CJEU ruling confirms permissibility of strict liability in preliminary injunction proceedings

In January 2024, the CJEU issued its keenly-awaited ruling in Mylan v Gilead (case C-473/22). This confirms the permissibility of certain types of strict liability regimes for losses caused by preliminary injunctions (PI) that have been cancelled. The ruling does not follow the Advocate General’s opinion, which was given in September 2023.

The CJEU’s ruling clarifies its previous ruling in Bayer Pharma (C 688/17, 12 September 2019). It confirms that certain type of strict liability regimes are consistent with the Directive on the enforcement of intellectual property (IP) rights (2004/48/EC) (the Enforcement Directive).

Background

The CJEU’s ruling provides for several interesting remarks and clarifications. The questions referred to the CJEU originated from the Market Court of Finland and concerned liability related questions when the IP right that the granted PI is based on is later found invalid.

Under Chapter 7 Section 11 of the Finnish Code of Judicial Procedure, a party who has applied for a PI, which is later found invalid, is obliged to compensate the other party for losses caused by that measure. The aim of the provision is to react to situations where the applicant of a PI is later found to have been lacking prerequisites for the granting of the PI and therefore provides for a way to balance out the interests of the parties. In the light of well-established Finnish case law, the provision has been interpreted as providing for strict liability.

In the case, Mylan requested Gilead to pay damages for losses caused by a PI sought by Gilead against Mylan. The PI was based on a supplementary protection certificate that was subsequently found invalid. Mylan argued that the PI had been sought unnecessarily which would expose Gilead to strict liability (under the above-mentioned provisions and case-law), as the IP right on which the PI was granted had been revoked.

Gilead argued that the strict liability regime was contrary to the Enforcement Directive following the CJEU’s earlier ruling in Bayer Pharma. In that case, the CJEU had ruled that the simple act of revoking the PI should not allow national courts to automatically and in any event order the PI applicant to compensate the defendant for any loss suffered.

Advocate General Szpunar supported Gilead’s view in his opinion issued in September 2023, and held that strict liability regimes are precluded by Article 9(7) of the Enforcement Directive. (This opinion is discussed in our…

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