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02 Mar 2020

Fresenius Kabi Deutschland GmbH (“Fresenius”) v. Biogen (Denmark) Manufacturing ApS and Biogen (Denmark) A/S (collectively “Biogen”), and intervening party Samsung Bioepis UK Limited (“Samsung Bioepis”), the Danish Maritime and Commercial High Court Case number BS-39398/2018-SHR, 20 June 2019

Right to continue use begun before the priority date, invalidity due to inadmissible extension of the subject-matter, legal costs

The case concerned preliminary injunction proceedings initiated by Fresenius against Biogen in relation to manufacture, sale etc. of the pharmaceutical product Imraldi® (a biosimilar version of the world’s bestselling pharmaceutical product Humira®). Two Biogen companies were parties to the proceedings: One being the facility manufacturing Imraldi (“Biogen (Denmark) Manufacturing ApS”). The other was responsible for marketing the product in Denmark (“Biogen (Denmark) A/S”).

Fresenius based its claim on two Danish utility models, BR 2018 00070 and BR 2018 00071 (collectively the “Utility models-in-Suit”). The main issues of the case were 1) whether Biogen had a prior use defence and 2) the validity of the Utility models-in-Suit.

Samsung Bioepis intervened in support of Biogen.

The facts of the case – the parties, pharmaceuticals and Utility models-in-Suit

Fresenius and the Utility models-in-Suit
Fresenius manufactures and markets the biosimilar product Idacio® containing the active ingredient adalimumab; the same active ingredient contained in the products Humira and Imraldi. Further, Fresenius is the owner of the Utility models-in-Suit. The priority date of the Utility models-in-Suit is 23 May 2014. The Utility models-in-Suit belong to a patent family, including, inter alia, the European patent applications EP 3 148 510 (“EP ‘510”) and the divisional thereof EP 3 403 646 (“EP ‘646”), covering adalimumab compositions. The Utility models-in-suit are Danish branches of EP ‘510 and EP ‘646, respectively.

Biogen and Samsung Bioepis
In 2011-2012, various companies in the Samsung and Biogen groups entered into a joint venture (“Samsung Bioepis”) as well as a “Manufacturing Agreement” and a “Quality Agreement” concerning the manufacturing of biosimilar pharmaceutical products. The agreements specified that the biosimilar pharmaceutical products could be manufactured at Biogen’s facilities in Denmark as well as at two US facilities. The Quality Agreement was also signed by the Danish Biogen entity responsible for the manufacturing facility, i.e. Biogen (Denmark) Manufacturing ApS. On 5 September 2013, an addendum to the Quality Agreement was concluded and Imraldi was mentioned on the list of products covered by the agreement, although under the name SB5.

Later, in a development and commercialization agreement of 13 December 2013, it was agreed that the Biogen group should oversee the marketing of the Imraldi product in Europe, including Denmark.

Case proceedings – Right to continue use begun before the priority date

During the proceedings, Biogen argued that the claim for preliminary injunction had to be rejected as Biogen had acquired a right to continue use begun before the priority date pursuant to Section 9 of the Danish Utility Models Act, as Biogen, at the priority date, had taken substantial steps to manufacture, market and sell Imraldi® in Demark. Under Danish law, a prior use right exists also if “substantial prepa-rations” to use the invention have been made.

The Court agreed with Biogen’s reasoning and held that Biogen had acquired a right to continue commercial use begun before the priority date. Inter alia, the Court based this on the following findings:

• Prior to the priority date, strategic decisions were taken within Biogen and Samsung to market Imraldi in Europe, including Denmark.
• In 2012, a Danish production facility was specified along with two American facilities.
• A Biogen party to the proceedings was party to the Quality Agreement from 2012 specifying SB5/Imraldi.
• The production of Imraldi had in fact been initiated in Denmark.
• According to the testimony given by the director of Samsung Bioepis, Danish delegates from the Danish Biogen manufacturing entity had been present at development meetings at Samsung.
• Considerable resources had been spent on the product and the development process which had been expedited at different levels, so that the phase I and III clinical trials had been performed parallelly before the priority date. The trials had been applied for and approved.

