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Pharmaceutical Litigation: BRPTO, BRFDA, and Infringers Ricardo Nunes Partner at Licks Attorneys BRAZILIAN HIGH-TECH LITIGATION: Law, Business & Policy The George Washington University Law School

Pharmaceutical Litigation: BRPTO, BRFDA, and Infringers Ricardo Nunes, Partner at Licks Attorneys Thursday, May 12 – Washington, DC

1. Overcoming the backlog problem

It is complicated... 5

BRPTO Backlog Judicially-induced fast track examination • Lawsuit at federal courts to expedite examination • Courts have been ruling against the BRPTO – decisions ordering the BRPTO to examine specific applications within 60 days • Some preliminary injunctions were also granted • Out of 32 cases, 26 favorable decisions, 4 unfavorable ones and 2 pending cases • Decisions from both lower and appellate courts 6

2. Pharmaceutical litigation in Brazil

Litigating in Brazil • Civil law system , usually no binding precedents • (In)validity lawsuits must be filed against the BRPTO before federal district courts , infringement lawsuits are filed before state trial courts (bifurcated system) • Some judges have no expertise in patent law • Court-appointed expert examination is key 8

Litigating in Brazil • Preliminary ex parte injunctive relief widely available • Plaintiff must present enough evidence to establish • likelihood of succeeding on the merits (presenting legal and technical opinions is key) • irreparable harm (or harm that is hard to repair) if injunction is not granted • injunction is not irreversible • Lower standard in comparison to the U.S. (FRCP, Rule #65): no need to give notice to adverse party, no need to give security or post a bond, balance of hardships and the public interest normally not an issue • Judge may request plaintiff to post a bond 9

Litigating against the BRPTO • Decisions from federal agencies reviewed by special courts. Government decisions must rely on statutory provisions, and are subject to judicial review . Government has no discretion with regard to the examination of patent applications • Government is by far the most frequent defendant in Brazil. So far, over 7,000 lawsuits filed against the BRPTO. There is no political harm in suing the government • Federal judges do not hesitate to rule against the government. Judges are not elected, are appointed for life and have financial independence. Courts pay no deferenceto decisions fromthe BRPTO , review is obtainedmore often than not • Overcoming unlawful rejections or limitations on the amendment of claims after request for examination is made. Invalidity lawsuits are also possible • Invaliditylawsuits filed by the BRPTO against mailboxpatents 10

Leading cases • 2010: Cephalon v. BRPTO – Lawsuit filed before the Federal Court of Rio de Janeiro seeking a declaratory judgement of validity of the patent covering Vigil (modafinil). Favorable decision on the merits and leading case establishing the criteria on nonobviousness • 2012: Schering Corp. v. BRPTO – First lawsuit against BRPTO’s rejection of pipeline patent application for matters claimed in a previous PCT designating Brazil (covering Noxafil - posaconazole). The only firm in Brazil with success on this matter 11

Leading cases • 2014: Bbraun v. BRPTO – Lawsuit filed before the Federal Court of Rio de Janeiro seeking a declaratory judgement of validity of a patent covering a medical device (catheter) • 2016: Merck v. BRPTO – Lawsuit filed before the Federal Court of Rio de Janero against the rejection for obviousness of a patent application covering Invanz (ertapenem). Favorable decision on the merits issued on April 6 (last Friday), declaring the invention meets the patentabilityrequirements 12

Litigating against BRFDA • Lawsuits seeking to restrain BRFDA from granting or invalidating Gx marketing approvals , based on Food and Drug law (non-compliance with safety and efficacy requirements) and unfair competition • Lawsuits to circumvent backlog • Lawsuits to overcome rejection of prior approval to patent application based on the alleged non-compliance with patentability requirements 13

Overcoming denial of prior approval • Section 229-C of the Patent Statute : “ The grant of patents to pharmaceutical products and processes will depend on the prior approval of the BRFDA ” – no guidance on what kind of analysis the BRFDA should perform • Two legal opinions issued by the General Attorney’s Office saying the BRFDA has no statutory authority to examine patentability requirements , but only issues related to public health... 14

