Glaxo SmithKline v Pharmachemie BV

Decision

THE HAGUE APPEAL COURT

Commercial Division

Case Number                                      : 105.007.171/01

Docket Number                                  : C07-1306

Docket Number District Court           : 271008/HA ZA 06-2677

decision of the fifth civil chamber of 2 November 2010

in the case of

the company under foreign law

GLAXO GROUP LIMITED,

established in Greenford, Middlesex, Great Britain,

appellant,

respondent in the cross-appeal,

to be referred to hereinafter as: Glaxo,

attorney: mr. P.J.M. von Schmidt auf Altenstadt in The Hague,

versus

PHARMACHEMIE B.V.,

established in Haarlem,

respondent,

appellant in the cross-appeal,

to be referred to hereinafter as: Pharmachemie,

attorney: mr. M.A.A. van Wijngaarden in The Hague.

Course of the Proceedings

By writ of 3 October 2007 Glaxo has lodged an appeal from the judgment rendered between the parties of the Hague District Court of 4 July 2007, which has been restored by judgment of 18 July 2010. By statement of grounds of appeal Glaxo challenged the judgment on appeal with eleven grounds of appeal which were contested by Pharmachemie by statement of defense, as also cross-appeal and conditional cross-appeal. Upon doing so Pharmachemie presented three unconditional grounds of appeal (1 to 3) and ten conditional grounds of appeal (4 to 13). They were contested by Glaxo by statement of defense in the cross-appeal.

On 9 September 2010 the parties had their case pleaded, Glaxo by mr. R. Hermans and mr. D.F. de Lange, both attorneys in Amsterdam, and Pharmachemie by its procedural attorney and by mr. L.L. Huisman, attorney in The Hague, all of them on the basis of oral pleading notes which have been added to the file of the proceedings. Prior to the hearing the parties each filed more exhibits which have been added to the file of the proceedings.

Next the parties asked for the giving of a decision.

Examination of the principal appeal and the cross-appeal

1. The facts established in the challenged judgment in jur.gr. 2.1 to 2.3 have not been refuted, and so the Appeal Court will also start from these facts. In its first ground of appeal Glaxo argues that furthermore it has to be established as fact that the G-Standaard relating to the month of June 2006 was published on 16 May 2006. Since as such this was not contested by Pharmachemie, the Appeal Court will assume  the following facts.
   
   
2. The present case concerns inter alia the following.
   
   

2.1 Glaxo is the proprietor of European Patent EP 0 226 266 B1 (hereinafter: EP 266) which has been granted according to the brief designation (in the authentic English language) for “Use of tetrahydrocarbazolone derivative for the manufacture of medicaments”.  The application for EP 266 was filed on 24 June 1986 while invoking priority on the basis of the British patent application GB 8 516 083 (hereinafter: “GB 083”) of 25 June 1985. The grant of EP 266 for inter alia the Netherlands was published on 28 February 1996. The patent has been granted for several countries, including the Netherlands.

The claims of EP 266 as granted read as follows.

1. Use of 1,2,3,9-tetrahydro-9-methyl-3-[(2-methyl-1H-imidazol-1-yl)methyl]-4H-carbazol-4-one

or a physiologically acceptable salt or hydrate thereof, for the manufacture of a medicament for

the relief of nausea and vomiting.

2. Use according to claim 1 wherein the 1,2,3,9-tetrahydro-9-methyl-3-[(2-methyl-1H-imidazol-1-

yl)methyl]-4H-carbazol-4-one is in the form of a hydrochloride.

3. Use according to claim 1 wherein the 1,2,3,9-tetrahydro-9-methyl-3-[(2-methyl-1H-imidazol-1-

yl)methyl]-4H-carbazol-4-one is in the form of its hydrochloride dihydrate.

4. Use according to any of claims 1 to 3 for the manufacture of a medicament to be used in

combination with an anti-cancer therapeutic agent.

5. Use according to claim 4 wherein the anti-cancer therapeutic agent is cisplatin.

      Against the grant of the patent no opposition was filed with the European Patent Office.

The effective life of the patent expired on 24 June 2006.

