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005-05-05-0015THE WEEKLY NEWSPAPER FOR THE LEGAL PROFESSION China has stepped up IP enforcement recentlyInvalidation of Viagra patent actually indicates rule of law’s ascendancy.
method-of-use patents it sought, and China did characterized the purveyors of this merchandise the same in 2001. However, Pfizer’s success in as “greedy, unscrupulous, soulless pirates.” obtaining this patent proved to be short-lived. Edward Lanfranco, “Lash Slams China IPR Driven by the large potential profits for E.D.
Enforcement,” United Press International, treatments, Pfizer’s rivals—Eli Lilly and Co., Property Office (SIPO) invalidated the patent Bayer A.G. and others—began challenging its on Viagra that it had granted to Pfizer Inc. just Most observers agree that this enforcement method-of-use patent around the world. In three years earlier. Numerous observers quickly dilemma can be resolved only through govern- 2000, a U.K. court revoked Pfizer’s method-of- seized on this decision as yet one more sign of use patent for its failure to satisfy the novelty the dire state of intellectual property rights in Institute, champion of libertarianism, has requirement, and the European Patent Office China. But instead of heralding the death (or suggested that “China [has to be] prepared to followed suit in 2001. The U.S. Patent and dearth) of IP rights in China, the Viagra case institute and live by the rule of law.” Roger Trademark Office is currently re-examining the could be viewed as highlighting the birth of a Pilon, “China’s Viagra Test,” Cato Institute, method-of-use patent it granted to Pfizer, new era for IP rights enforcement in China. Aug. 13, 2004, at 1. But this consensus view ignores what has turned out to be perhaps the Following in the footsteps of Pfizer’s rivals, a acted to construct a legal framework for most promising solution to the enforcement coalition of Chinese drug manufacturers filed Pfizer’s method-of-use patent. Many believe that this was the first time that anyone had ever asked SIPO to invalidate a patent. First, major intellectual property convention and dence, demonstrate that Chinese citizens and the Chinese drug manufacturers argued that treaty, and its laws and regulations are mostly companies are eager to enforce their own IP Pfizer’s patent did not meet the “inventive up to the rigorous standards established by the rights and to challenge the IP rights of others.
World Trade Organization’s (WTO) Agree-ment on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Indeed, the U.S.
In 1991, Pfizer applied for a patent on silde- trade representative has stated: “Overall, the nafil citrate, a pharmaceutical compound that it hoped would act as a heart drug. Pfizer generally in line with international norms in was, at that time, most of the developed world, most key areas.” U.S. Trade Representative, States, Europe and Japan. Significantly, Pfizer step” requirement. Generally put, this require- did not obtain a patent in China, which did ment precludes patents for inventions that do not begin granting patents on drugs until 1993. not sufficiently improve on existing knowledge.
Underlying this argument was the allegation that sildenafil citrate’s greatest potential lay in that sildenafil citrate’s potential as a treatment the question is how to remedy the one weak its use as a treatment for erectile dysfunction for E.D. was obvious or well known prior to the spot in China’s IP rights regime: enforcement.
(E.D.). Based on this evidence, Pfizer quickly This problem is reflected in the numerous applied for a method-of-use patent. Unlike the street stalls selling bootlegged copies of films original patent on sildenafil citrate, the new argued that Pfizer’s patent application was patent sought to protect a method of using the marred by insufficient disclosure. For example, before) they are released in the United States, drug to treat a specific disease, E.D. By this the method-of-use patent application included as well as in the counterfeit drugs that compete time, China was issuing patents on pharmaceu- with legitimate offerings by pharmaceutical ticals, so Pfizer filed its E.D. use claims in unknown. Pfizer’s own witness, a Nobel China, as well as in the United Kingdom, the laureate, conceded that he could not draw a Scott M. Flicker is a partner, and Matthew S. definite conclusion from the method-of-use Dunne is an associate, in the global competition and patent as to how Viagra could be used to treat trade group, and in the Washington office, of Paul, manufacturers to patent not just the drug itself, E.D. Ultimately, SIPO invalidated the patent Hastings, Janofsky & Walker. Flicker’s practice but also every conceivable use for it. In doing on the second ground, insufficient disclosure. focuses on intellectual property and international so, they seek to maximize both their legal Shortly after SIPO announced its decision, trade litigation, and Dunne concentrates in interna- protection and profit potential. In 1998, the a coalition of 17 Chinese drug manufacturers tional trade litigation and international arbitration. United States and Europe granted Pfizer the declared that they would soon initiate sales of competing products containing sildenafil Chinese citizen sued Dow Jones & citrate, and for half the cost of Co. for using a calligraphic painting of “Dao,” faced by parties seeking to enforce IP rights in the first character of the company’s Chinese China was the lack of injunctive relief, which translation, that he gave to its chief executive serves as an essential remedy in nearly all IP appeal SIPO’s decision. Pfizer’s appeal is officer in 1994, but which Dow Jones began rights regimes throughout the world. The prob- currently pending before the Beijing People’s using as its corporate symbol on its Web site.
