Supreme Court overrules both lower tribunals to recognise inventiveness

Introduction

On August 29 2017 the Supreme Court issued decisions recognising the inventiveness of two Novartis patents for a compound and a transdermal composition, covering two products used to treat dementia associated with Alzheimer's disease (Exelon Capsule and Exelon Patch).(1) The decision regarding the compound patent was noteworthy not only because this the second time that the Supreme Court has recognised the inventiveness of a selection invention in South Korea, but also because both lower tribunals had specifically rejected the inventiveness of the selection invention compound (an enantiomer of a previously-known racemate).(2)

Background

Novartis isolated a novel enantiomer ((S)-N-ethyl-3-[1-(dimethylamino)ethyl]-N-methyl-phenyl-carbamate, or rivastigmine) from a racemate disclosed in prior art references and discovered that it had remarkably superior transdermal penetration and 24-hour duration (transdermal effect), as well as superior anti-dementia effects, over the racemate. Novartis obtained two patents relating to these discoveries:

a compound patent directed to Exelon's active ingredient (rivastigmine); and

a pharmaceutical composition patent for systemic transdermal administration comprising rivastigmine.(3)

The Exelon Patch was the first patch-type transdermal therapy approved worldwide to treat dementia associated with Alzheimer's disease and has achieved huge commercial success.

Procedural history

SK Chemicals imported a significant amount of the rivastigmine active ingredient during the patent term of the compound patent and subsequently manufactured and exported their own rivastigmine patches. Novartis responded in 2012 by filing a patent infringement action against SK Chemicals based on their compound patent. SK Chemicals then filed invalidation actions at the Intellectual Property Trial and Appeal Board (IPTAB) against both of Novartis' patents covering the Exelon Capsule and Exelon Patch.

The IPTAB denied the novelty of Novartis' compound patent on the basis that a person skilled in the art could have directly recognised the enantiomer, rivastigmine, from the racemate(4)based on common technical knowledge when the patent was filed. The IPTAB also denied inventiveness on the basis that the prior art racemate would have had the same transdermal effect as rivastigmine as it had the same chemical structure; therefore, rivastigmine did not have a qualitatively different effect from the racemate. The Patent Court upheld the lack of inventiveness on appeal.(5)

However, the Supreme Court reversed the Patent Court and found both Novartis patents inventive, holding that the transdermal effect of rivastigmine was a qualitatively different effect from what would have been expected from the prior art by focusing on what was specifically described in the prior art reference (especially in the working examples).

Significance

The Supreme Court's decisions are noteworthy for at least two reasons. First, the compound patent was reviewed as a selection invention (specific enantiomer versus racemic mixture), and yet the court still recognised inventiveness. There are very strict patentability requirements for selection inventions in South Korea, and in fact there has been only one previous case in South Korea in which the Supreme Court recognised the inventiveness of a selection invention.(6)

Second, the Supreme Court came to its conclusion despite the fact that both lower tribunals (the IPTAB and Patent Court) agreed that the compound patent was invalid. Since Supreme Court review is discretionary, and in most cases substantive review is denied if both lower tribunals reach the same conclusion, the Supreme Court's decision in this case not only to take up review, but to reverse the lower tribunals' invalidation decisions was unexpected, and a welcome indication of the Supreme Court's interest in accurate review of the issues in this case.

For further information on this topic please contact Sang Wook Han, Alice Young Choi or Seung Hyun Lee at Kim & Chang by telephone (+822 3703 1114) or email (yhyang@kimchang.com, aychoi@kimchang.com or jhcho@kimchang.com). The Kim & Chang website can be accessed at www.kimchang.com.

Endnotes

(1) See Novartis AG v SK Chemicals; Supreme Court Decision 2014Hu2696 and 2014Hu2702, August 29 2017.

(2) An 'enantiomer' refers to each of the two mirror image forms of a chiral molecule. A 'racemate' or racemic mixture refers to a mixture containing an equal ratio of a pair of enantiomers.

(3) The pharmaceutical composition patent for systemic transdermal administration resulted from a divisional application based on the compound patent application.

(4) Only two types of enantiomers exist: the (R) and (S) forms.

(5) The IPTAB originally found that the pharmaceutical composition patent was inventive, but the Patent Court denied the inventiveness of both patents.

(6) Supreme Court Case 2010Hu3424, August 23 2012.