Opinion of the Advocate General — ECLI:EU:C:2023:699
Date: 2023-09-21
Language of the case: Finnish
Subject matter: Intellectual, industrial and commercial property;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Finland

summary of the guidance provided in that judgment. The judgment in Bayer Pharma 27. The case giving rise to the judgment in Bayer Pharma concerned whether Article 9(7) of Directive 2004/48 precluded a liability regime provided for in the national law of a Member State, under which compensation to the defendant for an unfounded provisional measure was not granted, where the losses were incurred as a result of the defendant’s conduct, provided that the applicant (for the provisional measure) had acted as would be expected of a person in that situation. 28. In his Opinion in that case, Advocate General Pitruzzella noted, first of all, that the purpose of Article 9(7) of Directive 2004/48 is to implement, at the level of EU law, Article 50(7) of the TRIPS Agreement, which leaves the signatory States a broad margin of discretion and does not prejudge the liability regime in the national law of those States. In his view, the same must apply to the interpretation of Article 9(7) of that directive, provided that that liability regime allows the defendant to obtain compensation for any losses incurred and does not unduly discourage the holders of intellectual property rights from seeking provisional measures under Article 9(1) and (2) of that directive. (7) 29. More specifically, as regards the liability regime at issue in the case giving rise to the judgment in Bayer Pharma, Advocate General Pitruzzella concluded that although Article 9(7) of Directive 2004/48 does not preclude the conduct of the defendant from being taken into account in determining the right to compensation and the amount thereof, it does, conversely, preclude the fact that the defendant has placed on the market a product infringing an intellectual property right, without waiting for that right to be declared invalid, from being sufficient, on its own, to deny the defendant the right to compensation. (8) 30. However, in its judgment, the Court of Justice adopted a solution more protective of the holders of intellectual property rights. (9) 31. First, the Court observed that the TRIPS Agreement expressly allows its signatories to implement more extensive protection of intellectual property rights than is required by that agreement and that this was precisely the choice made by the EU legislature in adopting Directive 2004/48. It therefore found that the concept of ‘appropriate compensation’, referred to in Article 9(7) of Directive 2004/48, the interpretation of which was requested by the referring court in the judgment in Bayer Pharma, was an autonomous concept of EU law which must be given a uniform interpretation in different Member States. (10) 32. The Court further held that it was for the national courts to assess ‘whether it [was] appropriate to order the applicant to pay to the defendant compensation’, (11) since such compensation could only be regarded as ‘appropriate’ if it were justified in the light of the particular circumstances of a given case. Thus, the mere fact that the conditions for such compensation provided for in Article 9(7) of Directive 2004/48 were satisfied – namely, that the provisional measures had been repealed or ceased to be applicable because of any action or omission on the part of the applicant, or that it was subsequently found that there was no infringement or threat of infringement of an intellectual property right – did not mean that the national courts should automatically and in any event be obliged to order the applicant to provide compensation for any losses suffered by the defendant as a result of those provisional measures. (12) 33. Pursuing this line of reasoning, the Court noted, referring to the context of Article 9(7) of Directive 2004/48, and in particular recital 22 thereof, that the aim of that provision was to ensure that the defendant receives compensation for injury caused by an unjustified application for provisional measures. However, a finding that such an application is unjustified presupposes, primarily, that there is no risk that irreparable harm may be caused to the holder of an intellectual property right in the event of delay in the adoption of those measures. (13) 34. As regards the particular circumstances of the dispute in the main proceedings in the case giving rise to the judgment in Bayer Pharma, which are similar to those of the dispute in the main proceedings in the present case, the Court found that the marketing of a medicine infringing a patent constituted prima facie a risk of irreparable harm, such that the application for provisional measures made in response to such conduct cannot be regarded a priori as unjustified. (14) 35. As for any subsequent repeal of the provisional measures, (15) the Court found that, although that was one of the conditions necessary for the exercise by the national courts of the authority to order compensation, it cannot, by contrast, be regarded in itself as a decisive factor in proving the unjustified nature of the application for those provisional measures. It added that a different interpretation could have the effect of discouraging holders from availing themselves of the measures referred to in Article 9(1) et