Vietnam Patent Litigation: Is the Absence of the Manufacturer in Litigation the Ground for the Court of First Instance to Reject a Lawsuit against the Local Distributor for Patent Infringement?

Attorney Le Quang Vinh – Bross & Partners

Email: vinh@bross.vn

A Patent Infringement Lawsuit Rejected by the Court of First Instance

In 2018, the plaintiff, an American pharmaceutical company, the patentee of granted patents for invention no. 5684 and 7037 that are currently valid in Vietnam, sued a Vietnamese company for patent infringement due to importing and distributing 2 medicines containing the active ingredient Sitagliptin. Patent 5684 that is valid until July 5, 2022 is patented for the invention named “Beta-amino tetrahydroimidazo (1, 2-a) pyrazines and tetrahydrotrioazolo (4, 3-a) pyrazines as dipeptydyl peptidase inhibitors for the treatment or prevention of diabetes” while Patent 7037 valid up to June 18, 2024 titled “Phosphoric acid salt of a dipeptidyl peptidase-iv inhibitor”

Along with the lawsuit filed at the court, the plaintiff provided the expert opinion (also commonly known as the patent infringement assessment conclusion) delivered by the Vietnam Intellectual Property Science Institute (VIPRI) concluding that the active ingredient Sitagliptin in the defendant's 2 drug products is identical with the plaintiff’s granted patents. Specifically, the products GETSITALIP 100mg and GETSITALIP 50mg imported and distributed by the defendant both contain the active ingredient sitagliptin phosphate monohydrate which coincides with claims 15, 16 & 18 under Patent 5684 mentioning the compound sitagliptin as a freebase and coincides with claim 1 for medicinal salts of the compound sitagliptin under Patent 7037.

As the patentee, the plaintiff asked the court to force the defendant to:

(1) cease all infringements of patent rights including but not limited to the importation, exploitation, circulation, sale, transportation, advertisement, offering and storage for circulation of the products GETSITALIP 100mg and GETSITALIP 50mg

(2) recall all the goods GETSITALIP 100mg and GETSITALIP 50mg available in market or in stock witnessed by the plaintiff

(3) compensate the plaintiff for damages of VND 500 million and a lawyer's fee of VND 300 million

(4) publicly apologize to the plaintiff in the Pharmacy and Cosmetics Journal, Health and Life Journal, Thanh Nien Newspaper

(5) must not register at the Drug Administration of Vietnam any products containing compounds that are being protected under Patents 5684 and 7037.

Disagreeing with the entire claims, the defendant contended that he is only a distributor of the above-mentioned products in the Vietnamese market under the contract signed with the Pakistan-based manufacturer, wherein one of terms and conditions clearly stipulates that the manufacturer shall be responsible for any intellectual property dispute, not the defendant. On the other hand, to express his goodwill, the defendant stopped importing and bidding activities for Getsitalip products. At the first-instance trial, the defendant requested the Court to summon the drug manufacturer Getsitalip (located in Pakistan and has a representative office in Vietnam) to participate in the civil proceedings as a person with related rights and obligations but the court did not accept. The defendant also argued that the plaintiff did not request the court to ask for expert opinion, hence the expert opinion provided by the plaintiff addressing to the court shall be not considered as admissible evidence, due to the failure to comply with the procedures prescribed by law. As a result, the defendant asked the court to dismiss the plaintiff's entire petition

The People's Court of Ho Chi Minh City issued the first-instance judgment no. 1030/2019/KDTM-ST dismissing the entire petition. The key reason that the court rejected the lawsuit was probably mainly based on the consideration that the distribution contract stipulates that the manufacturer is liable for intellectual property, so the defendant cannot be the subject of the lawsuit because the defendant did not infringe upon the plaintiff's invention.

The First-Instance Judgment Cancelled by the Appellate Court and Court of First Instance requested to remand

Because the first-instance judgment was appealed, the Court of Appeal (High People's Court in Ho Chi Minh City) in judgment no. 41/2020/DS-PT dated July 28, 2020 held that the fact that Court of First Instance did not include the manufacturer in the proceedings is a serious violation of the proceedings, seriously affecting the legitimate rights and interests of the defendant and the manufacturer. The Court of Appeal also said that the Court of First Instance had not collected enough evidence to prove whether the manufacturer's product has infringed upon the plaintiff’s patents. Therefore, the first-instance Court's rejection of the petition against the defendant for distributing Getsitalip tables 100mg and 50mg products manufactured by the Pakistan manufacturer was not yet of a solid basis, not guaranteeing the legitimate rights and interests of the parties. For the reason, the Court of Appeal canceled the first-instance judgment and requested the first-instance court to re-hear it according to first-instance procedures.

Bross & Partners, an intellectual property company ranked First (Tier 1) by Legal 500 Asia Pacific, has experience in resolving complicated IP disputes including trademarks, copyrights, patents, plant varieties

Please contact: Vinh@bross.vn; mobile: 0903 287 057; Zalo: +84903287057; Skype: honor.bross; Wechat: Vinhbross2603.