China's Supreme People's Court(SPC) recently concluded a patent dispute appealed by Eli Lilly and Company (hereinafter referred to as Eli) and Jiangsu Watson Company with a judgment that Jiangsu Watson did not violate Eli's a patent related to process for producing olanzapine，an atypical antipsychotic.

14 years ago, in 2003, Eli brought a case at Jiangsu Nanjing Intermediate People's Court against Jiangsu Watson on charge that Jiangsu Watson infringed the patent right relating to a process for producing olanzapine. The Nanjing Court ruled in favor of Jiangsu Watson in April 2008. Eli did not accept the judgment and appealed to Jiangsu High People's Court. In December 2011, the court reissued a judgment, which held that the process used by Watson for producing olanzapine infringed the patent right of Eli and ordered Jiangsu Watson to pay 500,000 yuan in damages and economic losses.

Almost two years later, Eli brought Jiangsu Watson to Jiangsu High People's Court again. The Jiangsu court then made a decision that Jiangsu Watson must cease infringement and pay 3.5 million yuan to Eli for economic losses and damages.

Eli and Jiangsu Watson then both appealed to the SPC. Jiangsu Watson held that it did not infringe Eli's patent right and Eli sought more compensation. SPC heard the case in public. During hearing, SPC made detailed analysis on main disputed issues including whether the producing process for olanzapine by Watson falls within the protection scope of the patent of Eli etc. SPC make a comparison between Jiangsu Watson's technique and equipment for producing olanzapine and Eli's patent, and held that there were obvious differences on reaction channels and steps of the two techniques. Jiangsu Watson did not infringe Eli's patent right.

Dr. Tang Jiawei from Fudan University, says that any pharmaceutical companies should learn a lesson from this case and build up patent portfolio as soon as possible. To avoid intellectual property risks, pharmaceutical companies should hire patent lawyers to make detailed analysis on Freedom to Operate (FTO) before they launch the new products. Also, companies should make thorough research on related technology and make evasion design. Meanwhile, they should also pay close attention to the patent applications by competitors and build up patent portfolio as soon as possible.

(by Jiang Xu)

(Source: China IP News)