Court of Appeal applies doctrine of equivalents as redefined by Supreme Court

On 3rd September 2009 the Supreme Court issued a key decision in Eisai v Krka (for further details please see "Supreme Court of Norway recognises doctrine of equivalents"). Less than two weeks later, the Borgarting Court of Appeal has referred to the Supreme Court decision and applied the test defined therein to an appeal concerning Krka’s alleged infringement of Merck Co, Inc’s licensed patent for losartan.

EI DuPont de Nemours & Co owned an analogy method patent covering a process for the preparation of losartan and losartan/hydrochlorinetiazide. Merck & Co Inc holds an exclusive licence to the patent and markets the products Cozaar® and Cozaar Comp® for the treatment of high blood pressure and heart failure. In December 2006, having learnt of Krka’s imminent launch of a generic losartan product on the Norwegian market, Merck & Co’s Norwegian affiliate MSD (Norge) AS obtained an interlocutory injunction that prevented Krka from launching. However, Krka prevailed in the main proceedings brought by Merck and its associates before the Oslo District Court to request a final injunction, and Krka was awarded Nkr30 million (approximately €3.2 million) in the counteraction seeking damages for an unjustified injunction.

On appeal, Krka again prevailed. The method used to prepare Krka’s losartan was an alternative method to that used by DuPont. It was not seen as an obvious modification, as a distinct route of synthesis was used which was rooted in known techniques. The appeal court referred to the Supreme Court’s decision in Eisai v Krka and to several appeal court judgments. In an obiter dictum, the appeal court said that there is no requirement that the alternative method should involve a technical advantage if it is to avoid being considered an equivalent. On the other hand, the court stated that a technical advantage would imply inventive step and thus would not be obvious to the average skilled person. This latter statement is likely to be questioned and tested in future cases.

The appeal court confirmed the district court’s award to Krka of Nkr30 million in damages for lost gross margins. However, although the amount awarded was the same, in the district court it represented a loss of gross margins from 1st January 2007 to 15th November 2008, while the appeal court stated that the award also covered the period from 15th November 2008 to 2nd September 2009. Therefore, it could be said that Krka was more successful in the lower court than on appeal.

The judgment included a detailed discussion of the complex Norwegian “stepladder” system for government subsidies of pharmaceutical products, and its impact on the losses of a party that is prevented from launching its generic products.

The appeal court's judgment is final and binding.

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