Drug patents are one of the most economically valuable types of patents. In recent years, the number of patent infringement disputes has increased significantly. If the enterprise infringes the patents of others, it will not only increase the financial burden of the compensation for patent infringement, but also have a negative impact on the corporate image. Whether pharmaceutical companies improve their preparation processes or produce new drugs, they should conduct thorough investigations in advance, and analyze whether there are patents related to their products and production methods. If there are related patents, it is necessary to further determine the protection scope of the patents to know whether the companies infringe the patent rights of others. As for the preparation process of drugs, because the defendant is responsible for the burden of proof in the relevant patent infringement disputes, the pharmaceutical manufacturing enterprises must take certain measures to prevent the adverse consequences caused by the insufficient evidence.

On July 25, 2013, Eli Lilly and Company (next called “Lilly”) claimed that they had a method patent No 91103346.7 and this patent was about the preparation method of the new drug Olanzapine. Watson Pharmaceuticals (next called “Watson”) used the preparation method that felt within the protection scope of related patent to produce the drug Olanzapine and sold in the market. Lilly filed a lawsuit in the Jiangsu High Court and hoped that Watson compensated for its economic loss of RMB 150 million.

1. The protection scope of the patent rights involved

The claim 1 of the patent involved was a method claim. The claim was open-ended, in which only the tricyclic reduction and N-methyl piperazine participating in the substitution reaction and the substituted group were defined. The protection scope covered all preparation methods for the formation of Olanzapine by the substitution reaction of the tricyclic reduction product with N-methyl piperazine at the Q group. Regardless of the reaction starting materials, and reaction conditions, they were all within the scope of the protection. To determine the preparation process of Watson whether fall within the protection scope, the key lied in the comparison of the reaction routes of the two technical schemes, wherein the specific reaction starting materials, solvents, reaction conditions, etc. were not included.

2. The Olanzapine preparation process used by Watson

In this case, the parties did not disagree with Olanzapine as the new product in the patent law. So Watson should bear the burden of proof for its Olanzapine preparation process different from the patent method involved. Specifically, Watson should provide evidence that the actual Olanzapine preparation process reaction route had not fallen within the protection scope. Watson advocated that it had been using the supplemental filing process from the State Food and Drug Administration in 2008 to produce Olanzapine since 2003. And Watson submitted its 2003 and 2008 Olanzapine batch production records, 2003, 2007 and 2013 production regulations, “drug supplement application approval” and other evidence to prove its actual use of Olanzapine preparation process.

The Supreme Court held that Watson could produce evidence that Olanzapine was produced using the 2008 supplemental filling process during the period from 2003 to the maturity date of the patent. First of all, Watson filed a registration application for Olanzapine supplementation with the State Food and Drug Administration in 2008, and clearly stated the reaction route of its Olanzapine preparation process in its “Registration Information for Olanzapine Drug and Supplement Application”. The “Technical Appraisal Report” also considered in its conclusion that “the production process of Olanzapine filed by Watson in 2008 to the China Food and Drug Administration is feasible”. Therefore, in the absence of other evidence to the contrary, it should be presumed that Watson’s 2008 supplemental filling process was the Olanzapine preparation process used after obtaining the “Approval for Drug Replenishment”. Secondly, from the research and development stage to the actual production stage, the long-term technical accumulation process was usually to optimize the adjustment of reaction conditions and operation details for the defects found in the actual production while keeping the basic reaction route stable. It could be seen that Watson had owned the same Olanzapine preparation process as its 2008 supplemental record process in 1999. It was unlikely that Watson would produce Olanzapine using other preparative processes with completely different reaction routes before the 2008 supplemental filling process. Finally, the China Food and Drug Administration issued a “Approval of Drug Additions” to Watson on September 8, 2010, stating: “The changed production process is based on the original synthetic route changing the original synthetic route. The adjustment is solvents and reagents used in the process”. That is, the China Food and Drug Administration confirmed that Watson’s 2008 supplemental filling process was the same as its previous preparation process.

Basically, the Supreme People’s Court compared the reaction route of Watson and the method of the involved patent, and believed that the differences between the two were the reaction steps, the key intermediates and the corresponding technical characteristics. Besides, the technical means were different and the technical effects achieved were different. So they were not the equivalent features. Therefore, the preparation process of Olanzapine of Watson did not fall within the protection scope of the involved patent.

The case is a guiding case issued by the Supreme People’s Court. It reflects the difficulties and hot spots of patent infringement disputes in drug preparation process. And it plays a guiding role for the trial of patent infringement disputes in drug preparation process at all levels of courts across the country. In the absence of other evidence to the contrary, it shall be presumed that the filing process of the alleged infringing drug in the drug regulatory department is its actual preparation process. If there is evidence that the registration process of the alleged infringed drug is untrue, it shall examine the technical source, production regulations, batch production records, and determine the actual preparation process of the infringed drug.

For the drug manufacturers, if they are sued by the patentee of the drug preparation method, the filing process in the State Food and Drug Administration may be most critical evidence material. Therefore, to avoid patent infringement dispute, it is necessary not only to search and analysis the related patents, but also to report the drug preparation process to the drug regulatory department. In the production process, it is necessary to manage and file the batch production records, production procedures and drug replenishment application approval documents timely. Documents about the preparation process of drugs from the State Food and Drug Administration shall be kept properly. These documents may be helpful evidence that the preparation process of the company is different from the patented method.