lem was that the Chinese legal system had no Intermediate Court. The outcome of the appeal See Cui Ning and Liu Li, “Awareness of IPR equivalent concept. As one justice of the is unclear, but the odds are against Pfizer: Fewer Rises, with Number of Cases,” Nov. 8, 2004, at Supreme People’s Court remarked, “[Injunctive than 20% of SIPO decisions get reversed.
w w w. s i p o . g o v. c n / s i p o _ E n g l i s h / g f x x / relief] occupies an important position in Whatever the outcome, given the publicity iprspecial/t20041108_36017.htm. protective systems of intellectual property These suits against right[s] of all countries. There are no corresponding legal stipulations found in the existing litigious [sic] legal system of our country.” Jiang Zhipei, “Regarding Preliminary ‘Injunction’ in Patent Suit of China,” revolution in Chinese society and culture. It domestic affairs between different Chinese relief. See Patent Law of the People’s Republic not only reflects the ascendancy of the rule of citizens and companies. See Cui Ning and Liu of China, Art. 61. The incorporation of this law, but also a new willingness on the part of Li, supra. This spate of litigation has only remedy into the Chinese legal system reflects Chinese citizens and companies to employ encouraged Chinese citizens and companies to the depth of the changes made since 1984. formal legal mechanisms to enforce or be more proactive in securing their IP rights.
In order to bring its IP rights regime up to The number of trademark filings in China in TRIPs standards, China has had to enact a 2003—450,000—exceeded those of any other host of laws and regulations, overhaul its patent was first invalidated in the United country in the world, and the number of patent dispute resolution process, retrain government Kingdom and Europe, only SIPO’s decision applications has quickly risen to close to U.S.
seems to have inspired dire warnings about a levels. For 2003, patent applications in public about the importance of respecting purported failure to comply with international China numbered 300,000, of which and protecting IP rights. The rapidity with IP obligations. This reaction stems largely from 12,000 were filed by Americans and 251,000 which China has transformed its IP persistent concerns over the rule of law in rights regime has been “rarely seen in the China. Foreigners appear to lack confidence annals of the history of intellectual property.” in the ability or willingness of Chinese Historical context Jiang Zhipei, “The Judicial Protection institutions to mete out fair and impartial of Patents in China,” May 23, 1998, at www.chi- decisions without regard to the nationality or embrace of IP rights by Chinese citizens and naiprlaw.com/english/forum/forum2.htm.
companies is nothing short of remarkable.
Of course, the system is not perfect. There remain, there is significant evidence of a concept of “intellectual sea change in China’s culture to embrace property rights” was Chinese law recently rights, and there are and expand the rule of law in the area foreign to most Chinese, of IP rights. For example, in the Viagra case, the Chinese drug manufacturers chose to protecting IP rights and contest the validity of the patent through legal process rather than by illegally manufacturing the drugs and selling them on the black market, as they might have done in the past.
built an IP rights regime from scratch. For strengthen China’s IP rights regime. The The depth of this change is reflected in the example, in 1984, China enacted its first patent Chinese government will undoubtedly play new willingness of Chinese citizens to enforce law. Prior to that, China offered no patent a critical role in this process, but so must IP rights against sacrosanct state institutions. A protection at all. Instead, China seized private citizens and companies. Until now, Chinese artist’s family recently won a copyright inventions it deemed useful and offered most observers have overlooked that lawsuit against the Museum of the Chinese certificates and cash rewards to the inventors. Revolution for selling copies of the artist’s That original patent law has been revised a Viagra case, as well as the other cases discussed 1950s paintings without their consent. dozen times since 1984 to bring it up to TRIPs in this article, demonstrate that IP litigation by Zha Xin, “Feature: Lawsuit to Honor standards. Indeed, one observer commented, private parties offers the most promising Artist’s Copyright,” at 1-2, at www.china- “China’s legal infrastructure—laws, enforce- vehicle for strengthening China’s IP rights iprlaw.com/english/letters/letter13.htm. This kind of action would have been unthinkable processes—are quite new and undergoing a seemingly endless series of changes since it first opened out to foreign investment.” Jayanthi enforce their IP rights against foreign compa- Iyengar, “Intellectual Property Piracy Rocks nies. Shanghai Unilever learned this lesson China’s Boat,” Asia Times, Sept. 16, 2004.
This article is reprinted with permission from the well after a Beijing resident sued it for using his patent without his authorization. See Liu Li, China’s patent law include the addition of new JOURNAL. 2005 ALM Properties, Inc. All rightsreserved. Further duplication without permission is “Patent Dispute Lands in Court,” May 13, categories of patentable items, the extension of prohibited. For information, contact American Lawyer 2004, at www.chinadaily.com.cn/english/doc/ patent terms to 20 years and the clarification of Media, Reprint Department at 800-888-8300 x6111.
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