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Case Study 52 - Infringement of a pharmaceutical patent in Vietnam

Background

In 2015 in Vietnam, a European pharmaceutical company discovered two companies circulating locally made drugs containing the gamma-crystalline form of an active ingredient for which the European company had a valid Vietnamese patent. This patent infringement case was unprecedented, as it was the first time that the infringement of a crystalline form of a patented compound had arisen in Vietnam. All previous pharmaceutical patent disputes had concerned the patented compound itself.

Action taken

To assess the patent infringement, X-ray diffraction testing was carried out. The examination took place in France as Vietnam is not capable of doing the tests. Based on the results, the expert opinion of a French academic and the Vietnam Intellectual Property Research Institute (VIPRI) were sought regarding the possibility of patent infringement. This was the first time a pharmaceutical patent infringement had been proven by an X-ray diffraction test. And, since the test cannot be performed in Vietnam, the court had to base their decision an expert opinion from abroad. This was also unprecedented.

After receiving the opinions of the experts, the company decided to pursue an administrative action through the Ministry of Science and Technology (MOST) to deal with the first infringer.

The second infringer, however, was notorious for its ability to slow down administrative procedures with frivolous requests (for example asking for the cancellation or invalidation of the counterpart patents or attempting to put pressure on the authorities).

In this case he decided to file a request with IP Vietnam for the cancellation of the European company’s patent, hoping that the judges would suspend the civil case while awaiting the administrative response. As administrative action against the infringer would have been ineffective, a civil lawsuit against him was brought before a court in Binh Duong Province on 1 December 2017.

The court decided to bring the case to trial on 6 October 2018 and issued a final judgment on 17 July 2019, concluding that:

  • The defendant clearly committed patent infringement when producing and distributing the infringing products during the term of validity of the patent;

  • The defendant must recall all infringing medicinal products from the market for destruction;

  • The defendant must withdraw the registration number of the infringing products at the Drug Administration of Vietnam;

  • The defendant must pay the plaintiff (i) VND 500 million as compensation for damages, and (ii) VND 300 million for legal fees, with any late payment subject to interest;

  • The defendant must apologise to the plaintiff publicly in Pharmaceuticals & Cosmetics magazine, Health & Life magazine and in three consecutive issues of the Thanh Nien newspaper.

Lessons learned

The court’s judgment provided a number of tantalising ‘firsts’ in terms of legal milestones, addressing a number of issues about provisions found in legal documents that had previously never been enforced in practice:

  • It was the first time the court agreed to accept expert opinion from abroad as evidence in proceedings in Vietnam.

  • The court approved the application of statutory compensation at the maximum level of VND 500 million. In practice, due to many obstacles (such as a lack of accounting books or proof of damages), the chance of success when claiming damages is usually quite low.

  • The courts were not obliged to suspend the civil procedure while awaiting the administrative office’s decision on the patent cancellation.

Reference: Tilleke & Gibbins, Vietnam

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