The Olanzapine Case and Its Implications for Novelty of Chemical-substance Patents in Europe

By Dr. Thorsten Bausch Partner, German and European Patent Attorney,[Patent]

I. Divergent Novelty Approaches in Europe
In the past, the EPO and the UK courts have taken considerably different approaches on novelty of chemical-substance claims than have the German courts. The EPO and the UK courts applied the concepts that a prior art document must disclose the claimed substance “clearly and unambiguously” and that a generic disclosure of a group of compounds in the prior art, e.g. in the form of a Markush formula, does not anticipate a specific substance covered by this formula of novelty. In particular, the EPO decisions T 12/81 Diastereomers/Bayer AG and T 7/86 Xanthines/Draco have been widely applied by the EPO for more than two decades. The latter decision established that a compound is novel over a general Markush formula if it requires two or more substituents to be selected from ‘lists of some length.’ Both decisions were cited with approval by Floyd J. in the recent UK decision Dr. Reddy’s vs. Eli Lilly on olanzapine.
In the view of the German courts, the disclosure of a general formula may also anticipate an individual substance, provided that this substance could be easily synthesized by the skilled person on the basis of the disclosure in the prior art document and with the help of his expert knowledge. The Federal Court of Justice (FCJ) held in its decision Fluoran (GRUR 1988, 447) that a general formula having four variable substituents, altogether covering approximately 3000 single compounds, can indeed disclose and deprive a certain individual fluorane compound. In deciding this case, the FCJ felt itself bound by certain factual findings by the first-instance court which, for procedural reasons, it had no authority to review. These findings were that a skilled person was able to take the specific fluorane at stake from the earlier generic disclosure and that a skilled person would have had no problem in manufacturing it. Hence, the FCJ affirmed the first-instance decision and held that the individual fluorane at stake was not novel. This decision and a few others in the field of numerical ranges resulted in a divergent novelty approach in Europe: the EPO continued to grant patents on selection inventions and the German courts invalidating them later in national revocation proceedings.
II. Background: The Olanzapine Patent
The Olanzapine Patent had a priority date of 25 April 1990 and protected Lilly’s drug olanzapine, which is a widely prescribed, anti-psychotic agent for the treatment of a variety of disorders including schizophrenia. Schizophrenia is a debilitating psychiatric disorder for which there was no effective treatment until the discovery of chlorpromazine in 1953. This breakthrough triggered a series of other first-generation antipsychotics (abbreviated to FGAs). Although many of the FGAs were efficacious against schizophrenia, they were all associated with unpleasant side effects, in particular Extra Pyramidal Symptoms (EPS) such as Parkinsonism. A second breakthrough occurred in 1959 with the advent of clozapine, which enjoyed similar efficacy to earlier treatments but without the range of EPS. However, an association with a fatal suppression of white blood cells forced the withdrawal of clozapine from the market. Even though clozapine was later re-approved, patients were still required to undergo weekly blood tests. These were inconvenient for the patient, and expensive. Thus, in 1990 there was still a need for a safe and effective antipsychotic treatment. This need was met with the discovery of olanzapine (Zyprexa®), which was approved by the FDA in 1996. Following its launch in 1996, it has enjoyed a huge commercial success: In 2006 it was the 7th biggest selling pharmaceutical, with global sales of $4.7b (0.8% of the global pharmaceutical market). The pertinent structural features of olanzapine with respect to this case are the unsubstituted phenyl ring and the 2-methyl-thiophene group at the right hand side of the molecule:
The main claim 1 of Lilly’s Olanzapine patent reads as follows:
2-Methyl-10-(4-methyl-1-piperazinyl)-4H-thieno-[2,3-b][1,5]benzodiazepine or an acid addition salt thereof.
Comparing this designation with the above-depicted correct structural formula of olanzapine, it is obvious that there was an error in the designation of this compound, i.e. the positions 4 and 10 were erroneously confused, and the compound should actually have been designated as 2-Methyl-4-(4-methyl-1-piperazinyl)-10H-thieno-[2,3-b][1,5]benzodiazepine or an acid addition salt thereof. The German courts in both instances considered that a skilled person would have had no problem to recognize what was actually claimed. The correct numbering was however also used in a structural formula disclosed in the specification of Lilly’s patent.
III. Decision on Novelty in the First Instance
In view of the existing Fluroran case law in Germany and the commercial opportunity offered by the possibility of entering a blockbuster market, two generic manufacturers attacked this patent in Germany by way of nullity actions. The generic manufacturers argued, inter alia, that the patent lacks novelty and inventive step vis-à-vis a pre-published document even though this document did not disclose olanzapine expressis verbis. And indeed, the Federal Patent Court declared the patent null and void for lack of novelty in first-instance nullity proceedings.
In the main prior art document, authored by the leader of the drug development team responsible for olanzapine (Chakrabarti et al.), various closely related analoga of olanzapine were published. The authors observed that clozapine differed from first-antipsychotics generation by the incorporation of a chlorine atom at the 8-position and, hence, postulated that an electron-withdrawing group (e.g. Cl) might increase activity by unbalancing the electron density of the tricyclic core. The authors further hypothesized that the same effect might be observed by replacing one of the phenyl rings of clozapine with a more electron-rich heterocycle, e.g. thiophene. This theory was supported by tests conducted on a large variety of compounds. Interestingly, ethyl-olanzapine (2-Et-thienyl in place of 2-Me-thienyl) was prepared in the study but not highlighted as a promising drug candidate.
Instead flumezapine was accentuated, which differs from olanzapine only in the electron-withdrawing fluorine atom on the phenyl ring. This compound was even investigated in clinical trials by Eli Lilly.
The article by Chakrabarti et al. further disclosed a general formula with just two variable residues R1 and R2:
