As I noted the other day, on January 11 the CJEU issued its decision in Mylan AB v. Gilead Sciences Finland Oy, Case C-473/22. The decision addresses, among other things, article 9(7) of the Intellectual Property Rights Enforcement Directive (IPRED), which reads as follows:
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.
The operative portion of the Mylan decision reads as follows:
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 not precluding national legislation which provides for a mechanism for compensation for any injury caused by a provisional measure, within the meaning of that provision, based on a system of strict liability of the applicant for those measures, in the context of which the court is entitled to adjust the amount of damages by taking into account the circumstances of the case, including whether the defendant played a part in the occurrence of the injury.
As Miquel Montaña has noted, the decision seems a bit hard to square with the CJEU’s 2019 decision in Bayer v. Richter, and leaves open several questions—though I was critical of Bayer v. Richter, and I am more sanguine about the Mylan decision than is Dr. Montaña.
As I have written before, portions of the Bayer decision (e.g., paragraphs 62-63) might 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) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, in particular, the concept of ‘appropriate compensation’ referred to in that provision, 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, Mylan v. Gilead clearly provides more leeway than some might have considered possible after Bayer v. Richter, for EU member states that wish to do so to apply some sort of strict liability approach. On this issue, Dr. Montaña expresses the concern that, in the absence of a harmonized rule there will be an incentive for forum shopping, though I am not as convinced about the significance of this concern. A company that believes its patent is being infringed, and that it is faced with irreparable harm pending trial, in numerous EU countries will still have an incentive to file suit in those countries in which it faces irreparable harm, I should think—though it will be more cautious, perhaps, in countries like Finland where the stakes of getting it wrong are more substantial. To be sure, as Dr. Montaña notes, there could be forum shopping in favor of the UPC, which might adopt a more patentee-friendly interpretation of its governing provisions, but I’m not sure why forum shopping in favor of the UPC is a bad thing either, unless the rule it adopts is clearly suboptimal.
The actual rule adopted in Mylan nevertheless is a bit puzzling, as Dr. Montaña suggests; one would think that strict liability is, after all, strict, and not subject to a consideration of “the circumstances of the cases.” But that is how the case was presented (see, e.g., para. 23, stating that “according to settled Finnish case-law . . . the amount of compensation may be reduced on the ground that the defendant himself or herself enabled the injury to occur or failed to take reasonable measures to avoid or mitigate the injury and thereby contributed to its occurrence”). So maybe this means that member states may adopt a regime of strict liability in favor of the excluded defendant, as long as they provide courts with some discretion to tailor the remedy in consideration of the circumstances of the case? For example, let’s suppose that the patentee acted in the good faith belief its patent was valid and infringed, and the defendant launched at risk; maybe the compensation due to the defendant will be lower than if there were fault on the part of the patentee, or if the defendant (as here) was poised to enter the market but hadn’t yet sold any products. That said, I’m still not sure that outcome is entirely coherent, since it means that in some cases the excluded defendant will recover something, but not full compensation, for the harm of being temporarily excluded, and that it may be penalized for launching at risk even if it ultimately prevails on the merits. Moreover, for what it’s worth, I don’t see what would be so bad about awarding the excluded defendant full compensation in every case in which the patent is invalid or not infringed; why should the temporary exclusion on the basis of a patent that is invalid or not infringed be damnum absque injuria? (As I have noted previously, some law-and-economics scholars agree with me on this.)
Maybe another solution that will emerge, in countries where this isn’t the practice already, will be to require the patentee to post a bond in a sufficient amount to cover any resulting injury, as permitted under article 9(6) of IPRED and noted in Phoenix Contact; though that leaves open the question whether the amount of the bond can be increased as time goes on and circumstances change, and also whether, if the bond turns out to be inadequate, the defendant should recover damages for its losses in excess of the bond (which is not done, for example, in the U.S., but may be permitted in some countries.)
No comments:
Post a Comment