Skinny labels ≠ safe harbor: evolving liability for second medical use patents in Germany

A strategic guide for generics facing second medical use patents in Germany 

Introduction

Generic and biosimilar companies play a vital role in healthcare systems by providing affordable access to medicines after patent expiration. However, the landscape of pharmaceutical patent protection extends well beyond the original compound patents covering the active pharmaceutical ingredients. Second medical use patents which protect specific therapeutic applications of known compounds present unique challenges for generic market entry strategies.

Developments in German case law, particularly the Östrogenblocker (OLG Düsseldorf, I-2 W 6/17, 5 May 2017), Fulvestrant (OLG Düsseldorf, I-2 U 27/18, 9 January 2019) and Nilotinib (LG Munich I, 21 O 14559/24, 4 December 2024) decisions, have significantly expanded the scope of potential infringement liability. Generics can no longer rely solely on "skinny label" strategies to avoid infringement. German courts do recognise that cross-label use - where products are prescribed for patented indications despite being marketed only for non-patented uses - can constitute direct patent infringement by the distributor under certain circumstances.

This article examines the evolving legal framework from the perspective of generic and biosimilar companies, providing practical guidance on risk assessment, market entry strategies, and compliance measures to minimise infringement exposure whilst maintaining commercial viability.

Understanding the legal framework

The traditional manifest preparation doctrine

Historically, German courts required a "manifest preparation" (“sinnfälliges Herrichtung”) for direct infringement of second medical use claims. Under this doctrine, articulated e.g. in the Federal Court of Justice's Pemetrexed decision (BGH X ZR 29/15), a generic would only infringe if it was specifically prepared and marketed for the patented indication. This typically meant referring to the patented use in the summary of product characteristics (SmPC), package leaflet, or other prescribing information.

This framework provided a relatively clear safe harbor, in particular, based on the regulatory framework allowing for skinny labeling for exactly that reason, i.e. providing the generics with the possibility to enter the market with the patent-free indication: by obtaining a marketing authorisation only for non-patented indications and excluding patented uses from all product information, generics could argue that they lacked the requisite intent for direct infringement, even if physicians subsequently prescribed their products for patented indications (“off-“ or rather “cross-label”).

The current liability framework: Östrogenblocker, Fulvestrant and Nilotinib

The Düsseldorf Higher Regional Court fundamentally altered this landscape by establishing that direct infringement can occur even without explicit manifest preparation. Under the Östrogenblocker/Fulvestrant framework, a generic may be held liable for direct infringement if:

1. Suitability: The product is objectively suitable for the patented use.
2. Exploitation of circumstances: The generic exploits circumstances that lead to use in the patented indication.
3. Sufficient extent: In practice, cross-label use occurs to a sufficient degree.
4. Knowledge or negligence: The generic knows or should reasonably know about such use.

This framework recognises that generic and biosimilar companies may benefit commercially from cross-label prescribing whilst maintaining technical compliance with regulatory carve-out strategies. The critical shift is that liability now depends not solely on what the generic explicitly communicates about its product, but on the generic's conduct in the broader market context and its knowledge of actual prescribing patterns.

The more recent case law demonstrates the practical application of these requirements. Whilst Östrogenblocker and Fulvestrant established the general criteria for cross-label use liability, the Munich Regional Court further elaborated on the “exploitation of circumstances”: In Nilotinib, the court held that a generic could be liable for cross-label use despite an explicit warning that patients potentially in need of the patented administration regime should use alternative products in its product information. The court found that an “exploitation of circumstances” arose from the generic's participation in the statutory substitution mechanism under § 129 SGB V (German Social Code), combined with the physicians' established knowledge that Nilotinib could be administered for patented use. The decision clarified that merely excluding the patented indication from labeling was insufficient where the generic participated in rebate contracts and the substitution system knowing that the drug would be prescribed cross-label in the patented use. The court required active protective measures, including restrictions on rebate contracts, database warnings, and regular information letters to specialists. 

Key implications

The current framework creates several challenges for generic and biosimilar companies:

• Skinny labels are not a complete defence: Regulatory carve-outs may be insufficient if other factors indicate exploitation of cross-label use.
• Market knowledge creates risk: Awareness of cross-label prescribing patterns can establish liability.
• Ongoing monitoring obligations: Generic and biosimilar companies need to actively monitor and respond to prescribing patterns.
• Commercial decisions carry legal weight: Business strategies, including tender participation, may constitute “exploitation of circumstances.”
• Proactive measures: Risk minimisation requires careful review of proactive measures to commercially remain within the boundaries of the skinny label – a clear warning in the SmPC may not suffice.

The UPC perspective

Beyond the German courts, the Unified Patent Court (UPC) has begun developing its own framework for second medical use patents resembling the German doctrine: In Sanofi/Regeneron v Amgen (UPC_CFI_505/2024, 13 May 2025), the Düsseldorf Local Division established a two-element test for infringement regarding second medical use: (1) an objective element — the product is offered or placed on the market such that it leads or can lead to the claimed therapeutic use; and (2) a subjective element — the alleged infringer knew or should reasonably have known that such use is to be expected. 

The court identified similar relevant factors as the German courts, including SmPC wording, awareness of infringing use, market share of the claimed use, prescribing practices, and measures taken to promote or prevent the patented use. The court particularly emphasised that whilst SmPC content is important, it is not solely determinative. 

Conclusion

The evolution of German case law on second medical use patents has fundamentally altered the risk landscape for generic and biosimilar companies. The Östrogenblocker, Fulvestrant and Nilotinib decisions make clear that skinny label strategies alone are insufficient to avoid infringement liability where substantial cross-label use occurs with the manufacturer's knowledge.

However, these developments do not render generic and biosimilar market entry impossible or commercially unviable. Rather, they require a more sophisticated risk assessment, strategic planning, and operational compliance. Generic and biosimilar companies must:

• Conduct a thorough patent landscape analysis identifying all relevant second medical use patents and carefully evaluating claim scope.
• Assess market reality through prescription data and clinical practice analysis to understand cross-label use risk.
• Select an appropriate market entry strategy based on patent strength, market structure, and company risk tolerance.
• Implement robust compliance measures demonstrating good faith efforts to limit the use of non-patented indications by informing respective stakeholders accordingly.
• Monitor prescribing patterns and respond promptly to cross-label use.
• Prepare for potential litigation with strong non-infringement and invalidity positions
• Engage with regulatory and reimbursement systems to align market access with patent strategy

The key insight from recent case law is that the generics’ conduct throughout the product lifecycle, from regulatory strategy through commercial decisions to post-launch monitoring, will be scrutinised for evidence of exploiting cross-label use. Generics who approach second medical use patents strategically, implement genuine risk mitigation measures, and document their compliance efforts can successfully navigate this challenging landscape.

Ultimately, the balance between originator innovation incentives and generic competition serves the broader public interest in both pharmaceutical innovation and affordable access to medicines. Generic and biosimilar companies who respect valid patent rights whilst challenging weak patents, and who compete fairly within the bounds of applicable law, fulfill their essential role in the healthcare ecosystem.

As this area of law continues to develop, generic and biosimilar companies must remain vigilant, adaptive, and strategic. Close collaboration between commercial, regulatory, and legal teams, supported by robust market intelligence and compliance systems, will be essential for success in markets affected by second medical use patents.