Novartis AG and Genentech, Inc. v. Celltrion Inc. and others – Court of First Instance – Düsseldorf Local Division, 6 September 2024, Case nos. UPC_CFI_165/2024 & UPC_CFI_166/2024
Pharmaceutical companies across Europe frequently require advice on pre-launch and marketing activities undertaken in respect of products, the objectives behind the advice aligned with the nature of the company. On the originator side wishing to enforce patents, companies may wish to know whether the activities carried out by a challenger breach the relevant national thresholds to obtain interim relief and prevent a loss of market share pending a main action. On the other hand, on the generics or biosimilars side seeking to launch the product, the objective is the opposite: how far can preparatory steps go before there is actual or imminent infringement?
The recent decision from the UPC’s Düsseldorf Local Division (“LD”) in an application for provisional measures filed by Novartis and Genentech (together, the “Patentees”) provides guidance on how the UPC assesses imminent infringement for the purposes of preliminary injunctions. On this occasion, the LD rejected the Patentees’ request for a preliminary injunction to stop the pre-launch activities of Celltrion Inc. and its seven subsidiaries (together, “Celltrion”) for its omalizumab biosimilar, OMLYCLO, on the basis that Celltrion’s activities did not constitute imminent infringement because Celltrion had not completed all pre-launch preparations to enable them to launch the product.
The parties have had 15 days to appeal this decision, but it is understood that no such appeal has been preferred as at the time of writing.
Background
The Patentees hold a family of formulation patents relevant to their original omalizumab product, XOLAIR®. The patent in issue, EP3805248 (“EP248”), covers a specific formulation of an anti-IgE antibody. The original product XOLAIR® has been authorised in Europe since 2005 for treating conditions such as asthma and urticaria that are brought on by allergies. Celltrion’s omalizumab biosimilar OMLYCLO received its European marketing authorisation (“MA”) on 16 May 2024. The Patentees claim that Celltrion’s OMLYCLO infringes EP248. Patent litigation proceedings are already underway between these parties in the UK and in the Netherlands, and there are also pending opposition proceedings at the EPO (incidentally, there are two divisionals in the patent family that have recently been granted and are in their opposition periods).
In April 2024, the Patentees applied for a preliminary injunction pursuant to Article 62 of the UPC Agreement (“UPCA”) read with Rule 211.2 of the UPC Rules of Procedure (“RoP”), alleging that Celltrion had been engaged in various pre-marketing activities since at least August 2022. The alleged activities include public announcements of Celltrion’s intention to launch OMLYCLO as soon as possible after obtaining the MA in Europe, and other specific instances of targeted approaches made by Celltrion’s agents or representatives to sell their product or offer their samples to interested customers and dermatologists at medical events and exhibitions. The patentees therefore sought an order against the Celltrion entities, including Celltrion Inc. (the parent company in the corporate group), Celltrion Healthcare Hungary Kft. (the MA holder) and Celltrion Healthcare Deutschland GmbH (the German subsidiary).
Celltrion contested the application citing various reasons, including that the LD was not the right forum to hear the patentees’ application, and in the alternative, requested the LD to stay these proceedings given the Dutch litigation and proceedings before the European Patent Office.
In summary, the LD’s findings are as follows:
1. It has competence to hear the Patentees’ application because it was very likely that the Celltrion parent would distribute OMLYCLO into Europe (and in particular into Germany) through the German subsidiary, which had been impleaded as a party.
2. There are no applicable grounds under the Recast Brussels Regulation to decline jurisdiction or stay the proceedings, and in any event, such applications for preliminary injunctions would require urgent consideration.
3. Although Celltrion’s product comes within the scope of claim 1 of EP248, there is no imminent infringement, and as a result no preliminary injunction was ordered.
4. No security for costs would have been ordered in any event.
1. Competence
Celltrion claimed that the actions of the main defendant, Celltrion Inc. have “no direct relevance to the territory of the UPCA” and that the jurisdiction of the LD could not be seised simply by including a German subsidiary, which was one of the six subsidiaries sued. The LD disagreed. It was accepted by Celltrion that Celltrion Inc. distributes its products through the Hungarian entity into the European market and subsequently, through its national subsidiaries, including the German one. Therefore, the LD concluded that launch of OMLYCLO would likely follow the same distribution pattern. Since the alleged threatened infringement could occur in Germany, the patentees were entitled to bring the application before the LD.
2. Lis pendens
Celltrion also argued that the LD could not hear the application because of the pending case before the Dutch courts due to the rules concerning lis pendens / related actions under the Recast Brussels Regulation. However, Article 29 of the Recast Brussels Regulation, which requires that the parallel proceedings involve the same parties and same cause of action did not apply. The Patentees had carved out the Dutch designation of the patent from the UPC proceedings, therefore the LD was satisfied that the Dutch proceedings in relation to the same patent did not have the same cause of action as the present matter before the UPC.
