Lessons From Mylan v Gilead For Those Seeking To "Launch At Risk" (And Those Seeking To Stop Them)!

• Published date: 19 December 2023
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Law Firm: Potter Clarkson
• Author: Richard Roberts and Kate Marrs

The AG Opinion in Mylan vs Gilead provides useful guidance as to when parties may obtain "appropriate compensation" from rights holders for wrongly granted interim measures.

The pro-rights holder opinion has highlighted the potential pitfalls of launching at risk, even when wrongly injuncted parties' activities are found to be non-infringing.

GILEAD SCIS., INC. V. MYLAN INC: AN OVERVIEW

"Launching at risk", a common strategy in the pharmaceutical industry where competitors commercialise generic products before the expiry of corresponding patents, may be an even more risky strategy for generics manufacturers (and in other comparable situations where rights holders may readily obtain interim measures) following the AG's opinion in Mylan AB v Gilead Sciences Finland Oy and others (Case C-473/22) (Mylan) and the CJEU's earlier decision in Bayer Pharma (C‑688/17, EU:C:2019:722) (Bayer).

Following the decision in Bayer, and if the CJEU agrees with the AG's opinion in Mylan, injuncted parties who have launched at risk may find it very difficult, practically speaking, to recover appropriate compensation for wrongly granted interim measures in EU member state courts, even when their actions are later found by the courts to be non-infringing.

But it isn't only potential infringers who need to be cautious.

All the circumstances of a case (including both parties' conduct) are relevant in assessing whether appropriate compensation is payable to 'wrongly' injuncted parties, and for determining how much. If rights holders behave badly, seek interim measures that hinder legitimate trade, are abusive, disproportionate or unjustifiable, it is more likely they'll need to pay.

WHAT DOE "LAUNCH AT RISK" MEAN?

"Launching at risk" usually occurs when a competitor launches a generic pharmaceutical product before the expiry of a patent or SPC, or when it considers those rights to be vulnerable.

Such a strategy can offer a significant competitive advantage, giving the party who launches at risk an opportunity to gain market share before other generics manufacturers can move into that space.

That advantage, however, comes with the inherent "risk" of financial loss and failure to make a return on investment. IP rights holders may initiate infringement proceedings, often seeking interim injunctions to prevent the premature marketing and sale of generic products. Such activity often corresponds with the tail end of a patent's life. This is commonly the most commercially valuable...