Compensating wrongly restrained defendants in pharmaceutical patent cases: recent developments in the EU, England and Australia - Patent

In 2019, the CJEU clarified the EU's position on compensation for wrongly restrained defendants in IP enforcement proceedings. What are the implications of this decision and how does it compare with recent trends in England and Australia?

Provisional measures in intellectual property enforcement and, in particular, patent enforcement in the pharmaceutical industry, have always required a careful balancing act between the interests of the rights-holder and the interests of the alleged infringer.

This is because, at an early stage in proceedings, the court is required to consider restraining an alleged infringer from certain conduct (and, in many cases, the launch of a new product or process) before it has had the opportunity to give careful consideration to the validity of the patent and whether such conduct actually infringes it.

In an effort to protect the alleged infringer subject to these restraints, many jurisdictions have a mechanism for compensating the defendant should it transpire that the patent is invalid or the relevant conduct would not have been infringing. The mechanism for providing such compensation throughout the EU (Article 9(7) of Directive 2004/481) was considered by the European Court of Justice in 2019 in Case C-688/17 Bayer Pharma AG v Richter Gedeon Vegyészeti Gyár Nyrt. and Exeltis Magyarország Gyógyszerkereskedelmi Kft. [2019].

This article looks at this decision in detail, considers how it aligns with the legal position in England, and compares this with some recent, interesting trends in this area in Australia.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.