Civil Court in Mexico Acquits Holder of Pharmaceutical Patent Rights to Compensate Damages Claimed by Alleged Infringer.

September 7, 2021

Recently, the civil litigation area from OLIVARES obtained a final acquittal judgment for one of our clients in the innovation pharmaceutical industry on a civil claim for payment of damages based on an alleged illegitimate exercise of a patent right in an administrative infringement proceeding.

The alleged infringer sought damages of $12,000,000.00 USD. The assessment was based on the amount of the value of the unrealized sales of its product during the years that preliminary injunctions containing a prohibition to commercialize it were in force and the years in which the infringement proceeding was firmly resolved.

They argued that the illegitimate exercise of the right was based on the patent, asserted in the administrative instance, not being in force, because in a different proceeding it was resolved that the adjustment to the patent term was improper, meaning that it would be without effective rights during the corrected term. This led to the fact that the merits of the infringement proceeding were not resolved, because the action was filed during the corrected term of the patent, and it was considered that the plaintiff no longer had a legal interest to file it.

A Civil Court of first instance and a Civil Chamber on appeal ruled that the defendant should pay compensation to the plaintiff, consisting of the value of the unrealized sales of the product during the years that the preliminary injunctions were in force. The decision was based mainly considering that continuing with the infringement proceeding and exhausting subsequent instances, when the patent was no longer in force, constituted an abuse and illegitimate exercise of a patent right. The ruling also indicated that the order to deliver the bond to the other party demonstrated that damages had been incurred.

Those decisions were revoked by a Collegiate Court, which concluded that there is no merit to claim compensation, among other reasons, for the following:

• That the infringement action was brought while the patent was in force.
•  The exhibition of the bond was a guarantee of effectiveness for the possible damages that could be caused to the defendant if the merits of the case were resolved, which did not happen in this specific case.

This judgment is significant because it contributes to defining issues related to the claim for damages in patent matters in Mexico from a civil perspective. Additionally, aspects related to patent law over time, the legal nature of infringement proceedings, preliminary injunctions, and the object in the exhibition of a bond were addressed.

OLIVARES has a consolidated and experienced team to represent clients in these types of claims, both in civil and administrative proceedings, which are becoming increasingly common, especially following the new provisions contained in the Federal Law for the Protection of Industrial Property, which now allow the claim of damages through administrative proceedings.