11. January 2024 – CJEU Case C 473/22: Mylan AB v Gilead and others

CJEU clarifies its 2019 decision Bayer v Richter (C-688/17): Strict liability permissible under EU law in case of unjustified PI

On 11. January 2024, the CJEU ruled on the referral of the Finnish Market Court, in which it asked the CJEU for an interpretation of Art. 9(7) IPRED (Directive 2004/48/EC on the Enforcement of Intellectual Property Rights) in the context of compensation claims following an unjustified PI.

Art. 9(7) IPRED provides that in case a provisional measure based on the claimed (threat of) infringement of IP rights proves to be unjustified or is revoked/lapsed, the defendant of the provisional measure is entitled to claim appropriate compensation for any injury caused by those measures from the applicant.

The central question of the request from Finland was whether the Finnish compensation regime based on strict liability is to be regarded as compatible with Article 9(7) IPRED. The same question arises in other legal systems, including German law.

In 2019, the CJEU had already addressed the question of the interpretation of Article 9(7) IPRED in the heavily discussed Bayer v Richter decision (C-688/17) – at that time in connection with the question of "appropriate compensation". The case concerned a launch at risk without prior clearing the way. While the relevant Bayer patent was subsequently revoked, the applicable Hungarian law nevertheless excluded a compensation claim as clearing the way could generally have been expected in the situation of a launch at risk in order to prevent or mitigate such losses. The Hungarian court addressed the CJEU in particular with regard to the question whether the concept of "appropriate compensation" referred to in Art. 9(7) IPRED, precludes the application of national law and rather obliges the national courts to award an adequate compensation in a scenario where the launch at risk was blocked by a PI based on an invalid patent. CJEU's answer was "no".

The CJEU's decision left the jurisdictions applying the concept of strict liability compensation unclear as to whether the application of these compensation provisions is precluded by Art. 9(7) IPRED as a result of the interpretation of the term "appropriate compensation".

Yesterday, in the decision Mylan AB v Gilead and others, the CJEU clarified unequivocally that Bayer v Richter does not exclude strict liability, but simply requires that the circumstances of the individual case must be taken into account when assessing compensation; strict liability must not mean "automatic liability".

For Germany, this means that the existing compensation law as provided by Sec. 945 German Code of Civil Procedure in combination with the general civil law provisions of Sec. 249 et sqq., in particular Sec. 254 German Civil Code continues to apply. The clarification by the CJEU leads to more legal certainty in practice and is therefore to be welcomed.