Future European Patent Policy

Lidia MalloLegal and Government Affairs Manager

EUPACO

Brussels, 24 January 2007

Index

1. Introduction to the Generic Medicines Industry

2. Our patent concerns: how to improve the European patent system

3. Our views on the European Patent Litigation Agreement (EPLA)

EGA - Who Are We ?

EGA Established 1992. Secretariat in Brussels Membership is Pan-European. (represent 28 European countries)Has over 80 direct members. Represents some 900 companies. Employs over 100,000 persons.Brings savings of 18 Billion Euro per year

Contributions of Generic Medicines from a Public Health perspective

Increase access through affordable medicines

Stimulate innovation through competition

Provide budget headroom for financing genuine new innovations

Develop for patients new formulations, methods of delivery etc.

Role of Generic Medicines

– “Pricing studies have shown unequivocally that generic competition is the most effective way to ensure lasting price reductions”

WHO 55th Assembly

May 2002

– “The promotion of generics can have important impact in reducing costs and creates headroom to help pay for new innovative products”

EU Council of Ministers June 2000

The Generic Reality – 50%

In the new EU 27 the generic pharmaceutical industry is becoming the principal supplier of medicines for EU citizens– 60-75% CEE / DK– 40-60% UK/DE/NL – 10-15% and expanding

rapidly in PT/F/Belgium

Growing Complexity Of Pharma Patents –

1980s (5 properties)

Primary usesProcesses and intermediatesBulk formsSimple formulationsComposition of matter

1990s (18 properties)Primary usesProcesses and intermediatesBulk formsSimple formulationsComposition of matterExpansive numbers of usesMethods of treatmentMechanism of actionPackaging Delivery profilesDosing regimen Dosing rangeDosing route CombinationsScreening MethodsChemistry MethodsBiological TargetField of use

Source: “Evolution of IPR & Pharmaceutical discovery and Development”, Eric Larson, Sr Director, Groton Site Head, Pfizer Global Research & Development.

Viewed on 9/11/2005 at: http://www7.nationalacademies.org/step/Larson_ppt.ppt

Pharmaceutical Innovation

IP protection in EU has increased dramatically since 1990 but the rate of innovation has declined.

Only 22% of “New” medicines are truly innovative (Public Citizen July 2001)

Getting the Right Environment For Generic Competition

Four Foundation Stones:

– Efficient Regulatory System

– Single Market

– Intellectual Property Balance

– National Measures Promoting Generic Medicines

How to improve the patent system

to favour generic competition

1. Need to improve patent quality: crucial role of EPO

• Higher standards in examination and prior art search

• Revise level of inventive step: should be higher

• No more weak patent granted by EPO

• Quality control system (external audit patent quality check?)

• Separation of powers to increase independence of examiners

2. Patent system should not encourage strategies against generic competition

Patent linkage

Frivolous & abusive litigation

Increased litigation based on dubious secondary patents

Injunctions granted on low level of proof because of inexperience of judges

These strategies:

prevent generic competition

restrict access and affordability

discourage real innovation

3. Need of harmonization of enforcement and litigation procedures either through EPLA, COMPAT or both.

WHY?

Litigation in parallel before several national courts is unaffordable

Legal uncertainty because of diverging decision by multiple national courts

Disharmony of judicial system encourages Forum Shopping

Different interpretation of patent law

Different granting of damages

Unpredictability: Difficult to invest, plan and

market.

The European Patent Litigation Agreement

(EPLA)

3 different systems to deal with patents

CURRENT SYSTEM: National courts deal with National & European patents

PROPOSAL 1: A new European Patent Court (set up by the EPLA) would deal with European patents

PROPOSAL 2: A new Community Patent Court would deal with a new EC

Community Patent

EPLA advantages

Sets up a European Patent Court to deal with infringements/revocations of European Patents

Central revocation of identical patents:

less revocation costs and less professional advice costs

Centralization: no more diverging decisions

more legal certainty for generic producers

The Court will create a single ruling, so if patent is declared invalid, the generic company can market the product simultaneously in all countries where the patent has been revoked.

Increase our EU market access

EPLA advantages

The real situation TODAY:

EPLA is not at good as it seems….

Why?

EGA is against current draft of EPLA (I)

Enormous increase of litigations costs for SMEs

Cost base is unsuitable:Need to generate revenue instead of

sound decision makingRisk of more litigation, instead of quality

decisionsCareful with EPO experience! Not

again….

EGA is against current draft of EPLA (II)

Predominant role of the European Patent Office (EPO): independence of European Patent Judiciary not guaranteed

Level of competence of judges is unclear

Forum shopping will not disappear:

Some Regional EPLA courts will have more patent experience than others

Patentee might choose to launch product in country where he ‘likes’ the Regional EPLA Court.

EGA is against current draft of EPLA (III)

Danger of bottle necks, specially in 2d instance

Detailed court procedures are inexistent

Loss of flexibility

If company brings badly prepared case and looses or poor decision is given: EU 27 market simultaneously closed

Recommendations to improve EPLA (I)

EPLA should minimize court fees

Need of detailed, transparent, easy to operate and fair Procedural Rules

Need of experienced, independent and well trained patent judges to assure quality decisions

Full case management from the EPLA with compulsory preliminary hearings to set a timetable with target dates for hearing and decision

Recommendations (II)

Transparency: all EPLA cases should have simple Register of Proceedings open to public. All decisions should be published.

National courts should not be phased out after 7 years transitional period

A review of EPO’s role in granting patents is crucial

Conclusion

Draft EPLA shows clearly influence of EPO but has little details on how it will work for practitioners and users

As currently drafted, EGA cannot support

We believe in harmonization of patent procedural law of the different Member States, to facilitate harmonization of patent litigation.

Thank you!

Our position paper on EPLA at www.egagenerics.com