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February 2013

The patent system gives innovators a monopoly right - a right which in the life science and pharmaceutical sector can be extremely valuable. For a blockbuster drug, annual revenue of $10 billion is not unusual and it is perhaps unsurprising that a manufacturer will go to some lengths to enforce their patent rights protecting it. One immensely powerful tool for this purpose is the injunction, which if deployed correctly, can stop a potential infringer in their tracks.

Although the Enforcement Directive (2004/48/EC) makes interim and final injunctions available across Europe, the question of whether one is granted remains discretionary and a question of national law. In the sections below, our European offices summarise some of the key issues and developments as to how applications for interim injunctions are handled by their national courts.

Austria

In Austria, the grant of interim injunctions are decided on the merits and such injunctions are relatively common, possibly due to prima facie evidence being sufficient and the courts being prepared to deal with interlocutory issues on the basis of the senates' (the lay-judges') own expertise. As Rainer Schultes of the Vienna office notes,"due to the Courts’ technical expertise, not even questions of equivalence and obviousness are per se excluded from preliminary proceedings".

Furthermore, some of the factors which go against the grant of an interim injunction in other jurisdictions have less influence in Austria. For example, "the balance of convenience" is not an established criterion as the payment of damages is never considered an adequate remedy for IP infringements.

The UK

Outside of the life-science sector, the UK courts are reluctant to grant interim injunctions as they are considered to be a draconian remedy. As a result, the threshold to pass before an interim injunction is granted is relatively high, and one will only be granted if all the factors set out in the American Cyanamid case (the legal test that is usually applied) are met, that is (i) there is a serious question in issue, (ii) damages are not an adequate remedy for the patentee and (iii) taking all the circumstance into account, the balance of convenience lies in favour of granting an interim injunction.

This reluctance to grant interim injunctions is arguably reversed in life-science patent cases and pharmaceutical patent cases in particular. This is because since SmithKlineBeecham -v- Apotex in 2002, there has been very clear judicial guidance that an alleged infringer in the pharmaceutical sector should "clear the way" of any blocking patents prior to entering the market. The traditional view is that an unauthorised entrant onto the market can cause significant and irreparable damage to the innovator's market where products are typically marketed on an exclusive basis and at a significant price premium.

Although this view may have softened in recent years, as particularly exemplified by the Modafinil case (Cephalon & Ors v Orchid & Anor [2010] EWHC 2945 (Pat)) in which failure to clear the way and arguments of irreparable damage to market were not effective, the view is still that the UK courts are ready and willing to grant injunctions in this sector to protect the patentee.

Recently, in Merck Sharp Dohme Corp v Teva Pharma BV [2012] EWHC 627 (Pat), the Patents Court even ordered a quia timet injunction against the sale of generic efavirenz (i.e., before the efavirenz had even entered the market). This was, however, granted in narrow circumstances where the court drew inferences about Teva's intentions from the fact that they obtained a marketing authorisation for efavirenz a little over two years before SPC expiry, and where the defendant refused to disclose its marketing intentions in correspondence. The fact that Teva had launched atorvastatin at risk on an earlier occasion also weighed in favour of the conclusion that pre-patent expiry launch was intended.

Germany

If a patent is valid and infringed and the defendant cannot rely upon a legal defence such as a license agreement, German courts always grant a permanent injunction as a standard remedy. To make matters worse for defendants, infringement and validity are dealt with in separate proceedings (bifurcated system). Because infringement proceedings are about one year faster than proceedings on validity, injunctions can be granted long before the defendant has a chance to present invalidity arguments and get the injunction lifted. Infringement courts have a discretion to wait for the outcome of proceedings on validity, but are very reluctant to do so.

The German courts' approach to interim injunctions in general focuses more on the merits of the case itself than on its economic impact. German courts are also willing to grant interim injunctions if they are convinced that a patent is valid and infringed, and the patentee acts without undue delay. Interim injunctions proceedings are dealt with in a mini trial that takes 6-8 weeks and is entirely independent of the proceedings on the merits.

In interim proceedings, validity and infringement will be reviewed by the same court and the burden of proof for validity is with the patentee. Usually, only patents that have survived contradictory proceedings (oppositions or nullity actions) are a suitable basis for an interim injunction. However, in cases dealing with a generic launch in Germany the Düsseldorf court has recently applied a different, more generous standard. Even if the validity of the patent is unclear, interim injunctions are possible (even ex-parte), if the balance of convenience is in favour of the patentee, which is – according to the recent case law of the Düsseldorf Court - usually assumed in cases of a generic launch. Further, in cases of patent infringement at trade fairs or early entry of generic drugs in the German market, German courts may even grant interim injunctions ex parte, i.e. without oral hearing.

In this patent-friendly environment, the launch of new products in Germany should be prepared by patent searches. The recent case law also suggests that generic launches in Germany should be prepared by clearing the way actions against critical patents to be filed about 24 months prior to the intended launch.