2.2 Pharmachemie has applied, with the perspective of the expiry of EP 266, for a marketing authorization for (four routes of administrations of) the generic drug “Ondansetron” having as active ingredient 1,2,3,9-tetrahydro-9-methyl-3-[(2-methyl-1H-imidazol-1-yl)methyl]-4H-carbazol-4-one hydrochloride dihydrate according to claim 3 of EP 266, said active ingredient next being referred to shortly as Ondansetron.

2.3 Subsequently it had this drug included in the G-Standaard, the database for drugs published by Z-Index (a subsidiary of the Koninklijke Nederlandse Maatschappij ter bevordering der Pharmacie) of June 2006. Its publication took place on 16 May 2006, i.e. before expiry of EP 266. On 29 May 2006 Z-Index sent at the request of Pharmachemie a so-called Taxe letter to all the users of the G-Standaard, including inter alia the following text:

“In the G-Standaard of June 2006 have been included the product packs of the firm Pharmachemie having the active ingredient

ONDANSETRON

(…)

The patent in the original product does not expire, however, but in the course of June 2006. For this reason said firm explicitly stated that they will not sell Ondansetron before 25 June 2006.”

Examination of the principal appeal

3. In the principal appeal the parties dispute whether by publishing (four modes of administration of) the generic drug having the active ingredient (and under the name of) Ondansetron in the G-Standaard of June 2006 Pharmachemie infringed the rights of Glaxo under EP 266 and this by reason of the provisions of Article 53(1), introduction and (b) of the Dutch Patent Act 1995 (hereinafter: DPA 1995):
   
   “A patent gives the patentee (…) the exclusive right:
   
   (…)
   to use the patented method in or for his company, or to use, market or resell, lease, deliver or market otherwise the product which has been obtained directly by using such method, in or for his company, or to offer, import or keep in stock for one of these purposes.”
   
   The issue is whether publication in the G-Standaard involves “offering for one of these purposes” as referred to in said provision.
   
   
4. The District Court answered this question partly to the negative in the challenged judgment, considering to that end – reproduced succinctly – that mere publication of the drug in the G-Standaard, which should primarily be considered a tool in relation to ordering and supplying drugs, instead as a platform for such offer, cannot be considered as such an offer to perform acts restricted to Glaxo relating to such drug, but rather a preparatory act for its supply. Nor did Pharmachemie use the G-Standaard as means to offer generic Ondansetron, but it was forced to do so in order to allow sale of the drug immediately as from the date of expiry, according to the District Court. Taking also into account that Pharmachemie made it clear to the buyers of the G-Standaard by means of the Taxe letter that it would not sell Ondansetron before the expiry date of EP 266, the District Court is of the opinion that publication in the G-Standaard cannot have essentially affected the exploitation monopoly of Glaxo and that, in the light of the interest of Pharmachemie in inclusion in the G-Standaard of June 2006, reasonable interpretation of the law implies that the mere fact that the information from the G-Standaard of June 2006 was available several weeks prior to the date of expiry of EP 266, should not be seen as offering generic Ondansetron in the sense of Article 53(1) DPA, at least not as offering for one of these purposes in the sense of said provision.
   
   
5. This finding is challenged by grounds of appeal 2 to 9 of Glaxo. In ground of appeal 10 it adds that the communication in the Taxe letter quoted above, should be considered an independent act of offering in the sense of Article 5(1) DPA. The Appeal Court will discuss the grounds of appeal jointly.
   
   
6. To the interpretation of Article 53(1) DPA (in which that provided under ‘a’ is similar to that provided under ‘b’, on the understanding that a concerns product claims) it is relevant what is stated in parliamentary history in the Explanatory Memorandum to the Act of 29 May 1987, OJ 1987, 316, in which the provisions of the DPA 1910 were adapted as far as necessary (inter alia) to the Community Patent Convention (CPC) of 15 December 1975, Trb. 1976, 103 (which has never become effective by the way). Purpose of the Act was inter alia to adapt the DPA 1910 as far as possible to the similar provisions of the CPC (TK 1984-1985, 19131, no. 3, p. 1). Article 25 introduction and (c) (formerly 29) of the CPC reads as follows:
   
    
   
   It appears from the comment on this provision that the CPC intends to prohibit the offering of patented products in the broadest sense (see Benyamini, Patent Infringement in the European Community, 1993, p. 116-117).
   
