The UPC

The most important development during 2023 was the Unified Patent Court (UPC). The UPC has a local division in Helsinki, with Judge Petri Rinkinen being appointed as the presiding judge on a part-time basis. The UPC is located in the same premises in Helsinki as the Finnish Market Court, which handles intellectual property (IP) actions in Finland.

The first UPC case was filed with the Helsinki local division on 5 July 2023 (Case ID: 214/2023) in a matter concerning an application for provisional measures (a preliminary injunction request) and a main infringement action. The provisional measures proceedings progressed in a timely manner with an oral hearing and an oral judgment being announced within two-and-a-half months from the filing date. The PI application was dismissed on formal grounds as the court found that the withdrawal of the opt-out concerning the patent-in-suit was ineffective, owing to the fact that the patent-in-suit had been subject to national litigation in a UPC country and appeal in the matter was pending. The decision is currently subject to appeal.

The initial experiences with the UPC have been positive, in the sense that the judges have significant expertise and willingness to proceed expediently. The case management system (CSM), however, has not been up to speed and will need significant improvements. While certain improvements have already been implemented, it will likely take some time for the CMS system to work properly.

Referrals to the CJEU

The Market Court has recently referred two cases to the CJEU in order to obtain judgments on the interpretation of the SPC Regulation and the Enforcement Directive.

Supplementary Protection Certificate (SPC)

Teva has initiated invalidation proceedings in Finland against Merck Sharp & Dohme’s SPC (granted based on the basic patent protecting the active ingredients sitagliptin and metformin – the active ingredients of Merck Sharp & Dohme’s product JANUMET®. Teva claims that an SPC should not be granted for the combination product sitagliptin/metformin as an SPC has already been granted for the mono product sitagliptin. Merck Sharp & Dohme claims that the definition of “product” should have the same meaning throughout Article 3 of the SPC Regulation and, as the criteria for an SPC under Section 3(a) were met for the combination product, the SPC was validly granted. It is possible to grant more than one SPC based on the same basic patent. 

On 17 February 2022, the Market Court referred the case (Teva v Merck Sharp & Dohme C-119/22) to the CJEU, with questions related to the interpretation of Article 3 (c) of Regulation (EC) No 469/2009 (the “SPC Regulation”). In a parallel case pending with the Irish Supreme Court, a similar referral (Merck Sharp & Dohme v Clonmel C-149/22) was made to the CJEU; both cases are being handled jointly by the CJEU. The questions asked by the Market Court are as follows.

• What criteria must be applied to determine when a product has not already been granted an SPC within the meaning of Article 3(c) of the SPC Regulation?
• Must the assessment of the condition set out in Article 3(c) of the SPC Regulation be regarded as being different from the assessment of the condition set out in Article 3(a) of that regulation, and if so, in what way?
• Must the statements on the interpretation of Article 3(a) of the SPC Regulation in the judgments of the Court in Case C-121/17 (Teva UK) and Case C-650/17 (Royalty Pharma) be regarded as relevant to the assessment of the condition in Article 3(c) of the SPC Regulation and, if so, in what way?

In that connection, particular attention should be paid to the statements made in those judgments regarding Article 3(a) of the SPC Regulation, specifically:

• the essential meaning of patent claims; and
• the assessment of the case from the point of view of a person skilled in the art, and in light of the prior art, at the filing date or priority date of the basic patent.

Further questions include the following.

• Are the concepts of “core inventive advance”, “central inventive step” and/or “subject matter of the invention” of the basic patent relevant to the interpretation of Article 3(c) of the SPC Regulation and, if any or all of those concepts are relevant, how are they to be understood for purposes of interpreting Article 3(c) of the SPC Regulation?
• For the purposes of applying those concepts, does it make any difference whether the product in question consists of a single active ingredient (mono-product) or a combination of active ingredients (combination product) and, if so, in what way?
• How is the latter question to be assessed in a case in which the basic patent contains, on the one hand, a patent claim for a mono-product and, on the other hand, a patent claim for a combination product, the latter patent claim relating to a combination of active ingredients consisting of the active ingredient of the mono-product plus one or more active ingredients from the known prior art?

The opinion of the Advocate General is expected in April 2024, and the judgment of the CJEU during Autumn 2024.

Liability to Compensate Damages for an Unnecessary Preliminary Injunction (PI)

In pending damages proceedings, Mylan has claimed damages from Gilead owing to a PI having been granted by the Market Court and thereafter cancelled by the Supreme Court. Finnish courts have traditionally applied a so-called strict liability regime when it comes to the damages to be awarded if a PI has been unnecessarily granted. On 14 July 2022 the Market Court referred the case of Mylan v Gilead (C-473/22) to the CJEU, requesting the CJEU to respond to questions addressing whether a strict liability damages regime, such as the one in force in Finland, is compliant with Article 9(7) of the Enforcement Directive.

In this case, the PI had been cancelled by the Supreme Court owing to the CJEU ruling in Teva UK (C-121/17), which led the Supreme Court to find it likely that the relevant SPC was invalid. Mylan has claimed that Gilead should compensate Mylan for the alleged damages caused by the PI. The Market Court found that it was unclear whether it could apply the strict liability regime, in light of the CJEU ruling in Bayer Pharma (C-688/19). The Advocate General’s opinion concluded that a strict liability regime would not be in line with Article 9(7) of the Enforcement Directive.

However, in its judgment announced on 11 January 2024, the CJEU concluded that Article 9(7) does not preclude national legislation, which provides for a strict liability-based damages regime where the court has the possibility of reducing the amount of damages to be awarded, taking into account all the relevant circumstances of the case including the potential contribution of the damage by the defendant. The CJEU began its response by first noting that the Enforcement Directive provides for the protection of IP rights and allows right-holders to claim provisional measures that can directly prevent the infringement of an IP right; however if these measures are revoked or lapse owing to the applicant’s own conduct, or if it is later established that no infringement has occurred, the defendant is entitled to claim compensation for the damage suffered.

