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Landmark Ruling: Victory in Compulsory Pharmaceutical Licensing Case

Sebastián Meythaler

 

Dear friends and clients,

We are pleased to inform you that we have obtained a favorable judgment in a case that sets an important precedent regarding the infringement of a pharmaceutical patent and the granting of a compulsory license to manufacture the invention. A compulsory license is an authorization for the use and exploitation of a patent without the consent of its holder. This case has also led the Andean Court of Justice to issue the first preliminary ruling in this matter.


Background

The conflict originated due to the improper granting of a compulsory license based on the now extinct Executive Decree No. 188, which deemed all medicines used by the Ecuadorian population to be of public interest. This grant called into question the regime of compulsory licenses in Ecuador as it contravened the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Decision 486 of the Andean Community, and other supranational norms that require a case-by-case analysis for the granting of compulsory licenses.


Regarding the case

In order to protect our client's interests, our Department of Intellectual Property Litigation filed a claim for damages against the licensee. In this claim, we argued that the defendant infringed the patent by commercializing the protected product, as they interpreted the license extensively and engaged in acts beyond what was granted. Furthermore, we argued that the rights derived from the patent were also infringed since the compulsory license had no legal effect.


The claim was heard by the District Court of Administrative Litigation in Guayaquil, which issued a favorable judgment for our client. The court rejected the counterclaim made by the defendant, which sought payment of US $5,289,936.30, and instead ordered the defendant to pay US $761,915.43 plus interest. This judgment was upheld by the National Court of Justice on June 2, 2023.


The District Court of Administrative Litigation based its decision on the Preliminary Ruling issued by the Andean Court of Justice in Case No. 144-IP-2019, which clarified the regime of compulsory licenses in the Andean Community.


Results

The affirmation by the Andean Court of Justice, which embraced our theory of the case and our interpretation of the regime of compulsory licenses in the Andean Region, now serves as the foundation for the analysis of such cases and lays the groundwork for increasing the protection of intellectual property rights.


If you need assistance or have any inquiries, please do not hesitate to contact us. We will be delighted to assist you.


Sincerely,


Sebastián Meythaler Galarza

Head of IP Meythaler & Zambrano Abogados


José Meythaler Baquero

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