Montefusco and Crespo on Spanish Eli Lilly v. Teva Decision

A post I published a few months ago titled Recent Patent Damages Decision of the Madrid Court of Appeal began as follows:

A few weeks back Adrián Crespo published a short post on the Kluwer Patent Blog titled Patent case: Judgment no. 18/2023 of Madrid Court of Appeals (Section32) of 23 June 2023, Spain.  The author writes that, as a result of the decision, “generic companies wishing to launch at risk” should be aware that “the first mover(s) will be held liable for triggering regulatory price reduction and thus for the damages arising from the price gap between the innovator and the generic, even if other third parties have launched at a later point in time.”  The post references a longer summary of the decision on Kluwer IP Law, to which I do not have access, but I was able to obtain a copy of the decision itself and will note a few things about it below.  (Here is a link to the decision in the original Spanish, and here is a link to a machine translation.)

More recently, Mr. Crespo and Josep Montefusco have published an article titled Madrid Court of Appeal Rules in Landmark Damages Case, 46 EIPR 65 (2024).  The abstract reads:

In a recent judgment, the Madrid Court of Appeal (Section 32) has ruled in the landmark raloxifene patent infringement case. The decision dealt inter alia with the allocation of liability among patent infringers for triggering regulatory price reduction. This comment considers the main implications of this precedent, which are likely to shape future damages claims in Spain (an important market for pharmaceutical products which, moreover, is not part of the Agreement on a Unified Patent Court).

The article provides a detailed analysis of the facts and the principal holdings.  It concludes, first, that one of the decision’s important holdings is that “patentees and/or their licensees may claim damages for losses suffered by their subsidiaries” (p.69).  (By way of comparison, I would note that U.S. law on this point is not altogether clear; for brief discussion and citations, see my post dated Oct. 26, 2016, noting Mark Lemley’s critique of Federal Circuit case law that generally precludes a patentee from recovering losses suffered by its exclusive licensee, and district court cases considering the “inexorable flow” doctrine, under which a parent may under some circumstances recover for losses suffered by a subsidiary.  In a somewhat related vein, see also my post dated Nov. 20, 2023, discussing some recent French and Canadian cases addressing  standing to sue of licensees and related companies. )  Second, the article notes the significance of the court’s holding that the first generic in the market can be liable for a subsequent price reduction even if other entrants follow, and considers its implications and possible nuances.