The Court noted that, following from Article 9(7) of the Enforcement Directive, it is up to the competent court to examine whether three conditions of said provision are met – namely:

• whether the provisional measures have indeed been revoked or lapsed due to the applicant’s own conduct, or whether it has been established that no infringement has occurred in the first place;
• whether any damage has been caused to the defendant; and
• whether there is a causal relation between the damage and the provisional measures.

To answer the question of whether member states are obliged to apply a certain compensation regime under Article 9(7), the CJEU pointed out that it is important to consider the context and history of said provision, as well as the aim pursued by the Enforcement Directive as a whole. In this respect, the court stressed that the Enforcement Directive is not intended to regulate all aspects of IP rights, but instead to oblige member states to provide for effective remedies. The CJEU noted that Article 9(7) of the Enforcement Directive, in light of Article 50(7) TRIPS, gives member states discretion as to the system of liability of the applicant for provisional measures, and this may be based on either strict liability or fault [34-36].

The CJEU noted that in Bayer Pharma it had held that the Enforcement Directive does not in principle preclude such national legislation as does not require the defendant to be compensated for the damage because they failed to act in a manner which was normally expected in the circumstances of the case to avoid or minimise the damage, even if the patent on the basis of which those measures were imposed has subsequently been invalidated.

The CJEU noted that it had also expressly stated in Bayer Pharma that such legislation is compatible with Article 9(7) only on condition that the court is able to take account of all the circumstances of the case in arriving at a possible refusal of compensation.

Consequently, the court noted that it cannot be inferred from the Bayer Pharma judgment that Article 9(7) would provide for compensation for the defendant’s damage only where the applicant for provisional measures is at fault. The CJEU’s intention in Bayer Pharma was merely to remind the national courts that they must assess the specific circumstances of the case in order to determine whether the applicant should be ordered to pay the defendant compensation, which must be “appropriate” – that is to say, justified in the light of those circumstances.

As a consequence, the CJEU re-stated its findings in Bayer Pharma: the CJEU stressed that, although national courts’ possibility of awarding damages is strictly limited to the conditions laid down in Article 9(7) of the Enforcement Directive, the fact that those conditions are satisfied in a particular case does not mean that the national courts must automatically and in any event order the applicant to compensate the defendant for the damage caused by those measures. It follows from this that member states must ensure that the national courts are able to take account of all the circumstances of the case before it, including the proceedings of the parties, irrespective of which type of liability regime has been adopted, when transposing Article 9(7) into national legislation.

The CJEU pointed out that the strict liability-based damages regime does not limit the right-holder’s ability to act as such, but strikes a balance between the protection of IP rights and the rights of the defendant. A strict liability-based damages regime does not necessarily undermine this balance.

The case is still pending with the Finnish Market Court, so the judgment of the CJEU in Mylan v Gilead (C-473/22) has not yet been applied by the Court.

PI Proceedings/Actions Based on Patent Application

The question as to what rights a patent provides pre-grant (ie, so-called provisional protection) was considered by the Market Court in a matter concerning Novartis’ blockbuster drug GILENYA®. On 10 March 2022, the Market Court granted a temporary preliminary injunction on an ex parte basis against Mylan and Teva, based on Novartis’ European patent application, the claims of which had been published by the Finnish PTO but not yet granted. After the inter partes hearing, on 7 April 2022 the Market Court rejected the application for a preliminary injunction and revoked the temporary decision. The Market Court concluded based on the wording of the law that the provisional protection does not provide an enforceable right, and therefore Novartis had not established that it had a claim against the generic companies. The Supreme Court did not grant a leave to appeal to Novartis, and thus the decision is final.

PI Proceedings/Forfeiture of Right to Claim Damages

On 16 December 2023, the Market Court ruled in an interim decision (Krka v Gilead) regarding the right to claim damages and expenses owing to an unnecessary PI having been forfeited. According to Chapter 7, Section 12 of the Code of Judicial Procedure (CJP), an action for compensation of damages and expenses should, under threat of forfeiture of the right of action, be brought within one year of the date on which the precautionary measure was cancelled.

The defendant had argued that this one-year period began to run from the date on which the PI had been revoked by the Supreme Court. The claimant revoked the provisional measure on 11 April 2019, and the Enforcement Office notified the claimant of the revocation of the provisional measure. Krka had brought the action for damages on 11 May 2021, which was therefore within the one-year time limit laid down in Chapter 7, Section 12 of the CJP. Krka claimed that the one-year period would start to run as of the date on which the Market Court gave its decision in the main infringement proceedings on 11 March 2021.

The Market Court held that the one-year time limit started to run as of 11 April 2019, when the Supreme Court ordered the revocation of Gilead’s provisional measure and when the Enforcement Office cancelled the enforcement of said measure. Therefore, Krka should have brought the action for damages on 11 April 2020 at the latest. However, as the action was only brought on 11 May 2021, it must be dismissed as time-barred. The decision is not final as Krka may appeal it within 60 days, subject to leave to appeal from the Supreme Court.

SEP Cases (Including the FRAND Defence)

During the past two years (and for the second time following the Nokia v Apple litigation cases), the Market Court has handled standard essential patent cases (including with the FRAND defence) between Nokia and OPPO. The cases were settled, so no rulings have been issued by the Market Court.

The question on formal priority has also been assessed in the context of SEPs (Nokia v TomTom and Continental).