Cablegate: Pfizer Wins Ipr Case

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E.O. 12958: N/A
TAGS: ECON ETRD KIPR PE
SUBJECT: PFIZER WINS IPR CASE

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1. (SBU) Summary. Pfizer, in 2002, filed a patent
infringement case against Indian company Ranbaxy, alleging
that the company was illegally copying its Lipitor patent.
Indecopi, (Peru's IPR Administrator), issued two final
decisions in June in favor of Pfizer, finding Ranbaxy guilty
of violating Pfizer's patents and denying the Indian
company's request for nullification of the Pfizer patent.
With this action, Ranbaxy can no longer sell its copy of
Lipitor on the Peruvian market, although it retains the
right to sell other medicines. The Indian company must also
pay a fine of $8,500 to Indecopi. Although Pfizer is
pleased with the outcome, the case shows Indecopi's inherent
deficiencies in protecting intellectual property rights.
Post will continue to monitor the case in light of
Indecopi's history of uneven enforcement actions. End
Summary.

Lipitor Patent Copied
---------------------

2. In 2002, Pfizer, one of the ten pharmaceutical companies
to hold patents in Peru, filed a patent infringement case
against Indian company Ranbaxy, alleging that the company
was copying its patent for Lipitor, also known as
atorvastatin calcium. (Note: Lipitor, used to control
cholesterol levels, is one of Pfizer's must successful
drugs. End Note.) Several months after Pfizer filed its
complaint, Indecopi, Peru's IPR Administrator, issued a
precautionary measure against Ranbaxy based on possible
patent infringement. The precautionary measure prohibited
Ranbaxy from selling the product in Peruvian markets,
although it could continue producing the drug. After 120
days, per Peruvian law, the precautionary measure expired,
allowing Ranbaxy to resume selling its product in the
Peruvian market.

Indecopi Fails to Act
---------------------

3. (SBU) During the past four years, Pfizer officials met
frequently with Indecopi officials, who continued to drag
their feet on the issue. In 2003, per Indecopi's request,
Ranbaxy presented Indecopi with confidential test data to
prove that its drug was not a copy of Pfizer's patent. In
addition to the information, Ranbaxy argued that Lipitor is
patented to treat cholesterol problems; Ranbaxy's drug
instead sought to counter the effects of erectile
dysfunction, with the side effect of lowering cholesterol.

4. (SBU) As a result of Ranbaxy's actions, the Director of
Indecopi's patent office informed Pfizer that the company
needed to prove that Ranbaxy's drug was a pirated copy.
Pfizer, noting that this practice appeared to be a violation
of TRIPS, submitted information to Indecopi. After a year
of reviewing the case, Indecopi ruled in favor of Ranbaxy,
stating that the Indian company's drug, while similar to the
Lipitor patent, was created through a different chemical
process. Ranbaxy then petitioned Indecopi to nullify
Pfizer's Lipitor patent.

Pfizer Appeals and Wins Both Cases
----------------------------------
5. (SBU) Pfizer immediately appealed both Indecopi's
decision and Ranbaxy's request for patent nullification,
providing Indecopi additional test data information. In
December 2005, Indecopi issued resolution 1468-2005,
overturning its previous decision on the Ranbaxy drug.
After reviewing the case, Indecopi found that both products
were crystalline and shared the same spectrum
characteristics. Indecopi concluded that the Ranbaxy drug
violated Pfizer's patent and dismissed the company's
nullification request.
6. (SBU) Ranbaxy appealed both of Indecopi's decisions,
but on June 1, 2006, Indecopi, with resolution 692-2006,
dismissed Ranbaxy's nullification request, upholding the
2005 resolution in favor of Pfizer. Indecopi's decision is
final, although Ranbaxy can file a petition for judicial
review within three months of the resolution (by September
1, 2006).
7. (SBU) On June 6, Indecopi issued an additional
resolution, 729/2006, which found that Ranbaxy infringed on
Pfizer's patent rights when marketing its drug in Peru. Per
the decision, Ranbaxy immediately halted the sale of this
product, although it can sell its other drugs on the market.
Ranbaxy must pay a fine of $8,500 to Indecopi to cover the
costs of the hearings.

Comment
-------

8. (SBU) While Pfizer is pleased with Indecopi's final
decision, the patent infringement case lasted four years,
costing the company more than $5 million in sales. Two
other U.S. pharmaceutical firms continue to face similar
problems and await Indecopi action. This case highlights
the inefficiency of Indecopi's procedures and inability to
protect pharmaceutical patents. Indecopi officials
recognize that there are flaws in the system and hope that
the next Administration changes the process. Post expects
that Indecopi will request substantial technical assistance
during the implementation of the FTA, in order to close
loopholes, promote capacity building and improve its legal
framework. We are working with State, Commerce, U.S. Patent
and Trade, and U.S. Customs to provide additional training
when funding becomes available.

STRUBLE

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