Law360 Article on Top Patent Damages Awards of 2023

Dani Kass published an article titled The Top Patent Damages Awards of 2023, Law360, Dec. 19, 2023, available here but behind a paywall.  The article states that, although there were no ten-figure verdicts this year, "multiple juries came back with nine-figure verdicts."  The highest ($470 million) was in March in ClearPlay, Inc. v. Dish Network L.L.C., Case No. 2:14-cv-00191-DN-CMR (D. Utah)--which however was overturned in an oral ruling on a motion for judgment notwithstanding the verdict, for lack of infringement, just eleven days later.  (The judge's written opinion granting the motion was published in June, and is available on Westlaw.  The case is on appeal to the Federal Circuit.)  Overall, there were "50 or so" trials that led to damages awards, but according to attorney Jeannine Sano (quoted in the article) aggregate damages have remained steady in recent years at about $3 billion.  Highly recommended.  

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I will taking a blogging break until the new year.  Happy holidays!

Canadian Court Denies Permanent Injunction in Biosimilar Case

The case is AbbVie Corp. v. JAMP Pharma Corp., 2023 FC 1520, decision by Madam Justice McVeigh.  (Thanks to Professor Norman Siebrasse for calling this to my attention.)  The decision is very long (217 pages), and I will admit that I haven’t read all of it for purposes of writing this post, but as the judge puts it “the dispute relates to JAMP’s SIMLANDI product – a biosimilar of AbbVie’s HUMIRA” (para. 1).  The dispute involves three patents, the relevant claims of two of which are found to be invalid; the judge rejects the validity challenge to the third patent, and JAMP concedes infringement of that patent.  The relevant question for purposes of the subject matter of this blog is whether AbbVie is entitled to an injunction.  The court concludes it is not.

The relevant portions are found in paragraphs 628-643 (pp. 182-88).  To summarize, the court states that under Canadian law injunction relief is discretionary, but that “this discretionary power is usually granted unless there is an equitable reason not to” (para. 630).  The court notes JAMP’s argument that removing SIMLANDI from the market “would deprive patients of the only 80 mg/0.8 mL formulation available in Canada” (para. 634), and that two of its experts suggested that patients who had to switch to the AbbVie formulation in the event of a removal might suffer injection site pain or suffer other possible detriment (paras. 635-37).  Ultimately, the court concludes:

[642] This is one of those rare cases where I will not grant a permanent injunction given the public interest factor. Forcing SIMLANDI patients to switch to another biosimilar, given it is the only 80 mg/0.8 mL formulation in Canada, is not in the public interest. AbbVie can be compensated. Even though the risk is low to those patients, it is preferable to compensate AbbVie rather than take SIMLANDI off the market. JAMP does not need to deliver up its infringing product.

 

[643] As suggested it is possible that AbbVie can be compensated by a reasonable, running royalty on future sales of SIMLANDI for any loss. This rate should easily be determined given the licensing agreements it has with seven other biosimilar pharmaceutical companies. But I will not make this determination as it is left to be determined at the bifurcated trial if the parties do not reach an agreement before.

Canadian law therefore would appear similar to U.K. law in permitting a court to exercise its discretion to deny injunctive relief in the public interest, subject to payment of a royalty, outside the framework established in the statutory provisions on compulsory licensing.  In Germany, some of the courts thus far have suggested they would go the other way on this issue, though several commentators (including those I mentioned on the blog last week) believe that German law should follow the U.K. (and now Canadian) approach.    

Two More Articles on Proportionality and Injunctions in the UPC

In recent days, I've mentioned Léon Dijkman’s new book The Proportionality Test in European Patent Law PatentInjunctions Before EU Courts and the UPC (Hart Publishing 2023) and  Benjamin Raue and Franz Hofmann's paper Injunctions and Damages for the Infringement of Patents under the UPCA - An Analysis in the Light of the Principle of Proportionality (here and here), both of which I highly recommend to readers.  On this same theme are two other papers cited in one or both of these works, which I had not previously come across, and which are noted below. 

First, Ansgar Ohly published a paper titled Injunctions in the UPC and the principle of proportionality, 5 Stockholm Intell. Prop. L.Rev. 58 (2022).  Here is  a link to the paper on ssrn, here is a link to the published version, and here is the abstract:

 

Whereas in U.S. patent law injunctions are subject to the "four-factor test" established by the U.S. Supreme Court in eBay v. MercExchange, continental European patent courts have granted injunctions in cases of patent infringement as a matter of course. But the EU law principle of proportionality might require a more nuanced solution and has, indeed, caused the German legislator to introduce a disproportionality defence into patent law. The paper explores whether the Unified Patent Court, which started adjudicating patent law disputed in the EU in 2023, can deny the grant of injunctions in cases of disproportionality, discusses the criteria of proportionality and the legal consequences.

