Compulsory arbitration and applications for interim relief: is Portugal's law invalid, or just plain wrong?

From the most recent BMA Newsflash published by the Lisbon, Portugal, law firm of Baptista, Monteverde & Associados comes the following news:

PATENT ENFORCEMENT: IS MANDATORY ARBITRATION IN LINE WITH THE PORTUGUESE CONSTITUTION?

Constitutional Court Case nº 1004/2013. Decision of March 25, 2015 [or maybe just 2014 ...]

The Law No. 62/2011, which created a system of composition of disputes arising from industrial property rights regarding reference medicinal products and generic medicinal products, was published on December 12, 2011. According to article 2 of the Law No. 62/2011, disputes arising from industrial property rights, including injunctions, related to reference medicines are subject to mandatory arbitration. It is provided in article 3 of the Law No. 62/2011 that such arbitration should be initiated within 30 days starting from the publication of the MA application of the generic medicine by Infarmed.

The company Bayer requested a preliminary injunction at the Intellectual Property Court against the company Laboratórios Effik, based on industrial property rights. The Intellectual Property Court refused to judge a preliminary injunction, based on the provisions of article 2 of the Law No. 62/2011, according to which disputes, including injunctions, are subject to mandatory arbitration.

Bayer filed an appeal at the Constitutional Court to assess the constitutionality of articles 2 and 3 of the Law No. 62/2011:

a. Article 2 of the Law No. 62/2011: The constitutionality of the owners of IP rights being excluded the right to turn to public courts in disputes arising from industrial property rights, even in case of preliminary injunctions;

b. Articles 2 and 3 of the Law No. 62/2011: The constitutionality of the compulsory 30-day term to initiate the mandatory arbitration as foreseen in the Law No. 62/2011.

On March 25, 2014, the Constitutional Court delivered a summary decision, according to which it rejects part of the appeal filed by Bayer, claiming that the Court’s intervention is limited to the analysis of the constitutionality of a rule when this rule was applied by the appealed court.

Thus, the second question posed by Bayer (interpretation of article 3 of the Law No. 62/2011) would be relevant only if an arbitral tribunal had decided not to accept the arbitration proceedings due to failure to comply with the 30-day term, which was not the case.

However, the Constitutional Court agreed to analyze Bayer’s 1st question, i.e., the constitutionality of the interpretation of article 2 of the Law No. 62/2011 in the sense that it excludes the right to turn to public courts in disputes arising from industrial property rights and generic medicines, even in case of preliminary injunctions.

We foresee that the Constitutional Court will deliver a decision on this important subject still in 2014.

It seems absurd that an application for interim injunctive relief should be subjected to a mandatory arbitration requirement, particularly when one considers how long it can take for an arbitration to be set up if one party is slow to cooperate (and then refuses to do so), and when also considers the short life of the protected patent term.  It is difficult to see how the mandatory arbitration provision can stand, in any event, in the light of the Intellectual Property Enforcement Directive (Directive 2004/48), Article 9 of which deals with Provisional and Precautionary Measures and states:

1. Member States shall ensure that the judicial authorities may, at the request of the applicant:

(a) issue against the alleged infringer an interlocutory injunction intended to prevent any imminent infringement of an intellectual property right, or to forbid, on a provisional basis and subject, where appropriate, to a recurring penalty payment where provided for by national law, the continuation of the alleged infringements of that right, ...

(b) order the seizure or delivery up of the goods suspected of infringing an intellectual property right so as to prevent their entry into or movement within the channels of commerce.
...

4. Member States shall ensure that the provisional measures referred to in paragraphs 1 and 2 may, in appropriate cases, be taken without the defendant having been heard, in particular where any delay would cause irreparable harm to the rightholder. In that event, the parties shall be so informed without delay after the execution of the measures at the latest.

A review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable time after notification of the measures, whether those measures shall be modified, revoked or confirmed.

..."

The word "arbitration" is not found in Directive 2004/48.