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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Excerpts

Background Note

Pfizer, the largest pharmaceutical company in the world, sold its products in more than 150 countries (Refer to Exhibit I for a brief note on Pfizer). In the early 1990s, Pfizer's scientists realized that a drug being developed by it to control hypertension was a potential drug to treat male impotence.

On May 13, 1994, Pfizer submitted an application for a patent called "Pyrazolopyrimidinones for the treatment of impotence"with China's SIPO. The same day, Pfizer submitted similar patent applications in the US Patent and Trademark Office and the European Patent Office...

SIPO Invalidates Viagra's Patent

In May, 2004, Pfizer announced that it was partnering with the Chinese government to enforce its patent on Viagra that had been granted in 2001. But on July 7, 2004, the SIPO revoked the patent. The alliance cited six alleged grounds for invalidity. Pfizer won on three and lost on one and two others remained undecided. The review board said that Pfizer was on the wrong side of the patent law as it had failed to accurately explain the uses of the Viagra's key ingredient, Sildenafil (Refer to Exhibit V for a brief note on China's patent law)...

SIPO Ruling Leads to International Outcry

Due to the huge market potential for ED drugs and the dispute between local and foreign firms, the Viagra patent litigation issue generated a lot of interest around the world. The decision of SIPO to invalidate Pfizer's patent for Viagra led to an international outcry. They viewed the adverse ruling as an indication that China was unwilling to comply with the guidelines set by its membership in the WTO. Some accused it of regressing back to the past when IPRs were violated by Chinese firms while the Chinese government looked the other way...

Analysts See a Silver Lining

But some experts felt that the legal challenge to Viagra had a silver lining as it indicated the continuing development and progress of the Chinese IPR regime. The Chinese pharmaceutical companies' decision to legally challenge Pfizer's patent demonstrated significant progress by China toward the rule of law in the IPR arena. They noted that on earlier occasions Chinese firms had blatantly violated IPRs and this new emphasis on seeking legal routes was indicative of the Chinese companies' growing appreciation of the value of patent laws...

China's Huge Market can't be Ignored

Analysts did not read too much into Pfizer and other MNC pharmaceutical companies' assertion that the ruling against Pfizer would lead to decreased investment in China. China continues to be an attractive market for multinational pharmaceutical companies. Alan Adcock, senior associate Rouse & Co. International said that the Chinese pharmaceutical market was "too attractive"for the foreign players to ignore...

Excerpts Contd...>>

  

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