Setting the stage: UPC Court of Appeal confirms the test for 'imminent infringement'

In a recent judgment, the Unified Patent Court (UPC) Court of Appeal set aside a decision by the Lisbon Local Division (LD) and granted Boehringer Ingelheim a pan‑UPC preliminary injunction (PI) against Zentiva’s nintedanib generics, holding that infringement was “imminent” in Portugal following completion of pricing and reimbursement processes.

The Court of Appeal agreed with the LD that the mere application for, or grant of, a marketing authorisation (MA) does not amount to imminent infringement. However, it held that completion of health technology assessment, pricing and reimbursement procedures could amount to imminent infringement. In Zentiva's circumstances, this "set the stage" for infringement so that it was "only a matter of starting the action".

Zentiva's actions in Portugal

Zentiva had not launched its generics of Boehringer Ingelheim's Ofev® product in Portugal, but had obtained MAs for them, including for the treatment of idiopathic pulmonary fibrosis (IPF). It had also undergone a prior-evaluation procedure (PEP) with the Portuguese regulator, INFARMED, to obtain an agreed price and reimbursement rate and to set conditions for acquisition of its nintedanib generics by public hospitals.

It was common ground that there was no actual infringement of Boehringer's patent protecting use of nintedanib in the treatment of IPF. Boehringer instead sought an injunction on the basis that infringement was "imminent".

At first instance, the Lisbon LD had noted that it was "customary" for generic companies in Portugal to seek a PEP prior to patent expiry. It held that requesting an MA and a PEP were "mere administrative actions" that did not amount to imminent infringement and refused an injunction.

Test for imminent infringement: has the stage been set?

The Court of Appeal held that the test for imminent infringement was whether the potential infringer has "already set the stage" for infringement to occur, such that it was "only a matter of starting the action" as the "preparations for it have been fully completed". This needs to be assessed on a case-by-case basis.

It went on to state that:

• In the generics context, the mere application for an MA does not amount to an imminent infringement, nor does the grant of one create imminence.
• However, completion of national health technology assessment, pricing and reimbursement procedures can amount to an imminent infringement. This needs to be assessed in light of the national regulatory and legislative context and the circumstances of the case.

In Zentiva's case, the Court of Appeal found it more likely than not that, having obtained PEP approval in Portugal, Zentiva could offer its generics to public hospitals without any further administrative steps or procedures. There was nothing but "self-restraint on Zentiva’s side" to stop it from offering its products for sale in public procurement exercises. The court also stated that Zentiva had "not offered any credible explanation" why, other than patent infringement, it had obtained its PEP over a year before Boehringer's patent expired.

The court concluded that Zentiva had set the stage for offering its generics in Portugal, so that the infringement was only a matter of starting the action because the preparations had been fully completed. It went on to consider that the requirements for a PI of both "necessity" (given the lower price of Zentiva's products, which would undercut Ofev® by at least 30%) and "urgency" were met, and ordered a PI.

The default position under Article 34 of the UPC Agreement is that UPC decisions cover all UPC states in which a European patent is in force. This was therefore the scope of the PI, despite Zentiva's statement that it did not hold any MAs outside Portugal.

Bolar exemption

Interestingly, Zentiva had sought to argue that its application for PEP should be covered by the Bolar exemption, a safe harbour that can exempt studies directed to obtaining regulatory approval from patent infringement.

Zentiva accepted that its actions did not fall under the existing UPC Bolar exemption, provided for under Article 27(d) of the UPC Agreement, but argued that the court's interpretation of imminent infringement should reflect the proposed revision of the exemption as part of the EU Pharma Package. Article 85(a) of the European Commission's proposed new medicines directive would extend the exemption to cover "studies, trials and other activities conducted to generate data", not just for applications for an MA (as now) but also to cover health technology assessment and pricing and reimbursement.

The court gave this argument short shrift. It did not engage with whether or not Zentiva's actions would fall under the proposed expanded Bolar, merely stating that "draft Art. 85 will come into play if and when it is enacted" and that "[t]he Court of Appeal applies the existing legislation".

Osborne Clarke comment

This is an important decision not just for the pharmaceutical industry but for patentees and third parties more generally.

It defines the standard to be applied for assessing imminent infringement in the UPC. The "set the stage" test had previously been used by the Düsseldorf LD in Novartis and Genentech v Celltrion. Although this decision was not expressly referred to in this judgment, that test has now been adopted and endorsed by the Court of Appeal. It indicates that where a party has done everything necessary to be ready to infringe, such that it just needs to push "go", the UPC may conclude that infringement is imminent and grant a PI.

The UPC Court of Appeal has also confirmed that seeking and obtaining an MA is not, in itself, enough to make infringement imminent. The completion of heath technology assessments and pricing and reimbursement procedures may be enough, if there are no other administrative hurdles to prevent launch. Self-restraint is not enough!