   Article 53(1) DPA 1995 is similar to Article 30(1) of the DPA 1910; the content is identical. As to the latter provision the following is stated in the explanatory Memorandum to the Amendment Act:
   
   “The first paragraph describes the exclusive right of the patentee by listing the acts which the patentee is allowed to perform with the exclusion of others; the similar Article 29 of the Convention lists the acts which the patentee can prohibit third parties to perform without his consent. These descriptions only differ from a terminological respect; substantially these approaches achieve the same result.
   (…)
   ‘Offering’ in the Convention provision should be taken in a broad sense and does not only comprise ‘offering for sale; it also means offering in general, regardless under what title and what the person to whom the product in question is offered will next do with it. The Convention provision will therefore in practice have the same result as the description used in the Act ‘offering for one of these purposes’, i.e. offering for one of the acts listed previously in section a. (…)”
   
   
7. The parties agree that the G-Standaard plays a crucial part on the market of drugs. Z-Index itself stated about this (statement of 23 August 2010, Exhibit 37 with brief of 9 September 2010 on the part of Pharmachemie):
   
   (In 5:)
   
   “The G-Standaard comprises next to drugs also medical devices, homeopathic drugs, self-care drugs and over the counter sale. Starting-point is that all drugs available in pharmacies or will possibly available are also included in the G-Standaard. (…). The G-Standaard is used by all public pharmacists, hospital pharmacists, pharmacy keeping general practitioners, general practitioners, health cure insurers, pharmaceutical wholesale companies, medical-pharmaceutical companies, by government and by some schools, universities and research firms. The G-Standaard comprises a large amount of information, which can be divided into:
   (1) the Taxe: product description, packaging size, price information (pharmacy purchase price, recommended selling price), refund information (refund price, GVS limit) and information about the preference policy;
   (2) pharmaco-therapeutic information: information about use, dosage, medical uses, counter-uses, side-effects and interactions;
   (3) logistic information: article number, name producer, market registration number.”
   
   
8. By reason of the above the Appeal Court is of the opinion that publication of a generic drug in the G-Standaard should be considered “offering for one of these purposes” as referred to in article 53(1), introduction and (b) DPA 1995. That by which Pharmachemie opposes this, does not alter this. By way of explanation the following.
   
   
9. Pharmachemie alleges inter alia that publication of the generic Ondansetron in the G-Standaard cannot be seen as offering the drug in said sense. It points out that the G-Standaard also states drugs which are not available and lead a sleeping life. Furthermore it points out that in the mention of Ondansetron in the G-Standaard of June 2006 no selling price is stated. Inclusion in the G-Standaard is only inspired by the need for this, in order to allow sale of the drug in the future, according to Pharmachemie.
   
   
10. This argumentation does not cut any ice. As Pharmachemie itself alleges, it reported Ondansetron for publication in the G-Standaard of June 2006 in order to allow sale of the drug after expiry of the effective life of EP 266. Seen the content and function of the G-Standaard publication it is the means by excellence to inform the market parties that a generic version of a specific drug comes on the market. The Appeal Court finds it likely that (there is an actual chance that) users of the G-Standaard will also let themselves be guided when prescribing, or ordering drugs, by the knowledge that within the foreseeable term a generic version of a drug having the same active ingredient will come on the market. It is important in this that, as Pharmachemie itself alleges, it is generally known that generic drugs are substantially (Pharmachemie says: about 40%) cheaper than the reference products (StofD/StofCC 119). Thus the publication will have an impact on the market behaviour in respect of the drug. Under these circumstances publication of the generic Ondansetron in the G-Standaard should therefore, seen the broad interpretation of the act “offering”, as advocated by the legislator, be seen as its offering. It also results from the stand of Pharmachemie that it reported Ondansetron for publication in the G-Standaard of June 2006 in order to be able to sell the drug immediately after expiry of the effective life of EP 266 that such “offering” took place with having in mind (later) marketing. For this reason the condition that the offering should have taken place “for one of these purposes, as referred to in Article 53(1)(b) DPA 1995, has also been met. The general condition that some drugs published in the G-Standaard are not sold does not alter this. The same goes for the circumstance that in the present case no selling price is mentioned, at least that the selling price is set at “0”. This fact as such does not involve that there is no offering (on the shorter or longer term). In this respect it is also important that the users of the G-Standaard know that it concerns a generic drug which will be substantially cheaper than the reference product.
    
