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Intellectual Property, Litigation & Arbitration / 30 Oct 2018

Borenius successfully represented Orifarm Generics at The Court of Appeal

We successfully represented Orifarm Generics A/S and Orifarm Generics Oy (“Orifarm”) before the Helsinki Court of Appeal in connection with an action for damages caused by an unnecessary preliminary injunction (“PI”) applied for by Novartis AG and Novartis Finland Oy (“Novartis”). Orifarm Group is the largest parallel importer of pharmaceuticals in Europe.

Contrary to the decision of the District Court, the Court of Appeal held that Orifarm had sufficiently shown the causality between the preliminary injunction and the claimed damages even in connection with the hospital tenders that Orifarm could not participate in due to the PI. The Court found it evident that, had the PI not been in force, Orifarm would have participated in the tenders and considered it very probable that Orifarm would have won due to its low prices. The decision of the Court of Appeal is final.

Background

In September 2010, Orifarm obtained marketing authorisations for its pharmaceutical products containing the active ingredient rivastigmine, which is intended for the treatment of Parkinson’s disease and Alzheimer’s disease.

In 2011, Novartis applied for an interim preliminary injunction at the District Court of Helsinki against Orifarm claiming that Orifarm’s rivastigmine products infringed on Novartis’ process patent and the supplemental protection certificate (SPC) granted on the basis of the said patent. The District Court granted the PI, prohibiting Orifarm from bringing its rivastigmine products to the Finnish market, and imposed a penalty payment of EUR 500,000 against Orifarm. The preliminary injunction remained in force until the expiry of Novartis’ patent and SPC in 30 July 2012.

During the main proceedings, it was later found that Orifarm had not infringed Novartis’ process patent and SPC. Consequently, Orifarm initiated new proceedings before the District Court of Helsinki, claiming compensation for the damages caused by the unnecessary preliminary injunction pursuant to Chapter 7 Section 11 of the Finnish Code of Judicial Procedure.

Orifarm won the case before the District Court, but Novartis appealed the decision. Also Orifarm appealed certain parts of the decision. In the case that was brought before the Court of Appeal, the key questions were whether resorting to the PI had been unnecessary, whether Orifarm had contributed to the granting of the PI, and whether the PI had caused the claimed damages to Orifarm. In addition, the Court had to assess and decide the amount of potential damages, the start date of the interest for late payment and the amount of legal costs.

Conclusions of the Court of Appeal

In its judgement, the Court of Appeal firstly noted that the liability of the PI applicant is strict and, therefore, it was not relevant to assess what information Novartis had or what Novartis’ understanding was of the suspected infringement when applying for the PI. This was the case in spite of the fact that, during the main proceedings, the burden of proof was on Orifarm to show that its rivastigmine products were not manufactured by using a manufacturing process covered by Novartis’ patent.

Further, the Court found that Novartis had not shown that good business practice would have required a notification from Orifarm two months before entering the market or that Orifarm should have demonstrated on its own initiative that the manufacturing process of the rivastigmine products did not infringe Novartis’ patent rights. Thus, Orifarm had not contributed to the granting of the PI.

Contrary to the District Court, the Court of Appeal held in its judgement that Orifarm had sufficiently shown the causality between the PI and the claimed damages even in connection with the hospital tenders that Orifarm could not participate in due to the PI. The Court of Appeal found it evident from Orifarm’s market practice and the presented evidence that, without the PI, Orifarm would have participated in the tenders and that it would have won the tenders due to its lower prices. The Court of Appeal awarded compensation to Orifarm for its lost sales and other damages as well as for all of its legal fees during the proceedings.

Borenius’ lawyers are available to assist in addressing any questions you may have regarding this legal alert. Please feel free to contact any of the Borenius’ attorneys listed in this alert or those with whom you usually work.

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