People’s Supreme Court of PRC, Civil Judgment ( No. 6 (2009))

December 3, 2010

Summary:

(US) ELI LILLY AND COMPANY (hereinafter referred to “ELI”) brought a case at People’s High Court of Jiangsu Province (“High Court”) against JIANGSU HANSOH PHARMACEUTICAL CO., LTD ( “HANSOH” ) on charge that HANSON infringed the patent right of three Chinese patents relating to a process for producing pharmaceutical gemcitabine and gemcitabine hydrochloride.

ELI did not accept the judgment of the High Court and appealed to the People’s Supreme Court of PRC ( “Supreme Court”).        The Supreme Court made a judgment of vacating the lower court’s judgment and remanding the case back to the High Court for a new trial. After the new trial, the High Court reissued a judgment, which held that the process used by HANSON for producing gemcitabine and gemcitabine hydrochloride does not infringe the patent right of ELI.

ELI did not accept the judgment and again appealed to the Supreme Court. The Supreme Court heard the case and held that the appellant ELI’s argument does not have ground and thus rejected ELI’s demand.

During hearing, the Supreme Court made detailed analysis on main disputed issues including: whether the producing process of HANSOH falls within the protection scope of the patent of ELI; whether the appraisal report produced in trial is admissible; and whether HANSOH has the burden of proof on the ratios of the starting materials used in the producing process.

Facts:

ELI obtained, in China, three patents for an invention relating to the process of producing gemcitabine and gemcitabine hydrochloride, namely, a patent titled “Stereoselective Glycosylation Process” with the patent number  93109045.8 (referred to as “Patent 1” for short), a patent for process titled “Process for the Purification and Isolation of 2’-Deoxy-2,2’-Difluoronucleosides” with the patent number 95196272.8 (referred to as “Patent 2” for short), and a patent for process titled “Process for preparing 1-(2'-Deoxy-2',2'-Difluoro-D-Ribofuranosyl-4-Aminopyrimidin-2-one) Hydrochloride”  (referred to as “Patent 3” for short). The aforementioned three patents constituted a complete technical solution for the production and preparation of gemcitabine and gemcitabine hydrochloride.

On Apr. 13, 2001, ELI brought a case at the High Court against HANSOH, alleging that ELI had three Chinese patents for invention relating to gemcitabine and gemcitabine hydrochloride, and HANSOH, without licensing, employed the patented process to produce gemcitabine and gemcitabine hydrochloride and marketed the product ever since year 2000, which infringed the patents. In 2001, the trial court (the High Court ) made a judgment that HANSOH did not infringe the patents of ELI. ELI did not accept the judgment and appealed to the Supreme Court. In 2002, the Supreme Court made the judgment of vacating the lower court’s judgment and remanding the case back to the High Court for a new trial. In 2003, after the new trial, the High Court made the judgment that HANSOH did not infringe the patents of ELI. ELI did not accept the judgment and again appealed to the Supreme Court.

In the time the appealing was heard, on Feb. 28, 2007, the Patent Reexamination Board of SIPO made the Invalidation Decision No. 9525,  announcing that all claims of Patent 1 are invalid. Against this invalidation decision, ELI brought an administrative case at the People’s No. 1 Intermediate Court of Beijing and appealed to the High Court. On Nov. 6, 2008, the High Court made the final judgment that affirmed the invalidation decision made by the Patent Reexamination Board of SIPO .

Issues:

During hearing by the Supreme Court, the two parties focused on: (1) whether the producing process of HANSOH falls within the protection scope of Patent 2 and Patent 3; (2) whether the appraisal report produced for the case  is admissible; and (3) whether HANSOH shall bear burden of proof on the proportion of 10α/10β. 

Holding:

Appeal dismissed;

Lower court’s judgment affirmed.

Reasoning:

Regarding the issue of whether the producing process of HANSOH falls within the protection scope of Patent 2 and Patent 3

The reactant to be purified and isolated as defined in the independent claim 1 of Patent 2 is nucleoside rich in β anomer, while the reactant to be purified and isolated in the producing process of HANSOH is not nucleoside rich in β anomer. Consequently, the producing process of HANSOH does not fall within the protection scope of Patent 2.

The de-protection in Patent 3 uses organic amine; in the meanwhile, the description of Patent 3 describes that US patent No. 5223608 has disclosed using methanol liquid of anhydrous ammonia for de-protection. The producing process of HANSOH, however, uses ammonia gas for de-protection, which belongs to the prior art anticipating patent 3. Nevertheless, the prior art should not be incorporated into the protection scope of Patent 3 through the doctrine of equivalents. Accordingly, the producing process of HANSOH does not fall within the scope of Patent 3, either.

Regarding the issue of whether the appraisal report produced for the case is admissible

The new drug application documents relating to the drug involved in the case submitted by the appellee HANSOH is consistent with the relevant producing process surveyed by Jiangsu Drug Administration and State Drug Administration. The producing process in the documents is thus admissible.

As for the experimental report provided by experts entrusted by ELI during appealing, it is not admissible because: the experimental method, feeding amount, and testing method and steps employed in the report differ from the technical features described in the process provided by the appellee, and thus the report does not suffice to overthrow the respective results concerning the disputed producing process of HANSON. 

The appellant alleges that the conclusion in the appraisal report, i.e., merely changing the temperature from 19̊̊̊˚C to 23˚C results in the substantive change of the methylsulfonate 10α/10β ratio, is wrong. Because the reaction route described in Patent 1 involves the ratio of α ribose and β ribose ratio, i.e., α>β, there is the possibility that the corresponding α/β ratio at 19℃ in Patent 1 changes abruptly at 23℃ in the disputed producing process.

The appraisal was made on the basis of deduction. If such deduction has basis of facts, the appraisal obtained from the deduction is admissible.

Regarding the issue of whether HANSOH should bear burden of proof on the ratio of 10α/10β

The product further produced by the starting materials methylsulfonate 10α/10β in the ninth step of reaction of HANSOH’s process is not the  nucleoside rich in β anomer disclosed in the patent of ELI. Moreover, during appeal, both parties agreed that it is not the case that only nucleoside rich in β anomer can be used to obtain gemcitabine hydrochloride. According to Article 60(2) of the Patent Law that took effect on Jan. 1, 1993, the burden of proof with regard to synthesis step shall be borne by ELI. The claim of ELI that HANSOH shall bear the burden of proof on the methylsulfonate 10α/10β ratio is not accepted.

Conclusion:

The producing process of HANSOH does not use the starting materials in claim 1 of Patent 2, and thus does not fall within the protection scope of Patent 2. Those used in the de-protection of the producing process of HANSOH belongs to prior art, and the prior art shall not be incorporated into the doctrine of equivalents. Accordingly, the producing process of HANSOH does not fall within the protection scope of Patent 3.

The procedure and conclusion of the appraisal report all comply with the law and thus is admissible for the final decision.

Because the ratio of the starting materials methylsulfonate 10α/10β in the ninth step of the reaction of HANSOH’s process is not related to the same product or new product obtained directly from the producing process of the patent of ELI, HANSOH is not the one bearing the burden of proof on the proportion of starting materials methylsulfonate 10α/10β.

In view of the above, the argument provided by the appellant ELI’ during appeal does not have grounds.