Declaration of non-infringement can be rejected in absence of marketing authorisation

The Courts of Appeal have now ruled that the plaintiff of a determination of non-infringement of patent action (a Gx or generic pharmaceutical company) had no legal benefit in filing such an action before a marketing authorisation (MA) was granted for its generic application, which was pending before the Ministry of Health. Until this decision the IP courts used to accept and examine determination of non-infringement actions from Gx companies even if they had pending MA applications.

Under Article 154 of the IP Law, any person who has legal benefit can file an action to have a court determine that their acts do not infringe IP rights. For many years the IP courts rejected any attempts by patent holders to uphold their rights against Gx companies where there was a pending generic MA applications on the basis that these are exempted from patent rights – the so-called Bolar exemption.

In 2013 an IP court issued a decision rejecting a declaration of non-infringement action on the grounds that the MA application was still pending. The evaluation of the Ankara (2) IP Court in its decision of 27 September (2012/248 E; 2013/223K) was as follows:

The plaintiff has no legal benefit in filing the declaration of non-infringement action. However, while bringing the so-called Bolar exemption provision, the legislator aims to prevent both the MA application owner and patent right owner from intervening the MA procedure before the Ministry of Health.

Besides during MA application procedure, the chemical properties and characteristics of the pharmaceutical subject to the MA application may be changed as per requirements of scientific boards of Ministry of Health. Therefore even if the court evaluates that there is infringement at a certain point of MA procedure it can be changed until finalisation of the procedure. Consequently it becomes unclear which stage of the MA procedure was subject to the decision of the court and if the decision is still valid in the light of final content of the MA dossier.

Finally as the legal provision (so-called Bolar exemption) already rules that a pending MA application is exempted from patent rights and therefore does not constitute patent infringement, it is unnecessary for the IP Court to re-evaluate if such an act constitutes infringement or not.

In this respect, as long as the MA application is pending, the patent owners cannot file patent infringement actions against owners of the pending MA applications and the owners of the pending MA applications cannot file declaration of non-infringement actions.

The 11th Chamber of Courts of Appeal evaluated the plaintiff’s appeal in its decision 2014/6103 E, 2014/11843K and upheld the findings of the first-instance court, without adding any additional supporting arguments in its appeal decision.

As an appeal court decision that merely upholds a first-instance decision has little precedential weight, some IP courts continued to deal with declaration of non-infringement actions while an MA application was pending and rejected defences based on lack of legal benefit argument.

However, in a new decision, the 11th Chamber of Courts of Appeal has overturned the first-instance decision on this matter (2016/14642 E, 2018/6811 K) due to the plaintiff’s lack of legal benefit. The court ruled that irrespective of the status of the marketing authorisation application at the date of the first-instance court’s final decision, if the application is still pending at the filing date of the declaration of non-infringement action, it should be accepted that the plaintiff has no legal benefit in filing such an action. However, the relevant legal provision (ie, the Bolar exemption) already exempts acts necessary to obtain a marketing authorisation from patent rights.

The appeal court’s reasoning is especially important as it clearly and definitively puts an end to the declaration of non-infringement actions of Gx companies that are filed before a Gx marketing authorisation is granted.

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