seq. of Directive 2004/48, and would thus run counter to the objectives of that directive. (16) 36. Lastly, the Court imposed on national courts, in the light of Article 3(2) of Directive 2004/48, the obligation to ensure that provisional measures are not abused by the holders of intellectual property rights. To that end, the national courts must, once again, take due account of all the circumstances of the case in which they are required to give a ruling. (17) 37. It is in the light of the judgment in Bayer Pharma that the first question referred for a preliminary ruling should be answered. Application in the present case of the approach adopted in the judgment in Bayer Pharma 38. In the light of the foregoing, it must now be determined whether Article 9(7) of Directive 2004/48, as interpreted by the Court in the judgment in Bayer Pharma, precludes the liability of the applicant for provisional measures provided for therein from being strict liability in the national law of a Member State. 39. I must state from the outset that this would seem to me to be the case. 40. It is clear that, as stated by the interested parties who submitted observations in the present case, Article 9(7) of Directive 2004/48 does not positively determine the liability regime to be adopted in the Member States in the context of the transposition of that provision. The judgment in Bayer Pharma does not alter that fact. 41. However, it is common ground that a regime of strict liability, also known as ‘liability for risk’ or ‘no-fault liability’, is characterised by the fact that the person concerned is liable by the mere fact of his or her status, (18) without the injured party having to prove any failure in the conduct of that person. In other words, strict liability is automatic and independent of the particular circumstances of the case. Specifically, the absence of any fault on the part of the person held liable does not exempt him or her from liability. It is only in certain legal systems that this principle of strict liability is mitigated by exceptional circumstances, such as force majeure or the decisive contribution of the injured party or a third party to the occurrence of the loss. (19) 42. However, this is precisely what is precluded by Article 9(7) of Directive 2004/48, as interpreted by the Court in the judgment in Bayer Pharma. Indeed, according to the Court, that provision requires that the national court authorised to order the applicant for provisional measures to compensate the defendant for any injury caused by those measures, if they were obtained unnecessarily, be able to examine all the circumstances of the case in order to assess whether it is necessary to order such compensation. That is the case if the application for provisional measures was unjustified, bearing in mind also that simply revoking those measures, or finding the absence of infringement of an intellectual property right, is not sufficient to establish the unjustified nature of that application. 43. Obviously we can attempt – as several interested parties who submitted observations in the present case do – to split hairs and look for a particular characteristic of a given strict liability regime in order to demonstrate that it complies with Article 9(7) of Directive 2004/48 and with the judgment in Bayer Pharma. 44. However, in my view, the interpretation of that provision, as summarised in point 41 of the present Opinion, quite simply precludes the liability under that provision from falling under a strict liability regime. The specific characteristics of a given liability regime cannot alter that finding. 45. This is particularly true given that – as noted by the referring court – in the Finnish system, the defendant’s conduct may be taken into account for the purpose of determining the amount of compensation. Indeed, the Court expressly required, in the judgment in Bayer Pharma, that the national courts take into account the circumstances of each case in order to assess whether it is appropriate to award compensation. Reducing the amount of compensation, when the actual principle of liability is maintained, is not sufficient to meet that requirement. Further considerations 46. I would wish to add that the interpretation of Article 9(7) of Directive 2004/48 resulting from the judgment in Bayer Pharma seems to me perfectly in line with the spirit and scheme of that directive. It is important to interpret that provision taking into account its different contextual elements. 47. In the first place, all the provisions contained in Article 9(7) of Directive 2004/48 must be taken into account. 48. In the judgment in Bayer Pharma, the Court observed that to regard the repeal of the provisional measures, in itself, as a decisive factor in proving the unjustified nature of the application which gave rise to those measures could have the effect of discouraging the holder of the patent in question from availing himself or herself of the measures referred to in Article 9 of Directive 2004/48 and would thus run counter to that directive’s objective of ensuring a high level of protection of intellectual property. (20) In my view, this consideration merits further examination. 49. The article at issue enshrines the right of holders, for the purposes of protecting their intellectual property rights, to apply for provisional measures against any infringer, including a potential infringer, in order to prevent an imminent infringement of those rights. That is the principal objective of that article. 