As discussed in the article, Ohly argues "that the UPC should steer a middle course" between the U.S.  approach and the traditional German approach under which injunctions were an "automatic consequence of an infringement."  Further, he argues that "the UPC should - and will probably -not conduct a balancing exercise in every single case," but rather will delay or deny injunctive relief only in exceptional circumstances; and that the most common scenarios probably will involve complex products, PAEs, or public health.  Finally, he argues (as he has previously) that compensation in lieu of an injunction should be limited to a reasonable royalty (a point on which I agree), and also that the authority to delay or deny injunctions on proportionality grounds should be available in some SEP cases as well (for example, cases in which a declared SEP is not in fact standard-essential)

Second, Matthias Leistner has posted a paper on ssrn titled Injunctive Relief in the UPC – A Case for Carefully Limited Flexibility, which is forthcoming in a festschrift for Reto Hilty.  Here is a link, and here is the abstract:

This article discusses whether and in what form the UPC has discretion with regard to the granting of injunctive relief. The argument is based on international and EU law, in particular the general proportionality principle, embedded in the Enforcement Directive, as well as on the text and context of the UPC itself. The author proposes an approach of limited discretion including appropriate compensation measures, namely payment in lieu of an injunction. These proposals are in line with the historically hybrid nature of the UPC as well as its internal and external context. Furthermore, the article explains, how this proposal can be implemented during the transitional period in the UPC as well as in national courts.

Leistner too argues that the UPC has the responsibility to delay or deny injunctive relief under extraordinary circumstances, which may include complex products cases in which the there is a substantial risk of holdup and cases involving serious risks to third parties (e.g., public health cases).  He leaves open the issues of PAEs and SEPs, and argues for compensation in lieu that would be in addition to damages.

Raue and Hofmann on Injunctions and Proportionality

Close on the heels of Léon Dijkman’s new book The Proportionality Test in European Patent Law Patent Injunctions Before EU Courts and the UPC (Hart Publishing 2023), which I noted last week (here), is a new paper by Benjamin Raue and Franz Hofmann titled Injunctions and Damages for the Infringement of Patents under the UPCA - An Analysis in the Light of the Principle of Proportionality.  Here is a link, and here is the abstract:

 

The infringement of a patent regularly results in a claim for injunctive relief and damages. However, depending on the facts of an individual case an injunction might be disproportionate. An injunction might cause hardship for third parties, be contrary to the public interest or, first and foremost, disproportionately disadvantageous for the infringer (e.g. “hold-up”). In our study, we discuss the impact of proportionality considerations on permanent injunctions and damages under the UPCA, with a special focus on non-practicing patent assertion entities (PAEs) and complex products. We will not discuss interim injunctions or the issue of SEPs.

The authors argue for a robust use of the proportionality defense to deny or stay injunctive relief in cases posing a substantial risk of patent holdup (particularly PAE and complex products cases), and to award ongoing royalties equal to a reasonable royalty.

Dijkman on Proportionality

Léon Dijkman’s book The Proportionality Test in European Patent Law Patent Injunctions Before EU Courts and the UPC (Hart Publishing 2023) is now available in print, and I understand that an open-access online edition will soon be available as well.  I read the book in draft several weeks ago, and think it is an excellent contribution to the literature on this emerging topic in E.U. law.  Here is the book description:

Does a European patent always entitle its holder to a permanent injunction?

 

This question has sparked vigorous debate in past years but so far remains unresolved. This open access book presents a detailed, practical, and comprehensive test to determine when injunctive relief should be limited on proportionality grounds.

 

The book's 3 parts guide readers from proportionality's normative foundations to its practical applications. Part I argues that, contrary to conventional wisdom, proportionality is not an open-ended balancing test but rather applies the principle of commensurate scope at the remedies stage. Part II offers an in-depth analysis of situations where a permanent injunction risks upsetting that principle. It draws on a unique qualitative study of all US District Court decisions between 2006 and 2020 granting or denying a permanent injunction in patent cases to stake out circumstances where an injunction might have disproportionate consequences. Part III grounds the inquiry in EU law and proposes a proportionality test along three elements: overreach, abuse, and conflicts with third-party rights.

 

The book thus provides a distinctly European response to a global problem. The book is an invaluable resource for practitioners, clerks, and scholars looking not only for the normative, empirical, and legal basis of proportionality in European patent law, but also for guidance on its real-world operation.

There also will be a book launch event at the University of Rotterdam in January.  Information is available here.

Update:  Dr. Dijkman has published a post summarizing the book on IPKat, here.