Olanzapine falls within the scope of this general formula (I), when R1 is a hydrogen group and R2 is a methyl group in 2-position of the thiophene ring. Thus, olanzapine could be considered as a selection invention.
The German Federal Patent Court considered that olanzapine was not novel vis-à-vis this formula disclosed Chakrabarti et al. (Court ref. no K4).
In summary, the Federal Patent Court argued that a skilled person would for essentially two reasons understand the Chakrabarti paper so as to also disclose olanzapine:
(i)                Olanzapine falls under the general formula (I) which has two variable substituents R1 and R2, together forming a list of (only) 12 (preferred) compounds. Those 12 compounds are therefore all disclosed to a skilled person.
(ii)             Olanzapine is the immediate neighbor of three compounds that are expressly disclosed by Chakrabarti et al and fills out the gap between them. A skilled person would have recognized this gap (the “negative”) and which compound was necessary to close it.
From a legal point of view, the Federal Patent Court felt that its decision was so well backed by the Federal Court of Justice’s earlier decisions Fluoran (see above) and Elektrische Steckverbindungen (a decision in the engineering field wherein the concept of a subintellegitur was explicitly approved and applied) that it did not even bother discussing obviousness of claim 1. It simply declared the patent null and void for lack of novelty.
The decision resulted in contentious debates within the IP community in Germany. Various articles appeared in legal journals, wherein the Federal Patent Court’s expansive concept of disclosure was criticized and the Federal Court of Justice was asked to reconsider its Fluoran decision. One judge of the Federal Patent Court (who was not involved in this decision) even publicly voiced doubts that this was a case of a lack of novelty and would have preferred discussing it under the heading of obviousness.
IV. Infringement Proceedings
As a consequence of the revocation of the Olanzapine patent in the first instance, a considerable number of generic manufacturers immediately launched generic medicaments containing olanzapine in Germany. Lilly reacted aggressively and requested provisional injunctions against the generics offering and selling olanzapine. While all of these requests for provisional injunctions were rejected by the first-instance courts (Regional Courts of Düsseldorf and Hamburg), Lilly had spectacular success before the Higher Regional Court of Düsseldorf. This Court allowed Lilly’s appeal and issued preliminary injunctions against some of the generic manufacturers, arguing that it was not bound by the Federal Patent Court’s decision which it designated as “evidently wrong”.
Unsurprisingly, this decision caused major excitement, not only with the injuncted generic manufacturer who was taken completely by surprise, but also within the entire IP profession in Germany. Indeed, this was the first case ever, to the best of this author’s knowledge, where an infringement court did not respect the traditional German division of roles between the infringement courts (regional and higher regional courts) and the Federal Patent Court which has exclusive competence to decide on the validity of a patent. Moreover, there had never been a precedent where an infringement appeal court had so clearly neglected and criticized a decision by the Federal Patent Court which usually enjoys a very good reputation.
V.Decision on Novelty in the Second & Final Instance
These developments, together with the fact that this case called for a fundamental decision on novelty of chemical substances, since the existing case law was quite old and considered to be outdated and unfortunate by many, prompted the Federal Court of Justice to put this case on a fast track and to summon the parties to a final hearing within 18 months, without requesting a written expert opinion beforehand. The Court appointed an expert who gave his views during the trial and was cross-examined by both parties during the hearing.
The result of the appeal hearing was that the first-instance decision was set aside and the patent was restored and maintained in its entirety. Both novelty and inventive step were affirmed. As was to be expected, the major part of the Federal Court of Justice’s reasoning revolved around novelty and the question of what is “disclosed” to a skilled person by a general formula.
The FCJ explained in its judgment that the assessment of whether the subject-matter of a patent is anticipated by a prior art publication requires that the entire content of the previous publication must be ascertained. Decisive is which technical information was disclosed to the person skilled in the art.
These principles would apply, continued the FCJ, also in the field of substance chemistry and in particular also when assessing the information in a structural formula.  That a chemical compound falls under a pre-published general formula therefore does not mean anything.  To the contrary, what is decisive is whether the specific compound is disclosed, stated the Court. To ascertain this, details are required which put the skilled person readily into a position to carry out the invention pertaining specifically to this chemical compound, i.e. to obtain access to the particular substance.
Finally, the Federal Court of Justice held that the individual compounds falling under a general formula are not as such disclosed by the indication thereof; in order to “make them available” to the skilled person, for novelty purposes, further information is as a rule required, in particular with regard to their individualization.
Having developed these general principles, the FCJ came to the conclusion that there was not enough specific information in Chakrabarti paper to allow the skilled person to infer olanzapine from the general formula disclosed therein. And finally, the Court satisfied itself that this result is consistent with the case law of the EPO and the UK courts.
The German Federal Court of Justice (Bundesgerichtshof) issued a long awaited landmark decision on novelty Olanzapine (X ZR 89/07) in February 2009. The patent had been revoked by the first-instance court (Federal Patent Court) for lack of novelty, but has now been fully restored by the Federal Court of Justice. The Federal Court of Justice took the opportunity to clarify its existing case law on novelty, bringing it in closer harmony with the case law of the European Patent Office. However, several important questions still remain unanswered, particularly whether this decision will also have an impact on patents characterized by numerical ranges and, possibly, single enantiomers.

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