    
11. The communication in the Taxe letter of 29 May 2006 does not alter the above. On the contrary, by reason of this communication the users of the G-Standaard will see their expectation confirmed that a generic version of Ondansetron will come on the market. In this Pharmachemie cannot be followed in its stand that the communication only involves that the drug will not be sold (before the date stated). The reader will conclude from this, also seen the common nature and the purpose of such communications (i.e.: avoiding patent infringement) precisely that the drug will be available after the expiry date of the patent. The circumstance that there will not be any actual sale but after expiry of the patent does not prevent the conclusion here that with the publication in the G-Standaard there is offering for one of these purposes (see NethSC 18 December 1992, NJ 1993, 735 and opinion AG Strikwerda, in 26 and 27).
    
    
12. The argumentation of Pharmachemie that the market parties already know by reason of publication of the market authorization(s) that a generic version of the patented drug will come on the market and that publication in the G-Standaard therefore does not bring anything new, does not succeed either. In the first place this does not alter the conclusion that with the publication in the G-Standaard there is offering for (later) marketing. In the second place publication in the G-Standaard, as Pharmachemie itself stresses, is a necessary condition to allow marketing of the drug, and so in that sense it most definitely marks the beginning of a new stage.
    
    
13. Pharmachemie further argues that to assume infringement of a “second medical use patent”, as the present one, it is required that the use has been stated in the G-Standaard. If this was even correct, then it is such that it results from the statement of Z-Index that the G-Standaard also gives pharmacotherapeutic information, including the use. The stand of Pharmachemie, that the use is not stated in the present publication, seems unlikely in the light of this statement. Faced with this at the oral pleading, Pharmachemie did not get any further than the allegation that the statement of Z-Index must be founded on a mistake in that extent. However, the Appeal Court finds this, also seen the usefulness of the mention of the medical use of a drug, unlikely. Moreover it is such that the medical use does appear in any case from the marketing authorization which is referred to in the G-Standaard and which is known, as Pharmachemie alleges itself, to the relevant market parties (StofD/StofCC 119).
    
    
14. Pharmachemie invokes the circumstance that the act of mentioning a generic drug in the G-Standaard in the month of or before expiry of the patent in question, combined with the statement in the Taxe letter, has been founded on a previous decision of a judge from the Hague District Court, that in such a system the interests of all parties are taken into account, including the ones of the patentee and that, save by Glaxo, this has been accepted by everyone for years and years.
    
    
15. However, this argument cannot be of any avail to Pharmachemie either. After all, the alleged practice (of tolerance) cannot alter the conclusion that a specific act amounts to patent infringement, nor it alter can the powers of the patentee to enforce its patent.
    
    
16. Pharmachemie further alleges that the system of the G-Standaard, part of which is the production schedule, as carried out by Z-Index without market parties like Pharmachemie being able to influence this, results, upon honouring the stand of Glaxo, into unlawful extension of the effective life of the patent. Using the patent under such circumstances amounts to abuse of rights according to Pharmachemie.
    
    
17. The Appeal Court does not follow Pharmachemie in this argumentation. It is factually correct that seeing the finding that publication in the G-Standaard before expiry of the patent produces patent infringement under Article 53(1) introduction and (b) DPA, the system as used by Z-Index involves that producers like Pharmachemie cannot be on the market with their generic drug immediately after the date of expiry. It is also true that as a result (former) patentees can in fact still profit from their monopoly position notwithstanding expiry of their patent. However, exploiting and enforcing the rights associated with the patent until the very last day of its effective life does not produce abuse of rights. After all, the patentee has an interest in this which has been sanctioned and justified by law. The circumstance that third parties like Pharmachemie are set back by the method of Z-Index cannot lead to a different conclusion, or to a different interpretation of the law.
    
