Third time’s the charm? Setterwalls has once again successfully represented pharmaceutical companies in defending itself against preliminary injunctions

The Patent and Market Court of Appeal (PMCA) annulled interim injunctions and clarified how the presumption of validity applies when examining validity objections as a defence against preliminary injunction claims in patent cases. The PMCA’s reasons for the decisions indicate that the presumption of validity is less rigid than many have previously assumed. The PMCA stated – unusually – that it is important for the application of law that the PMCA decision may be appealed to the Supreme Court (SC).

As Setterwalls has previously reported here and here, Setterwalls has on two previous occasions (in 2022) successfully represented pharmaceutical companies in defending themselves against preliminary injunction claims based on a patent application and subsequently a patent regarding a dosing regimen for the drug fingolimod, used in the treatment of multiple sclerosis.

In round 1, the Patent and Market Court (PMC) stated that interim injunctions cannot be issued based on a patent application that has not yet been granted. In round 2 – after the patent had been granted – the PMC concluded that preliminary injunctions could not be issued, as it appeared likely that the patent lacked an inventive step and would be invalidated. The PMCA did not grant leave to appeal.

Subsequently, the patent holder – with similar arguments – filed preliminary injunction claims against a third pharmaceutical company, which is not represented by Setterwalls. In the spring of 2023, The PMCA surprisingly chose to grant the patent holder’s claims and thus issued a preliminary injunction against the third pharmaceutical company. The PMCA’s application of the presumption of validity was very strict. In practice, the approach underlying the PMCA’s reasoning for its decision would mean that it would seldom be meaningful for the defendant to raise validity objections as a defence against preliminary injunction claims in patent cases.

Based on the PMCA’s decision against the third pharmaceutical company, the patent holder chose to file new preliminary injunction claims against Setterwalls’ clients in the spring of 2023. The PMC granted the claims with reference to the PMCA decision.

Setterwalls’ clients appealed against the PMC’s decision to the PMCA, arguing that the PMCA’s decision against the third pharmaceutical company was based on an incorrect application of the presumption of validity and that the decision could under no circumstances be used as a basis for issuing a preliminary injunction on Setterwalls’ clients in the light of the previous decisions. The PMCA granted leave to appeal and decided that the injunctions issued would not remain in force during the PMCA’s examination of the appeals (so-called inhibition).

On September 5, 2023, the PMCA announced the final decision. The PMCA upheld the appeal and lifted the interim injunctions against Setterwalls’ clients. It is clear from the grounds for the decision that the PMCA considered that the PMCA had applied the presumption of validity too strictly in its decision vis-à-vis the third pharmaceutical company. There must be greater scope within the framework of the preliminary review to assess whether a patent has been wrongly granted, both in situations where new facts and evidence have come to light and in situations where it emerges that the decision to grant the patent has material deficiencies. The PMCA concluded that it is appropriate and reasonable for a review of the validity issue to be carried out in the context of the preliminary review, as this reduces the risk of preliminary injunctions being issued that are fundamentally incorrect.

The PMCA then proceeded and made a preliminary examination of the validity objection raised by Setterwalls’ clients. Similar to the PMC’s assessment during round 2, the PMCA concluded that it was likely that the patent lacked an inventive step and therefore will not stand up to a final validity assessment. Consequently, the PMCA upheld the appeal and lifted the preliminary injunctions against Setterwalls’ clients.

It is unusual for the PMCA to allow its decisions to be appealed to the SC. In this case, the PMCA noted that the decision concerns issues where it is important for the application of law that an appeal be heard by the SC. The PMCA’s decision may therefore be appealed to the SC. It remains to be seen whether the patent holder will appeal the decision and, if so, whether the SC will take up the case.

We will, of course, follow developments in this matter.

(See the PMCA’s decision of 5 September 2023 in cases PMÖ 7680-23 and 7681-23)