Analysis: First compulsory licence ordered in Russia

Maxim Sobolev of Rouse examines a compulsory licence dispute in which a dependent patent was deemed to be an important technical achievement and have significant economic advantages over the first patent
In Russia a compulsory licence for a patent can be granted in two cases: if an invention is not used or insufficiently used, or if there is a second dependent patent, which one cannot use without infringing the first patent. These two provisions have long been in the Russian legislation. However, until recently there had not been any real cases where a compulsory licence was granted in Russia.
The pharmaceutical company Celgene owns the Russian patent RU2595250 for lenalidomide, the active substance of the drug Revlimid which is used to treat multiple myeloma. The Russian pharmaceutical company Nativa, producer of lenalidomide-nativ (a generic version of Revlimid), offered Celgene the opportunity to conclude a licence agreement for the patent. Celgene did not respond. Nativa then filed a claim against Celgene seeking a compulsory licence on the basis that Oleg Rostislavovich Mikhailov owns the dependent patent RU2616976 for a crystalline modification of lenalidomide.

In accordance with Russian legislation, for a compulsory licence to be granted, the owner of a dependent patent should prove that his invention is an important technical achievement and has significant economic advantages over the invention of the first patent.

Expert assessment and court order

The court ordered an expert assessment. As both parties agreed that RU2616976 was a dependent patent, the expert had to answer only one question: “Is the invention of the patent RU2616976 an important technical achievement in comparison with the invention of the patent RU2595250?”
The expert stated that it was. The use of the crystalline modification of lenalidomide is advantageous in terms of preparation and encapsulation of the final product. The yield of Nativa’s product is almost 40% higher than Celgene’s. Additionally, Nativa’s product has a better powder distribution in a capsule than Celgene’s. The step of grinding and sieving particles, which is very dangerous because of the harmful dust, is excluded from the process. Lyophilization, which Nativa uses, allows complete purification of the active substance of the organic solvent dichloromethane.
Furthermore, the court found that the invention of RU2616976 had significant economic advantages over the invention of RU2595250. Nativa’s product is more than 30% cheaper than Celgene’s, which is mainly due to the exclusion of grinding and sieving from the preparation process.
The court ordered Celgene to give a non-exclusive licence to Mikhailov, the royalty being 30% of the revenue. Mikhailov has already assigned his patent to Nativa. Nativa will therefore be able to keep producing the drug lenalidomide-nativ legally.

Assessing ‘important technical achievement’

Perhaps, the main question regarding this court decision is how to determine whether or not an invention is “an important technical achievement”. There is no criteria for this in Russian legislation, and an expert opinion remains the only criteria. Yet the question “is the invention an important technical achievement?” appears to be beyond typical technical questions the court usually poses to experts, since it involves a considerable degree of subjectivity.
As they are usually scientists, experts are, perhaps, not inclined to subjective assessments. For instance, an expert could easily determine if the compound 3-(4-amino-1-oxo-1,3-dihidro-2H-isoindol-2-yl)-piperidin-2,6-dion (lenalidomide) cited in the claims of RU2616976 falls within the general chemical formula of RU2595250 (that is whether RU2616976 is dependent on RU2595250 or not), but it is certainly more challenging for them to assess the importance of these two inventions.

The public interest

In its decision, the court explained that a compulsory licence is granted on the grounds of economic development, country security or when it is socially significant. The inventions of Mikhailov and Celgene’s patents are used to treat severe diseases, including oncological ones. As such, Nativa’s product should provide a diversity in approaches to the treatment of such diseases and, most importantly, increase its effectiveness. Ultimately, this is socially significant.  
Given that the Russian government is subject to economic sanctions and is particularly focused on supporting Russian pharmaceutical manufacturers, it is no surprise that the court found that the Russian invention of the patent RU2616976 was an important technical achievement in comparison with the foreign one. It is clear that Russia is interested in having cheaper, more affordable drugs.

Practical points

Although the court’s decision can be appealed, applicants seeking patent protection in Russia should take into account that the granting of compulsory licences in Russia is increasingly becoming a reality. This does not mean that applicants should abandon their plans; they should simply use all possible legal instruments to protect their interests, including filing more applications in Russia and, if appropriate, oppositions against granted patents.

: Maxim Sobolev is a Russian patent and trade mark attorney at Rouse