INNsight article by Manuel Durães Rocha, September 2012

As you may be aware in 12 December 2011 a relevant legal milestone for the pharma industry in Portugal occured with the publication of the Law nº 62/2011 which amended the existing Portuguese Pharma Law.

This new law aims to clarify the extent and consequences of the application of the bolar exemption clause and creates compulsory arbitration proceedings to rule litigation cases between original pharma industry and generic pharma industry about the conflict between IP rights and new generic medicines.

The new compulsory arbitration proceeding system is aimed to rule the potential conflict arising from the existence of marketing authorisations and retail prices approval to new generic medicines with existing patents and SPC protecting original medicines. This arbitration includes the right to request preliminary injunctions and is applicable either to product, process or use patents and supplementary protection certificates.

As a consequence of this new arbitration procedure system several arbitration proceedings were launched in Portugal between major originator companies and major or local generic companies since January 2012.

Among these several arbitration proceedings started we may identify proceedings concerning different API such as: montelukast, escitalopram, rizatriptan, valsartan, telmisartan, dorzolamide, ibandronic acyd, irbesartan, sildenafil;

Although more than 6 months have gone in the vast majority of the cases the pharma companies involved are still discussing procedural questions such as arbitration rules for each case and costs of the arbitration panels. The settlement of these procedural issues is prior to the discussion on the merits on whether the generic medicine infringe or does not infringe IP rights such as patents and SPCs.

As a consequence of this delay it is expected that the very first decisions from the arbitral courts do not occur before the end of the first semester of 2013. The only arbitral case closed concerns ibandronic acyd following EP 1506041 revocation by the EPO.

Since the new law nº 62/2011 establishes that neither existing patents nor supplementary protection certificates can interfere with the administrative proceedings to grant marketing authorisations and retail prices approval it is expected that some new generic medicines will be launched in the Portuguese market. Their APIs were previously withheld by the administrative courts on the ground of the application of the patent linkage system.

The existence of the arbitral disputes do not prevent generic companies to launch their generic medicines however in the case they are found as IP infringing by the arbitral courts such generics medicines shall be subject to market removal.

There is still a long path to walk.