EU: Finland liability regime 'compatible' in big pharma feud

Case concerns a supplementary protection certificate granted to Gilead by Finland’s Patent Office for a HIV drug | CJEU judges contradict AG opinion on whether a Finnish regime is at odds with an EU directive.

The Court of Justice of the European Union (CJEU) has ruled that strict liability regimes for losses caused by preliminary junctions (PI) based on IP rights that are then found to be invalid are consistent with the EU Directive on the enforcement of IP rights.

Today’s decision (January 11) concerns Mylan v Gilead and contrasts with the opinion of the Advocate General issued in September last year.

Richard Roberts and Kate Marrs of Potter Clarkson said the CJEU’s ruling "balances the rights of claimants and defendants more finely than the AG’s earlier, pro rights-holder opinion" in the same case.

"Critically, the CJEU’s interpretation of its earlier Bayer judgment as permitting strict liability regimes (allowing for 'automatic' compensation where injunctions fall away) means that the status quo will, somewhat, remain that 'wrongly' injuncted parties can expect a degree of compensation, as of right, in many jurisdictions," said Roberts and Marrs.

"However, Mylan also emphasises that courts are empowered to consider the all the circumstances of an individual case when assessing the appropriateness (and amount) of such damages. This is likely to put both claimants and defendants (including those who 'launch at risk') under considerable scrutiny to justify their actions,” they added.

The case concerned a supplementary protection certificate (SPC) granted to Gilead by Finland’s Patent Office on the basis of European Patent number EP091589, for an antiretroviral drug indicated to treat people with HIV.

Gilead accused Mylan, which merged with a Pfizer division in 2020 to become Viatris, of infringing the SPC with a proposed generic. Finland’s Market Court granted its request for interim measures, prohibiting Mylan from selling the copycat version of the medicine.

However, the SPC was later found to be invalid and Mylan requested more than €2.3 million in compensation from Gilead for the damage caused by the preliminary injunction.

Finland’s Market Court referred the matter to the CJEU to decide whether the country’s strict liability regime, which would automatically entitle Mylan to compensation, was compatible with Article 9(7) of Directive 2004/48 of the European Parliament and Council.

AG says regime incompatible

Advocate General Maciej Szpunar said in September that the automatic nature of strict liability regimes—such as those in Spain, Sweden and Finland—were not compatible with EU law.

The AG stressed the factors that needed to be considered when deciding whether interim measures were justified, and said that such measures could be considered justified even if they were later found to be invalid.

The EU Directive “must be interpreted as precluding national legislation providing […] 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 premises 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,” he wrote.

Strict liability mechanism ‘proportionate’

However, today’s judgment put forward a different view, with the court stating that the directive was not opposed to national regimes of liability “within the framework of which the judge is empowered to adjust the amount of damages taking into account the circumstances of the case, including the possible participation of the defendant in causing the damage”.

“The fact that the applicant for such measures is required to assess the risk of their execution corresponds to the risk taken by the defendant in deciding to market products which are likely to constitute an infringement,” judges wrote.

“Thus, a strict liability mechanism, based on the risk taken by the applicant, appears proportionate to the Union legislator’s objective of ensuring respect for intellectual property rights while globally mitigating the risk that the defendant suffers harm as a result of the provisional measures.”

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