This still left the question open as to whether these Dutch proceedings were nevertheless “related” to fall within Article 30(1) of the Recast Brussels Regulation, which may provide the court with a discretion to stay the proceedings. The LD held that even if that were the case, applications for provisional measures in the face of imminent infringement (if that were shown) would be urgent enough to warrant the LD to exercise its discretion and continue with the proceedings.
Celltrion had also requested a stay pursuant to Rule 295 of the RoP, but this was categorically refused by the LD, noting that this rule referred unambiguously to ‘actions’ and would therefore not apply to the present ‘application’.
3. Imminent infringement
UPC preliminary injunctions are available under Article 62 of the UPC Agreement (UPCA), which is substantiated by Rule 211.2 of the RoP. Article 62(1) provides that “In taking its decision the Court may require the applicant to provide reasonable evidence to satisfy the Court with a sufficient degree of certainty that the applicant is entitled to commence proceedings pursuant to Article 47, that the patent in question is valid and that his right is being infringed, or that such infringement is imminent.”
In dismissing the preliminary injunction application and finding for Celltrion, the LD considered the following three questions:
(1) did the Celltrion product come within the scope of claim 1 of EP248?
(2) which Celltrion entities would be liable for an infringing acts?
(3) did the acts complained of constitute imminent infringement?
On the first question, the LD found that, on the evidence before it, Celltrion’s product would infringe the patent. In particular, it noted that the Celltrion did not really challenge the allegation that OMLYCLO came within the scope of claim 1 of the patent, apart from an assertion that the patentees’ original omalizumab product, XOLAIR®, did not do so. The claim feature in issue required the presence of 0.02M histidine and Celltrion argued that the Patentees’ XOLAIR® would not fulfil this requirement since it contained 0.009M histidine and 0.011 M histidine-Cl.
However, the LD held that since the claimed pH was 6, the skilled team would understand the requirement of 0.02M histidine to include within its meaning also histidine which was present in a more or less 1:1 mixture of its neutral:protonated form. Despite adducing some expert evidence in support of its argument, Celltrion did not satisfy the LD on this point. The LD stated that it was necessary for a party to make their technical arguments in a “focused and precise” manner and not merely copy or refer to the party’s expert report on specific points.
It appears that the Court was expecting a better articulated technical argument from Celltrion as to why they contended XOLAIR® did not fall within the scope of claim 1 of the patent in issue backed by suitable expert evidence, consequent to which, Celltrion were probably arguing that as a biosimilar, OMLYCLO would also not fall within the patent’s scope. It is especially relevant that the panel hearing the application also included a technically-qualified judge (in this case with a chemistry background).
On the second question, the LD held all impleaded entities of the Celltrion group jointly (“cumulatively”) liable on any potential findings of infringement. The LD was satisfied that the manner in which the Celltrion group organised its marketing and distribution activities warranted this finding.
Finally, the LD answered the question of imminent infringement in the negative. In its decision, the court helpfully confirmed that Union law (pursuant to the UPCA) would apply in determining this issue, rather than different national laws. The key question was whether any or all of the complained activities proven to be undertaken by Celltrion constituted an offer to sell OMLYCLO in the relevant member states, which would directly infringe the patent. The LD held that it would suffice if the patentees were able to show the act in question actually creates a demand for the product, which the offer (short of a concrete offer) is likely to satisfy. Noting that potential customers in the pharmaceutical industry were very likely to regard generic statements of future market entry when all relevant regulatory measures and pricing and reimbursement steps had not been fulfilled as “vague announcements”, the LD held that, in fact, Celltrion had not completed all the pre-launch preparations, and in particular, had not even initiated the pricing and reimbursement procedure in certain countries such as France, as alleged by the patentees.
The Court’s analysis suggests that it took into account Celltrion not initiating pricing and reimbursement steps, but also that it informed some potential customers upfront that exact dates of launch were not yet known because of the outstanding patent issues. The other important fact appearing to influence the Court’s decision is from a written witness statement of a Celltrion employee who appears to have clarified to the French pricing authorities that the company did not have any intention of commercialising its biosimilar product as long as the Novartis/Genentech patents are valid. Therefore, this approach, if adopted more widely, suggests that contemporaneous evidence, such as correspondence exchanged, especially with pricing and reimbursement authorities, setting out intentions to launch and potential launch dates, will be critical in proving imminent infringement.
4. Security for costs
Since provisional measures were not ordered, Celltrion’s request for security for costs was no longer relevant. Nevertheless, the LD held that Celltrion would not have been entitled to such security due to lack of sufficient substantiation of any difficulty in recouping money from the patentees. The LD noted that security for costs (pursuant to Rule 158 of the RoP) would not be ordered simply to protect against the difficulties of enforcing a cost decision outside of the UPC regime.
The LD’s Orders can be found here and here.