    
18. Furthermore Pharmachemie tries to convince that the interpretation of Article 53(1) DPA pleaded by Glaxo is, seen the system of the G-Standaard and the resulting effects discussed above, contrary to free movement of goods as guaranteed in Articles 3(g), 10 and 28 of the EC Treaty. In that respect Pharmachemie argues that Article 30 of said Treaty only allows exceptions to the prohibition (of import, export and transit restrictions and measures with equivalent effect) to the extent that they are justified by guaranteeing rights that form the specific object of industrial property. According to Pharmachemie this is not the case to the extent that the effective life of the patent is in fact extended beyond its expiry date.
    
    
19. This argumentation fails on similar grounds as phrased in jur.gr. 17. In the view of the Appeal Court exploiting and enforcing the rights vested in the patent up to the very last day of the effective life is part of the specific object of the patent and the circumstance that a system used by a semi-public agency results in competitors not being able to be on the market immediately after the expiry date of the patent with their generic drug, does not alter this.
    
    
20. Finally Pharmachemie invokes the freedom of expression as guaranteed in Article 10 of the European Convention on Human Rights and Fundamental Freedoms (EHRC). In its view the restriction of its freedom to inform which will be the effect of allowance of the claim of Glaxo does not meet the review criteria applicable to this (including the condition that the restriction should be necessary in a democratic society, as well as proportionate).
    
    
21. The Appeal Court dismisses also this argumentation. To the extent that publication of a drug in the G-Standaard might fall within the scope of the freedom of expression guaranteed in Article 10 ECHR and its restriction during the life of the patent of a third party should be considered infringement of such freedom, it is such that the restriction in question has been laid down by a formal Act, more specifically in Article 53 DPA 1995, and this in view of protection of the rights of the patentee. The restriction is further necessary in a democratic society, because it meets the urgent need for the sake of promoting innovation, to assign to inventors for a specific period exclusive rights relating to the subject-matter of their invention. This general interest is (in this case) more important than the individual interest of producers of generic drugs to be able to exchange information during the effective life of the patent, in order to be able to come on the market with their products immediately after expiry of the patent. Contrary to what Pharmachemie argues, there is no stretching of the duration of said exclusive rights with artificial tricks (see jur.gr. 17 and 19 above), and so its argument that the protection of the rights of Glaxo is disproportionate for that reason, does not hold.
    
    
22. The conclusion from the above is that grounds of appeal 2 to 9 in the principal appeal succeed. It can be left aside in this whether issuing the statement requested by Pharmachemie in the Taxe letter can be seen as an independent act of offering (ground of appeal 10), since publication in the G-Standaard preceded this and this already produces infringement.
    
    Examination of the conditional cross-appeal
    
    
23. Grounds of Appeal 4 to 13 in the cross-appeal are presented in the event that the Appeal Court would reach the opinion that by publishing its generic Ondansetron in the G-Standaard of June 2006 Pharmachemie infringed EP 266. Since this condition has been met according to the above, the Appeal Court will discuss the grounds of appeal in question.
    
    
24. Pharmachemie argues in this that EP 266 is invalid, since Glaxo cannot derive any priority from the British patent application GB 083 filed on 25 June 1985. This would involve that the (actual) date of filing EP 266, being 24 June 1986, becomes decisive to the examination of novelty and inventive step of EP 266. The result thereof is, according to Pharmachemie, that EP 0 201 165 (EP 165) having a filing date of 10 March 1986 and a date of publication of 12 November 1986, becomes post-published art and therefore prejudicial to novelty, as well as that EP 266 is not inventive in the light of the Dutch patent NL 190 373 (NL 373), having a filing date of 25 January 1984 and a publication date of 16 August 1985, combined with a publication of Legeza et al. “Mechanism of species differences in sensitivity of monkeys and dogs to the emetic action of various drugs”, 1982. Furthermore Pharmachemie argues that EP 266 is (just like GB 083) insufficiently disclosed by reason of lack of a technical effect over the entire width of claim 3 dependent upon claim 1 (or the prejudice against this) specifically in respect of dogs.
    
