Spanish Appeal Court rejects unfair competition claims based on a patent application in ground-breaking ruling

Summary

On 20 January 2023, the Barcelona Appeal Court (specialised section for IP matters) lifted the PI against fingolimod generics issued by a first instance court in Barcelona (Commercial Court No 10).

The first instance court had declared that launching a generic before the grant of a patent was an act of unfair competition, because the generics would have to withdraw from the market as soon as the patent is granted. It considered that the decision to launch amounted to a breach of the general clause (bona fide clause) established in the Unfair Competition Act (any behaviour which is objectively contrary to good faith is deemed to be unfair).

In reversing this decision, the Barcelona Appeal Court maintained that unfair competition and patent infringement are different types of actions and are subject to different requirements. So, the unfair competition action cannot be based on the same arguments as a patent infringement action. Indeed, the claimant could not prove that launching before the granting of the patent was unfair, because there was an objective justification of launching, i.e., the will to compete because the generics companies thought that the patent was invalid. The Appeal Court also clarified that, when the generics companies believed that the patent is invalid, launching at risk is a legitimate business decision which cannot be declared disloyal per se. The patentee had to pay the costs of the…