14 February 2022
Egorov Puginsky Afanasiev & Partners Defends Novartis in a Precedent-Setting Case Over Unfair Competition by a Generic Distributor

EPAM’s competition and litigation team of lawyers has successfully defended the interests of multinational pharmaceutical corporation Novartis before the Federal Antimonopoly Service of Russia and in court in a case involving a breach of the competition protection law by a distributor that commercialised a generic drug in an infringement of the patent rights to the original drug formula.

At the end of 2016, Novartis, having discovered an infringement of its patent, filed a lawsuit against the manufacturer of the Nativa generic drug with a demand to cease the production of the generic drug. The proceedings lasted several years and the courts of all instances supported the position of Novartis, prohibiting the introduction and further distribution of the drug on the territory of the Russian Federation. After losing its initial legal bid, Nativa filed a lawsuit against Novartis and Rospatent to grant a compulsory license for a patent to a foreign company.

Despite the injunction, Nativa transferred the rights to the drug to its distributor, Mamont Pharm, which continued to produce and sell the drug and intervened in the case regarding compulsory licensing.

Lawyers of EPAM identified this patent infringement, developed a multi-stage legal position, and appealed to the Federal Antimonopoly Service of Russia with a request to review the actions of Mamont Pharm for unfair competition. In July 2021, the FAS Russia recognised the position of the Novartis group as justified, found that Mamont Pharm’s actions constituted unfair competition and ordered it to cease violating Novartis’s patent rights, as well as to forfeit the illegally obtained revenue to Novartis. After that, the companies entered into a settlement agreement on the dispute over the issuance of a compulsory license, under the terms of which Mamont Pharm agreed not to obtain a compulsory patent and agreed not to violate the exclusive patent rights of Novartis. However, Mamont Pharm continued to challenge the decision and the order of the FAS Russia in court.

On January 21, 2022, the Moscow City Arbitrazh Court rejected Mamont Pharm’s claims in full, agreed with the position of the FAS Russia and of the Novartis group. The ruling in this case is one of the final stages of a longstanding dispute between the Novartis group and the generic manufacturer.

“The court’s decision not only protects the interests of the client, but also contributes to the successful practice of the FAS Russia on cases concerning unfair competition within the pharmaceutical industry,” says Anna Numerova, Partner of EPAM’s competition practice.

“The decisions of the courts and the FAS on the Novartis case are of key importance for the Russian pharmaceutical market and are a signal to international companies that their rights and legitimate interests can be properly protected. The implementation of this defence strategy was possible thanks to EPAM’s comprehensive experience in the field of patent rights and the distribution of pharmaceuticals,” adds Vera Rikhterman, Partner of EPAM’s litigation practice.

A joint team of lawyers from competition and litigation practices worked on this project: Partners Anna Numerova, Vera Rikhterman and Valery Eremenko, Senior Associates Olga Denchenkova and Alexey Artemenko and Junior Associate Larisa Garmashova.

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Anna Numerova

Anna Numerova

Moscow