Extraterritorial Patent Scope and Limitations: Forewarned is Forearmed
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1 Extraterritorial Patent Scope and Limitations: Forewarned is Forearmed Life Science Group Conference PRESENTED BY Philip A. Swain, Ph.D. Patent Agent September 25, 2008
2 Patents in a Global Economy Incentive to maximize geographic scope of patent protection Business plan/goals should be strategy driver Each country calls for a unique strategy Must understand and exploit different patent systems to maximize protection But what of a patent s extraterritorial scope? Extraterritorial Patent Scope and Limitations 2
3 Outline International agreements Territoriality Infringement and the Saccharin doctrine Expansion of the Saccharin doctrine Consequences for Canadian business Extraterritorial reach of US patents New US legislation The European situation Take home message Extraterritorial Patent Scope and Limitations 3
4 International Agreements Towards patent harmonization WTO TRIPS: Exclusive rights with some exceptions Paris Convention: Territoriality Exclusive rights of process patent Extraterritorial Patent Scope and Limitations 4
5 WTO TRIPS Article 27 Patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced. Article 30 Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of third parties. Extraterritorial Patent Scope and Limitations 5
6 Paris Convention No discrimination against non-nationals Article 2 Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with. Extraterritorial Patent Scope and Limitations 6
7 Paris Convention Exclusive right of process patent Article 5 quarter When a product is imported into a country of the Union where there exists a patent protecting a process of manufacture of the said product, the patentee shall have all the rights, with regard to the imported product, that are accorded to him by the legislation of the country of importation, on the basis of the process patent, with respect to products manufactured in that country. 7
8 Territoriality of Patents Patent protection is limited by territory Patents only protect, and are enforceable, in the country where issued The scope of protection differs from country to country However, certain aspects of territoriality have now changed Extraterritorial Patent Scope and Limitations 8
9 Canada: The Scope of Infringing Activity Section 42: Every patent granted under this Act shall, subject to this Act, grant to the patentee and the patentee s legal representatives for the term of the patent, from the granting of the patent, the exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used, subject to adjudication in respect thereof before any court of competent jurisdiction. Includes direct and indirect infringement But what about importation of a product into Canada for which a Canadian patent is granted for a process to produce the product? 9
10 The Saccharin Doctrine 1900 English Chancery case of Saccharin Corp Ltd v. Anglo-Continental Chemical Works Ltd The Saccharin doctrine holds that a process patent may be infringed when the patented process is used in a foreign country to produce a substance that is then imported into Canada for sale Also applies to process claims to intermediates used in the synthesis of the imported compound, provided the intermediates were synthesized by the claimed process 10
11 Patented process for making a compound Saccharin doctrine Claim: A process for making compound X, comprising: a) reacting reagents A and B in a solvent at 100 o C for 1 hour; and b) isolating compound X from a) Compound X made by: a) reacting reagent A and B in a solvent at 100 o C for 1 hour; and b) isolating compound X from a); Compound X INFRINGEMENT! 11
12 Patented Process for Making an Intermediate Saccharin Doctrine Claim: A process for making intermediate Y, comprising: a) reacting reagents A and B in a solvent at 100 o C for 1 hour to form an intermediate Y; and b) isolating intermediate Y from a) Compound X made by: a) reacting reagent A and reagent B in a solvent at 100 o C for 1 hour to form an intermediate Y; b) isolating intermediate Y from a); and c) using intermediate Y to synthesize compound X. Compound X INFRINGEMENT! 12
13 American Cyanamid Co. v. Charles T. Frost & Co. 47 CPR 215 Exchequer Court 1965 Concerned chlortetracycline and tetracycline Process claims for a medicine and importation of same Court applied the Saccharin case by stating that the practice abroad of the subject-matter of a process claim of a Canadian patent will infringe that claim on the importation and sale in Canada of the product made thereby. This also applies to the use outside of Canada of a claimed intermediate and the resulting product imported into Canada Thus, there is infringement of a patented process in Canada where the process is used outside Canada and the product of the process is imported into Canada whether or not the product itself is patented in Canada 13
14 Monsanto v. Schmeiser 2004, I SCR, 902 [T]he main purpose of patent protection is to prevent others from depriving the inventor, even in part and even indirectly, of the monopoly that the law intends to be theirs; only the inventor is entitled, by virtue of the patent and as a matter of law, to the full enjoyment of the monopoly conferred. 14
15 Product Claims Not Covered by Saccharin Doctrine However, the Saccharin doctrine did not extend to the foreign use of patented products. Claim: Compound X. Claim: Process to manufacture compound Y using compound X Manufacture of compound X and use to manufacture compound Y Compound Y NO INFRINGEMENT 15
16 Pfizer v. Ranbaxy & Minister of Health, 2007 FC 898 Atorvastatin calcium (LIPITOR) Marketed in Canada by Pfizer Issue surrounded crystalline Form I of atorvastatin calcium hydrate claimed as: A crystalline Form I atorvastatin hydrate characterized by solid state 13 C NMR having the following chemical shift differences between the lowest ppm resonance and other resonances:...and its use in a process to make LIPITOR India-based Ranbaxy Labs. manufactured and used, in India, crystalline Form I atorvastatin calcium hydrate to manufacture Ran-Atorvastatin for importation into Canada 16
