What is new on preliminary injunction proceedings in pharma and biotech cases in Germany – and would it be different under the UPC?

No PI based on a mere patent application!

The background

What sounds clear on first sight has been the most discussed issue in the pharma patent world in the first half of 2022. In the meantime, the District Court Düsseldorf decided that a request for preliminary injunctive relief based on a patent application cannot be granted (docket numbers 4a O 27/22, 4a O 28/22 and 4a O 44/22).

Also the German Patent Act is very clear in this regard stating that injunction, damages, recall, destruction of infringing goods could only be claimed for infringement of a granted patent (cf. Sec. 139 et sqq. German Patent Act), while for infringement of a patent application only fair compensation under Sec. 33 (1) German Patent Act could be requested and any further claims are excluded.

Nevertheless, the patentee in these cases tried to injunct competitors based on the second medical use patent application EP 2 959 894 for which the intention to grant according to Art. 71 (3) EPC was not yet issued, but imminent and certain following a decision of the EPO's Technical Boards of Appeal. The patent owner argued based its arguments on tort law (Sec 826 German Civil Code) and unfair competition law. This attempt has now been clearly refused by the DC Düsseldorf – in line with the clear wording of Sec. 33 (1) Patent Act. This decision can still be appealed.

How would the UPC have decided?

The decision of the Düsseldorf District Court is in line with the Dutch Court of The Hague that refused to grant a preliminary injunction with the same arguments in a parallel case. In France, however, the Paris Court in principle acknowledged the admissibility of a PI application on the basis of a pending patent application (3 June 2022, No. 22/52718), but refused to grant the preliminary injunction because of serious doubts regarding the validity of the patent application.

Despite the nuances in the reasonings, these decisions underline the common legal understanding of the national courts which sheds a good light on the future harmonization of the patent law in Europe under the UPC.

The neverending story about validity of patents – what threshold counts?

The CJEU decision Phoenix Contact/Harting, C-44/21

Another ongoing discussion is the degree of the validity of the patent in PI proceedings. Upon the referral of the 21st chamber of the Munich District Court (LG München, GRUR 2021, 466 – “Rechtsbestand im Verfügungsverfahren”), the CJEU ruled on April 28, 2022, that Article 9 (1) of the Enforcement Directive 2004/48/EC must be interpreted as precluding national case-law under which applications for interim relief for patent infringement must, in principle, be dismissed where the validity of the patent in question has not been confirmed, at the very least, by a decision given at first instance in opposition or invalidity proceedings. Such rule has in particular been applied by the Düsseldorf courts (cf. OLG Düsseldorf, InstGE 9, 140, 146 – Olanzapin, InstGE 12, 114 – Harnkatheterset). as well as recently by the Munich Court of Appeals (GRUR-RR 2021, 148 – “Fassungsanordnung”).

Nevertheless, a number of exceptions to the rule have anyway already been made in particular in cases of generic launches at risk where the courts so far usually looked into the validity of the patent in suit in more detail and did not apply the general rule that a patent should already have survived first instance opposition or revocation proceedings because of the – according to the current opinion of the courts irreparable – damage that would occur once generic companies enter the market (OLG Düsseldorf, GRUR-RR 2013, 236 – Flupirtin-Maleat). So in particular for this kind of pharmaceutical and biotech cases, the CJEU decision has little practical relevance.

While the CJEU decision looks clear at first sight, it leaves many questions open. In particular, the quite blanket statement in n°. 41 of the decision that European patents enjoy a presumption of validity from the date of publication of their grant is somewhat irritating and questionable taking into consideration the general revocation rates of granted patents. Furthermore, the referring questions were limited to one specific situation, namely where a patent has been granted very recently. The decision does therefore not cover situations where the patent has already been revoked in first instance. Also unclear is the frequent situation that there is already a negative preliminary opinion of the revocation body.

What will the UPC bring for PI cases?

With regard to the UPC, the court should, when applying its discretion whether to grant a preliminary injunction or not, consider the validity of the patent for which a preliminary injunction is requested, namely whether the patent has been upheld in an opposition procedure before the EPO or has been the subject of proceedings in any other court according to R 209.2 (a). Furthermore, R. 209.2 (d) obliges the court to consider arguments brought forward by the defendant in a protective brief, i.e. also including any arguments on invalidity like new prior art.

In addition, concerning evidence, R 211.2 of the Rules of Procedure allows the court to require the applicant to provide reasonable evidence among others for the fact that the patent is valid. It is however not specified whether such “reasonable evidence that the patent is valid” could only be a simple extract of the Patent Register confirming that the patent is granted or whether there are stricter requirements. In the light of the Phoenix Contact/Harting decision of the CJEU, the standard seems to be rather low as long as there is no (first instance) decision in EPO opposition or national revocation procedures (cf. R. 211.2). As a general rule, the UPC is bound to consider the appropriateness of the requested provisional measure according to Art. 3 and Recitals 17 and 22 of the Enforcement Directive 2004/48/EC, as also confirmed by the CJEU in the Phoenix Contact/Harting decision which – given the general revocation rates of granted patents – also includes the consideration of the (in-)validity of the patent.

In summary, it is to be expected that the (in-)validity of the patent in litigation will play a decisive role in preliminary injunction proceedings before the UPC. Nevertheless, there remains uncertainty to which extent invalidity arguments will be taken seriously by the UPC as long as there is not yet a first instance EPO opposition or national revocation action as mentioned by R. 209.2 (a), but e.g. only a preliminary opinion by the revocation body or just a recently filed invalidity attack. For this reason, potential defendants should consider clear the way strategies soon enough to ensure that invalidity proceedings are already at an advanced stage at the time a preliminary injunction is requested.