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Malaysian Patent – Interim Injunction Granted in Malaysia Based on American Cyanamid principles

In the case of Aventis Farma SA (m) Sdn Bhd v Rohibul Sabri bin Abbas @ Megat & Anor [2008] 3 MLJ 451, This case is based on the selling generic version of docetaxel trihydrate (hereinafter referred to as “DT”) According to the Plaintiffs, the Defendants had infringed their Malaysian Granted Patent MY-118481-A (herein after referred as ‘481A patent) which is a process patent for the manufacture of DT was granted to the second plaintiff and the product obtained by this process patent.

The second Plaintiff was a multinational pharmaceutical company and the first Plaintiff a company registered under the Malaysian law, is a subsidiary of the second Plaintiff. The first plantiff is the registrant of the marketing approval of the drug Taxotere®, and has been marketing Taxotere® since 1997. The active ingredient in Taxotere® is docetaxel trihydrate (‘DT’). The Malaysian Patent No. MY 481A being a process for the manufacture of DT was granted to the second plaintiff on 30 November 2004. The second Plaintiff also became the registrant of US Patent No. 6022985 on 8 February 2000 for the manufacture of DT.

Recently, the plaintiffs discovered that the second defendant and the first defendant as the second defendant’s agent, have been offering for sale and was selling the drug Daxotel since late 2005. The active ingredient in Daxotel is also DT. The plaintiffs claimed that both the first and the second defendants have infringed the plaintiffs MY481A patent registered in Malaysia. Accordingly, the plaintiffs sought, to restrain the defendants by themselves or their officers, or servants or agents from offering for sale, or selling Datoxel, or authorizing others so to offer for sale.

The Defendants case was that their product Daxotel was also a drug to treat cancer. Daxotel is was prepared by a process which was patented in the United States of America (the US Patent US 6838569). The US Patent process comprises: step (1) the purification of crude docetaxel, and step (2) the preparation of docetaxel trihydrate by dissolving docetaxel in acetonitrile. The defendants contended that the plaintiffs’ process involved crystallization from the mixture of C1-3 alcohol, whereas the defendants’ method involved precipitation from a mixture of acetonitrile and water. The Defendants’ further asserted that the plaintiffs dried the product in step (1) under a defined condition of, among others, humidity, whereas the defendants’ process did not use any conditions for controlling or regulating humidity. Thus, the Defendants method in producing docetaxel trihydrate was totally dissimilar from the plaintiffs’ patented intellectual property right. The process employed by the second defendant to manufacture the active ingredient DT in Daxotel was different and distinct from the process that was patented to the second plaintiff under patent No. MY481A, and as such there was no infringement of the said patent. It was claimed that the process used by the second defendant in the US on 4 January 2005 vide US of Patent No. 6838569 B2. Their further argument was that the plaintiffs’ case was based on process patent and not product agent, which led to the submission that a “back door” relief to obtain an injunction against a product when the Plaintiff had no product patent,.

The principles whether or not to grant an interim injunction had been established in a patent infringement case of American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504; [1975] AC 396(‘American Cyanamid’) as follows:

(i) whether any serious question to be tried;

(ii) whether damages could constitute an adequate remedy if the injunction is not granted;

(iii) whether balance of convenience lies in favour of granting the injunction;

(iv) if balance appears even, to consider preservation of status quo;

(v) and if this seems even, to consider, only on a prima facie basis, the relative strengths of

each party’s case;

(vi) most importantly, at this early stage of the proceedings, the court must be mindful that the

relative strengths of each party’s case should be considered only on a prima facie basis

without dealing with the existing evidence in detail and giving reasoned assessments of the

court’s views that is, to try to resolve conflict of evidence on affidavits as to facts.

The current position in both the UK and Malaysia on the law pertaining to interim injunction is the same, i.e. the principles enunciated in American Cyanamid case were still good law in Malaysia and have been consistently affirmed.

The Court considered the provision in Section 36(4) of our Patents Act 1983 (herein after referred as “ACT”) which was a reinstatement of art 34 of the Trade Related Aspects of Intellectual Property Rights Agreement (“TRIPS”). Section 36(4) read:

For the purposes of this section, if the patent has been granted in respect of a process for obtaining a product, the same product produced by a person other than the owner of the patent or his licensee shall, unless the contrary is proved, be taken in any proceedings to have been obtained by that process.

It however the Court failed to consider that the Article 34 of TRIPS was restricted to new processes and that if the presumption is taken without qualification, there would be an issue as to whether the presumption can be applied to all patents or those where the processes were new.

Since the Defendants asserted that they had used a different process to produce the trihydrate form of Docetaxel the crucial issue for determination was, whether even upon a prima facie basis, the Defendants had discharged the presumption. This would determine whether there were serious issues to be tried. The Defendants contended that its US patent involved a process of purification of crude docetaxel (Step 1: purification) and preparation of docetaxel trihydrate from purified docetaxel (Step 2: manufacture of docetaxel trihydrate). And that since the plaintiffs’ MY481A did not cover step 1 (purification), Dabur’s US Patent did not in any way infringe the plaintiff’s patent. The court however was not persuaded by such contention of the Defendants as the process of purification could be an irrelevant factor. The Court relied on the Plaintiff’s Expert Report on the same. However unfortunately the Court failed to discuss what are the issues raised in the Defendant’s Expert Report which will refute the the Plaintiffs stand.