    
25. As to the allegation that Glaxo wrongfully derived priority from GB 083 the Appeal Court considers as follows.
    
    
26. In order to determine in conformity with the provisions of Articles 87 to 89 of the European Patent Convention (EPC) whether a claim (in the present case claim 3 of EP 266) can rightly derive priority from an earlier patent application (the priority document) it is required that “the subject matter of the claim must be directly and unambiguously derivable from the disclosure of the invention in the priority documents, also taking into account any features implicit to a person skilled in the art in what is expressly mentioned in the document” (Enlarged Board of Appeal of the European Patent Office G02/98, OJ 10/2001, 413).
    In the case at hand the point is therefore whether the essential features of claim 3 of EP 266 are included in GB 083 (as a whole) in such sense that the average skilled person can derive them directly and unambiguously from this while using his common general knowledge.
    Moreover – according to settled case law of the Technical Board of Appeal – the invention must be described in an enabling manner in the priority document.
    
    
27. Glaxo has analysed, summarized and categorized the features of EP 266 reproduced in its statement of defence in the cross-action, in 10 et seq. As far as relevant here these features are once more reproduced:
    
    

Claim  1:          A:        Use of 1,2,3,9-tetrahydro-9-methyl-3-[(2-methyl-

                                    1H-imidazol-1-yl)methyl]-4H-carbazol-4-on

                                    (hereinafter "ondansetron")

                        B:        or a physiologically acceptable salt thereof

                        C:        or a physiologically acceptable hydrate thereof,

                        D:        for the manufacture of a medicament

                        E:        for the relief of nausea and vomiting.

Claim 2:           F:         use of ondansetron according to claim 1, in the form of a hydrochloride.

Claim 3:           G:        use of ondansetron according to claim 1, in the form of its hydrochloride dihydrate.

This layout has also been taken by Pharmachemie as starting-point. Pharmachemie argues that feature E (use of Ondansetron for the relief of nausea and vomiting) cannot be derived directly and unambiguously by the average skilled person from GB 083.

28. In this respect Pharmachemie argues in the first place that the essential feature of EP 266 (as second medical use claim) is: achieving the technical effect of providing relief in case of nausea and vomiting (contrary to the sole use to counter said symptoms).Pharmachemie concludes this from the decision of the Technical Board of Appeal of the European Patent Office (TBA) T 609/02, in which reference is made inter alia to the decisions also cited by Pharmachemie G 2/88 and G 6/88. In its view achieving such effect cannot be found in GB 083, at least not in respect of Ondansetron. As to sufficient disclosure Pharmachemie further argues that GB 083 lacks the required experimental proof to disclose said effect.
    
    
29. In said decision the TBA considered, to put it briefly, that the priority document must disclose in cases like the present one the suitability of the drug for the claimed therapeutic use. In this it is not always required that the results of extensive clinical trials are presented, but the application must include some information, for instance in the form of experimental tests, from which it can be concluded that the drug has the claimed therapeutic effect. The mere communication of the possibility of such effect does not suffice.
    
    
30. Contrary to Pharmachemie, the Appeal Court believes, like the TBA does in T 1039/92 (concerning the present priority matter), that GB 083 includes sufficient indications for the average skilled person to allow to conclude directly and unambiguously from this that (precisely) Ondansetron is suitable for the relief of nausea and vomiting (and that such therapeutic effect is indeed achieved). In GB 083 the formula is reproduced of a group of compounds (I) about which it is said (p. 6, l. 4-6):
    
    “Results from patients suffering from the symptoms of nausea indicate that the compounds of formula (I) alleviate the symptoms of nausea.”
    
