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12 May 2020

Sayenko Kharenko successfully defended interests of Bayer in the Supreme Court of Ukraine

The intellectual property team of Sayenko Kharenko  has successfully defended the interests of the world-famous German pharmaceutical manufacturer Bayer AG (Bayer) in the Supreme Court. In early 2018, the defendant imported products including the invention protected by a patent for the active substance “Rivaroxaban”.

These imports infringed the intellectual property rights of Bayer who owns the rights to the invention under the Ukrainian patent “Substituted oxazolidinones and the use thereof to prevent blood clotting”, used in manufacturing and sale of “Xarelto” drug (Xarelto) with the active ingredient Rivarox (Rivaroxaban).

The defendant did not deny the fact of the import and use of the Bayer patent, but referred to the fact that it imported products for scientific purposes. According to the Law of Ukraine “On protection of rights to inventions and utility models”, the use of a patented invention (utility model), inter alia, for scientific purposes or in an experiment, is not considered a violation of the rights arising from the patent.

There had been no precedents of such case in Ukrainian judicial practice. Furthermore, the “use for scientific purposes” was not clearly defined.

Thus, the defendant stated that the import for scientific purposes constituted an undeniable evidence of absence of violation. Besides, the scientific purposes can justify further use of the results of research for commercial purposes. The court of the first instance and the Appelate court agreed with the arguments of the defendant.

Contrary to the defendant’s arguments, Sayenko Kharenko lawyers pointed out the need to establish whether the defendant could be considered a scientific organisation and, accordingly, carry out scientific research, or whether any research could be considered “scientific”, and to determine what constitutes the use of a patent by a commercial organisation for scientific purposes.

This is only a part of the questions which had not been answered by the courts of the lower levels. The court of the first instance and the Appelate court established that the defendant, a commercial organisation which imported nine kilograms of Rivaroxaban suitable for manufacturing of hundreds of thousands of medicines, which does not deny the use of the research results in the future for the commercial purposes, can import the patent– protected innovation based on the Article 313 of the Law of Ukraine “On the protection of rights to inventions and utility models.”

Sayenko Kharenko team did not agree with the decision by the courts of the lower level and appealed it to the Supreme Court.

On 14 April 2020, the Supreme Court satisfied the appeal by Bayer and overturned the decision of the lower level courts.

In addition, a legal position has been formed to define the concept of “use of the invention for scientific purposes.”

Thus, the Supreme Court stated that in order to carry out scientific, scientific-technical or scientific-organisational activities, a lab as a scientific division of a company must not only provide for employing at least 50% of researchers, but also ensure that these positions are occupied by the qualified scientists (e.g., those who have a minimum of master’s diploma, are engaged in scientific, scientific-technical, scientific-organisational or scientific-pedagogical activities according to their employment contracts and have appropriate qualifications regardless of their scientific degree or an academic title).

The Supreme Court upheld Sayenko Kharenko’s position in that “scientific use” must be defined from a level more comprehensive than a statement by an unscrupulous user.

The project was led by the senior lawyer Maksym Medvid and lawyer Pavlo Kovalchuk under the management of partner Yaroslav Ognevyuk.

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