The Latest in Mexican Life Sciences and Pharmaceutical Intellectual Property Litigation

Biologics research and manufacturing has increased rapidly in the last few decades and shows no sign of slowing down. This recent increase in the development of biologics for therapeutic use has driven substantial growth in the global litigation sector. Naturally, the expanding area of biologics has also led to increased interest in the development of biosimilars. While litigation continues for small molecules, cases concerning the complex technologies behind biologics have also begun to creep into the Mexican courts, mainly due to the increased use of biologics and biosimilars in the Mexican market. This is not surprising, given that Mexico represents a large market opportunity for many international companies due to its proximity to the US, particularly for the manufacture and sale of biosimilars. In this article, we explore the latest trends and emerging issues shaping life science litigation in Mexico today.

Legal standing to file invalidation actions: third-party invalidation filings have now become more difficult

Post-grant invalidation actions are available in Mexico. These are usually filed with the Mexican Patent Office, also known as the Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial, or IMPI), to counter a claim for patent infringement initiated by the patentee. A defendant in such a claim has automatic legal standing to start invalidation proceedings against the corresponding patent. However, a third party can also file an invalidation action without the presence of an infringement action, provided that they can demonstrate sufficient legal standing. When there is no claim for infringement, the plaintiff will be considered to comply with this legal standing requirement if they can show that they have suffered direct harm as a result of the granting of the patent.

In previous years, the simple act of being a company involved in the pharmaceutical field was sufficient to prove legal standing in a pharmaceutical case. However, this is no longer the case. After considerable debate in the courts, new decisions have made this requirement much stricter, making it much more difficult for a third party to prove legal standing without an infringement action.

The Supreme Court of Mexico recently confirmed legal standing as a valid requirement in a decision resulting from a challenge asserting that the requirement should have been considered to misrepresent constitutional provisions. Generally, to prove legal standing in civil law proceedings, the plaintiff must show that a fact or set of facts is capable of harming or affecting the exercise of their rights. Being a defendant in a patent infringement action is sufficient to show legal standing to counterclaim and seek to invalidate the patent. However, in the absence of an infringement action, the simple fact of being a pharmaceutical company is no longer sufficient to prove legal standing.

During previous years, for pharmaceutical patents, a third party could establish standing by showing that it conducted industrial or commercial activities in the pharmaceutical industry. Unfortunately, this is no longer sufficient and more detailed evidence is now required. According to a decision by the IP Branch of the Federal Tribunal, in the absence of an infringement action, third parties had only the following two options to prove legal standing to institute invalidation proceedings against a pharmaceutical patent:

• As a first option, a third party can assert that it has legal standing if it has filed a request for market approval of a product covered by the relevant patent with the regulatory authority, the Federal Commission for Protection Against Sanitary Risks (Comisión Federal para la Protección contra Riesgos Sanitarios, or COFEPRIS), which entails a tacit admission that the product for which approval is being sought would infringe on the patent.
• A second option occurs if a third party has applied for market approval for a pharmaceutical product and the regulatory authority has objected on the grounds of potential infringement of a patent under the Linkage System. This entails that the Mexican Patent Office has provided relevant information drawing attention to the potential infringement. This option does not therefore entail an admission of infringement on the part of the third party.

The decision by the IP Branch of the Federal Tribunal was recently confirmed, albeit with a minor yet relevant difference on how to demonstrate sufficient legal standing. In the wording of the decision, Justice Farjat failed to list specific circumstances which could be used to demonstrate legal standing, leaving third parties free to come up with appropriate arguments and evidence to demonstrate how the relevant patent prevents them from exercising earlier rights. This method, which diverges from the two options originally provided by the IP Branch of the Tribunal, consists of the third party demonstrating the development or sale of an asset which may be in conflict with the claimed subject matter of the patent. This has proved successful and can be considered a third option for an interested third party wishing to pursue an invalidation action.

In any case, because of the considerations offered in the decision by the Supreme Court of Justice, legal standing is to be analysed on a case-by-case basis, albeit it is no longer valid to assert legal standing based on the condition of being a pharmaceutical company.

The challenges surrounding the inclusion of process patents in the Mexican Linkage System

As is well known, the manufacturing process plays an essential role in the development of biologics. The manufacturing processes for such biologics involve many steps, such as cell line development, cell culturing conditions, bio-reactor conditions, purification, and quality control testing. These processes are sensitive to change and any modification in one or more of these complex steps runs the risk of changing the quality and/or quantity of the final biologic product. Thus, it is no surprise that process patents now play a central role in the litigation of biologic patents.

