IP Newsletter | Fall/Winter 2015
	PATENT
	Generic's Argument Against Patent Term Extension Validity Thwarted
	What does "registered" mean? More precisely, does "registration" have to occur within a certain timeframe? This was one of the main issues disputed in a recent preliminary injunction (PI) action between Bristol-Myers Squibb (BMS), the maker of Baraclude®, the top grossing drug in Korea, and Dong-A ST ("Dong-A"), a generic company that had sold its generic version of Baraclude® prior to the expiration of the extended term of BMS's patent covering the active ingredient. Previously, both the Intellectual Property Tribunal (IPT), an administrative tribunal within the Korea Intellectual Property Office (KIPO), and the Patent Court had upheld the validity of the patent. Dong-A's Interpretation of the "Registered" Licensee BMS initiated the PI action to enjoin Dong-A's sale of and other commercial activities in connection with its generic version of Baraclude®, a hepatitis B drug. Dong-A responded to BMS's complaint by asserting that the patent term extension (PTE) of the patent was invalid, and because the original patent term had already expired, the patent was no longer enforceable. The governing PTE statute states that an interested party may challenge validity of a PTE if the extension was granted based on a drug marketing approval obtained by someone other than the patentee, exclusive licensee or registered non-exclusive licensee of the patent covering the drug. Dong-A asserted that the statutory term "registered" has a strict time requirement — the non-exclusive license must have been "registered" with KIPO as of the time the drug marketing approval was granted. Because BMS Korea (the entity who obtained marketing approval for Baraclude®) was a non-exclusive patent licensee, and had not yet registered its license at the time of marketing approval, Dong-A argued that BMS Korea was not qualified as a registered licensee under the statute. Consequently, Dong-A argued that because the PTE for the Baraclude® patent was granted based on a market approval obtained by an unregistered licensee, BMS Korea, the PTE was invalid. The Court's Ruling In the first substantive interpretation of this portion of the PTE statute, the Seoul Central District Court disagreed with Dong-A and found that the PTE for Baraclude® was valid. The Court determined that the PTE statute never contemplated a requirement that a licensee be registered with KIPO specifically before obtaining marketing approval, and therefore BMS Korea's registration of its non-exclusive license was sufficiently timely because it took place before the PTE application for the patent was granted, though after marketing approval was obtained. Implications for Generic Exclusivity Although the PTE validity issue was explored in a PI case rather than a PTE invalidation action at the IPT, we expect the ruling to significantly influence the determination of PTE invalidation cases going forward. Under the patent-drug approval linkage regulations enacted earlier this year (in March), a generic may obtain exclusive rights to sell its generic of a particular drug by securing a favorable decision in one of three types of IPT proceedings — patent invalidation actions, scope confirmation actions, and PTE invalidation actions. Generics have typically sought to meet the "favorable decision" requirement by pursuing as many types of actions as possible against the same patent (including a PTE invalidation action if the patent at issue was extended). Dong-A's argument in this case (that the licensee was not "registered") has been commonly asserted in the PTE invalidation actions filed to date. The District Court's ruling should largely undercut the force of this argument in PTE invalidation cases, and assist patentees' defenses against generics seeking unfairly early entry into the markets for their patented drugs.
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