The past days have been marked by landmark rulings from the Russian Supreme and Constitutional Courts, decisions that will influence future case law and the pharmaceutical market as a whole.
The Supreme Court of the Russian Federation Rules in Favor of the FAS in the Case Against Axelpharm
On 11 March 2026, the Supreme Court of the Russian Federation upheld the position of the Federal Antimonopoly Service (FAS) in the case against Axelpharm. The company was found to have violated Article 14.5 of the Law on the Protection of Competition and was ordered to pay 513 million rubles into the state budget. In doing so, the Supreme Court overturned the judgments of the lower courts. The Ruling of 16 March 2026, in case No. A40-264483/2024, has already been published in the case file.
The Supreme Court noted that the FAS had lawfully concluded that exclusive rights had been infringed based on the evidence submitted in the case, in particular an extract from the Pharmaceutical Register of the Eurasian Patent Organisation and the expert opinion. The Court stated that the fact that the report was commissioned by a party to the dispute does not in itself undermine its reliability. Axelpharm did not contest the reliability of the expert’s conclusions on the merits, nor did it submit any other evidence refuting the fact of the invention’s use, nor did it dispute the expert’s sufficient qualifications. Moreover, the FAS lawfully took into account the conduct of the generic manufacturer (including filing an application for a government compulsory licence, seeking a court-ordered compulsory licence, and lodging an objection to the grant of the patent with the Chamber of Patent Disputes).
The Supreme Court also pointed out that the provisions of the Law on the Protection of Competition do not impose an obligation on the antitrust authority to commission an expert examination to establish whether a patented invention has been used in the manufacture and sale of a generic product, particularly where the infringer has not, in substance, denied this fact.
Furthermore, the Supreme Court emphasised that, in order to classify the actions of a business entity as a breach of Article 14.5 of the Law on the Protection of Competition, it is not necessary to establish the existence of a competitive relationship between the infringer and the patent holder.
The absence of direct references to Eurasian patent legislation is not a sufficient ground for declaring the decision of the FAS invalid, given that the relevant regulations in the Russian Federation are identical to the Eurasian norms.
The Russian Constitutional Court Clarifies the Procedure for Issuing Compulsory Licences
On 12 March 2026, the Constitutional Court of the Russian Federation set out its position on the granting of compulsory licences under Article 1362 of the Russian Civil Code, ruling that the article is consistent with the Constitution of the Russian Federation. Ruling No. 13-P of 12 March 2026 has already been published on the official website of the Court.
The Constitutional Court noted that compulsory licensing is an exceptional measure restricting the rights of a patent holder. It is to be used when necessary to eliminate the threat of a product shortage on the market, or an actual shortage arising from the patent holder’s abuse of their monopoly. Crucially, such a licence does not restrict the patent holder’s ability to use their other patents.
In other words, a compulsory licence is a tool for balancing the legal regime of patent protection with the aim of bringing a patent-protected invention into circulation quickly and effectively.
Criteria for Granting a Compulsory Licence
The Constitutional Court stated that a key factor in cases concerning the granting of a compulsory licence is determining whether the patent holder is capable of independently meeting the entire current demand on the domestic market for products manufactured using the patented invention, taking into account, inter alia, their price.
Burden of Proof in Compulsory Licence Cases
The Constitutional Court has also ruled on the burden of proof in such cases. It held that each party must disclose the evidence on which it relies; however, a party cannot be compelled to provide information which it does not possess or cannot objectively obtain. Furthermore, the parties must act in good faith and must not seek to gain access to confidential information relevant to the market by means of burdensome requests to the court or demands made to the other party for the provision of additional information.
Determining the Scope of Patents to be Licensed
An applicant for a compulsory licence is required to specify only those patents that are necessary for the manufacture of products with a similar consumer benefit. Patents protecting a manufacturing process may be included in the licence only in exceptional cases (e.g., if the process is not fully known or if the equivalent consumer effect of the generic drug can only be achieved by using such a patent) . Conversely, the patent holder must demonstrate that a given patent is not relevant to the manufacture of the original product.
Abuse by the Patent Holder as Grounds for a Compulsory Licence
According to the position of the Constitutional Court, non-use or insufficient use of a patent may arise due to abuse by the patent holder. For example, this could occur if the patent holder or its distributor fails to supply goods, systematically refuses to participate in public tenders, or offers products at excessively high prices. However, the bad faith of the patent holder’s actions or inaction must occur in tandem with a shortage of supply of the relevant products on the market and be causally linked to it.
In such cases, the court may grant a compulsory licence to persons who are willing and able to supply the market with equivalent products, in order to meet the needs of the Russian market.
Duration and Scope of a Compulsory Licence
When determining the duration and scope of a licence, the court must be guided by the principles of cost-effectiveness and proportionality. In other words, the compulsory licence must cease to apply as the market becomes saturated with such goods, and the licensee may only use the relevant intellectual property within the limits specified by the court.
Cases Where the Patent Holder Has Not Acted in Bad Faith
However, if the non-use or insufficient use of a patent is not due to valid reasons but is not linked to bad faith on the part of the patent holder, the courts must ascertain whether there are equivalents of the original product, or official distributors of such products, already on the market.
Consultation with Experts and Market Monitoring
According to the position set out in the Ruling, when deciding on the issue of a compulsory licence, including the amount of remuneration, the court may, where necessary, consult a specialist or expert.
Furthermore, the Constitutional Court noted that the court deciding on the grant of a compulsory licence must be able to instruct authorised bodies with the relevant competence to monitor the consumer impact of the use of substitutes and to take immediate remedial measures should a lack of effect or harm be identified.