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Who will file a lawsuit under the UPC first?
The deadline for opting out of patents will begin on March 1, 2023, and the UPC will begin on June 1, 2023. The schedule was recently changed in response to allegations of access issues with the UPC case management system, which had thrown into question the beginning of the sunrise phase on January 1, 2023, and the UPC’s implementation on April 1, 2023.
They are well aware that pharmaceutical and biotechnology firms reportedly hesitate to retain their patents under the new system by choosing to opt out of all crown jewels.
But it’s still unclear whether this won’t end up being a hoax. If the invention is believed to be legitimate, patent owners would lose the possibility to quickly and effectively enforce their patent in the UPC, particularly for defendants who are suddenly subject to an action, the timeframes for submitting briefs are very tight. Additionally, compared to many national courts, the UPC appears to have higher probability of granting preliminary injunctions. Last but not least, the patent holder will receive an injunction that applies to the entire UPC.
How will instances involving compulsory licencing and disparity of injunctive relief interact in German pharma and biotech patent litigation?
The determination that an injunctive belief is disproportionate in pharmaceutical and biotech patent matters where patients must be treated with the medication covered by the contested patent is one of the unresolved difficulties after the most recent update of the German Patent Act.
According to one opinion, the circumstance in which a compulsory licence could be sought under Section 24 of the German Patent Act (GPA) is analogous to disproportionality under Section 139(1) of the GPA. However, the Düsseldorf District Court reached the opposite conclusion: It dismissed a defendant’s argument for proportionality under Section 139 (1), Third Sentence, of the German Patent Act (GPA). A petition for injunctive relief is forbidden if it would cause a disproportionate and unjustifiable burden for the infringement or a third party, according to a clause that was codified into the GPA about a year ago. In the past, plaintiffs in pharmaceutical cases who did not also obtain a compulsory licence had their disproportionality defences rejected by the Düsseldorf courts. The now-codified proportionality defence is already evaluated using the same criteria. A year after the infringing action was initiated, the defendant (Gilead) in the current case submitted a concurrent application for a compulsory licence. Additionally, it declined to ask for an expedited process—a forced interim licensure. The defence that an order against Gilead would be too harsh was not accepted by the Düsseldorf District Court. This first-instance ruling has been extensively covered. It would be interesting to observe how the Court of Appeal rules in 2023 and how other German infringement courts resolve cases with a similar legal issue.
What has changed in Germany’s preliminary injunction procedures for pharma and biotech matters, and how may they differ under the UPC?
Preliminary injunction proceedings in German pharmaceutical and biotech matters have seen a lot of new developments in 2022. Whether the bar for the validity of patents in Germany needs to be lowered in light of the CJEU judgement Phoenix Contact/Harting, C-44/21, or whether the question if a preliminary injunction might be issued based on a simple patent application – present answer: a clear No. The Düsseldorf District Court has not up until now adopted the viewpoint that awarded patents ought to be subject to a presumption of validity. According to the court, even if the CJEU’s decision were to be interpreted as a legal presumption of validity, an explanation that the Düsseldorf District Court disputes such a presumption could be contradicted by a negative ruling in opposition or nullity proceedings or by an opposition brought against the asserted divisional patent premised on a nullity attack that led to a partial overturning. In contrast, the Munich District Court bases its ruling on the notion that awarded European patents are presumed to be valid (decision of September 29, 2022, case number 7 O 4716/22, Fingolimod). Thus, it is the responsibility of the alleged infringer to disprove the assumption. Rebuttal may take place, for instance, based on a negative preliminary opinion on validity in a concurrent nullity assault against the asserted patent or in international or domestic invalidity actions asserting the same priority date as the asserted patent, according to the Munich District Court. Speculations about how the UPC will handle cases where there is a question as to the validity of the patent at issue immediately follow the query about how German courts will rule on the matter in subsequent cases.
What will the Art. 3c SPC Regulation’s purview be?
Hopefully, 2023 will bring additional clarification on how the CJEU and the German Federal Court of Justice will read Article 3(c) of the SPC Regulation:
On June 23, 2021, the German Federal Patent Court (“FPC”) revoked MSD’s German SPC for its diabetic medication Janumet (case nos. 3 Ni 2/20, 3 Ni 24/20, and 3 Ni 3/21). The decision, which is one of several in the area of SPCs for the mix of active components, considers earlier decisions in the Actavis and Teva/Gilead cases, the FPC’s Ezetimib case, as well as the CJEU’s Actavis and Ezetimib cases. Due to MSD’s appeal of the ruling, the matter (X ZR 64/21) will soon be decided by the German Federal Court of Justice (FCJ).
Parallel to this, the Finnish Market Court referred the case to the CJEU, notwithstanding the German Federal Patent Court’s rejection to send the case to the CJEU, and the CJEU was given issues concerning the meaning of SPC Reg. Art. 3(c) in the setting of the Janumet SPC. It asked the Court of Justice of the European Union (CJEU) many questions concerning how to interpret the SPC Regulation in relation to MSD’s Finnish Janumet SPC. On February 17, 2022, the Finnish decision was made (file no. 7/2022). The CJEU is once again faced with addressing a number of pertinent problems regarding the interpretation of the SPC Regulation in Case C-119/22, in addition to a second reference from the Irish Supreme Court in yet another SPC dispute (Case C-149/22).
Will unitary SPCs exist?
There is still no unitary SPC, despite the industry’s strong desire to link the unitary patent with a unitary SPC, and the UPC is set to launch in a few months. The issues that need to be settled in this regard include the awarding body, the legal remedies available, the territory covered, and the type of MA that will be acceptable for receiving a unitary SPC. The European Commission’s response to its request from last spring is highly anticipated and, ideally, will come shortly.
Will the courts rule on the SPC Manufacturing and Stockpiling Waiver?
The SPC Manufacturing and Stockpiling Waiver’s transitional period was completed, and it entered into full force in July last year. Given the numerous uncertainties and confusions in the regulation that have been discussed, courts will soon need to determine the precise line separating permitted use under the SPC Manufacturing and Stockpiling waiver from patent infringement. Whatever the case, it is certainly clear that the line will be incredibly thin.