    This communication implies that it has appeared from experiences with patients that the compounds of such group actually relieve the symptoms of nausea and vomiting. In this Ondansetron, referred to as formula I(b), is the only one of the group of compounds which is marked as “a particularly preferred compound” (in respect of which moreover no counter-indications have appeared), and so it is (directly and unambiguously) clear to the average skilled person that (specifically) this compound has the claimed therapeutic effect; and so this does not concern a case which the decision T 609/02 relates to, and in which the subject-matter of the examined claim “covers limitless and untried downstreams developments in relation to yet to be demonstrated molecular mechanisms” and “amounts to no more than an invitation to set up further research programs for which no guidance is forthcoming.”
    As to the condition of substantiation the Appeal Court finds the reference to experiences with patients, as beginning of experimental proof, sufficient within the context of the priority matter (see also The Hague Appeal Court 27 January 2009, submitted as Exhibit 8 with statement of defence in the cross-appeal).
    
    
31. The circumstance that no further details of the study in question are disclosed does not involve, as described in GB 083, that the invention is not sufficiently disclosed, as Pharmachemie argues; there is no undue burden for the skilled person. Pharmachemie also argues that GB 083 is not sufficiently disclosed either because the application does not include information about the dosage and administration route. The Appeal Court rejects this argumentation on the same grounds as the District Court did and adopts that considered by the District Court on that account in jur.gr. 4.13.
    
    
32. The above implies that grounds 4 to 11 fail.
    
    
33. In ground of appeal 12 Pharmachemie argues that EP 266 and GB 083 are not sufficiently disclosed, because it appears from the publication of Legeza et al. that 5 HT inhibitors are in general ineffective in dogs. So the skilled person would expect that Ondansetron – also a 5 HT inhibitor – would not be effective in dogs either. Nevertheless, wrongfully according to Pharmachemie, the therapeutic effect is claimed over the entire width of the human – animal range.
    
    
34. Glaxo contested this argumentation by statement of defence in the cross-appeal while stating reasons (par. 87 et seq.). In this it invoked inter alia a publication of Fukui et al. of 1999, from which it appears in its view that Ondansetron is most definitely effective against nausea and vomiting in dogs. Since Pharmachemie did not discuss this anymore upon oral pleading, the Appeal Court finds its argumentation also insufficiently substantiated in appeal. And so this ground of appeal also fails.
    
    
35. Ground of Appeal 13 concerns the conclusion of the District Court that EP 266 is valid. It may appear from the above that the Appeal Court shares this conclusion, and so this last ground of appeal also fails.
    
    Further examination of the principal appeal
    
    
36. It was not refuted that the generic drug Ondansetron of Pharmachemie falls within the scope of protection of EP 266 and it did not appear that Glaxo has granted Pharmachemie permission to offer said drug. In the period in question Pharmachemie therefore infringed the patent. The above implies that it must be examined to what extent the claims of Glaxo are allowable.
    
    
37. In 1 and 3 Glaxo claims court declarations involving that by reason of publication of generic Ondansetron in the G-Standaard Pharmachemie infringed (the Dutch part of) EP 266. The Appeal Court will allow these claims, joined into one court declaration as phrased in the operative part.
    
    
38. In 2 Glaxo primarily claims an injunction against the act stated in Article 53 DPA 1995 for the time during which Pharmachemie infringed and acquired an unlawful advance. Alternatively it claims damages to be taxed by the court.
    
    
39. The injunction primarily claimed the Appeal Court will dismiss. Since the effective life of the patent has expired, Glaxo apparently has a moratorium in mind of the sale of Ondansetron by way of damages in kind. To the extent that such a form of damages does not already reach too far in its generality, there is no room for this here in any case. Seeing the limited period of infringement (16 May to 24 June 2006), the circumstance that Pharmachemie did not sell the generic Ondansetron in that period but only offered it (for future sale) and the circumstance that although Pharmachemie acquired an advance by reason of the infringement, it was as such entitled to sell as from 24 June 2006 on the one hand, and the far-reaching effects of such an injunction to be presently imposed for Pharmachemie the Appeal Court finds such an injunction a disproportionate form of damages.
    
    
40. As to the claim for damages the following applies.
    The products containing Ondansetron sold by Glaxo were the following ones:
    - film coated tablets 4 mg.
    - film coated tablets 8 mg.
    - melt tablets 4 mg.
    - melt tablets 8 mg.
    
