« Res Judicata | Main | IT Industry in Fear of Patent Trolls »
June 6, 2006
Great Brother
Beijing
No. 1 Intermediate People's Court on Friday upheld the validity of Pfizer's
patent for Viagra in China, overturning a 2004 decision by China's patent review
board. Pfizer's shares stiffened up on the news.
Sildenafil citrate, the main ingredient in Viagra, is known in China as "weige," meaning "great brother." China, with a long tradition of using various substances to boost male sexual prowess, is a huge potential market for the drug.
Pfizer filed for patent protection for sildenafil citrate in May 1994, which was granted after seven years of examination, in late 2001.
Chinese-made counterfeits of Viagra are widely available in China, and are showing up in other world markets, including the U.S. and Europe. Viagra was introduced by Pfizer in the China market in 2000. After six months on the market, the state media organ reported that around 90% of the Viagra pills sold in Shanghai were fake.
It's common for Chinese drug manufacturers to ignore patents and proceed with generic production. It's relatively rare that local drug makers band together and use political pressure on China's patent agency to invalidate patents, thus allowing them to legally market generic copies. In the battle against Viagra, 15 companies, known as the "Weige Alliance," were involved in getting Pfizer's patent invalidated in July 2004. China's patent review board said that Pfizer had not disclosed enough data on how the drug was made.
Pfizer appealed the patent review board invalidation based upon erroneous retroactive application of the law, and in violation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS), part of the WTO agreement.
Xu Guowen, the lead attorney for the Weige Alliance, had argued the case before the patent review board. In its appeal to the Beijing court, Pfizer pointed out that was inappropriate, because Xu had recently retired from the patent review board. The Wall Street Journal reports, "Mr. Xu, during an interview in Beijing, said that while he had worked closely with all five judges on the panel for almost a decade and was friendly with each, often sharing meals and attending social functions with them, he didn't exert any special influence on the panel's decision." Whether Xu's involvement weighed on the Beijing court's decision is unknown.
China also has a long tradition of corruption, which is still rampant in innumerable ways. As a part of joining the World Trade Organization (WTO) in 2001, China agreed to tighten intellectual property protection, but locals firms have repeatedly been favored over foreign manufacturers. For example, according to government data, for the past several years, only about one in ten appeals to the Beijing Court over the patent appeal board succeed.
Worldwide political pressure in recent years may be having some effect. Last December, a Shanghai judge ruled against a Chinese company that had adopted the Chinese name of Starbucks, along with a similar logo.
Large multinational corporations are often reluctant to challenge a ruling by a Chinese regulatory agency with which they must continue to seek approval from. GlaxoSmithKline opted not to appeal an invalidation of its patent for rosiglitazone, a key ingredient in its Avandia diabetes medication.
The Viagra patent case is now back before the patent board for review, and consideration whether to appeal to a higher court. Appeals of Chinese court decisions must be made within 15 days. Pfizer's patent is enforceable during the appeal process.
Pfizer global sales of Viagra last year was $1.65 billion.
Posted by Patent Hawk at June 6, 2006 12:02 AM | International