50. It is solely to balance the interests of all the parties to the case that Article 9(5) to (7) of Directive 2004/48 provides for measures to protect the defendants’ interests, by providing that the provisional measures should be revoked if the applicant fails to act and that the applicant must compensate the defendant for any injury caused as a result of the unnecessarily obtained provisional measures. The purpose of those provisions is to prevent the abuse of the provisional measures. 51. However, those provisions would undermine the effectiveness of Article 9 of Directive 2004/48 as a whole if they were interpreted and transposed into national law in such a way as to place the applicant at a disproportionate risk of having to compensate the other party as a result of the measures granted in order to protect his or her intellectual property rights. According to the logic of that article, the risk is not shared equally between the holder of the intellectual property rights and the infringer – or potential infringer – of those rights. It is the latter who runs a risk by infringing, even if only potentially, an intellectual property right. This may be deliberate if the infringer considers the holder’s position to be weak, for example because the intellectual property right is vulnerable. Nevertheless, the decision whether or not to bear that risk is taken in full knowledge of the facts. 52. By contrast, it would be contrary to the spirit and objective of Article 9 of Directive 2004/48 to expose the holder of the intellectual property rights to any risk in defending those rights. Provided that the holder cannot be accused of failing to fulfil his or her obligations, he or she should be free to make full use of the measures provided for in that directive, including those provided for in Article 9 thereof, without being discouraged by the prospect of adverse consequences arising from recourse to those measures. This is particularly the case when the intellectual property right in question results from a decision of the public authority, such as a patent or an SPC, as in the present case, and the lapse of the provisional measures is the result of that right being declared invalid. The holder should be able to have confidence in that decision and not have to contend with the risk that it might be unlawful. 53. Furthermore, by definition, the provisional measures provided for in Article 9 of Directive 2004/48 do not prejudge the substantive outcome of the case. However, holding the party who applied for those provisional measures liable automatically whenever he or she is unsuccessful for any reason would have the effect of distorting the provisional nature of those measures – contrary, once again, to the objective of that article. 54. In the second place, it is necessary to take into account all the provisions of that directive and, in particular, its general rules. 55. The Finnish Government explains in its observations that, in Finnish law, the strict liability of the applicant for provisional measures is the corollary to the significant ease of obtaining those measures, which are granted almost automatically. According to the Finnish Government, if the principle of strict liability were abandoned, the courts would be forced to examine more thoroughly the merits of the applicant’s claims, which would be an unwelcome development. 56. I do not share that view. The position of the Finnish Government reflects a somewhat ‘Wild West’ approach to the relationships established by Article 9 of Directive 2004/48: on one side is the sheriff (the holder of the intellectual property right); on the other, the gunfighter (the infringer or potential infringer); the person who is quickest on the draw (in reality, the one with the best lawyers) wins. However, it does not seem to me that this vision of a legal O.K. Corral (21) is what the EU legislature intended when it adopted Directive 2004/48, and Article 9 thereof in particular, in order to protect intellectual property rights. 57. Indeed, Article 3(2) of Directive 2004/48 requires the measures it provides for to be effective and dissuasive, but also proportionate, and applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. However, the application of those measures is primarily the responsibility of the national courts. It is, therefore, the national courts that must ensure the prima facie justified nature of the measures applied for by the holders of intellectual property rights, and of the provisional measures in particular. Only an assessment by the court of the proportionality of the application can ensure that the provisional measures adopted are proportionate, do not create barriers to legitimate trade and are not abused. (22) This is moreover expressly provided for in Article 9(3) of Directive 2004/48, which authorises the judicial authorities to require the applicant for provisional measures to provide any evidence of the justified nature of the application. That provision would be irrelevant if those measures were to be adopted automatically. 