France

In France, interim injunctions may be granted if it can be shown that there is a likelihood of patent infringement or that such infringement is imminent (Article L. 615-3 of Intellectual Property Code). In general, the courts require evidence of infringement (or intent to infringe) before granting an interim injunction although it has been held that life-science companies merely doing acts to prepare for launch post-patent expiry (for example, obtaining regulatory approval before patent expiry) is not sufficient to show an intent to infringe during the patent term.

As to the substantive examination of the patent in question, the French courts will conduct a preliminary assessment of the patent's validity and also consider whether there are any serious arguments raised by the parties on this issue.

Poland

In the past, certain types of rights, i.e. IP rights, enjoyed a higher level of protection under the Polish Code of Civil Procedure: for example, it was possible to obtain an interim injunction to secure the monetary claim in question, even before the final ruling. Patentees as other IP right owners used to enjoy this privilege as well. However, respective provisions were changed on 3 May 2012 when one of the most significant amendments to the Polish Code of Civil Procedure came into force. As a consequence, the changes significantly altered the grounds for interim remedies available regarding a patent infringement in Poland.

Currently the pre-requisites to obtain an interim injunction under Polish law are:

• an arguable case (i.e. a substantiated claim); and,
• a legal interest. 

The latter pre-requisite requires that a Claimant substantiate the fact that the lack of an interim injunction will make it impossible, or significantly impede, obtaining the object of the proceedings, i.e. the enforcement of the court's future ruling in the main proceedings. 

According to recent rulings, the Court has decided that "within the proceedings regarding preliminary injunctions – in general – the court does not determine definite facts of the case but only judges if the facts relevant for granting the interim injunction have been substantiated". In another case, the Court held that "the aim of the interim injunction is to enhance the effectiveness of the civil proceedings and to guarantee that despite the time necessary to consider the main case, it is possible to achieve the aim of the proceedings in the interim". However, it must be stressed that the interim injunction may not aim to satisfy the claim of the main proceedings, unless the law expressly states otherwise. Such a situation takes place when the interim injunction is necessary to reverse the impending damage or other disadvantageous consequences for the owner of the rights. Thus a court may issue an interim injunction prohibiting the distribution of the products which allegedly infringe the patent rights.

As can be seen, the judicial approach and prospects of successfully obtaining an injunction vary across Europe. At one end, an infringer who is merely threatening infringement in the UK but has done nothing to challenge the patent in question is highly likely to be injuncted at the interim stage; at the other end, such as in Germany, both patent validity and infringement will be considered before such a remedy is granted (with a more generous approach being taken with pharmaceutical patentees in cases of infringement by generics).

Faced with this uncertainty, is there any prospect of harmonisation across Europe to simplify patent enforcement and make it a more predictable exercise?

After some 40 years of efforts, we now appear to be close to having a Unitary Patent and Unified Patent Court (UPC) in Europe.  The Unitary Patent will have unitary effect in all EU member states (except Spain and Italy) and the UPC will have exclusive jurisdiction over issues of infringement and validity of Unitary Patents and those European Patents that have not been opted out of the UPC system. Importantly, the draft legislation gives the Unified Patent Court jurisdiction to grant both final and interim injunctions to prevent patent infringement of these patents. Whilst such a one-stop-shop may be attractive, there are certain limitations:  the UPC will not have jurisdiction over European patents that have opted out of the UPC system for the transition period and these will need to be enforced at a national level. The court will also have no jurisdiction over national patents. It also remains to be seen how many companies will apply for Unitary Patents.

Another option to achieve a similar result (and available now) is to seek a cross-border injunction from a national court. The CJEU's recent decision in Solvay v Honeywell (Case C‑616/10) suggests that cross-border injunctions may be granted in circumstances where defendants domiciled in more than one country are infringing two or more national counterparts of a European Patent with the same product or process.

Solvay applied for cross-border injunctions before the Dutch courts to prevent infringement by Honeywell of a European patent in force in various member states, including Austria, Finland and Greece. Honeywell said the various national parts of the European patent were invalid. Under article 22(4) of Regulation 44/2001, validity is a question for the courts of the member state in which the patent is granted. Honeywell said the Dutch court should have stayed the case as it did not have jurisdiction to decide on the validity of the Austrian, Finnish and Greek parts of the patent.

The Dutch Court referred the case to the CJEU which held that it is open to the Dutch Court to grant a cross-border injunction, even where validity is raised as a defence to the injunction,  when there is a risk on the facts of irreconcilable judgments from parallel national actions, further to Article 6(1) of Regulation 44/2001. Such a risk is to be determined by the national court in question.

It remains to be seen how the Dutch Court (and other courts of EU member states in the future) will apply the decision of the CJEU but it would appear that in certain cases, a pan-European injunction may be possible.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

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