000, after a 5 years transitory period.

[6] The Memorandum was signed in Bucharest on September 9, 1994 and was ratified by the Romanian Government by Government Ordinance no. 32/ 1996 approved by the Romanian Parliament by Law no. 32/ 1997, published in the Official Gazette no. 43 of March 14, 1997.

[7] The invitation has been released on January 29, 1999 to all East European countries, signatory of Association Treaties with the European Union and provides that the European Patent Convention shall enter into force as of July 1, 2002.

[8] Published in the Official Gazette no. 212 of October 21, 1991.

[9] Published in the Official Gazette no. 79 of April 30, 1992.

[10] Published in the Official Gazette no. 186 of May 20, 1998. As result of the official publication, Law no. 93 entered into force on May 20, 1998.

[11] Published in the Official Gazette no. 358 of September 22, 1998.

[12] Published in the Official Gazette no. 362 of December 17, 1997.

[13] Published in the Official Gazette no. 525 of December 31, 1998.

[14] Published in the Official Gazette no. 134 of March 30, 2000.

[15] Published in the Official Gazette no. 588 of November 21, 2000.

[16] Published in the Official Gazette no. 142 of March 22, 2001.

[17] For further details, see Government Decision no. 573/ 1998 on the organization and functioning of the State Office for Patents and Trademarks, published in the Official Gazette no. 345 of September 11, 1998.

[18] At present, the cash flow on the Romanian pharmaceutical market is estimated at an average of USD 500,000,000.

[19] For details see Intellectual Property Official Gazette-the Patents Section issue no. 9 of September 30, 1998.

[20] Such as: unauthorized fabrication, marketing and commercialization, offering for sale, use, import or deposit of Stamlo, on Romanian territory, in the absence of an agreement between the parties.

[21] Court Decision no. 43/ January 21, 2002 makes reference to an amount of ROL 378,578,130. The exchange rate of ROL 32,945 for USD 1 released by the Romanian National Bank on April 12, 2002 was used for calculation purposes.

[22] The Decision including relevant information was published in the Romanian daily newspaper "Ziarul Financiar", dated March 22, 2002, under the signature of Mr. Laurentiu Ispir. Therein, Mrs. M. Oproiu is mentioned as Pfizer consultant for intellectual property issues in the lawsuit against Dr. Reddy's.

[23] With reference to the system of the Romanian Civil Procedural Regulation to patent enforcement procedures, see also "Patent Enforcement Developments in Romania" by Marius Petroiu and James Forstner in World Intellectual Property Report no. 7, vol. 15 of July 2001.

[24] The provisions of article 1 and article 3 lit. a of Law no. 93 refer to any country which adhered to the Paris Convention for the Protection of Industrial Property, signed on March 20, 1883 and successively amended in Brussels (1900), Washington (1911), The Hague (1925), London (1934), Lisbon (1958) and Stockholm (1967).

[25] The applicant shall also provide information as to any similar application submitted or as to the inventors that have been created the patent.

[26] The legal representative of the applicant shall be authorized to sign the application in the name and on behalf of the applicant.

[27] According to article 5 of Rules no. 211/ 1998, the legal representative shall have its registered headquarter in Romania and shall become the official representative of the applicant by way of registration of its power of attorney at OSIM. All identification data regarding the legal representative shall be included within the application. The legal representative who acted on behalf of Pfizer in Romania was "Cabinet M. Oproiu SRL", an Intellectual Property Counselor office.

[28] According to article 7 of Rules no. 211/1998, all information in the application or in the documents attached hereto, shall be treated as confidential until publication by the Intellectual Property Official Gazette-the Patents Section issue.

[29] See the Intellectual Property Official Gazette-the Patents Section issue no. 9 from September 30, 1998.

[30] See the Intellectual Property Official Gazette-the Patents Section issue no. 8 from August 30, 1999

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