58. Therefore, it seems necessary to consider the merits of the application and to weigh up the interests of the two parties in general when granting provisional measures in the light of the objectives of Directive 2004/48. The vigilance of the courts called upon to order provisional measures must, therefore, be the first line of defence against the abuse of those measures by the holders of intellectual property rights. (23) 59. As regards completing the procedure as quickly as possible, Article 9(4) of Directive 2004/48 allows, in cases of extreme urgency, provisional measures to be adopted without the defendant even having been heard, subject to review at the request of the defendant. This may result in the measures being modified, revoked or confirmed. It goes without saying that, in order to ensure the effectiveness of that provision, any modification or revocation of those measures after review does not mean that the applicant is automatically liable. 60. It is, therefore, with some caution that national courts should, in accordance with Article 3(2) of Directive 2004/48, order the measures provided for in that directive, including the provisional measures referred to in Article 9(1) and (2) thereof. The same caution should also be reflected in the liability regime implemented under Article 9(7) of the directive. 61. As a general rule, strict liability occurs in three types of situation: as a result of a risky activity related, inter alia, to the use in the context of an activity of ‘forces of nature’ that the user does not fully control; as a result of the actions of third parties for whom the interested party is responsible, such as employees or minors; and, lastly, as a result of ‘nuisance’, that is to say damage caused by the use of a building. By contrast, it seems to me to be inconsistent with the spirit and logic of Directive 2004/48 that applicants for the provisional measures provided for in Article 9 of that directive should automatically be held liable as a result of decisions concerning such measures ordered, after a thorough examination of the application, by the national courts. The liability of those applicants should instead be limited, as is apparent from the judgment in Bayer Pharma, to failures regarding their own conduct, particularly when submitting the application for provisional measures. 62. In the third and last place, all the provisions of EU law in the field of intellectual property should be taken into account. 63. Although Directive 2004/48 is strongly inspired by Part III of the TRIPS Agreement, (24) which it transposes into EU law, the fact remains that it is part of a much broader process of harmonising the substantive provisions concerning the different categories of intellectual property rights, in particular patents, trade marks, designs, and copyright and related rights. Indeed, its role is to ensure a high, equivalent and homogeneous level of protection of those rights. (25) 64. Article 9(7) of Directive 2004/48 must, therefore, be interpreted homogeneously not only in the context of the pharmaceutical market or patent law, but also in different areas of intellectual property law and in the different legal systems of the Member States. However, the balance of power between the parties to a dispute concerning the various intellectual property rights varies considerably. In my view, the appropriate solution for each situation will only be found if the court called upon to order compensation takes due account of all the circumstances of the case. It is essential, therefore, that the national law of each Member State allows those circumstances to be taken into account. Proposed answer to the first question referred 65. It seems to me that both the solutions found by the Court of Justice in the judgment in Bayer Pharma and the scheme and objectives of Directive 2004/48 preclude the liability provided for in Article 9(7) of that directive from falling under a strict liability regime like the one adopted in Finnish law. However, since it is for the Member States to define that liability regime, the answer to this question must be formulated in a more abstract way, so as not to limit their margin of discretion unduly. 66. I therefore propose that the answer to the first question referred for a preliminary ruling be that Article 9(7) of Directive 2004/48 must be interpreted as precluding national legislation providing, in the situations referred to in that provision, for a liability regime for the applicant for provisional measures that does not allow the court hearing an action for compensation of the loss caused by those measures to take into account – in addition to the premisses of that liability set out in that provision – other relevant circumstances of the case in order to assess whether or not to order such compensation. The second to fourth questions referred for a preliminary ruling 67. The second to fourth questions referred were based on the assumption that it would follow from the answer to the first question that Article 9(7) of Directive 2004/48 precludes a strict liability regime for the loss caused by unnecessarily obtained provisional measures. In view of the answer that I propose to give to the first question, it is necessary to analyse the second, third and fourth questions. The second question referred for a preliminary ruling 68. By its second question, the referring court asks, in essence, what type of liability regime is compatible with Article 9(7) of Directive 2004/48. 