Landmark Market Court Decision Strengthens Invalidity Attack as Defence Against Preliminary Injunctions

The strong presumption of validity has long made it difficult (especially for generics manufacturers) to fight off preliminary injunctions in patent litigation. This presumption, which the Finnish Market Court abides by in preliminary injunction proceedings, means that the court presumes that the patent or supplementary protection certificate (“SPC”) is valid when assessing the likelihood of an infringement as part of its process of deciding on the grant of a preliminary injunction. Due to the summary nature of preliminary injunction proceedings, respondents have limited chances of overturning the presumption of validity.

Given that the invalidity of a patent or an SPC is a key defence against infringement (and thus preliminary injunction), the strong presumption of validity leaves respondents with few arms against preliminary injunctions even in a situation where the invalidity of a patent or SPC is likely.

This dilemma has led to a situation where the invalidity defence is often overlooked, and preliminary injunctions can be effectively fought off only on the basis of non-infringement arguments.

The first step towards a more balanced assessment was taken when the presumption of validity of an SPC was addressed a few years back in a Finnish Supreme Court precedent (please see our legal alert on the case here) where Borenius successfully represented a major generics manufacturer to cancel a preliminary injunction ordered by the Market Court. In that case, the Supreme Court ruled that a decision of a foreign court (here by the CJEU) indicating that the SPC is invalid was sufficient to overturn the presumption of validity.

A recent decision issued by the Finnish Market Court brings welcome reinforcement to this practice adopted by the Supreme Court. It further confirms that foreign decisions must be taken into account when assessing the validity of patents or SPCs in preliminary injunction proceedings.

In the case leading to the Market Court’s decision, the respondent contested the ordering of a preliminary injunction on the basis that the patent was invalid. This argument was supported i.a. by the fact that the national designations of the said patent had been declared invalid in full first instance proceedings in both the UK and Germany due to lack of inventive step and that a preliminary injunction had been dismissed in a court of the first instance in France for the same reason.

The Market Court accepted the respondent’s position and ruled in the respondent’s favour based on the decisions handed down in the UK and Germany. While the Market Court did note that the presumption of validity should still serve as the starting point, the Market Court expressly referred to the earlier Supreme Court precedent and concluded that the presumption of validity is, by its wording, indeed only a presumption that can be overturned with sufficient counter evidence, in which case the burden of proof regarding the validity of the patent will shift to the patent holder. The Market Court held that in the case at hand, the presumption of validity was overturned, and the burden of proof shifted to the patent holder due to the foreign decisions invalidating the patent. As the patent holder was not able to prove that the patent was likely valid, the Market Court rejected the application for a preliminary injunction.

The Market Court’s decision is not yet final.

The Market Court’s landmark decision offers welcome ammunition for defending against preliminary injunctions in situations where the patent or SPC is likely invalid. Up until now, it has been difficult to overturn the presumption of validity even with several foreign decisions indicating invalidity.

The decision confirms the legal rules established in the Supreme Court’s precedent in terms of the presumption of validity and burden of proof:

The Market Court’s decision also provides an important clarification of the evidentiary value of foreign decisions in preliminary injunction proceedings. In summary preliminary injunction proceedings, foreign decisions indicating that the rights holder’s exclusive right is invalid have significant evidentiary value when determining whether the right being enforced against the respondent should be considered valid or not.

With this Market Court decision, the practice of assessing the fulfilment of the prerequisites for granting a preliminary injunction can be expected to become more balanced. Furthermore, it is likely that the invalidity defence will gain foothold as a defence against preliminary injunctions along with non-infringement arguments in situations where there are strong grounds to believe that the rights holder’s exclusive right, be it a patent or some other registered intellectual property right, is invalid.

Borenius’ lawyers are available to assist in addressing any questions you may have regarding the Market Court’s decision and the implications it may have for the defence of your intellectual property rights.