Stief on Preliminary Injunctions Prior to Grant

The issue of whether courts in EPO member states have authority to grant preliminary injunctions on the basis of pending patent applications has recently been litigated in a number of European countries (see previous mentions on this blog here, here, here, and here).  Marco Stief has now published two papers, one in German and one in English, on the topic, noting that such injunctions appear to be permissible in some countries, albeit in several of them only in exceptional cases.  His more recent contribution is Fingolimod—(no) injunction before patent grant, J. Intell. Prop. L. & Prac. __ (forthcoming 2024).  Here is the abstract:

This article analyses the position of European courts on the availability of preliminary injunctions on the basis of a patent application, reviewing several national decisions in the fingolimod litigation. The decisions handed down by the Düsseldorf Regional Court, the Tribunal Judiciaire de Paris, the Danish Maritime and Commercial Court, the District Court of The Hague and the Barcelona Commercial Court show that the courts, with limited exceptions, reject provisional legal protection on the basis of a mere patent application on the grounds of absence of legal certainty.  The analysis identifies four (minimum) prerequisites that must be fulfilled for the courts to consider the possibility of issuing an injunction before a patent is granted.

The corresponding German article is (Keine) Unterlassungsverfügung:  Zugleich Besprechung von LG Düsseldorf „Fingolimod‟ unter Berücksichtigung von Parallel-Verfahren in anderen Jurisdiktionen, ("No Preliminary Injunction:  As Well as Case Law from the Düsseldorf Regional Court in "Fingolimod" in Consideration of Parallel Proceedings in Other Jurisdictions"), 23/2023 GRUR 1651-60.

For a different point of view, see Matthieu Dhenne’s article Preliminary Injunctions Based on a Patent Application:  A Justified Solution? (Fingolimod Case), 45 EIPR 236 (2023), previously noted here, and his more recent post FINGOLIMOD or the Hesitation Blues: can preliminary injunctions be based on a patent application under French law?, Kluwer Patent Blog, Dec. 19, 2023, which updates the French case law discussed in his earlier article and in the two Stief articles.

FRAND in China, Strict Liability in CJEU: Two Recent Decisions

Two newsworthy items I will be blogging about in greater detail in the days to come:

1. In a decision dated December 22, 2023, China’s Supreme People’s Court has ordered Oppo to pay Advanced Codec Technologies LLC (ACT) a FRAND royalty amounting to a little over US$2 million.  This is the second Chinese FRAND decision handed down in December, following the Chongqing court’s decision in Nokia v. Oppo, previously noted here.  For discussion, see Aaron Wininger’s posts here and here; the former links to the ACT decision, in the original Chinese.

2. On the Kluwer Patent Blog, Miquel Montaña discusses last week’s decision of the CJEU in Mylan v. Gilead.  Somewhat surprisingly, the court appears to have backtracked somewhat from its decision in Bayer v. Richter, by upholding Finland’s strict-liability approach to awarding compensation to a defendant who is preliminarily enjoined on the basis of a patent that is subsequently invalidated.  The author is quite critical of the decision.  I will have more to say about the decision, which I want to read carefully, in the coming days and in a forthcoming book project.  Stay tuned.

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.  

 

CJEU to Consider Once Again Article 9(7) of the Enforcement Directive

Article 9(7) of the European Communities' Intellectual Property Rights Enforcement Directive states that where "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."  Readers may recall that in its 2019 decision in Bayer v. Richter the Court of Justice for the European Union (CJEU) held that article 9(7) does not necessarily require the IP owner whose rights are later invalidated to compensate a party who has been preliminarily enjoined from entering the market prior to invalidation, at least where the patent owner's conduct was not abusive and the defendant did not try to mitigate its loss by seeking to invalidate the patent prior to at-risk launch.  Although the precise contours of the decision remain to be fleshed out, some of the commentary following the decision, including my own preliminary thoughts on the case, has been negative.  See Agnieszka Sztoldman, Compensation for a Wrongful Enforcement of a Preliminary Injunction under the Enforcement Directive (2004/48/EC), 42 E.I.P.R. 721 (2020); see also Léon Dijkman, CJEU rules that repeal of provisional measure does not automatically create liability for wrongful enforcement (2019) 14 Journal of Intellectual Property Law and Practice 12 (2019).  In any event, the CJEU will have an opportunity to revisit article 9(7) in the pending case of Mylan AB v. Gilead Sciences Finland Oy, Case C-473/22.  So far the case does not appear to have attracted as much attention as I would have expected, although I learned about it myself from a recent write-up on the EPLaw Blog.  Anyway, it appears that Finland awards compensation to an enjoined defendant on a strict liability basis, in cases in which the IP in suit is later invalidated, and so the present case poses the following questions: 

 

          Is a compensation regime based on strict liability, such as that described above (paragraphs 16 to 18 of this request for a preliminary ruling) which is in force in Finland, to be regarded as compatible with Article 9(7) of the Enforcement Directive? ^{. . . .}

 

            If the first question is answered in the negative, what then is the nature of the liability for compensation on which the liability under Article 9(7) of the Enforcement Directive is based? Is that liability to be regarded as a form of liability based on fault, an abuse of rights, or some other ground?

 

            In relation to the second question, what circumstances must be taken into account in assessing the existence of liability?

 

            In particular, as regards the third question, must the assessment be made solely on the basis of the circumstances known at the time when the provisional measure was obtained, or is it permissible to take into account, for example, the fact that the intellectual property right on whose alleged infringement the provisional measure was based was subsequently, after that measure was obtained, found to be invalid ab initio and, if so, what significance is to be attached to that circumstance?

The commentators I linked to above had foreseen the potential incompatibility of Bayer v. Richter with such strict liability regimes, as did Tanguy de Haan in his article The CJEU sides with IP right holders: the Bayer Pharma judgment (C-688/17) and the consequences of the Europeanisation of provisional and precautionary measures relating to IP rights, 42 E.I.P.R. 767 (2020).  It will be interested to see if the Court interprets that decision broadly or narrowly.