Patent law developments in the Philippines

By Richmond K Lee, ACCRA Law Offices
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In a case of first impression, the Philippine Supreme Court invoked public interest considerations as one of the grounds for denying a petition to revive an abandoned patent application. In the 2016 case of E I Dupont de Nemours and Co v Director General Emma C Francisco, the court denied DuPont’s petition to revive its patent application No. 35526 covering losartan, an angiotensin receptor blocker used in the treatment of hypertension. According to the court, public interest would be prejudiced if, despite DuPont’s inexcusable negligence, the petition were granted.

Richmond-K-Lee-Partner-at-ACCRA-Law-Offices-in-Manila
Richmond K Lee
Partner at ACCRA Law Offices
in Manila
Tel: +632 8308000
Email: rklee@accralaw.com

As a background, DuPont’s counsel sent a letter to the Intellectual Property Office of the Philippines (IPOPHL) on 19 December 2000, requesting it to issue an office action on DuPont’s patent application, which was filed in 1987.

On 20 January 2002, the IPOPHL issued an office action, marked as paper No. 2, informing DuPont that on 19 July 1988, the first office action was mailed to DuPont’s former counsel. Because the former counsel failed to respond to the office action, the application was declared abandoned as of 20 September 1988.

On 30 May 2002, 13 years after the date of abandonment, DuPont filed a petition for revival. DuPont claimed that its former counsel had died, and it was neither aware of his death, nor of the abandonment of the application. DuPont also took the position that the four-month period to revive a patent application should be counted from actual notice, which it claimed was on 30 January 2002, the date of paper No. 2. Thus, its petition for revival was filed in a timely manner.

The Director of Patents denied the petition for revival for having been filed out of time. According to the director, the mistakes of counsel bind the client, regardless of the degree of negligence committed by the former counsel. The decision was sustained by the Director-General of the IPOPHL. The Court of Appeals initially reversed the decision, ruling that there was sufficient justification to relax the application of the rules, and afford DuPont some relief from the gross negligence committed by its former counsel.

In the interim, Therapharma, an affiliate company of United Laboratories, the largest pharmaceutical company in the Asean region, appeared as an intervenor in the proceedings and filed a motion to reconsider the decision. It argued that, as a holder of a certificate of product registration for losartan, issued by the Philippine Food and Drug Administration (FDA), the decision directly affects its “vested” rights to sell its own generic losartan product.

Therapharma contended that prior to filing an application with the FDA, it conducted a patent clearance search and found no existing patent for losartan, since DuPont’s patent application was considered abandoned by the IPOPHL. It also alleged that sometime in 2003-2004, there was an exchange of correspondence between Therapharma and Merck, and Merck informed Therapharma that it was pursuing a patent on the losartan product, and that it would pursue any legal action necessary to protect its product.

After considering the evidence presented by Therapharma, the Court of Appeals reversed its decision. It ruled that not only public interest would be prejudiced by the revival of DuPont’s patent application, but that Therapharma’s interest would likewise be prejudiced as it had already invested more than PHP20 million (US$375,000) to develop its own losartan product, and had acted in good faith when it marketed its product.

The Supreme Court sustained the decision of the Court of Appeals. It held that DuPont committed inexcusable negligence in the prosecution of its patent application.

First, under the rules, DuPont has four months from the date of abandonment to revive a patent application. In this case, DuPont filed its petition 13 years after the date of abandonment. The rules do not provide any exceptions that could extend this four-month period to 13 years.

Second, DuPont’s former counsel was undoubtedly negligent in failing to respond to the office action sent on 19 July 1988. Because of his negligence, DuPont’s patent application was declared abandoned. He was again negligent when he failed to revive the abandoned application within four months from the date of abandonment.

Third, DuPont’s failure to be informed of the abandonment of its patent application was caused by its own lack of prudence when it failed to immediately apprise itself of the status of its patent application upon learning of the death of its former counsel.

In summation, the court ruled that it would be prejudicial to the public interest if, notwithstanding the negligent acts shown by DuPont and its former counsel, it were allowed to revive its patent application. The public interest referred to by the court is Filipinos’ access to affordable medicine.

The court quoted a World Health Organization study that found that 25% of adults aged 21 years and older in the Philippines suffer from high blood pressure. Hypertension is considered a major risk factor for cardiovascular diseases such as heart disease, stroke, kidney failure and blindness. The court then took into account Therapharma’s evidence that the introduction of its losartan product created market competition that reduced prices and increased sales and, consequently, accessibility of losartan to more hypertensive Filipino patients.

The court finally noted that, even without a pending patent application, DuPont (through Merck) was already threatening to pursue legal action against Therapharma if it continued to develop and market its losartan products. For the protection of public interest, the court ruled, DuPont’s patent application should be considered forfeit.

Although public interest considerations are found in laws, treaties and conventions governing intellectual property rights, it is the first time that the Philippine Supreme Court took it into account in determining whether an abandoned patent application should be revived.

While a comparison of the old patent law and the current one was mentioned only in passing in the decision, the court must also have taken into account that DuPont’s application was filed under the old patent law, which grants a term of 17 years from the issuance of the patent (compared to the 20-year term under the current law, counted from the date of filing). Had the Court allowed DuPont to revive its application, it would have been granted an exclusive right over losartan for at least 17 years from when a patent is eventually issued, even if its application was filed more than 30 years ago.

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