In the 1980s, Sanofi developed Plavix, a medication aimed at preventing strokes. The basic patent, which protected both the molecule and its Form 1 polymorph, expired in 2008, theoretically paving the way for generic versions to enter the Israeli market.
However, a twist occurred a few years prior when a malfunction in Sanofi’s production process led to the spontaneous creation of a new, more thermodynamically stable polymorph – Form 2. This new form “contaminated” the laboratory, making it impossible to produce Form 1 in the same environment. Recognizing the stability of this new form, Sanofi filed a patent application for it.
Despite the expiration of the original patent, Unipharm and Teva, did not enter the market in 2008. Instead, they both opposed Sanofi’s application for the new polymorph. In 2010, while the opposition was still under review, Teva decided to take a risk and launch their product. Shortly after, Sanofi withdrew their application for commercial reasons.
Unipharm subsequently sued Sanofi for unjust enrichment, claiming that Sanofi had intentionally misled the Registrar during the patent application process. The District Court found that Sanofi had indeed deliberately misled the Registrar on significant issues related to the investigation of the patent application. This deception resulted in a delay in proceedings, preventing Unipharm and Teva from marketing their generic substitutes immediately after the expiration of the first patent in 2008.
The case raised several critical questions for the Supreme Court to consider:
What rule did Sanofi break when it misled the registrar? The court found that Sanofi had breached the duty of good faith.
Does patent law prevent relief under Unjust Enrichment law? The court ruled that patent law does not prevent relief under the law of unjust enrichment in cases of misleading the patent Registrar.
What is the liability rule in the context of misleading the patent Registrar? The court determined that there must be an intent to deceive. Mere negligence is not sufficient.
Is deception regarding material information necessary, or is the requirement less stringent? The court rejected Sanofi’s argument that the misleading information must be related to the eligibility of the invention. Instead, the court emphasized Sanofi’s misconduct in attempting to extend its period of exclusivity and its subsequent unlawful enrichment.
How can it be claimed that Sanofi’s wealth came at Unipharm’s expense? The court found that Sanofi had violated Unipharm’s legitimate expectation of fair competition, granting Unipharm a cause of action against Sanofi.
What is the causal relationship between misleading the registrar and Sanofi’s enrichment? The court proposed a test to determine how the Registrar’s misleading affected Unipharm’s risk assessment, given the estimated strength of the patent application; and whether it dictated their decision not to “enter the market” during the risky launch period.
In conclusion, when submitting a patent application, the applicant is obligated to refrain from providing misleading information to the Registrar. This obligation stems from the duty of fairness that the patent applicant owes to the Authority, which has the power to grant him a benefit in the form of patent protection for his invention. This affects the conduct of its competitors, who calculate their steps according to the chance that the patent will be granted. The enrichment of an applicant, which is the result of a breach of the duty of good faith done by deliberately misleading the patent Registrar, is therefore enrichment “not in accordance with a legal right” that establishes a cause of action under the Unjust Enrichment Law.