Pfizer's Intellectual Property Rights Battles in China for Viagra


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Case Details:

Case Code : BENV010
Case Length : 22 Pages
Period : 2000-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Pfizer, Inc.
Industry : Pharmaceutical
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Pfizer Wins Viagra IPR Litigation - China In Transition? Contd...

In late 2001, Pfizer was granted a patent for Viagra in China. But Pfizer soon became engaged in numerous patent litigations. An alliance of Chinese pharmaceutical companies petitioned the State Intellectual Property Office's (SIPO) Patent Re-examination Board (PRB) to invalidate the patent. They contended that Viagra should not be provided a patent as it failed to fulfill the "novelty"requirement under China's patent law. In July 4, 2004, PRB invalidated Pfizer's patent for Viagra citing that it had failed to accurately explain the uses of the Viagra's key ingredient, Sildenafil citrate (Sildenafil). Pfizer argued that at the time of filing of the patent application, there was no requirement for that data, and to invalidate the patent on that basis was a flawed, "retroactive"judgment.

The invalidation of the patent led to a huge international outcry. Free trade supporters viewed this as an attack on IPRs of foreign companies and an indicator of China's reluctance to provide adequate protection to IPRs.

Critics lambasted China for failing to properly enforce IPR laws and called for political pressure to make China conform to TRIPS.

Roger Pilon (Pilon), vice president for legal affairs at the Cato Institute8, explained the reason for the outcry: "On average, from the time a company first applies for a patent, it takes 12 to 15 years and $800 million before the first pill reaches the market. Obviously, if others were free to copy and sell that pill, having incurred none of those costs, there would be no incentive to make that kind of investment - and none of the modern "miracle"drugs that investment produces. No one grows crops if others are free to harvest them."9

However, some analysts felt that there were significant positives relating to the litigation. It showed that Chinese companies had begun to appreciate the importance of IPRs. The decision of these companies to take legal recourse rather than infringing on the IPRs was appreciated. It indicated that China was keen to project its transition to become fully compliant with the WTO agreements...

Excerpts >>


8] The Cato Institute, headquartered in Washington, DC, USA, is a think tank in the public policy arena.

9] Roger Pilon, "China's Viagra Test,"www.cato.org, August 13, 2004.

 

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