Glaxo vs. South-West Pharmaceutical Factory 

Recently,a court in Chongqing has closed its first-instance hearing of a case of great effect involving an infringement on a patent for pharmaceutical process. In this case, the defendant South-West Hecheng Pharmaceutical Factory has lost the lawsuit for failure to meet its statutory burden of proof. Of all the lawsuits of patent infringement involving foreign plaintiffs, this is the first case in which the defendant is defeated due to its failure to meet its statutory burden of proof.

I.The Case

The plaintiff owns a patent for invention of a process in China, and the products manufactured thereby include, among other things, Ondansetron.

Upon knowledge of the manufacture by the defendant of Ondansetron, the plaintiff filed a complaint with the local administrative authority for patent affairs, requesting for investigation and handling of the matter.

In May 1995, the plaintiff withdrew said request for investigation and handling of the matter and instituted a legal proceeding in the Chongqing Municipal No.1 Intermediate People's Court, accusing the defendant of the infringement of its patent right in China and requesting it to cease its infringement, to make a public apology, and to pay RMB 320,000 yuan in compensation for the economic loss thereto.

By an order from the court, the defendant submitted its processes for the manufacture of Ondansetron respectively in March 1998 and December 1999, and suggested that the court conduct an on-site inspection and technical appraisal if necessary. Besides,the defendant defended that the processes submitted were essentially different from the patented process of the plaintiff; hence, it stated that it had never carried out any act of infringement on the patented process of the plaintiff.

The plaintiff held the view that the defendant had only furnished the processes for the manufacture of Ondansetron, but failed to prove that these were the ones actually exploited thereby. The plaintiff, on this account, requested the defendant to furnish the regulatory documents involving the examination and approval of the clinical trials and production, to testify that the submitted processes were the ones it had actually exploited. Moreover, it held that the proposed site inspection and technical appraisal were unnecessary before said documents were presented to the court.

II. Court Hearings and Judgement

Early 2000, the court conducted its second hearing of the case, and eventually ruled that The Ondansetron manufactured by the South-West Hecheng Pharmaceutical Factory from 19 September 1994 on are identical with the products manufactured with the patented process of the plaintiff Glaxo Group Limited. Pursuant to the provision of Article 60(2) of the Patent Law of the People's Republic of China, "When any infringement dispute arises, if the patent for invention is a process for the manufacture of a product, any entity or individual manufacturing the identical product shall furnish proof of the process in the manufacture of its or his product", the defendant South-West Hecheng Pharmaceutical Factory should meet its burden of proof on the two levels. One, it should furnish a process for the manufacture of Ondansetron; two, it should further prove that this is the very process it has actually exploited. In this case, the product of the patent process involved is pharmaceutical product. As the relevant laws and regulations for the administration of pharmaceuticals in China provide, processes and technological procedures for the manufacture of pharmaceutical products shall be examined and approved by the administrative authority for pharmaceuticals before being put to practical exploitation. The technological process and procedure of the defendant have been examined and approved, and it should have submitted to the Court its technological process and procedure examined and approved by the administrative authority for pharmaceuticals to prove the processes it has actually exploited.

The defendant refused to furnish the regulatory documents containing the processes examined and approved by the Ministry of Health for the manufacture of the new drug and failed to prove that the submitted processes were the ones it actually exploited. Accordingly, the defendant failed to meet its statutory burden of proof and should bear its liability after losing the case. Eventually, the court ruled that The Defendant South-West Hecheng Pharmaceutical Factory immediately cease its manufacture and sale of Ondansetron and the related chemical compound; 2. The Defendant South-West Hecheng Pharmaceutical Factory pay the Plaintiff Glaxo Group Limited RMB 320,000 yuan in compensation for the economic damages thereto; 3. The Defendant South-West Hecheng Pharmaceutical Factory make a public apology to the Plaintiff Glaxo Group Limited in the press; and 4. The litigation fee of RMB 15,363 yuan be borne by the Defendant South-West Hecheng Pharmaceutical Factory.