Legal framework of compulsory licensing in patent law
The application for the granting of a compulsory license in patent law serves as an exceptional instrument to ensure access to patented inventions in certain cases—particularly when overriding public interests are at stake and licensing negotiations fail due to the conduct of the patent holder. The statutory basis can be found in Section 24 of the Patent Act (PatG), which details the requirements and process of the compulsory license procedure. A central role is played by the court’s ability to grant a preliminary license to use a patent by way of interim injunction.
The focus of the present decision was whether a pharmaceutical company could claim such a preliminary compulsory license for a medication used to lower cholesterol levels. The Federal Court of Justice (BGH) had to address the interpretation of the concept of public interest and its weighting within the framework of the licensing requirements (BGH, Decision of June 4, 2019, Case No.: X ZB 2/19).
Background of the legal dispute: cholesterol-lowering medication and patent protection
The parties involved and matters in dispute
The starting point of the proceedings was the patenting of an active ingredient used to reduce elevated cholesterol levels. After negotiations with the patent holder failed to reach an agreement, a pharmaceutical company sought a compulsory license for the manufacture and marketing of the corresponding medication. During the legal dispute, an application for a preliminary permit to use the patent was first filed with the Federal Patent Court. The aim was to continue legally marketing the product on a provisional basis during the main proceedings.
Application for a preliminary compulsory license in expedited proceedings
Requesting a preliminary license means that the court can make a provisional ruling even before the main proceedings are concluded. A prerequisite is, among other things, credible evidence of an urgent public interest in ensuring access to the medicinal product in question. Given the importance for public healthcare, this criterion carries significant practical weight, particularly if the medication could be deemed indispensable for certain groups of patients.
Decision of the Federal Court of Justice: requirements for demonstrating public interest
Relevant criteria for review and assessment by the BGH
In the present case, the BGH clarified that particularly high standards must be met in substantiating an overriding public interest—especially when it comes to a preliminary license to use, which is to be granted before the main proceedings are concluded. In the court’s opinion, it is not sufficient that the medication constitutes one of several available treatment options within the scope of physicians’ therapeutic freedom. Rather, it must be examined whether there is a gap in healthcare provision that cannot be closed without the granting of the compulsory license. This means it must be specifically demonstrated that no other approved medication with comparable efficacy and safety is available to the affected patients.
Assessment of alternatives and the role of therapeutic freedom
The availability of alternatives is central to the assessment. According to the BGH, the mere possibility that physicians might prefer the medication is not sufficient to affirm an overriding public interest. What matters is whether a true medical emergency exists and whether other, equally suitable products are available. In this specific case, the BGH found these requirements unmet, so the application for the preliminary compulsory license failed due to lack of evidence of a sufficient public interest.
Rejection of the application and practical consequences
The decision of the Federal Court of Justice underlines the hurdles applicants must overcome in the context of compulsory licensing. The mere existence of therapeutic advantages or the consideration of individualized treatment decisions is not sufficient to justify the exceptional nature of a compulsory license. This makes it clear that patent law in Germany remains a difficult protective right to overcome—even in the face of substantial health policy concerns.
Relevance of the decision and significance for companies and the patent sector
Prevention of abusive applications and planning certainty for patent holders
The current case law strengthens the position of patent holders by strictly limiting the possibility of interfering with the patent’s validity through preliminary compulsory licenses. Companies active in pharmaceutical development thereby gain improved planning certainty regarding their investments and research efforts. At the same time, the decision counters the inflationary use of compulsory license procedures.
Implications for future proceedings and strategic recommendations
The requirements for justifying an application and for demonstrating an overriding public interest have been clearly defined by the BGH’s ruling. For companies confronted with issues of patent licensing or the development of generics, it is advisable to closely monitor current case law and carefully document the development of alternative products.
Conclusion
The decision of the Federal Court of Justice highlights the narrow exceptional character of compulsory licenses in the pharmaceutical sector. Applicants in compulsory license proceedings are required to clearly and convincingly demonstrate the existence of a paramount public interest and the absence of equivalent alternatives. For the pharmaceutical industry, as well as for investors and licensees, this ruling provides critical guidelines for dealing with patent law protections in Germany.
If further questions arise in connection with patent licensing, compulsory licenses, or other topics in intellectual property law, the lawyers at MTR Legal are happy to offer advice.
