istock-874274796-anyaberkut
25 September 2018Patents

AIPPI 2018: Novartis’s IP protection strategy and warning letters in China

Prevention is better than cure when it comes to IP protection, according to Leticia Leon, regional legal head for Latin America and Canada at pharmaceutical company Novartis.

Leon was speaking yesterday, September 24, during the panel session “Alternatives for enforcement: criminal and administrative proceedings” at the 2018 AIPPI World Congress in Cancún, Mexico.

“Do we consider that criminal actions are enough? Being honest, we’re more focused on prevention, and for this we need access to information and [for countries] to have transparent laws … Our experience is that when we’re able to identify activities in advance, we will have more opportunities to stop them,” said Leon.

As part of these preventive measures, Novartis is working with customs in Mexico to stop the import of infringing goods.

Leon noted that there are many types of drug counterfeiting: no active ingredient, the wrong ingredients or dosage, dangerous substances, and mis-labelled goods.

Counterfeiting is so serious for Novartis, not only because of its financial impact and the benefit to criminal organisations, but because fake drugs can seriously damage the health of patients.

“It’s not only a crime, it’s a serious crime,” she added. “While technology is a very valuable tool, it’s also a challenge because sales done through this medium are allowing for a higher participation of criminals.”

Looking at enforcement in Mexico, José Alejandro Luna Fandiño, partner at Olivares, explained that in order to claim damages, you need to exhaust the appeals process first, which can take more than ten years for patents because of the need for technical evidence.

However, it’s relatively simple to obtain a preliminary injunction, said Fandiño.

He added: “It’s easy to get injunctions, but it’s also easy to lift injunctions, and that’s one of the main downsides in the system. Our law has established that [a] vendor is entitled to lift injunctions by posting a counter-bond.”

This provision is currently being challenged before the Mexican Supreme Court, which will study the issue in the next few months to decide whether it is unconstitutional.

China, Cambodia and the Philippines are the only three countries in Asia that provide civil, criminal, administrative and customs enforcement actions, added Lena Shen, partner at Beijing Sanyou Intellectual Property Agency.

She warned attendees about one pitfall of enforcement—that letters are not effective.

“It’s very common for Westerners to send warning letters, but this doesn’t work in China. You need to pay attention to the downsides of a warning letter—it may make evidence collection more difficult in the future and may enable the other party to start declaratory judgment declarations at their home court,” said Shen.

Shen cited a recent case that her firm was involved in regarding the Burger & Lobster restaurant. The company discovered that another entity was planning to open a business with the same name in Shanghai.

After the local authority was contacted, an officer visited the restaurant and ordered it to change its logos and stop using the trademarks on items such as menus.

Shen said: “We were worried they would just change back after the officers left. The officers agreed to check again and went on the weekend. They discovered some parts were not completely removed and ordered their removal. This shows how efficient and diligent the officers are in handling trademark cases.”

In terms of customs actions, the majority relate to trademarks (98.48%), with 99.54% of the total actions being taken on by customs (although the trademark rights need to be triggered in advance).

“For the cases that are triggered by rights owners, it’s more difficult because they need to tell customs the specific time and place where the infringing product will be exported or imported,” added Shen.

Finally, on criminal proceedings, Shen noted that in 2016 and 2017, more than 6,000 people were sued for trademark infringement, with more than half being arrested.

In the final presentation, Raimondo Galli, founder of Avv. Raimondo Galli in Italy, explained that the Italian criminal IP protection system is very effective.

“The most important feature of Italian proceedings is that when a criminal action is filed, the public prosecutor is bound to prosecute the action. It’s compulsory, unless the action is totally and clearly ungrounded,” he said.

Additionally, under a criminal proceeding, a defendant will never be able to request the revocation of the IP.

Galli added: “There can be liability if the action is rejected only in the case where the action was filed maliciously.”

Gustavo de Freitas Morais, managing partner of Dannemann Siemsen in Brazil, moderated the panel.

All panellists were speaking in a personal capacity.

The 2018 AIPPI World Congress is taking place until September 26.

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Today's top stories

Lawyers concerned by no-deal Brexit guidance on IP exhaustion

Existing EUTMs to cover UK in no-deal Brexit, says government

Iancu: USPTO may revise s101 guidance on abstract ideas

AIPPI 2018: The FRAND battleground and ‘life-or-death’ decisions

EU General Court rejects sandal manufacturer's TM appeal

Mayer Brown adds tech IP partner from Davis Polk

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Adrian Tapping at atapping@newtonmedia.co.uk