CASE IN WHICH THE APPLICABILITY OF UNFAIR COMPETITION (ARTICLE 2, PARAGRAPH 1, ITEM 21 OF THE UNFAIR COMPETITION PREVENTION ACT) WAS CHALLENGED IN RELATION TO PATENT LINKAGE

1. Overview of the incident
      This case involved the appellant (creditor in the original instance: Samsung Bioepis Company) filing a petition for a provisional injunction to stop the appellee (debtor in the original instance: Regeneron Pharmaceuticals Inc.), the patent holder of the patents in question (Patent No. 1: Patent No. 6855480 and Patent No. 2: Patent No. 7233754), from notifying the Ministry of Health, Labour and Welfare (MHLW) and the Pharmaceuticals and Medical Devices Agency (PMDA; hereinafter, collectively with MHLW, the “MHLW, etc.”) that the appellant’s manufacturing and sales of the creditor’s products, which are biosimilars of the debtor’s products, infringe the patents in question. The appellant’s notification of such infringement constitutes unfair competition as defined in Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act (UCPA). The right to seek an injunction against such notification under Article 3, Paragraph 1 of the UCPA is a right to be preserved.
      The original court dismissed the appellant’s petition, finding that the information provided by the appellee to the MHLW, etc. was reasonable in light of the purpose of providing pharmaceutical patent information under the patent linkage system. Dissatisfied with this dismissal, the appellant filed this appeal.

2. Summary of the original ruling
      The original court held that the debtor, who holds the patent right in question, notified the MHLW, etc. that the creditor’s manufacturing and sales of the creditor’s product, a biosimilar of the debtor’s product, by listing “age-related macular degeneration with subfoveal choroidal neovascularization” in the package insert would infringe the patent right in question. Therefore, the illegality was precluded, and the infringement could not be considered unfair competition under Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act. Furthermore, the court held that there was no risk of the debtor’s unfair competition infringing the creditor’s business interests, nor was there any need for preservation. Consequently, the original court dismissed the creditor’s petition. The original creditor appealed to the Intellectual Property High Court.

3. The patented invention
(1) Patent Right 1
      Claim 1 of the scope of claims of Patent Right 1 is as follows:

[Claim 1]
1. Use of a vascular endothelial growth factor (VEGF) inhibitor in the manufacture of a medicament for treating a patient with macular degeneration, wherein the patient has previously been administered a VEGF inhibitor for about one year, and the patient has one or more genetic variants determined by performing or having a genotypic assay on a DNA sample obtained from the patient, wherein the one or more genetic variants are single nucleotide polymorphisms selected from the group consisting of rs2056688, rs5962084, rs5962087, rs5915722, rs5962095, rs2106124, rs1879796, rs12148845, rs12148100, rs17482885, and rs17629019.

It should be noted that claims 2 to 9 are all dependent on claim 1.

(2) Patent Right 2
      Claim 1 of the scope of claims of Patent Right 2 is as follows:

[Claim 1]
1. Use of aflibercept in the manufacture of a medicament for the treatment of a patient with macular degeneration, wherein the patient has previously been administered aflibercept for about one year, and the patient has one or more single nucleotide polymorphisms selected from the group consisting of rs2056688, rs5962084, rs5962087, rs5915722, rs5962095, rs2106124, rs1879796, rs12148845, rs12148100, rs17482885, and rs17629019.

4. Manufacturing, sales, etc. of the debtor’s (appellee’s) products
      The debtor (appellee) began selling “Eylea Intravitreal Injection 40 mg/mL” in November 2012.
      The package insert for the debtor’s product lists the following as the product’s efficacy:

   – Efficacy or effect ○ Age-related macular degeneration with subfoveal choroidal neovascularization

5. Intellectual Property High Court Decision
(1) Article 2, Paragraph 1, Item 21 of the Unfair Competition Act
      The Unfair Competition Prevention Act is based on the premise of a trading society in which free competition takes place under the guarantee of freedom of business, and aims to prevent unfair competition when competition between businesses engaged in economic activities goes beyond the scope of free competition and is abusive, or when it disrupts the fair competitive order of society as a whole. In light of this, the court determined that the “business credibility” referred to in Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act can be interpreted as a social evaluation of the economic value of a business in a trading society, which may influence the decision of whether to do business with that business.
      In contrast, approval for the manufacture and sale of pharmaceuticals is an administrative disposition made by the Minister of Health, Labour and Welfare based on the authority and responsibility granted by the Pharmaceuticals and Medical Devices Act as a regulation necessary to ensure the quality, efficacy and safety of pharmaceuticals, etc., and to prevent the occurrence and spread of health and hygiene hazards resulting from their use, and is clearly different in nature from transactions in a trading society where free competition takes place.
      In addition, when the MHLW, etc. are reviewing the approval of generic drugs (including biosimilars), they will use the following procedures to check whether there are any patent conflicts between already approved original drugs (including original biopharmaceuticals) and generic drugs.
      Therefore, the MHLW, etc. requires patent holders of substance patents or use patents related to the active ingredients of original drugs (original drug patent holders, etc.) to submit Pharmaceutical Patent Information Reports to the PMDA. Furthermore, the MHLW, etc. requests supplementary explanations from original drug patent holders, as necessary, during specific approval review processes. These are information gathering activities prior to administrative dispositions, which are a prerequisite for the Minister of Health, Labour and Welfare to exercise his authority appropriately. This does not appear to suggest that the MHLW, etc. intends to form a social evaluation of the economic value of generic drug applicants. Furthermore, in the approval review of generic drugs, the Minister of Health, Labour and Welfare makes decisions based on his own authority and responsibility, taking into consideration not only the information provided by original drug patent holders, but also all other factors. Furthermore, since information provided by original drug patent holders, etc. is not publicly disclosed, it is not possible to say that there is a risk that such information may leak into the market, lowering the social evaluation of applicants’ economic value in the trading community.
      Based on the above, it is reasonable to interpret that when a patent holder of a brand-name drug provides information to the MHLW, etc. that the manufacturing and sales of generic drugs infringe on the patent right, this does not constitute “the notification of false facts that harm the business reputation of another person” as defined in Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act.
      Therefore, the court ruled that the appellee’s actions did not constitute unfair competition under Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act, and therefore the appellant could not claim an injunction under Article 3, Paragraph 1 of the same Act.