Overcoming denial of prior approval • BRFDA’s internal rule from 2013: “ The patent application shall be considered against public health when: I - The pharmaceutical product or process… presents risk to health ; or II - The patent application of pharmaceutical product or process is of interest to the public policies of access to medicines and pharmaceutical assistance of the Public Healthcare System (SUS) and does not meet patentability requirements and further criteria established by the Patent Statute ” • We are beating the BRFDA ( 100% success so far). Class action also filed 15

Leading cases • 2002: Sanofi-Aventis v. Libra and BRFDA – Complaint filed before the Federal Court of Rio Grande do Sul seeking to invalidate Libra`s MA for Gx of Sanofi`s Taxotere (docexatel). Leading case regarding the possibility of judicially invalidating a MA granted by BRFDA due to non-compliance with the Food and Drug legislation. After more than 10 years of litigation, Sanofi prevailed before Superior Court of Justice (highest court of matters related to Federal Law) • 2009: Genzyme v. EMS and BRFDA – Complaint filed before the Federal Court of Brasília seeking to invalidate EMS’s MA for a Gx of Genzyme’s Renagel (sevelamer hydrochloride). Leading case in which a company had full access to the Gx dossier. No final decision was issued yet. However, since 2012 the Ministry of Health have ceased to acquire EMS’ product 16

Leading cases • 2009: Schering Plough v. Zodiac and BRFDA – Complaint filed before the Federal Court of Brasília seeking to invalidate Zodiac’s MA for a Gx of Schering’s Caelyx (pegylated liposomal doxorubicin). Leading case discussing BRFDA’s technical orientation #46, which establishes a list of products that cannot prove its equivalence to the innovator drug through pharmaceutical equivalence and bioavailability studies.No final decision was issued yet. • 2014 – AstraZeneca v. EMS and BRFDA – Complaint filed before the Federal Court of Brasília seeking to prevent BRFDA from granting a MA to EMS’s for a Gx of Astrazeneca’s Selozok (metoprolol succinate). Complaint was filed after we identified EMS`s MA applications. No final decision was issued yet. However, until this moment BRFDA has not approved EMS’s products 17

Enforcing patent protection • Infringement cases decided by state trial courts • Declaratory non-infringement lawsuits also available • Paris Convention grants to foreigners the same level of protection afforded to local companies. No bias against foreign companies • Injunction widely available (pre-litigation is key), and may include search and seizure of products and accounting books • NPEs are not an issue so far. May be hard to show potential to suffer irreparable harm and therefore obtain an injunction 18

Enforcing patent protection • Compensation for loss profits (your losses or infringer`s profits or reasonable royalties) + actual / consequential damages + moral damages (sometimes awarded as de facto punitive damages ) • Procedural measures make it hard to collect damages • No incentives to settle , most cases go to trial • Sham litigation (antitrust) and IP misuse defenses 19

Leading cases • 2004: Eli Lilly v. Pfizer – First declaratory non-infringement lawsuit ever filed in Brazil. We represented Eli Lilly against Pfizer and obtained and ex parte injunction authorizing the sales of Cialis in the country, followed by favorable decisions on the merits • 2010: Germed v. Merck – We represented Merck on a declaratory non- infringement lawsuit filed by Germed (local Gx company) regarding patent covering Cosopt(dorzolamide/timolol). We prevailed and also obtained a decision stating that Germed was indeed infringing Merck’s patent. Germed was not able to launch its copy in the market 20

Competitive intelligence through market monitoring to identify possible new Gx • Monitoringof bioequivalenceand bioavailabilitystudies • Monitoringof Gx MA applications • Monitoringtrademark applicationsfor similar products • Monitoring of API importation (amount imported, port of product entry, value of the importation,country from where the product was exported) 21

Thank you! Ricardo Nunes, Partner at Licks Attorneys ricardo.nunes@lickslegal.com T +55-21-3550-3704