Strict Liability for a Wrongly-Issued Preliminary Injunction

The EPLaw Blog recently published a post excerpting portions of the English-language version of the provisional text of Advocate General Szpunar’s opinion in the case of Mylan AB v. Gilead Sciences Finland Oy, Case C-473/22.  I’m not sure when to expect the CJEU’s decision, but this promises to be an important case.  The question presented is whether Finland’s strict liability regime—under which a firm that (1) launches at risk and (2) is preliminarily enjoined on the basis of a patent or SPC that subsequently is invalidated or found not to be infringed, is entitled to compensation for the losses suffered as a result of the injunction—is consistent with IPRED article 9(7).  Article 9(7) states that “Where the provisional measures are revoked or where they lapse due to any act or omission by the applicant, or where it is subsequently found that there has been no infringement or threat of infringement of an intellectual property right, the judicial authorities shall have the authority to order the applicant, upon request of the defendant, to provide the defendant appropriate compensation for any injury caused by those measures.”  Portions of the CJEU’s 2019 decision in Bayer v. Richter can be read as expressing the view that article 9(7) precludes a strict liability regime like Finland’s, although the operative part of the judgment states only that article 9(7) “must be interpreted as not precluding national legislation which provides that a party shall not be compensated for losses which he has suffered due to his not having acted as may generally be expected in order to avoid or mitigate his loss and which, in circumstances such as those in the main proceedings, results in the court not making an order for provisional measures against the applicant obliging him to provide compensation for losses caused by those measures even though the patent on the basis of which those had been requested and granted has subsequently been found to be invalid, to the extent that that legislation permits the court to take due account of all the objective circumstances of the case, including the conduct of the parties, in order, inter alia, to determine that the applicant has not abused those measures.”  In any event, the contours of Bayer v. Richter have been a matter of debate over the past four years, so presumably we will get some clarity on the matter before long.  For what it’s worth, I am inclined to think that a strict liability regime makes sense in this context; and I was a little taken aback by some of AG Szpunar’s characterizations of the at-risk firm’s conduct (see, e.g., para. 1, where he states that “Where the protection conferred on the holder of an intellectual property right, such as a patent or a right derived therefrom, expires or where that right is considered legally vulnerable and likely to be declared invalid, the holder’s competitors may be tempted to place on the market products infringing that right without waiting for it to lapse. By placing their products on the market prematurely, they obtain a competitive advantage which allows them to gain market share before other more scrupulous competitors arrive”) (emphasis added, and yes, the original (French) text of the opinion uses the corresponding terms “tentés” and “concurrents plus scrupuleux”).  I would think that if the patent or SPC is actually invalid, there is nothing unscrupulous about launching at risk.  On the other hand, the AG’s interpretation of Bayer seems consistent with statements the court made in that decision, so his recommended answers to the questions presented (para. 80) are not all that surprising:

(1) Article 9(7) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as precluding national legislation providing, in the situations referred to in that provision, for a liability regime for the applicant for provisional measures that does not allow the court hearing an action for compensation of the loss caused by those provisional measures to take into account – in addition to the premisses of that liability set out in that provision – other relevant circumstances of the case in order to assess whether or not to order such compensation.

 

(2) The court hearing an action for compensation for losses under Article 9(7) of Directive 2004/48 must take into account, in order to assess whether or not to order such compensation – in addition to the premisses of that liability set out in that provision – other relevant circumstances of the case, both before and after the application for the provisional measures at issue, which allow it to assess the justified nature of that application in the light of the risk of irreparable harm caused to the applicant in the absence of such measures.

 

If the CJEU does go along with this, I believe it will result in changes not only to Finnish law but also to some other countries’ laws, including Germany’s. For previous discussion on this blog, see, e.g., here.  Also of relevance to this topic, see Konstanze Richter's post on JUVE Patent titled Kühnen grapples with Mylan dura vs. Teva damages claim on final day of hearings, discussing Mylan dura's claim of €15 million to compensate for having been preliminarily excluded from the market for 15 months on the basis of a patent later declared invalid.  The post stated that a ruling would be forthcoming on October 12, so I'm hoping to hear something about this soon.