In April 2008, two patent decisions were handed down by The Hague court:
Threat of infringement; sunset clause and out of court warnings
On 7 April 2008, The Hague preliminary relief judge handed down judgment in a patent infringement suit between Eli Lilly and Ratiopharm. Eli Lilly had argued that Ratiopharm threatened to infringe its European patent (and SPC) for olanzapine, the active ingredient of its blockbuster drug Zyprexa. The preliminary relief judge, however, concluded that no such threat had been made and therefore refused to grant a preliminary injunction.
At the time of the action, Ratiopharm had an application pending for a marketing authorisation (MA) for generic olanzapine via the decentralised procedure. In The Netherlands, it is standing case law that the mere holding of (or applying for) an MA does not constitute a threat of infringement. A patentee will have to demonstrate additional, specific circumstances that would make it plausible that the defendant is planning to introduce a competing drug during the term of the patent (or SPC). Such additional, specific circumstances were not demonstrated by Eli Lilly.
Amongst other things, the preliminary relief judge held that the so-called ‘sunset clause’ does not constitute such an additional, specific circumstances. According to this clause (Article 47(4) of the Dutch Medicines Act, which is the Dutch implementation of Article 24(4-6) of EU Directive 2001/83; and for centralised MAs Article 14(4-6) of EU Regulation 726/2004) an MA shall cease to be valid if a product under the MA has not actually been placed on the market or been on the market for a period of three consecutive years. Eli Lilly had argued that the three year term starts at the date of grant, and indicated that Ratiopharm will therefore launch the product before expiry of its exclusive rights (11 September 2011). The preliminary relief judge, however, held that “the obligation to enter the market with a product [..] only starts when the product can actually be brought onto the market, taking into account the various protection rules, that is to say after expiration of (extended) patent protection.”
Furthermore, Ratiopharm’s pre-trial refusal to provide an undertaking of non-infringement did not constitute such additional, specific circumstance either. The preliminary relief judge held that “under the circumstances of this case – where account must be taken of the fact that there was no prior actual infringement – the latter is not something to which Lilly is entitled. There is no general obligation under law to any written confirmation by third parties (or competitors) of anyone’s absolute rights [..]. A refusal to provide such therefore does not constitute an (urgent) interest to obtain such in preliminary injunction proceedings, at least not without additional circumstances [..].”
First ex parte provisional patent infringement injunction
On 1 May 2007, the Dutch rules implementing Directive 2004/48/EC (the so-called IP Enforcement Directive (IPED)) entered into force. As of that date, IP owners with an urgent interest can request the Dutch court to hand down preliminary injunctions without hearing the defendant to prevent a threatened infringement. ‘Urgent interest’ is particularly assumed if delay would cause irreparable harm to the IP owner.
On 1 April 2008, in Meijn Food Processing Technology vs. Tieleman Food Equipment et al., the Hague court for the first time granted such an ex parte preliminary injunction in a patent infringement case.
Until now, patentees have adopted a rather reticent attitude towards the application of this enforcement tool. Amongst other reasons, it was not clear how the Dutch courts would deal with the criteria of urgent interest/irreparable harm in patent cases, especially considering that Dutch procedural law also provides for swift inter partes preliminary relief proceedings.
In its decision of 1 April, The Hague court did not set a very high threshold for urgent interest/irreparable harm. Ten years ago Meijn had warned one of the (group related) defendants. In its application for ex parte relief anno 2008, Meijn asserted that it had recently discovered that the defendants were infringing or threatening to infringe the patent. Further, it asserted that due to the infringements that had occurred and due to the ongoing infringements that threatened to occur, it suffered irreparable harm. According to Meijn, the deterioration of its patent based exclusive position cannot (easily) be remedied by a financial compensation, taking into account the of price reduction effect caused by third party trade in the patented products. This was considered sufficient by the court.
Now that the first ex parte preliminary injunction has been handed down in a patent infringement action, it is likely that more will follow. In trade mark matters, ex parte preliminary injunctions are already relatively common. Given the reasoning of urgent interest/irreparable harm in Meijn’s successful application, innovative drug companies may also want to test this enforcement tool for use in anticipated first generic entry.
Parties fearing that they may become the target of ex parte preliminary injunctions (or other ex parte measures under the implemented IPED rules) can file a so-called ‘protective letter’ with the courts. In such a protective letter - similar to the German ‘Schutzschrift’ - the potential defendant can request the court to refuse the preliminary measures that a third party may institute, or in any case not to render a decision without an inter partes hearing of the matter at hand. It should be noted that not all relevant courts in The Netherlands accept protective letter filing and therefore careful planning is advised.