Copyright

Copying Ethical Drug’s Package Insert on Generic Drug Is Exempt From Liability

It was a standard course of action that an ethical drug company would allege copyright infringement if a generic drug company copies the user’s guide developed for the ethical drug. Filing a copyright action would prevent generic drugs from entering the marketplace. However, there were disparate court decisions and heated debate as to whether the labeling of an ethical drug is a literary work that should enjoy copyright protection, or whether the use of an ethical drug’s copyrighted package insert for the sale of its counterpart generic drugs constitutes fair use under the Copyright Law.

The dispute had been resolved by the IP Court’s decision in an action initiated by Takeda Pharmaceutical Company Limited, a Japanese ethical drug company, against China Chemical & Pharmaceutical Company, a Taiwanese generic drug company. In the case, China Chemical copied the package insert of a Takeda ethical drug (i.e. ACTOS) for diabetics for use with China Chemical’s generic version (i.e. GLITOS). The Court held that China Chemical’s copying of Takeda’s package insert should be deemed as fair use of a copyrighted work, and should not be liable for copyright infringement.

This case involves a conflict of laws between the Copyright Law and the Drug Inspection, Registration & Review Standards issued by Department of Health (DOH). The Court opined that the Drug Inspection, Registration & Review Standards is categorized as an administrative order, whose hierarchy ranks lower than the Copyright Law, which belongs to the category of laws legislated by Congress. Therefore, Copyright Law trumps the administrative order in the application of laws.

The Court acknowledged that, Takeda’s user’s guide, or the package insert, is a coined work that was developed in the course of Takeda’s research into producing a medicament (i.e., ACTOS) for treating diabetics. It is therefore an original work under the definition of Copyright Law and deserves copyright protection. However, it is also true that Article 20 (1) III of the Drug Inspection, Registration & Review Standards requires generic drug companies to use the same package insert as was approved for, and is used in the sale of an ethical drug. Under the requirements of the Standards, the defendant China Chemical’s copying of the insert of Takeda’s ethic drug (ACTOS) and the use of such copied insert in its generic version (GLITOS) is justified. The Court reasoned that, China Chemical should not be afforded the unfavorable result due to a conflict of laws between the Standards and the Copyright law. Even though China Chemical’s guide is concededly a copy of Takeda’s original work and was intended to be used in a direct competition of ACTOS, the Standards issued by DOH precluded China Chemical from the liability of copyright infringement.

The Court concluded that, copyright infringement of a generic drug company becomes an inevitable result in view of the current requirements set by the Standards. Unless there is a further amendment of laws by the competent authorities, copying the insert of an ethical drug to be used in the sale of a generic drug will be deemed as fair use of a copyrighted work.