69. As I have already stated, that article does not prescribe a specific system of liability, such that it is for the Member States to define and organise that system. 70. However, it follows directly from the answer that I propose to give to the first question referred for a preliminary ruling that the liability regime under Article 9(7) of Directive 2004/48 must allow the court hearing a claim for compensation for losses caused by unnecessarily obtained provisional measures to take into account – in addition to the premisses of the liability set out in that provision – other relevant circumstances of the case in order to assess whether or not to order such compensation. Thus, if the Court of Justice were to follow that proposed answer, it would not, in my view, be necessary to give a separate answer to the second question referred for a preliminary ruling. The third and fourth questions referred for a preliminary ruling 71. By its third and fourth questions, which I propose to analyse together, the referring court asks, in essence, what circumstances the court hearing a claim for compensation of injury under Article 9(7) of Directive 2004/48 must take into account to assess whether or not to order such compensation. 72. As the Commission rightly observes, it is difficult to enumerate all the circumstances that the court might have to take into account in such a situation. However, the judgment in Bayer Pharma gives some general guidance on the subject. 73. It follows from that judgment that the liability of the applicant for the provisional measures results from the unjustified nature of the measures sought. Whether they are justified is assessed in the light of the existence of a risk of irreparable harm likely to be caused to the applicant in the absence of those provisional measures. The fact that the provisional measures have been repealed – or, more generally, that the premisses for the applicant’s liability under Article 9(7) of Directive 2004/48 are satisfied – does not in itself prove that the application was unjustified. (26) 74. It follows, first, that the circumstances to be taken into account by the court hearing an action for compensation under Article 9(7) of Directive 2004/48 are those that enable it to assess whether the application for provisional measures was justified. To be comprehensive, such an assessment must, in my view, relate not only to the original application for provisional measures, but also to the applicant’s subsequent conduct as regards any maintenance, extension or renewal of those measures. Indeed, the justified nature of such an application may change depending on circumstances such as how the dispute unfolds between the applicant and the opposing party. 75. Second, it is evident that the court must take into account the circumstances following the application, granting and enforcement of the provisional measures. These include the circumstances mentioned in Article 9(7) of Directive 2004/48, namely the revocation of the provisional measures (and the grounds for that revocation) and the finding of no infringement of an intellectual property right. However, those circumstances must be taken into account not as a post factum confirmation of the unjustified nature of the application for provisional measures, but for the purpose of assessing the justified nature of the application at the time of its submission (or at the time of subsequent applications). 76. For example, a possible indication that the applicant erred in assessing the merits of his or her claim is that the intellectual property right at issue is found to be invalid after the provisional measures have been adopted. However, if such an error were to be considered excusable in a given case, it could not result in the applicant being held liable, otherwise it would undermine the effectiveness of Article 9 of Directive 2004/48 as a whole. (27) 77. Third, whether an application for provisional measures is justified must be assessed in the light of a risk of irreparable harm to the applicant – that is to say, by definition, the probability of such harm. That probability concerns not only the occurrence of an event detrimental to the applicant’s interests, but also the very legitimacy of those interests, including the validity of the intellectual property right at issue. If that right is subsequently found to be invalid, it does not, therefore, mean that, at the time of the application for the provisional measures, the risk of irreparable harm did not exist. 78. Fourth, and last, the revocation of the provisional measures or the finding of no infringement or threat of infringement of an intellectual property right may be an indication of abuse of those measures by the applicant. Such abuse must, in my view, be considered equivalent to an unjustified application for provisional measures and give rise to an obligation to provide compensation for the injury caused by that application, as the Court held, in essence, in the judgment in Bayer Pharma. (28) 79. Thus, although Article 9(7) of Directive 2004/48 does not set out the specific causes of the liability it provides for, it is still possible to give the competent courts guidance as to the circumstances to be taken into account in their assessment. I therefore propose that the answer the third and fourth questions referred for a preliminary ruling be that the court hearing an action for compensation for