Yasmin case sends good signal to patentees
Yasmin* is the trade name for drospirenone and ethinyl estradiol, used mainly as an oral contraceptive.
It is also indicated in the treatment of acne. According to reports in Bloomberg, Yasmin was the number four oral contraceptive in the US during 2011. Bayer AG’s contraceptives generated $1.58 billion in sales in 2010—a sizable market by any measure.
Internationally, and particularly in the US, Yasmin has been the subject matter of class action litigation. It has also been the subject of patent litigation in South Africa. An action for the infringement of South African patent 2004/4083 was instituted against Pharma Dynamics in response to approval by the Medicines Control Council to market a competing generic product, Ruby, in South Africa.
In response to the action, Pharma Dynamics counterclaimed for the revocation of the patent held by Bayer AG as patentee. The counterclaim for revocation precipitated an application to amend the claims of the patent by way of deletion of all claims, bar claim 1, coupled with an interim interdict (injunction) pending the outcome of final relief to be determined in due course.
Matters came to a head on November 14, 2011, when judgment in the application for amendment and interdict was handed down.
Pharma Dynamics, as respondents to the application, opposed the relief sought on myriad grounds including: material false representation in the prescribed declaration lodged in respect of the patent, lack of novelty, lack of inventive step and continuing invalidity after amendment.
“THE ACTING COMMISSIONER NOTED THAT THE FACTS WERE NOT SUCH SO AS TO DISALLOW ITS EXERCISING ITS DISCRETION TO ALLOW THE AMENDMENT OF THE PATENT.”
In coming to its decision, the acting commissioner of patents upheld the prior decision in Deton Engineering (Pty) Ltd and another v JP McKelvey and others 1997 BIP 113 (CP). In following the reasoning in Deton, the acting commissioner noted that the facts were not such so as to disallow its exercising its discretion to allow the amendment of the patent, and to leave the issues raised in respect of revocation of the patent to be properly aired and decided upon in revocation proceedings to be heard at a later date.
The court accordingly granted the amendment and the commissioner then turned to consider the merits of the request for an injunction.
In this matter, the arguments in favour of and against the validity of the patent were equally weighed based on the evidence of diametrically opposed experts for both sides of the argument.
The grant or refusal of the injunction thus turned on the commissioner’s consideration of the balance of convenience arguments. The patentee argued that it would not be able to prove its damages against the respondent as it would be “virtually impossible to determine what percentage of a decline in its sales in the marketing of Yasmin would be caused by the concurrent sale of Ruby in the market”.
On the other hand, should the injunction be granted incorrectly, the respondent’s damages would be easily quantifiable. The commissioner thus found in favour of the patentee in relation to the injunction as well.
It would appear, then, that in the South African context Bayer has done enough to maintain for the time being its market share of the Yasmin product and that of its local licensee.
Given that there is still some way to go in relation to the duration of the patent, the matter may well proceed to trial for final adjudication. In the meantime, the outcome of the application for amendment and interim interdict, which we believe to be a good one, should serve as a reminder to foreign patentees that South African courts are issuing decisions in patent matters that ought to attract a greater amount of foreign interest in South Africa as a patent filing destination.