The Court stressed that it was irrelevant for establishing a prior use defence that the substantial preparations had taken place outside Denmark. The decisive fact was that the substantial preparations had taken place with a view to use in Denmark. In these circumstances, it was not relevant that Denmark was not the only country where the products were intended to be exploited.

The Court took the fact that the two Biogen entities were subsidiaries in the Biogen group into consideration, but held that this did not contradict that a right to continue use begun before the priority date existed in Denmark. In this context, the Court noted that the pharmaceutical industry is internationally based and characterised by high demands for investments, developments and research, and that pharmaceutical products are often intended for worldwide use. Additionally, the Court noted that the Danish Biogen entities were indeed equipped with the rights and facilities to manage the originally planned commercial exploitation of Imraldi in Denmark.

On this basis, the Court rejected the request for a preliminary injunction.

Comment: In Danish case law, only a few decisions have allowed a defence based on a right to continue use begun before the priority date or even considered whether such a right has been established.

The decision is also interesting as it shows that not only use or preparations in Denmark, understood within a strict literal meaning of the rule, can substantiate a claim for a right to continue use begun before the priority date. Thus, as the Court held, preparations made with a view to exploitation in Denmark can substantiate a right to continue use begun before the priority date, and decisive importance was not attached to the fact that the preparations had not taken place in Denmark, and in these circumstances it was irrelevant that Denmark was not the only country in which exploitation was intended.

Case proceedings – Invalidity

Even though the Court had already decided that Fresenius was prevented from obtaining a preliminary injunction due to the existence of the right to continue use begun before the priority date, it took the opportunity to assess whether the Utility models-in-Suit were invalid due to inadmissible extension of the subject-matter beyond the content of the application as filed.

The Court found the Utility models-in-Suit invalid due to inadmissible extension of the subject-matter beyond the content of the application as filed, i.e. the EP ‘510 application, as filed, and referred to the nature, extent and course of the case at hand.

The Court explained, citing, inter alia, Article 123(2) of the European Patent Convention, that amendments to an application are inadmissible if these entail that registration of the utility model is sought for something which a person skilled in the art, using common knowledge and ability at the priority date, could not deduce directly and unambiguously, either explicitly or implicitly, from the application as filed. The Court stated, citing the decision of EPO’s Enlarged Board of Appeal in case G 0001/03, that this qualified test of whether something can be deduced from the application as filed equalled the novelty test according to the Danish Utility Model Act, Section 5(1).

The Court held that at least the Utility models-in-Suit’s feature, according to which the formulation additionally contains a citrate buffer, lacked basis in the EP ‘510 application as filed. Thus, the Court held that the EP ‘510 application did not, neither in the general definition of “buffer” or “buffer solution”, which, inter alia, covers citrate, or anywhere else in the application, contain a sufficiently qualified specification of an embodiment equal to claim 1 of the Utility models-in-Suit.

Therefore, the Court concluded that Fresenius’ claim for a preliminary injunction was denied.

Comment: This part of the Court’s decision is interesting in light of the clear doctrine in Danish law regarding the presumption of validity of granted utility models. In Denmark, it is generally rare that rights having been examined and issued by the patent authority, are found invalid in cases regarding a preliminary injunction.

In Danish practice, this has mostly happened when either

1) new, novelty-destroying prior art are presented to the court, or

2) the right in question has been found invalid by the competent authorities (typically the EPO), but the right is nevertheless still in force because pending appeal proceedings have suspensive effect (see e.g. EPC Article 106(1)).

The decision has been appealed to the Eastern High Court on 3 July 2019 where the appeal proceedings are currently pending.

You can read the decision (in Danish) here.

Reported by: Peter Nørgaard and Mads Laurberg Pedersen, Plesner Advokatpartnerselskab