German Court Issues Compulsory License for Isentress®

Birgit Kramer

On 31 August 2016, the third senate of the Federal Patent Court (ref. no. 3 LiQ 1/16(EP) has issued a compulsory license to Merck for the antiretroviral HIV/AIDS product Isentress®. The compulsory license has been issued in preliminary proceedings and allows the use of the German part of EP 1 422 218 owned by Shionogi by the continued sale of the specified Isentress® products until the decision on the merits is issued. In Germany compulsory licenses are extremely rare. Prior to this, the Federal Patent Court had only issued one compulsory license in 1991 (ref. no. Az. 3 Li 1/90). This has been lifted in the appeal proceedings by the Federal Supreme Court, GRUR 1996, 190 –Polyferon (ref. no. X ZR 26/92). The compulsory license for Isentress® is the first to be issued in preliminary proceedings.

Under sec. 24 German Patent Act a compulsory license can be granted in individual cases where (i) a licence seeker has, within a reasonable period of time, unsuccessfully attempted to obtain permission from the proprietor of the patent to use the invention on reasonable commercial terms and conditions, and (ii) the public interest calls for the grant of a compulsory licence. The decision of the Federal Patent Court of 31 August 2016 contains elaborate explanations as to what is necessary for such an attempt to obtain permission to use the invention on reasonable commercial terms and conditions and why an overweighing public interest is given in the case of Isentress®.

The Federal Patent Court stressed that the attempts to obtain permission to use the invention shall be directed to obtaining a contractual license. The efforts to obtain a license had to be directed to a license under commercially usual terms and conditions, i.e. terms and conditions a third reasonable and commercially acting party would be ready to offer. The attempt to obtain permission was a necessary preposition for obtaining a compulsory license doing justice to the right to freely license under sec. 15 German Patent Act, however the essential requirement for the granting of the compulsory license was the public interest. Therefore, the assessment whether there has been a sufficient attempt to obtain a license under reasonable terms and conditions might not be too strict but had to give the party seeking a license room for business decisions. This was however limited in cases where there were indications for an abusive behaviour like pretend negotiations to avoid the requirement of sec. 24 par 1 no. 1 German Patent Act. Thus, other than provided for under sec. 24 of the German Patent Act where validity was assumed, doubts about the validity of the patent could be considered in the offer for obtaining a license. The offer did not have to satisfy the requirements of a compulsory license in case of a market dominant position under competition law. In particular, it was sufficient that the party seeking a license showed that it was basically prepared to take a license at reasonable terms without having to name the concrete sum of a license fee that the court would consider reasonable. All the more, the offer did not have to satisfy the requirements established for standard essential patents under the ZTE/Huwai decision of the CJEU.

The necessary public interest was confirmed because Isentress® was the only available pharmaceutical product with the active substance Raltegravir. The Federal Patent Court assumed a basic equality of all active substances used in the antiretroviral combination therapy. This was assumed for the used classes of substances, namely reverse transcriptase inhibitors, protease inhibitors and integrase inhibitors as well as for the different active substances available in the class of intregrase inhibitors that included Raltegravir. Instead of general recommendations the antiretroviral therapy as recommended in guidelines and as clinically practiced followed the concept of an individualised therapy. For such therapy, there were certain groups of patients who did not have an alternative to Raltegravir like infants and children, pregnant women and patients needing post-exposure prophylaxis. For patients who were currently using Raltegravir, in particular those who had been treated with antiretrovirals for a long time including therapy switches due to resistances, a switch to another substance would mean an inacceptable health risk. The Federal Patent Court rebutted the patentee’s argument that the public interest might not be based on the consideration of individual cases, because this would allow the use of the patent not only to these individuals but to all patients. The Federal Patent Court referred to the Federal Supreme Court (Federal Supreme Court, GRUR 1996, 190, 193 – Polyferon) confirming that in cases of pharmaceutical products, a public interest could be justified for the entire society by the meaning of the availability of a pharmaceutical product for the health and life of individuals, in particular in cases of severe diseases, for reasons of medical care.

Furthermore, the Federal Patent Court hinted to the fact that fighting an infectious disease was always in the common interest. The reduction of the viral load of each individual person reduced the risk of new infections for all.

Measured at this, the Federal Patent Court could not see an equal or overweighing interest of the patentee Shionogi. The court stressed that Shionogi was already marketing a pharmaceutical product in the substance class of integrase inhibitors, i.e. the market entry would not hindered or blocked by the compulsory license. The interest in potential higher revenues with its marketed product would be sufficiently considered by the fee for the compulsory license. Therefore, there was a clearly overweighing public interest in the availability of Isentress®. The urgency to grant the compulsory license in preliminary proceedings was given with respect to the pending infringement proceedings (Regional Court Düsseldorf, ref. no. 4c O 48/15) and the impending order of injunction.

The compulsory license allows Merck preliminary – up to the decision on the merits – continuing the marketing of the Isentress® products specified in the requests by their dosage and pharmaceutical form. The request for a comprehensive compulsory license, i.e. for potential future Isentress® products was rejected due to lack of a respective public interest.

The decision of the Federal Patent Court of 31 August 2016 is an extraordinary decision considering in a well-founded manner the needs of medical care and the individual patients. The complaint against this decision is pending at the Federal Supreme Court (ref. no. X ZB 2/17).

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