A patent infringement litigation was brought by Eli Lilly & Co. (“Eli Lilly”) in Taiwan against a local generic drug producer, TTY Biopharm (“TTY”), in 2003 for its alleged infringement upon Eli Lilly's process patent by producing Gemzars, a prescription drug for combating pancreatic cancers. In addition to the principal lawsuit, Eli Lilly requested a preliminary injunction in 2006. The preliminary injunction was granted by the District Court.

Eli Lilly filed such litigation after learning that TTY had imported the active pharmaceutical ingredients of Gemzar from China and had developed another format of the drug for clinical trials. One of the major issues of the case is whether TTY's improvement of the drug and practice of the patent constitute “research and experiment activities” protected in the “experimental use exception”. Pursuant to Taiwan Patent Act, an invention patent right does not exclude others from working the invention for non-commercial research, educational or experimental purposes. And in order to make the medicine affordable to the public and promote the public health, the Legislature amended the Pharmaceutical Affairs Act in 2005 and explicitly provided that the patent right cannot bar experimental and research activities for developing generic drugs.

ince TTY obtained the medicine permit issued by the Department of Health in 2006, a Taiwan company named Scino Pharm has become the supplier to provide TTY with the pharmaceutical ingredients of Gemzar. Scino Pharm was thus added to the patent infringement litigation initiated by Eli Lilly, but according to recent news released by Scino Pharm, Scino Pharm and Eli Lilly have reached a settlement agreement.

This case has passed through the District Court, the High Court and the Supreme Court. The appellate court affirmed the district court's decision on the same ground that TTY's act did not fall within the “experimental use exception” provided by the Patent Act and Pharmaceutical Affairs Act. However, the Supreme Court reversed the appellate court's decision and remanded the case to the lower Court. On the other hand, TTY also applied for the revocation of the preliminary injunction, which was rejected by the IP Court. Even so, the Supreme Court recently reversed the IP Court's ruling and remanded such application to the IP Court. Therefore, the application filed by TTY for the revocation of the preliminary injunction is currently under review and hearing of the IP Court. The preliminary injunction granted to Eli Lilly might be revoked after the longstanding tug of war over to establish the proper balance between the protection of intellectual property rights and accessibility of affordable drugs.