    Pharmachemie offers:
    - film coated tablets 4 mg.
    - film coated tablets 8 mg.
    - phials 2 mg. (injection fluid)
    - phials 4 mg. (drink)
    
    
41. Pharmachemie alleged: i) that Glaxo does not have a marketing authorization anymore for the film coated tablet of 4 mg already since 2003 and ii) that the phials supplied by it (Pharmachemie) on the one hand and the melt tablets of Glaxo on the other hand are not competitive, because they cannot be mutually substituted. Glaxo did not, at least not sufficiently refute this. The conclusion drawn by Pharmachemie from this that Glaxo cannot have incurred any losses in respect of these products, should therefore be considered correct.
    
    
42. Pharmachemie further argues that the sales of Glaxo of film coated tablets of 8 mg. had already substantially dropped before May 2006, and so as to this product Glaxo did not incur any losses as result of the infringement either. Glaxo pleaded against this (at oral pleading in appeal) that the drop in sales may also be the effect of the price lowering it made at the time. Although Pharmachemie is right in pointing out that this is a new allegation, the Appeal Court nevertheless finds, also if this allegation is disregarded, the possibility of loss (of sales) as a result of the publication in the G-Standaard in question (necessary for an order to pay damages to be taxed by the court) sufficiently likely. After all, the mere circumstance stated that the sales regarding the 8 mg. film coated tablets had already dropped before May 2006 does not simply justify the claim that as from May 2006 loss of sales cannot have occurred as well with and by reason of publication of generic Ondansetron in the G-Standaard of the month June 2006. The Appeal Court will therefore allow the claim for damages to be taxed by the court.
    
    
43. For allowance of the claimed civil fine there is no ground by reason of the above.
    
    Further examination of the principal appeal and the cross-appeal
    
    
44. Being the party largely found to be at fault Pharmachemie will be ordered to pay the costs of the first instance (in the principal action) and the (principal and cross-)appeal. This implies that Pharmachemie does not have an interest in grounds of cross-appeal 1 to 3, at least that they fail. The costs will be estimated while applying Article 14 of Directive 2004/48/EC (as to the first instance) and Article 1019h DCCP. For the first instance Glaxo has estimated its costs at EUR 82,344.- of which EUR 41,172 (cross-action) has already been allowed. To the level of the costs made in the first instance by Glaxo Pharmachemie did not object. As to the appeal the parties have agreed that a sum of EUR 90,000.- should be considered reasonable and proportionate, whereat half of it can be considered regarding the principal appeal – and the other half regarding the cross-appeal. The Appeal Court will allow the costs accordingly.

Decision

The Appeal Court:

in the principal appeal:

annuls the judgment on appeal, as far as rendered in the principal action, and adjudicating again:

-          declares that Pharmachemie infringed the Dutch part of the patent EP 0 226 266 B1 in the name of Glaxo by causing drugs with the active ingredient Ondansetron to be listed under its name in the G-Standaard published on 16 May 2006 (its paper and electronic versions);

-          orders Pharmachemie to pay damages for the losses incurred by Glaxo as a result of such infringement, to be taxed by the court and to be paid in conformity with the law;

-          orders Pharmachemie to pay the costs of the proceedings in both instances, estimated on the part of Glaxo as to the first instance (in the principal action) at EUR 41,172.- and in the principal appeal at EUR 45,000.-.

-          declares this decision so far enforceable notwithstanding appeal;

-          dismisses any further or other claims;

in the cross-appeal:

-          upholds the judgment on appeal, as far as rendered in the cross-action;

-          orders Pharmachemie to pay the costs of the proceedings in the cross-appeal, estimated on the part of Glaxo at EUR 45,000.-;

-          declares this decision enforceable notwithstanding appeal as far as the order to pay costs concerns.

This decision was rendered by mr. J.C. Fasseur-van Santen, mr. T.H. Tanja-van den Broek and mr. R.A. Grootoonk, and was pronounced at the public session of 2 November 2010 in the presence of the clerk of the court.

(signatures)