The Federal Court of Justice is 1-1 in Granting Applications for Compulsory Licenses in Germany

On June 4, 2019, the tenth senate of the Federal Court of Justice (FCJ) confirmed the German Federal Patent Court’s (FPC) rejection of an application for a preliminary compulsory license to Amgen’s European Patent No. 2 215 124 (the ‘124 patent) covering the drug Repatha® (evolocumab).  Repatha®, a monoclonal antibody that inhibits the proprotein convertase subtilisin-kexin type 9 (PCSK9) protein, is used to reduce low density lipoprotein (LDL) cholesterol levels in blood.  Repatha® is particularly helpful in patients with persistently high cholesterol levels who do not benefit from statins such as Lipitor® (Pfizer, Inc.).  The ‘124 patent survived an opposition at the European Patent Office and was maintained as amended.

Sanofi’s developed its own anti-PSCK9 monoclonal antibody, Praulent® (alirocumab), also for use in reducing LDL cholesterol.  Both Repatha® and Praulent® were approved in Europe in late 2015.

After Sanofi began distributing Praulent® in Germany, Amgen filed a lawsuit for patent infringement in the Regional Court (Landgericht) in Düsseldorf (Docket No. 4c O 39/16), requesting among other things, injunctive relief.  In response, Sanofi filed an application in the FPC for a compulsory license under § 24 Patent Act (PatG) and, preliminary permission to use the invention for the drug Praulent® in four specific forms via preliminary injunction pursuant to § 85 of the PatG.

By way of background, § 24 of the PatG states:

“The non-exclusive right to industrial use of an invention is granted by the patent court in individual cases in accordance with the following regulations (compulsory license), provided that

1.1.1     The licensee has unsuccessfully sought, after a reasonable period of time, to obtain the consent of the patentee to use the invention on reasonable commercial terms; and

1.1.2     The public interest requires the grant of a compulsory license.”

Additionally, § 85 of the PatG states:

“In the proceedings for the grant of a compulsory license, the plaintiff may be allowed, at his request, the use of the invention by injunction if he can show credibly that the requirements of Section 24 Abs. 1 to 6 and that the granting of the permit in the public interest is urgently required.”

The FPC rejected Sanofi’s request for a preliminary injunction.  Specifically, the Court stated that Sanofi failed to make sufficient efforts during a reasonable period of time to obtain a license to the ‘124 patent.  Additionally, the public interest did not urgently require the granting of the preliminary injunction because Praluent® did not have superior therapeutic properties when compared to Repatha®, particularly, in the reduction of the risk of mortality.

The FCJ affirmed the FPC.   In agreeing with the FPC with respect to Sanofi’s lack of sufficient efforts to obtain a license to the patent within a reasonable time period,  the FCJ noted that Sanofi expressed its interest in a license from Amgen at a very late stage, offered only to pay a very low royalty rate, failed to respond to communications from Amgen regarding the matter and, when it did respond, only did so during the appeal proceedings in the ‘124 patent.  Additionally, the FCJ held that the public interest did not warrant granting the compulsory license because there was no credible evidence demonstrating that Praluent® offered any tangible therapeutic advantages over Repatha®.  Moreover, the FCJ did not find it credible that the administration of Praluent®, when compared with Repatha®, reduced the mortality rate of hypercholesterolemia in patients.  Finally, the FCJ did not find that the possible administration of Praluent® at a lower dose justified the granting of a compulsory license.

This is the second case involving a compulsory license decided by the FCJ in the last two years.  On July 11, 2017, the FCJ in decision X ZB 2/17 confirmed the granting of a compulsory license to Merck to European Patent No. 1 422 218 (‘218 patent) owned by Shionogi.  The compulsory license allowed Merck to continue to distribute its HIV drug raltegravir (marketed as Isentress®) in the German market.

After a year of license negotiations between the parties failed, Shionogi sued Merck for patent infringement before the Regional Court (Landgericht) in Düsseldorf.  In response, Merck filed for compulsory license proceedings before the FPC requesting a license based on § 24 PatG.  Several months later, Merck requested the compulsory license be granted by way of a preliminary order. On August 31, 2016, the FPC preliminarily granted the license, allowing Merck to continue distributing raltegravir.

In affirming the FPC, the FCJ found that HIV-infections were both infectious and lethal and a “serious disease”.   Although alternative compounds were available on the market (such as dolutegravir (Tivicay®)), experts appointed by the Court confirmed that the replacement of raltegravir with another drug was not acceptable given the potential life-long side effects and disadvantageous drug interactions that could result from the exchange.  Moreover, the experts also demonstrated that raltegravir was particularly advantageous in the post-exposure prophylaxis and in the treatment of certain patient groups (e.g. babies, infants, pregnant women and long-term patients). As a result, the public interest outweighed Shionogi’s interest in the exclusive exploitation of the ‘218 patent.

One particularly interesting issue that arose during the proceedings was determining what the scope of the compulsory license right should be, namely, whether the use of raltegravir should be restricted to specific patient groups.  This was a particularly complicated question as noted by the FPC:

“In view of a multitude of actors, which – each individually – decide if a certain patient in his individual situation requires raltegravir or not is not a criteria that can establish ‘in advance’ in a specific group of patients …This does not allow for limiting the patient group.  Already, for that reason, a limitation of the right to use for a life-saving drug is not possible.”  (Decision 3 LiQ/16, GRUR 2017, 373 382 at nr. 127).

While specific restrictions were not imposed, the right to use was limited to products already on the market.

In view of these two recent cases, the question is whether compulsory licensing will start to become a strategic tool used during patent litigation in Germany.  The answer is maybe – time will tell.  However, based on the decisions to date, what we can glean is that the FPC appears to be leaning towards granting compulsory license requests only in exceptional cases.

Not surprisingly, compulsory license proceedings present benefits and risks for the parties involved.  For the party seeking the license (license seeker), they will need to show consistent efforts to obtain a license.  If licensing talks fail after an adequate time, they will bear the burden of proof of establishing public interest in the compulsory license proceedings. Additionally, the license seeker will need to show that its product provides a tangible advantage over other available treatment options. In contrast, the patentee, if it loses and a compulsory license is granted, could be faced with the risk of having to allow a potential competitor to use his patent broadly, with no limitations as to, for example, patient groups.

This post was written by Lisa Mueller.