Authored by Celine Bey and Alexis Augustin with contributions by Miray Kavruk (Germany), Christopher van Barr (Canada), Jian Xu (China) and Alex Driver (UK).
The Court of Justice of the European Union (CJEU) assessed recently the compliance with Directive 2004/48/EC of a national legislation providing for the strict liability of the party enforcing a provisional measure on the basis of a subsequently revoked title. Based on its recent decision, the CJEU approves EU member states providing that parties are accountable for damages if they are enforcing provisional measures based on a later-invalidated intellectual property right.
In this article, we take a look at the decision, its impact, and a view on the situation in France, Germany, Canada, China and UK.
The CJEU's decision of 11 January 2024 issued in the case Mylan v Gilead, C-473/22, held that Finnish legislation providing for strict liability of the applicant for provisional measures that were subsequently revoked complies with Article 9(7) of Directive 2004/48/EC if the national courts can adapt the amount of damages in order to take into consideration all the circumstances of the case.
Although Gilead had obtained the enforcement of provisional measures in the context of an infringement action brought against Mylan on the basis of a supplementary protection certificate (SPC), these were revoked following the revocation of the SPC relied on. Mylan then sought damages to compensate for the harm caused by these measures, leading to a preliminary ruling on whether the Finnish legislation complies with Article 9(7) of Directive 2004/48/EC.
This decision, which is contrary to the opinion of the Advocate General M. Szpunar, supplements the Bayer decision of 12 September 2019 (C-688/17). Under the terms of that previous decision, the CJEU had held that Article 9(7) does not preclude national rules excluding compensation for damage suffered as a result of the enforcement of provisional measures subsequently revoked where that damage could have been avoided or limited by the defendant, provided that those rules enable the courts to take account of all the circumstances of the case.
In its decision on 11 January 2024, the CJEU points out that the risk taken by the applicant for provisional measures is merely the counterpart of the risk taken by the defendant marketing a possibly infringing product.
From this point of view, the French and German regulations comply with the judgment of 11 January 2024. Both enshrine a principle of strict liability for the party enforcing provisional measures that are subsequently revoked, while allowing their respective courts to assess the quantum of compensation, having regard to all the circumstances of the case.
It is worth noting the great diversity of regulations worldwide. For example, in some countries whose legal system is based on common law (including the United Kingdom and Canada), a wide margin of discretion is left to the national courts – the principle being that, unless the court decide otherwise, the party requesting a provisional measure must, in return and under the conditions determined by the court, undertake to compensate the defendant for any loss suffered. Conversely, in China, where the revocation of an intellectual property right is not retroactive, the party implementing provisional measures can only be held liable if they were obtained in bad faith.
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