Despite the important role that processes play in biologics and their IP protection, the Mexican Patent Office does not consider these types of patents as listable in the Mexican Linkage System. The Mexican Linkage System’s purpose is to establish a direct line of communication between the Mexican Patent Office and the Mexican regulatory authority to prevent the marketing authorisation of generic versions of patented products. Under the Linkage System, the Mexican Patent Office publishes a special gazette (similar to the Orange Book) every six months.

To be listed in this special gazette, the patents should refer to inventions “susceptible to be used in allopathic medicines”. Product, combination and formulation patents are eligible for listing. However, medical use and process patents, among others, remain an issue, despite their clear use in allopathic medicines. This outright rejection of medical use and process patents contradicts the objective of sanitary registrations (ie, pharmaceutical products with defined therapeutic indications) and there are numerous court cases where the Mexican Patent Office has been compelled to list medical-use patents. Litigation is thus currently required to list use patents and process patents in the Linkage Gazette. In light of the recent increase in patents relating to biologics and their processes, increased efforts are being made to include such processes in the gazette, particularly since processes play an essential role in the development of “allopathic” medicines, such as biologics, and are becoming a common target for infringement cases. This issue is currently being debated and represents an area of evolvement. A close eye should be kept on developments in this area over the next few years.

Burden of proof in infringement cases: how do we prove the technical facts of cases involving process patents?

Regarding the litigation of process patents, the technical facts of these cases may be difficult to prove in a case of infringement. For instance, it is commonplace that many different processes may exist for manufacturing the same biologic product. However, certain processes offer certain advantages for a biologic product, which is why these processes are often patentable. Unfortunately, when it comes to the enforcement of such process patents, reverse engineering to determine the process used to manufacture the infringing product is often not possible. Thus, it may not be obvious or easy to determine if the biologic at the centre of the litigation case infringes on a process patent. This is where the reverse of burden of proof comes into play.

Under normal circumstances, the burden of proof lies with the plaintiff. Yet, as mentioned above, in the case of manufacturing/process patents for biologics, this can pose a challenge. For instance, a particular process may increase the amount of product produced, but the final product produced is the same as that produced by any other process used to manufacture the same biologic. Or perhaps a specific process increases the quality of the product being manufactured, reducing the need for purification processes. For this reason, and through many binding precedents, the constitutional courts in Mexico have introduced the idea of a “dynamic” burden of proof, which permits that the burden of proof be reversed in certain situations. The circumstances for such a situation are as follows:

• the plaintiff has difficulty accessing the documents required to demonstrate the facts of the case; and
• the defendant has easier access to the evidence or can easily prove the evidence in the trial.

Article 335 of Mexican Patent Law states the following:

“When the subject matter of the patent is a process for obtaining a product, in the administrative infringement declaration procedure, the alleged infringer must prove that said product was manufactured using a process other than the patented one when:

I.- The product obtained by the patented process is new, or

II.- There is a significant probability that the product was manufactured using the patented process and the patent holder has not succeeded, despite having tried, in establishing the process actually used.”

Thus, Mexican Patent Law does contemplate the problem associated with product patents when debated during infringement actions. However, despite this provision in the law and the availability of a reversal of the burden of proof, process patents relating to biologics remain one of the more difficult types of infringement cases to litigate.

Patent term extensions of pharmaceutical patents: complementary certificates

Pharmaceutical patents can often take a while to move through prosecution, particularly due to their complexity. Thus, patent term extensions have become an attractive option for clients in recent years, particularly for biologic patents which may move slowly through the prosecution system at the Mexican Patent Office. However, patent term extensions filed before 5 November 2020 remain a difficult issue. Such patents are barred from term extension under the former governing law, yet litigation has made them possible (in a few cases). Specifically, when prosecution of the relevant application took more than five years, it was possible to seek a conventional interpretation of the Paris Convention together with the so-called “pro-homine” principle, under which a patent term could be adjusted to 17 years from the date of granting (in Mexico), as opposed to the current 20 years from date of filing (priority date). The path to seek the extended term must initiate before the patent expires, and in a best-case scenario, at least two or three years before the original expiration date, to ensure sufficient time to reach the courts and obtain the injunctive remedy preventing the term from expiring before a final decision in the case can be rendered. The injunction then results in a relative win in the case, as it provides the patent holder with an additional term for at least as long as it takes for a final decision in the case to be rendered.

On the other hand, the new law clearly outlines how patent term extensions can be obtained for any patent application filed on or after 5 November 2020. These are obtained via “complementary certificates”, which can be requested if the time between the filing date and the granting date is more than five years, and the Mexican Patent Office is directly responsible for this delay.