Monday, March 29, 2021

Sztoldman on Compensation for Wrongful Enforcement

In October 2019, I published a post titled Bayer v. Richter: Worst CJEU Decision Ever?, discussing the CJEU's decision in case C-688/17.  According to my description of the decision, "the fact that the defendants's launch of their generic contraceptive product put Bayer at risk of suffering irreparable harm may mean that Bayer isn't required to pay adequate compensation to the defendants, even though the patent in suit was later invalidated, for having been wrongly excluded from the market."  Exactly what the implications of the decision are still remains to be seen, as evidenced for example from the comment to my post and from a subsequent article by Léon Dijkman (noted here).  Anyway, Dr. Agnieszka Sztoldman has published a paper titled Compensation for a Wrongful Enforcement of a Preliminary Injunction under the Enforcement Directive (2004/48/EC), 42 E.I.P.R. 721-27 (2020), and it's fair to say that she's not a big fan of the decision either.  Here is the abstract:

This article explores legal mechanisms for compensating a wrongful enforcement of a preliminary injunction under the Enforcement Directive 2004/48/EC. Special focus is given to the recent judgment of the Court of Justice of the European Union in the case of Bayer Pharma of 12 September 2019. This article argues that the test proposed by the Court of Justice in national cases for compensating for a wrongful enforcement is incorrect in the view of art.9(7) of Directive 2004/48/EC. Despite art.9(7) of Directive 2004/48/EC, which strikes a balance of competing interests of a potential infringer and the intellectual property right holder, the Court of Justice held that, when the patent was ultimately invalidated, it does not automatically follow that the preliminary injunction was unfounded. As for specific issues, this article, notably, discusses whether the test for compensating a wrongful enforcement takes into account an abuse of a preliminary injunction and the behaviour of the defendant who launched a product without first challenging the patent. This article argues that it would be contrary to the aim of Directive 2004/48/EC if the compensation of defendants could be routinely refused when they do not wait for the invalidation of the injuncted patent. Otherwise this would encourage the misuse of preliminary injunctions. Finally, this article questions the applicability of national correction instruments to assessing of damage resulting from a wrongful enforcement of a preliminary injunction, implied in the case law of the Court of Justice.

I think this may be the summer when I finally turn my attention to a project I've been mulling over for a while, on the comparative law and economics of wrongful patent enforcement.  If so, the issues raised in Bayer v. Richter will be among the leading topics to consider.  

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