[Ip-health] IP-Kat: BGH grants compulsory license in preliminary proceedings

Thiru Balasubramaniam thiru at keionline.org
Wed Jul 12 03:30:15 PDT 2017


Wednesday, 12 July 2017

BGH grants compulsory license in preliminary proceedings

According to its media release of 11 July 2017, the German Federal Court of
Justice confirmed the decision of the Federal Patent Court granting Merck a
compulsory license to EP 1 422 218 owned by Shionogi. This allows Merck the
continued distribution of its antiretroviral drug Isentress, an approved
medication for treatment of HIV-patients, on the German market.

The case is highly unusual not only because compulsory licenses are
exceptionally rarely granted under German law, but also because the license
was granted in preliminary proceedings, which is a first.

After license negotiations between the parties failed, Shionogi sued Merck
for patent infringement before the Regional Court (Landgericht) Düsseldorf
(No. 4c O 48/15). This proceeding was stayed pending the outcome of the
opposition before the EPO (the oral proceedings in the appeal before the
EPO are scheduled for 11/12 October 2017).

In defense, on  5 January 2016 Merck initiated compulsory license
proceedings before the BPatG requesting such a license based on § 24(1)
German Patent Act in proceedings on the merits. Five months later, on 7
June 2016, Merck requested the compulsory license be granted by way of a
preliminary order. With decision of 31 August 2016, the Federal Patent
Court (3 LiQ 1/16) preliminarily granted such license, allowing Merck to
continue distributing Isentress.

§ 24(1) Patent Act allows the grant of a compulsory license if (i) the
infringer tried to obtain a license on reasonable terms, and (ii) there is
a public interest in the grant of the license. In its Polyferon decision,
the BGH had further specified the requirements for a compulsory license in
the public interest for medicaments (BGH GRUR 1996, 190 –
Interferon-gamma/Polyferon). The BGH ruled that in order for a medicament
to fulfill the requirement of public interest, it (a) must treat a serious
disease that (b) cannot be treated by a comparable product or (c) can only
so with considerable side effects.

Applying the Polyferon criteria, the Federal Patent Court held that
HIV-infections were both infectious and lethal, thus a “serious disease”.
While there might have indeed been alternative compounds like Dolutegravir
on the market the Court appointed experts confirmed that the replacement of
Isentress with another drug was not acceptable given potential life-long
side effects and  disadvantageous drug interaction due to the exchange.

Further, the expert also stated that Raltegravir showed particular
advantages in the post-exposure prophylaxis and in the treatment of certain
patient groups (e.g. babies, infants, pregnant women and long-term
patients). In consequence, as the other pre-requisites of § 24(1) Patent
Act were fulfilled, the public interest outweighed Shionogi’s interest in
the exclusive exploitation of the patent at issue.

Judging from the media release - the grounds of the decision are not
available yet - the Federal Court of Justice fully followed this reasoning,
preliminarily permitting Merck to distribute Isentress for the treatment of
specific patient groups that could not be treated with other drugs without
serious side effects.

A deeper analysis of the decision is possible only once the grounds are
available. It will be particularly interesting to see what the BGH has to
say on the efforts required of the alleged infringer to obtain a license on
reasonable terms. The Federal Patent Court held that the criteria developed
under competition law for FRAND licenses were not applicable in the context
of § 24(1) Patent Act. The media release of the BGH only states, somewhat
cryptically, that in view of the specific facts of the case, "namely the
uncertain outcome of the opposition proceeding", Merck's efforts had been

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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