losses under Article 9(7) of the directive must take into account, in order to assess whether or not to order such compensation – in addition to the premisses of that liability set out in that provision – other relevant circumstances of the case, both before and after the application for the provisional measures at issue, which allow it to assess the justified nature of that application in the light of the risk of irreparable harm caused to the applicant in the absence of such measures. Conclusion 80. In the light of all of the foregoing considerations, I propose that the Court of Justice should answer the questions for a preliminary ruling referred by the markkinaoikeus (Market Court, Finland), as follows: (1) Article 9(7) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as precluding national legislation providing, in the situations referred to in that provision, for a liability regime for the applicant for provisional measures that does not allow the court hearing an action for compensation of the loss caused by those provisional measures to take into account – in addition to the premisses of that liability set out in that provision – other relevant circumstances of the case in order to assess whether or not to order such compensation. (2) The court hearing an action for compensation for losses under Article 9(7) of Directive 2004/48 must take into account, in order to assess whether or not to order such compensation – in addition to the premisses of that liability set out in that provision – other relevant circumstances of the case, both before and after the application for the provisional measures at issue, which allow it to assess the justified nature of that application in the light of the risk of irreparable harm caused to the applicant in the absence of such measures. 1 Original language: French. 2 Judgment of 12 September 2019 (C‑688/17, ‘the judgment in Bayer Pharma’, EU:C:2019:722). 3 OJ 1994 L 336, p. 1. 4 OJ 2009 L 152, p. 1. 5 OJ 2004 L 157, p. 45, corrigendum in OJ 2004 L 195, p. 16. 6 C‑121/17, EU:C:2018:585. 7 Opinion of Advocate General Pitruzzella in Bayer Pharma (C‑688/17, EU:C:2019:324, points 26 to 48). 8 Opinion of Advocate General Pitruzzella in Bayer Pharma (C‑688/17, EU:C:2019:324, points 49 to 60). 9 That interpretation of the judgment in Bayer Pharma is also found in the literature. See, in particular, Dijkman, L., ‘CJEU rules that repeal of provisional measure does not automatically create liability for wrongful enforcement’, Journal of Intellectual Property Law & Practice, No 12, 2019, p. 917; de Haan, T., ‘The CJEU sides with IP right holders: the Bayer Pharma judgment (C‑688/17) and the consequences of the Europeanisation of provisional and precautionary measures relating to IP rights’, European Intellectual Property Review, No 11, 2020, p. 767; Tilmann, W., ‘Consequences of the CJEU’s Bayer v Richter decision’, Journal of Intellectual Property Law & Practice, No 6, 2022, p. 526; as well as, critically, Felthun, R., et al., ‘Compensating wrongly restrained defendants in pharmaceutical patent cases: recent developments in the EU, England and Australia’, Bio-science Law Review, No 6, 2020, p. 234; and Sztoldman, A., ‘Compensation for a wrongful enforcement of a preliminary injunction under the Enforcement Directive (2004/48/EC)’, European Intellectual Property Review, No 11, 2020, p. 721. 10 Judgment in Bayer Pharma, paragraphs 47 to 49. 11 Judgment in Bayer Pharma, paragraph 51 (my emphasis). 12 Judgment in Bayer Pharma, paragraphs 51 and 52. 13 Judgment in Bayer Pharma, paragraphs 60 to 62. 14 Judgment in Bayer Pharma, paragraph 63. 15 In the dispute in the main proceedings in that case, the provisional measures were set aside on the grounds of procedural defect, but were not subsequently renewed due to the advanced stage of the proceedings for a declaration of invalidity of the patent on which they were based, that patent eventually being declared invalid (see judgment in Bayer Pharma, paragraphs 23 to 26). 16 Judgment in Bayer Pharma, paragraphs 64 and 65. 17 Judgment in Bayer Pharma, paragraphs 68 to 70. 18 And, of course, the occurrence of a loss. 19 On strict liability, see, for example, Knetsch, J., ‘The Role of Liability without Fault’, in Borghetti, J.-S., Whittaker, S., (ed.), French Civil Liability in Comparative Perspective, Hart Publishing, Oxford, 2019, pp. 123 to 142, and Szpunar, A., ‘La responsabilité sans faute dans le droit civil polonais’, Revue internationale de droit comparé, No 1, 1959, pp. 19 to 33. 20 Judgment in Bayer Pharma, paragraphs 64 and 65. A similar observation had already been made in the Opinion of Advocate General Pitruzzella in Bayer Pharma (C‑688/17, EU:C:2019:324, point 47). 21 I am referring of course to John Sturges’s famous 1957 western, Gunfight at the O.K. Corral. 22 See, to that effect, Sikorski, R., ‘Patent Injunctions in the European Union Law’, in Sikorski, R. (ed.), Patent Law Injunctions, Kluwer Law International, 2018, p. 22. 23 As the Court observed, moreover, in the judgment in Bayer Pharma, paragraphs 66 to 70. 24 This part is entitled ‘Enforcement of Intellectual Property Rights’. 25 See, in particular, recitals 3 and 10 of Directive 2004/48. 26 Judgment in Bayer Pharma, paragraphs 60, 62 and 64. 27 See points 48 to 52 of the present Opinion and the judgment in Bayer Pharma, paragraph 65. 28 Paragraphs 66 to 70.