COBALT represents Exeltis Baltics, whose entry to the Estonian market with a generic medicinal product had been blocked for years due to an interim injunction requested by the seller of the original medicine. The Supreme Court confirmed that, in a situation where a claim is secured to protect an IP right that is later annulled, the applicant is liable for the damage caused, regardless of fault. The dispute will continue in the Court of Appeal, following the Supreme Court’s guidance, to determine the amount of damage suffered (including lost profits).
A delay in launching a medicinal product on the market at the planned time may result in damage amounting to millions. The Supreme Court’s decision provides long-awaited clarity for both original and generic medicine sellers: damage caused by excluding another market participant from the market through an interim injunction applied to protect an IP right that is later annulled must be compensated regardless of the applicant’s fault.
The Supreme Court also clarified whether, and to what extent, damage caused by interim measures must be compensated to a third party who is not a party to the proceedings. In such a case, the person who applied for the interim measure is not liable to the third party for the damage under the special provision. Instead, liability for the damage must be assessed under the general rules of tort law.
The judgment also provides essential guidance on determining the amount of lost profits, a complex issue in practice. The Supreme Court explained how the burden of proof is allocated between the parties, and which costs must be deducted from the compensation. That lost profit can also be determined based on a company’s average profit margin.
Exeltis Baltics is represented by COBALT’s Managing Associate Kadri Michelson and Senior Associate Anna-Riin Brett.
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