[Ip-health] Tal Band in Lexology: Unusual Times, Unusual Measures: the Israeli Ministry of Health Permits the Exploitation of Abbvie's Patents Covering KALETRA(R) to Allow Importation of Generic Version

Thiru Balasubramaniam thiru at keionline.org
Fri Mar 20 23:58:21 PDT 2020


Sections 104 and 105 of the Israeli Patents Law, 1967 can be found in the
WIPO Lex database: https://www.wipo.int/edocs/lexdocs/laws/en/il/il040en.pdf


Unusual Times, Unusual Measures: the Israeli Ministry of Health Permits the
Exploitation of Abbvie's Patents Covering KALETRA® to Allow Importation of
Generic Version

S Horowitz & Co
March 19 2020

The growing public health challenge posed by the COVID-19 pandemic in
Israel, and concerns over a worsening of the outbreak, gave rise to an
urgent need for large quantities of potentially effective therapies for the
virus. One such therapy is Abbvie's antiretroviral drug KALETRA®
(lopinavir/ritonavir), indicated for the treatment of HIV.

As it turned out, Abbvie is currently unable to supply Israel's public
health system with the required quantities of KALETRA®. At the same time,
it transpired that a generic version of KALETRA® is available from Hetero,
a generic manufacturer operating in India. However, since KALETRA® is said
to be covered by three Israeli patents assigned to Abbvie – IL185390,
IL207260 and IL173939 ("the KALETRA Patents"), the last of which is set to
expire in 2024 - the importation into Israel of the generic product would
constitute patent infringement, and is thus prohibited.

The Israeli Patents Law, 1967, includes several provisions which may be
pertinent in the context of the exploitation of inventions in view of
public needs. In addition to provisions allowing for the grant of
compulsory licenses by the Commissioner of Patents under certain strict
conditions (and in timelines that are apparently less relevant to the
current crisis), the Patents Law also provides, in section 104, that a
minister designated by the government "may permit the exploitation of an
invention by Government Departments or by any enterprise or agency of the
State, even though a patent has already been granted for it or applied for,
if it appears to the Minister that it is necessary so to do in the
interests of the defence of the State or the maintenance of essential
supplies and services". The Patents Law further provides, in section 105,
that "the Minister may, if it appears to him that it is necessary to do so
for the purposes mentioned in section 104, grant a permit under that
section to a person operating under a contract with the State, with a view
to ensuring or facilitating the execution of that contract and for the
requirements of the State only".

Under the current unusual and dramatic circumstances, and as a similarly
unusual measure, the Minister of health, Mr. Yaacov Litzman, today
exercised his power under sections 104 and 105 of the Israeli Patents Law,
1967, and permitted the exploitation of the KALETRA Patents by the Ministry
of Health's Emergency Department and a private company, KS Kim
International.  Since the permit impinges upon Abbvie's exclusive patent
rights, it is narrowly defined: the permitted exploitation of the KALETRA
Patents is confined to the importation into Israel of generic KALETRA from
Hetero, for the sole purpose of treating patients infected with the Corona
virus. Accordingly, the permit does not allow for the use of generic
KALETRA® imported thereunder, for the indication of KALETRA®, namely the
treatment of HIV.

The issuance of the permit does not entail that Abbvie will not be
compensated for the exploitation of the KALETRA Patents. According to the
Patents Law, once a permit under sections 104 or 105 is issued, the State
of Israel must pay the patent owner, or its exclusive licensee, royalties
that will be agreed upon between the parties. In the absence of such an
agreement, the royalty rate will be determined by the Royalties and
Compensations Committee ("the Committee"), a statutory committee acting
under the Patents Law and chaired by a former Justice of the Supreme Court,
the Patents Commissioner, and a member of the academia.

If the Committee ends up being required to determine the royalty rate, the
Patents Law provides that in doing so, the Committee must take into
consideration, inter alia, the scope and nature of exploitation allowed
under the permit. The Committee may also take into consideration royalty
rates stipulated in licenses similar in terms to the issued permit.
Notably, however, the Committee's decisions are not subject to an appeal,
and can only be challenged by way of a petition to the High Court of
Justice (HCJ). The HCJ has already held, albeit in the context of the
Committee's decisions in matters relating to compensation for employee
inventions, that the scope of the court's intervention in the Committee's
decisions is extremely limited, and reserved for exceptional cases.

It therefore remains to be seen whether the unusual permit issued today by
the Minister of Health to exploit the KALETRA Patents will also be followed
by similarly unusual proceedings before the Committee, to determine the
royalties to be paid to Abbvie.

It should be noted that while the permit issued today relates to a specific
importer and specific supplier, it stands to reason that if other importers
and suppliers of generic KALETRA® are found, the Minister of Health will
issue similar permits.

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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