17 Did Ranbaxy Infringe Pfizer s Patent? The Court held that Ranbaxy s use of Pfizer s patented intermediate in India was infringement of Pfizer s Canadian patent The Court held that it was logical to extend the doctrine to product patents because the doctrine s main aim is to prevent the deprivation of the patentee s full right to the monopoly conferred by the patent In Ranbaxy Laboratories Limited v. Pfizer Canada Inc., 2008 FCA 138 Apotex sought leave to intervene in the appeal arguing that the Saccharin doctrine ought to have no application in Canada at all, but the application to intervene by Apotex was dismissed 17
18 Consequences for Canadian Business Thus, the Saccharin doctrine now appears to extend to the use of a patented product off-shore as an intermediate in the production of a final product imported into Canada where the final product does not contain the intermediate Exposure of Canadian importers, retailers and users to potential patent infringement for activities undertaken by others Difficult for Canadians to defend against the claim if foreign manufacturer refuses to cooperate Canadians will likely have no idea how product is made by foreigner Will favour foreign patent owners and foreign manufacturers to the detriment of Canadian importers, retailers and users 18
19 Extraterritorial Reach of US Patents Are US patents enforceable in Canada? 35 USC 271(a) grants right to exclude acts within the United States or imports into the United States. Thus, acts of direct infringement must take place within the United States. but Extraterritorial Patent Scope and Limitations 19
20 NTP, Inc. v. Research in Motion, Ltd. System claims called for a control point. RIM said this was its relay processor in Canada Method claims required use of an interface or interface switch RIM said this too was in Canada CAFC held the system claims were infringed under 35 USC 271(a), but the method claims were not Jury found infringement because the entire system, including the control point was put into use within the US Extraterritorial Patent Scope and Limitations 20
21 Extraterritorial Reach of US Patents US patent enforceable extraterritorially? 35 USC 271(f) grants rights to exclude acts of supplying or causing to be supplied all or a substantial portion of the components of a patented invention so as actively to induce the combination of the components outside the U.S. in a manner that would infringe the patent if carried out in the U.S. or knowing that it would be combined outside the U.S. Extraterritorial Patent Scope and Limitations 21
22 Union Carbide v. Shell Oil (Fed. Cir. 2006) CAFC found infringement with respect to Shell s shipping catalyst abroad whose use infringed Union Carbide s process claim to make ethylene oxide Component under 35 USC 271(f) covers every component of every form of invention, so 271(f) covers the use of components in the performance of patented processes (Eolas v. Microsoft 399 F.3d 1325, 1339 (Fed. Cir. 2005)) Extraterritorial Patent Scope and Limitations 22
23 Monsanto Co. v. Syngenta Seeds, Inc. CAFC (2007) 35 USC 271(g) grants rights to exclude acts of importing into, or selling, offering to sell or using a product in the U.S. made by a process patented in the U.S. In this case, Monsanto owned three US patents covering a modified gene conferring glyphosphate resistance to plants, a process for producing a herbicide and insect resistant corn, and a process for producing glyphosphate resistant corn Syngenta found not guilty under 271(g) because several steps of the process (...bombarding cells with DNA-coated microprojectiles ) were performed before the patents issued 23
24 New US Legislation Tabled International Intellectual Property Protection and Enforcement Act of 2008 Designed to crack down on theft of US intellectual property Placement of officials in foreign embassies to enforce IP rights Enforcement actions include: Prohibiting financing of projects in or exports to foreign country Withdrawing preferential treatment for qualified countries Extraterritorial Patent Scope and Limitations 24
25 The European Situation: Article 64(2) EPC Article 64(2) EPC: If the subject-matter of a patent is a process, the protection conferred by the patent shall extend to the products directly obtained by such process. Article 64(2) EPC applies only to the direct products of a manufacturing process. What about screening methods? 25
26 European Screening Methods Claim A: A method for identifying a compound that binds to receptor X comprising. Claim B: A method for producing a pharmaceutical composition comprising the method of claim A and furthermore mixing the compound identified with a pharmaceutically acceptable carrier. Claim B covers the situation where an infringer screens for a compound and manufactures a pharmaceutical composition in a country for which the European patent has not been granted. 26
27 Take Home Message No clear violation of International Agreements, but some aspects may conflict with their spirit Monitoring IP rights inside and outside Canada can be tricky and requires careful consideration Solutions: Know the extraterritorial limitations and scope differences Be aware of issues that can adversely affect your portfolio Watch for new foreign legislation Monitor foreign competitors Retain the services of proactive legal professionals to work with you in a cost predictive manner Extraterritorial Patent Scope and Limitations 27
28 Thank you! Philip A. Swain, Ph.D. Patent Agent This presentation contains statements of general principles and not legal opinions and should not be acted upon without first consulting a lawyer who will provide analysis and advice on a specific matter. Fasken Martineau DuMoulin LLP is a limited liability partnership and includes law corporations
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