The springboard doctrine in the context of patent law – part two

The first article in this two-part mini-series discussed the merits and relevance of the ‘springboard doctrine’ permitting ‘retrospective’ effects of patent protection after its expiry. In certain cases, European courts have also affirmed a patent proprietor’s claims for injunctive relief after patent expiry and have based their calculation of the claim for damages to which the patent owner is entitled on acts of use that were not realised until after the patent expired.

In German jurisprudence, an extension of protection after the expiry of the term of protection is recognised for destruction claims under patent law. In 2021, the German Higher Regional Court in Karlsruhe explicitly acknowleged in its Polsterumarbeitungsmaschine judgment (March 10 2021 – 6 U 9/16) that, in principle, the expiry of a patent does not invalidate a claim to destruction in respect of products that were the subject of acts of use in violation of the patent prior to expiry but continue to exist.

With regard to claims for injunctive relief, it is still debatable whether such claims can be asserted after patent expiry in respect of a patent-infringing act carried out before patent expiry. In 1989, the German Federal Court of Justice ruled in the Ethofumesat judgment (February 21 1989 – X ZR 53/87) that the performance of field trials during the term of protection constituted an infringement of the plaintiff's patent. The defendant was ordered not to utilise their results for two years. Consequently, they were not able to enter the market until two years after the patent expired.

The court argued that it was only by infringing the patent had the defendant been enabled to enter the market shortly after the expiry of protection. By utilising the patent during its term of protection, the defendant therefore unlawfully gained an advantage from a patent law perspective (achieved an earlier market approval). The injunction is aimed at reinstating the situation that would have existed without the patent infringement.

As such injunctions cannot be granted based on a patent-specific injunction claim under Section 139(1) of the German Patent Act, due to that section’s essential requirement of an existing patent, the legal basis for springboard injunctions is not conclusively settled under German law. In the Ethofumesat judgment, the Federal Court of Justice thus invokes the general civil law remedy of removal and injunction (see Section 1004 of the German Civil Code).

However, it is worth highlighting an alternative perspective in German legal scholarship: some legal experts view an injunction after expiry of the patent term as constituting a form of natural restitution (see Section 249(1) of the German Civil Code) for damages stemming from patent infringement during the patent’s term (see Section 139(2) of the German Patent Act).

In its 2001 Antihistamine decision, the Düsseldorf Regional Court considered the springboard doctrine as a possible remedy after patent expiry. The court, which is highly regarded in Europe, first recognised that the mere offering of a generic version of a branded drug before the patent's expiry constitutes an infringement under Section 9 No. 1 of the German Patent Act (and not merely a preparatory act), even if the intent was to manufacture and supply the product only after the expiry of the relevant patent.

Unlike in the earlier Ethofumesat decision, however, the Düsseldorf court rejected the patentee’s request to generally prohibit the respondent from offering the relevant pharmaceutical product after expiry of the patent. The court considered that a blanket ban on the respondent's distribution of the generic product was disproportionate to the individual offers made by the respondent to potential buyers before expiry of the patent. The court stated that imposing a blanket ban (in the case at hand) would not be confined to an act of removal of disturbance but would also have a punitive character foreign to German patent law. In particular, a general prohibition would have also encompassed buyers who had not received an offer before patent expiry.

Nevertheless, the Düsseldorf Regional Court recognised the springboard injunction claim in principle and prohibited the respondent from concluding contracts resulting from the patent-infringing offerings in spite of the expiry of the patent in the meantime. The court also emphasised the possibility that new offers for the sale of the pharmaceutical products in question could be made at any time.

In the subsequent Cholesterinsenker decision (June 29 2004 – 4a O 201/03) of the Düsseldorf Regional Court – where a patent-compliant cholesterol-lowering drug was advertised as a generic product before the relevant patent's expiry, stating it would be available in a few weeks or shortly – the court granted the patent holder damages of €50,000 as a fictional lump-sum licence fee, after the plaintiff was able to credibly demonstrate having received payments of up to €50,000 from other competitors to avoid a damages lawsuit related to the premature offering of simvastatin generics.

Also noteworthy is a decision of the Canadian Supreme Court from 2022 (Nova Chemicals Corp. v. Dow Chemical Co., November 18 2022 – 2022 SCC 43).

The facts were as follows: Dow Chemical brought an action for patent infringement against Nova Chemicals with regard to its patent concerning linear polyethylene. Dow Chemical sold the patented plastics under the name Elite. Nova Chemicals produced and sold plastics covered by Dow Chemical's patent under the name Surpass. In 2014, Dow Chemical's patent expired.

The Supreme Court retroactively upheld a C$644 million damages claim. It agreed with the Federal Appeals Court that the defendant must surrender the springboard profits which resulted from the past patent infringement to the patent proprietor. The springboard profits included the portion of Nova Chemicals' Surpass profits in the 20 months following patent expiry that were causally attributable to Nova Chemicals' patent infringement prior to patent expiry. With its justification that a portion of the defendant's post-patent expiry profits were causally attributable to pre-patent expiry infringement, the Canadian Supreme Court dismissed the defendant's appeal.

Thus, for the first time in Canadian legal history, so-called springboard profits were awarded and declared admissible.

In summary, the springboard doctrine, particularly in the pharmaceutical and life sciences sectors, represents an effective and current legal tool to address initially unnoticed patent infringements post-patent expiry. Consequently, it would be prudent not to assume that the temporal limitation of patent protection necessarily dictates the enforcement of the rights emanating therefrom.