A New Proposed Exemption from Infringement of a Patent Term Extension Order – a Call for Comments

On August 29^th 2021, the Israel Ministry of Justice published an exposure bill proposing to introduce into Israel patent law, an exemption from infringement of a PTE Order, along the lines of the EU so called manufacturing waiver, albeit substantially more favorable to the generic industry. The draft exposure bill is open for public comments until September 19^th, 2021.

Elements of the proposed exemption

The main elements of the proposed exemption are:

1. It will not be an infringement of a PTE Order to manufacture a pharmaceutical or a medical device protected by the PTE Order (“a Product”) for its marketing outside of Israel and to do any act necessary for the manufacture or marketing as aforesaid;
2. During the last six months of the duration of the PTE order, it will not be an infringement of a PTE order to manufacture and stockpile a Product for its marketing within Israel the expiry of the PTE Order and to do any act necessary for the manufacture or marketing as aforesaid;
3. The exemption from infringement will not apply to importation of a Product for the sole purpose of repackaging, export or storage of the imported Product;
4. The amendatory law is proposed to enter into force on the date of its publication and will apply to PTE requests applied thereafter. In addition, the exemption will apply, commencing on July 2^nd, 2022, to PTE Orders granted on the basis of PTE requests that were pending on the date of entry into force as well as to PTE Orders that were granted before the date of entry of the amendatory law, if the basic patent to be extended has not expired before such date.

Preliminary non-exhaustive comments

1. Unlike the EU arrangement, the proposed exemption does not contain any safeguards necessary to preserve the public interest in prevention of abuse of the proposed mechanism. For example, unlike the EU arrangement, the proposed bill does not establish a mechanism of notification of the Patent Office, or the patentee, of activities alleged to be covered by the exemption.
   In addition, there is no requirement that the entity availing itself of the exemption must notify the next entity in its supply chain that it is acting based on the exemption and that marketing in Israel is not permitted by the exemption.
2. There is no real transition for PTE Orders already granted but not yet in force. The July 2022 date seems to be a lip service.
3. The proposed six months stockpiling exemption is substantially more detrimental to the public interest in the integrity of the patent system. This is because in Europe the average duration of SPCs is substantially longer than in Israel. In Europe, five year extensions are abundant, whereas the average extension duration in Israel is substantially lower (see the excellent work of Dr. Ofer Tur-Sinai here).

Stay tuned.