The Defendants further stated that step 2 of their process did not use any condition for controlling or regulating humidity and is thus different from the MY481A patent. However, this claim was also challenged by the Plaintiff’s Expert Report, that pronounced that to produce the trihydrate form of docetaxel both processes needed to control the relative humidity and that, contrary to the defendants’ submissions, the humidity is controlled at the same level in both processes. However again the Court failed to consider what was in the Defendant’s Expert Report.

The fact that the second Defendant (Dabur) holds a US patent was quite irrelevant to the question of infringement of the Malaysian patent, since the lex loci of the cause of action (law of the country in which the breach occurred) was Malaysia while the lex fori of this action (law of the country where the action is brought) was also Malaysia, and , a fortiori, it was indeed a Malaysian registered patent MY481A that was sought to be enforced. Again the Court failed to decide on the issue of as the Defendant’s US Patent was granted after the Plaintiff’s US Patent was is the impact of that.

Following the rationale in American Cyanamid, it was pertinent to bear in mind that the “priority date” of the second plaintiff in Malaysia was 30 November 2004 when it became the registrant under Malaysian Process Patent MY481A. This was also underscored by the fact that the first plaintiff started selling the drug Taxotere® in Malaysia in 1997, whereas the second defendant’s initial sales of Daxotel was only in October 2005. The Court pointed out that the Defendant’s US Patent was registered only on 4 January 2005 whereas the second Plaintiff secured US patent registration on 8 February 2000. However the Court did not discuss the significance of the Defendant’s Patent being issued after the Plaintiff’s patent may show that the USPTO has considered the Defendant’s process is independent.

On the issue of adequacy of damages the Plaintiffs claimed that their sales will not only be seriously affected but the continuing infringing activities of the Defendants will irreparable damage the plaintiffs’ goodwill and reputation in Malaysia. And, as such reputation and goodwill were impossible to assess and quantify, the plaintiffs cannot be adequately compensated in monetary terms. The Court applied the decision in SAP(M) Sdn Bhd v I World HRM Net Sdn Bhd & Anor [2006] 2 MLJ 678. Furthermore, the Defendants’ activities in manufacturing and selling Daxotel will destroy the plaintiffs’ proprietary rights in the patent especially as they had claimed that their product was cheaper than the plaintiffs. The Plaintiffs will amongst other things set out below, lose market share in Malaysia. If the defendants were allowed to continue to sell Daxotel, having incurred virtually no up-front investment relating to research and development, the plaintiffs would be difficult, if not possible to restore to the current, pre-generic price level should the plaintiffs succeed at the trial in obtaining a permanent injunction. Consequently, if there was a premature erosion of the pricing for Taxotere® to generic levels even before the trial, it would deprive the plaintiffs of their legitimate right to the pre-generic pricing that is appropriate to recompense them for their significant research and development investment. The generally accepted norm was that drugs had a life cycle that includes a period of exclusivity during which the innovator can recoup its considerable research costs and expenses. Once the innovator’s intellectual property had expired, generics enter the market, usually with significantly reduced pricing, which would usually compel the innovator to match the generic pricing in order to preserve even a small portion of its original market share. However as this was a process patent as opposed to a product patent the Court failed to discuss some of the salient differences in that.

The Court also felt that it was also pertinent for this court to note that once patients and doctors get used to the defendants’ product, it may be commercially impracticable to insist on a permanent injunction after trial. The Court failed to explain how if there is a finding of infringement after trail the Plaintiff would not be entitled to an injunction even if doctors are used to the product.. The Court then finally held that the damage to plaintiffs will be much greater owing to the fact that significant sums had already been expended in current and future research.

The Defendants also argued that if they were forced to vacate their product from the market, the financial impact could not be possibly quantified yet as they themselves had stated that as at 29 March 2006 the volume of sales of Daxotel was RM 476,000.50′ which reveal that their loss was quantifiable. Since the Defendants had not expended significant resources in the development and marketing of their product their probable losses, even though quantifiable, could not be as a grave as the plaintiffs. The Defendants had also argued that public interest would be better served if they were allowed to continue selling Daxotel, since the defendants’ Daxotel cost substantially less to cancer patients than the plaintiffs’ Taxotere®. The Court went on to compare the case with that of cheaper copies of DVD’s being available. This however side stepped the issue of the benefit of lower costs generics which are quite different from counterfeit DVD’s.

Upon the usual undertaking damages by the plaintiffs the interim injunction was thus granted

The decision of the Court was based on the principles in the English case of American Cyanamid in respect of granting an interlocutory injunction, however the Court failed to address a number of important issues in its reasoning, which would have been useful in clarifying those issues in patent litigation.