Compensation for Wrongful Preliminary Injunctions in Germany

 

The 13/2023 issue of GRUR includes an excerpt from a September 2022 decision of the LG Düsseldorf (Judgment of Sept. 29, 2022, 4c O 48/21— Glatirameracetat, 2023 GRUR 957-66, full text available from dejure.org here) and an accompanying article by Marco Stieff and Anja Geller, that touch on a topic I discuss in a pending book project: namely, under what circumstances can a defendant (often a generic drug company) or a third party recover compensation for losses suffered from having been excluded from the market as a result of a preliminary injunction, where the patent in suit has been subsequently invalidated or found to be not infringed.  Readers will recall that this topic has been taken up once in recent memory by the CJEU in Bayer v. Richter, and is the subject of another pending dispute there in the case of Mylan v.  AB v. Gilead Sciences Finland Oy, Case C-688/17 (CJEU filed July 15, 2022).  (See my blog post of July 9, noting that this subject is also the topic of discussion in a recent post on the Kluwer Patent Blog.)  In the German case, the court concluded that Mylan (the generic firm) could recover its losses and also losses suffered by its sister company, Mylan Germany GmbH, even though the latter was not a named party in the injunction proceeding.  I may have more to say about this case in a future post, after I've had some time to read it more carefully.  For now, I will note only that the authors of the article, titled Ersatzansprüche bei ungerechtfertigten einstweiligen Verfügungen im Pharmabereich:  Ansprüche des Antragsgegners und geschädigter Dritter (“Compensation claims for wrongful preliminary injunctions in pharmaceutical cases:  Claims of injunction defendants and injured third parties”), 2023 GRUR 931-37, are supportive of the outcome but argue that third parties should be given greater leeway to claim compensation from the firms that obtain preliminary injunctions under these circumstances.  Here is the abstract of their article, in the authors’ own English translation which is provided along with the German:

Preliminary injunctions are commonly granted for pharmaceutical patents.  If an order later proves to be unfounded, under § 945 German Code of Civil Procedure (ZPO) the defendant generic company can claim damages on the basis of the plaintiff’s strict liability.  However, attempts to enforce these claims are rare, and even when they are, originators have little to fear because their profits routinely exceed the losses of the generic companies by a wide margin.  Yet delayed market entry by generic companies not only harms generic companies themselves, but also leads to the unjustifiable maintenance of high prices for patent-protected medicines.  The resulting higher costs place a burden on the already strained healthcare system as well as on the health insurance companies.  § 945 ZPO does not take into account these higher costs, raising the question of the need for further bases for claims.

The authors discuss cases in France, the U.K. (a case I blogged about here), and the Netherlands that have denied third parties compensation, though in the Dutch case the party seeking compensation (actually, unjust enrichment) initially was successful before the court of first instance (only to lose on appeal).  The authors speculate about whether such a claim would succeed in Germany, but conclude that in general German courts should be more cautious than they currently are before granting preliminary injunctions in pharma cases, given the high rate of invalidation and the prospect that injuries suffered by generic firms, much less third parties, often will not be fully compensated.