Judgment of the Court of Justice of January 11, 2024, Mylan (C-473/22)
Facts
This judgment arises from a request for a preliminary ruling submitted by the Finnish courts to the Court of Justice regarding the interpretation and scope of Article 9(7) of Directive 2004/48/EC on the enforcement of intellectual property rights (“Directive 2004/48”).
The facts of the case were as follows:
In 2017, Gilead Sciences Finland Oy, Gilead Biopharmaceutics Ireland UC, and Gilead Sciences Inc. (collectively, “Gilead”) filed an infringement action against Mylan AB (“Mylan”) in the Finnish Commercial Court over Mylan’s marketing of a generic drug that infringed the scope of protection of a SPC held by the plaintiffs. Gilead also sought preliminary injunctions against Mylan, which were granted.
In 2019, the provisional measures were revoked and the plaintiffs’ CCP was annulled.
Mylan then asked the trial court to order Gilead to pay compensation for the damages it suffered as a result of the provisional measures that were granted and later revoked. In doing so, it relied on Finnish law, which establishes an objective system of compensation for damages in such cases, regardless of fault. Gilead opposed Mylan’s claim by invoking the Court of Justice’s doctrine established in the Bayer Pharma case (C-688/17). This doctrine rejected the automatic nature of compensation in such cases, stating that the lifting of provisional measures“does not imply that the competent national courts may, automatically and in all cases, order the applicant to compensate the defendant for any harm suffered as a result of those measures.”
The Commercial Court then decided to stay the proceedings and refer several questions to the Court of Justice for a preliminary ruling regarding the interpretation of Article 9(7) of Directive 2004/48.
Statements
The Court of Justice rules only on the first preliminary question referred by the Finnish court. That question asks the Court of Justice whether the aforementioned article is compatible with national legislation establishing a mechanism for redressing any damage caused by a provisional measure based on a system of strict liability on the part of the applicant for the measure, under which the court is empowered to adjust the amount of compensation taking into account the circumstances of the case, including the defendant’s possible contribution to the damage.
The Court of Justice answers the above question in the affirmative. In its response, the Court of Justice argues:
- Article 9.7 of Directive 2004/48, in conjunction with Article 50.7 of the TRIPS Agreement, must be interpreted as establishing a minimum standard of protection for intellectual property rights (“IPRs”), while leaving Member States a degree of flexibility that allows them to opt, where appropriate, for a system of strict liability or a system of fault-based liability.
- The measures that those States adopt to ensure compliance with IPRs in accordance with the aforementioned Directive must, in any case, be fair, proportionate, and dissuasive, and must be applied in a manner that avoids creating obstacles to legitimate trade.
- And that a strict liability mechanism, such as that provided for under Finnish law—under which the judge hearing the case may take into account all the circumstances of the case, including the defendant’s possible contribution to the damage—allows for the amount of damages to be adjusted and, in this way, mitigates any potential deterrent effect on the IPR holder.
Comment
The ruling in question has been highly controversial and contentious because it departs entirely from the Supreme Court’s previous jurisprudence on the matter, as we have just pointed out.
Spain has an objective system for awarding damages in this area (see Articles 745, 742, and related provisions of the LEC). Therefore, our legal system is compatible with the doctrine of the Court of Justice. However, Spanish courts must, as a matter of principle, take into account all the circumstances of the case—including the defendant’s possible contribution to the harm—in order to adjust and determine the final compensation owed to the plaintiff in the specific case.
Enrique Armijo, Partner in the Legal Department at ELZABURU.