Germany: German Court Grants Preliminary Injunction Despite "Invalid" Patent

Last Updated: 11 August 2008
Article by Andreas von Falck and Florian Gerhardt

For the first time in history, a German court has awarded a preliminary injunction in circumstances where the patent in suit had previously been revoked by the German Federal Patents Court. In its landmark decision10, the Appellate Court of Dusseldorf enjoined a generic company from manufacturing and distributing a generic version of the patented anti-schizophrenia medication olanzapine.

Background

The German patent law system divides proceedings concerning the validity of patents from infringement proceedings. While the Federal Patents Court and, in second (and last) instance, the Federal Supreme Court examines the validity of patents, the assessment of infringement cases is assigned to the District Courts, the regional Appellate Courts and, in the final instance, to the Federal Supreme Court. According to the previous case law, if the Federal Patents Court has revoked a patent, infringement proceedings with respect to the patent are stayed until the final decision as to the validity by the Federal Supreme Court. Applications for preliminary injunctions are rejected if the underlying patent has been revoked, because the matter is considered not to be suitable for preliminary injunction proceedings in those circumstances. However, according to the recent decision of the Dusseldorf Appellate Court, this should be handled differently in certain circumstances.

Facts of the case

In the case assessed by the Dusseldorf Appellate Court, the patent holder was a research based pharmaceutical company which had invested substantial amounts of money and done research for more than 20 years in order to find a new medication for the treatment of schizophrenia, before finally discovering the patented drug substance. The substance's International Nonproprietary Name (INN) is olanzapine. The corresponding product, Zyprexa®, is one of the best selling anti-schizophrenia medications.

In nullity proceedings initiated by two generic companies, the Federal Patents Court had held the invention to be not novel and thus not patentable. This was despite the fact that the cited prior art document (a test report) did not show or even mention olanzapine. However, in the opinion of the Federal Patents Court, olanzapine could be (in accordance with case law of the Federal Supreme Court) "read between the lines" of the document because it was a "neighbouring" substance to some of the substances examined and referred to in the test report. The patentee appealed the decision, and the case is yet to be heard by the Federal Supreme Court.

Following the first instance revocation of the patent, generic companies started manufacturing and selling competitive olanzapine-containing products. As the patentee strongly believed that the decision of the Federal Patents Court was wrong, and in order to protect one of its most important products, it applied for a preliminary injunction at the Dusseldorf District Court. However, the District Court rejected the application. It stated that, after the decision of the Federal Supreme Court, severe doubts as to the validity of the patent existed. In its view, an infringement court could assess the validity on its own only in exceptional cases, for example if the nullity judgment gave no grounds for the revocation.

The Dusseldorf Appellate Court's judgment

The Appellate Court repealed the District Court's decision and granted the preliminary injunction. It held that in circumstances where the judgment of the Federal Supreme Court was evidently wrong and the infringement court was capable of assessing the technical facts on its own, (that is, without extensive expert evidence), constitutional law demanded it to do so. It pointed out that in such a situation, effective legal protection was required since the term of a patent was limited by statute. The patent holder would be deprived of its rights if it was denied a preliminary injunction or if the proceedings were stayed. It would even be an ultimate deprivation if, as in this case, the appeal decision on the validity could not be expected before the term of the patent ended. The alternative of relying on main proceedings starting only after the Federal Supreme Court had reinstated the patent (in this case not likely until after the patent had expired) was not acceptable.

When examining the nullity decision, the Appellate Court said it could determine "with certainty" that the decision was wrong. The patented substance could not be "read between the lines" of the citation. The court said:

  • At the time of the publication, the exact mechanisms of the effect of antipsychotics were widely unknown. Instead, one had to rely on "trial and error". Therefore, predictions of the efficacy of untested substances were hardly possible
  • The citation recommended a certain substituent that did not exist in the patented active ingredient. For a citation to be novelty-depriving, there must be a concrete pointer to the patented substance. This was not the case.

Comment

The decision gives hope to a variety of pharmaceutical companies that have suffered from an extreme broad application of the novelty test to chemical patents by the Federal Patents Court. In the future, in cases where the decision of the Federal Patents Court is evidently wrong, technically skilled courts like the Dusseldorf courts will examine more carefully the nullity decision and the cited documents of prior art. This applies to both proceedings for a preliminary injunction and proceedings on the merits. It is fair to say, however, that the "evidently wrong" threshold will be hard (but not impossible) to meet. Lovells acted for the patentee.

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.

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