(2) Notification of patent infringement
      It should be said that the Unfair Competition Prevention Act, which is intended to protect fair competition in the trading community, is not intended to extend to information gathering procedures prior to administrative action. Furthermore, it does not appear that the MHLW, etc. are expected to form a social evaluation of the economic value of generic drug applicants in the process of reviewing generic drug approvals. Furthermore, given that information provided by patent holders of original drugs to the MHLW, etc. is not to be made public, it cannot be said that the provision of such information would lower the social evaluation of the applicant’s economic value, and therefore the appellant’s argument cannot be accepted.

6. Comments
      In this case, the patent holder, a brand-name drug manufacturer, notified the MHLW, etc. that the sale of a biosimilar manufactured by a generic drug manufacturer, which listed “age-related macular degeneration with subfoveal choroidal neovascularization” as an indication in the package insert, constituted patent infringement. In response, the generic drug manufacturer sued the brand-name drug manufacturer, alleging that the notification by the brand-name drug manufacturer to the MHLW, etc. constituted unfair competition under Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act.
      This ruling stated that under the patent linkage system, approval of the manufacture and sale of pharmaceuticals is an administrative disposition made by the Minister of Health, Labour and Welfare based on the authority and responsibility granted to him by the Pharmaceuticals and Medical Devices Act. The MHLW, etc. requests patent holders to submit a Pharmaceutical Patent Information Report to the PMDA to confirm whether there are any patent conflicts between approved original and generic drugs. Furthermore, requesting supplementary explanations from the original drug patent holder, if necessary, constitutes information gathering prior to administrative disposition. This is not expected to affect the social evaluation of the generic drug applicant’s economic value. Furthermore, it cannot be said that such information could be disseminated to the market and thereby lower the social evaluation of the applicant’s economic value in the trading community. Therefore, it is reasonable to interpret the provision of information suggesting that the manufacture and sale of generic drugs infringes a patent as not “making false statements that harm the business reputation of another person” under Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act.
      Although there is an opinion that the decision on whether or not there is patent infringement of pharmaceuticals should be decided by the courts, which are the judicial branch, rather than by the MHLW, which is the administrative branch, this case is not about whether or not there is patent infringement, but about the validity of the notice of patent infringement. Furthermore, the Unfair Competition Prevention Act is intended to protect the order of fair competition in the trading society, and it can be said that the decision not to extend the provisions of the Unfair Competition Prevention Act to the information gathering procedures prior to administrative action is a reasonable judgment from the perspective of the smooth implementation of administrative procedures. In particular, the fact that the notification of patent infringement in administrative procedures falls outside the scope of Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act is important for future administrative procedure practices.
      Meanwhile, regarding the patent linkage system, a similar unfair competition case (Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act) was disputed between the debtor’s affiliate and the creditor in the Tokyo District Court ruling of October 28, 2024 (Reiwa 6 (Yo ) No. 30029 ). In this case, an affiliated company publicly notified the MHLW that its act of manufacturing and selling a biosimilar to a pharmaceutical product infringed the affiliated company’s patent rights, and sought a provisional injunction to halt the rights to be preserved, claiming that this constituted unfair competition as defined in Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act. However, the court ruled that the act of the affiliated company providing information to the MHLW that the creditor’s product infringed the affiliated company’s patent was not immediately illegal. However, the court also ruled that if there are special circumstances that make it deemed extremely inappropriate in light of the purpose of patent linkage for a patent holder of a brand-name drug to state that there is a patent conflict between the patent for the brand-name drug and the patent for a generic drug, it is appropriate to interpret this as unfair competition as set forth in Article 2, Paragraph 1, Item 21 of the Unfair Competition Prevention Act, as it constitutes the disclosure of false facts that harm the business reputation of an applicant for manufacturing and marketing approval for a competing generic drug.
      From these findings, providing information that the manufacturing, sale, etc. of generic drugs infringes patent rights does not in itself violate the Unfair Competition Prevention Act, but it can be said that the content must be fully in line with the purpose and objective of patent linkage, and careful consideration will be necessary.

https://www.courts.go.jp/asset s /hanrei/hanrei-pdf-94618.pdf