(Novellierung des Markengesetzes in Tschechien und in der Slowakei – was haben Inhaber von Schutzmarken ab dem 1. 1. 2019 zu befürchten?)
1. Introduction
On 1 December 2017, it will be one year after a fundamental amendment to the Act on Pharmaceuticals1 (the “Act”) became effective. One of its main goals was to ensure the availability of medicinal products for the needs of patients in the Czech Republic. The amendment not only laid down restrictive rules for the distribution of medicinal products abroad, but also brought about new obligations for marketing authorization holders and distributors in relation to the distribution of medicinal products in Czech Republic. Under Section 77(1)(h) of the Act, distributors are obliged to ensure supplies of medicinal products to operators authorised to dispense medicinal products (essentially pharmacies, including hospital pharmacies) no later than within two business days of receipt of their request.
At the same time, said provision foresees that in order to ensure the availability of medicinal products on the Czech market, the distributor has the right to request a marketing authorization holder (the “marketing authorization holder”) to supply medicinal products to the extent of the distributor’s market share, and the marketing authorization holder has the obligation to do so.
The cited provision has raised considerable controversy during the legislative process. The first year of the validity of the new regulation shows that the critical voices were justified and that the amendment raises more questions than it answers.
2. Distributors’ obligation to ensure supplies of medicinal products within two days
First, we shall examine the practical difficulties distributors face when they are obliged “to ensure supplies of medicinal products within two business days of receipt of an order.”
In practice, distributors often face the situation where they cannot comply with orders within the statutory time limit. This is particularly the case when they do not have the required products in stock. Within two business days, they are thus forced to obtain them from a third party, for example, from the marketing authorization holder or another distributor. However, these persons do not have the stipulated time limit for delivery.
Distributors are obliged to comply with the order even if the product is not in their portfolio at all. In addition, they are obliged to ensure the supply without being entitled to examine the reasons behind the order. In other words, they are obliged to supply even when a pharmacy requires a medicinal product only for the purpose of its storage, or even for export abroad.
It is evident from the above examples that the Act places a heavy burden on distributors and in extreme cases may be even abused against them.
3. Obligation of marketing authorization holders to supply to distributors
The Act attempts to ease the distributors’ situation by conferring on them the right to request the marketing authorization holder to supply medicinal products “to the extent of the distributor’s market share”. However, this obligation leads to considerable problems in practice, too.
The main problem for marketing authorization holders is to determine the extent to which they are obliged to comply with distributors’ orders. Under the Act, a distributor’s market share is equal to “the market share achieved on the Czech market by the distribution of all human medicinal products in the calendar quarter preceding the last ended calendar quarter.”
Unfortunately, the marketing authorization holder does not have reliable data available, on the basis of which he could accurately determine the distributor’s market share. Such data are available only to the State Institute for Drug Control (the “SIDC”). However, the SIDC must not disclose the data in a way that would identify individual distributors’ market shares. In the end, the marketing authorization holder is thus unable to check whether the order is justified in terms of its extent.
It is also unclear whether the market share should reflect the distributor’s turnover in CZK or the volume of medicinal products supplied. Similarly, it is unclear to what distributors and in what amount the supply of a medicinal product that is consecutively distributed through more distributors should be attributed, as well as the date that will be decisive for including the supply in the respective quarter (contract conclusion date or physical delivery date, invoice due date or other time). The question is also how back discounts, turnover bonuses, etc. should be taken into account in market share calculation.
Another uncertainty arises from the fact that it is not clear what volume of medicinal products should be used as a basis to determine the permissible extent of the order. This basis may be, for example, the volume of medicinal products that the marketing authorization holder supplies statistically to the market in a given month or quarter. However, theoretically, the basis may also be the volume of medicinal products that the marketing authorization holder supplies historically to the market for the entire calendar year.
In extreme cases, it may happen that the marketing authorization holder receives orders for example from two largest distributors for the supply of a particular product to the extent equal to, say, 50% of the volume that the marketing authorization holder supplies for the entire year. The marketing authorization holder may thus lose all its stock and may be unable to satisfy other distributors who will contact him subsequently.
The obligation of marketing authorization holders to supply to distributors “to the extent of their market share” is also problematic from competition law perspective. As a consequence, such obligation will significantly weaken competition as it will lead to the fixing of market shares, in particular, of major distributors, the prevention of market expansion of existing distributors, and the prevention of new distributors from entering the market.
4. Possible reasons for rejecting an order
On its face, the Act provides marketing authorization holders and distributors with very limited options to reject orders.
One of the options explicitly foreseen by the Act is a case where a party has at least one monetary debt overdue more than 30 days to the marketing authorization holder or the distributor. The second option is a situation where the placing of a medicinal product on the market is interrupted or terminated in the Czech Republic.
Both the marketing authorization holder and the distributor may release themselves of their liability if they prove that they have made all reasonable efforts to fulfil their obligation.2 This reason may be taken into account with respect to the marketing authorization holder, for example, when its stocks are exhausted, typically as a result of an order from a major distributor “to the extent of its market share.”
On the distributor’s side, this reason may be considered, for example, in a situation where it is confronted with a pharmacy’s order to supply a medicinal product it does not have in its portfolio. If, without delay, the distributor reaches out to the relevant marketing authorization holders and distributors and, despite this, it does not receive the medicinal product from them, in our opinion, it should not be held liable.
Finally, in some opinions, one may release themselves of their liability for failing to comply with an order by referring to the purpose of the Act, which is to ensure the availability of medicinal products for patients in the Czech Republic. This principle is also enshrined in Article 81 of Directive 2001/83/EC, under which the “holder of a marketing authorisation for a medicinal product and the distributors of the said medicinal product … shall … ensure appropriate and continued supplies of that medicinal product to pharmacies and persons authorised to supply medicinal products so that the needs of patients in the Member State in question are covered.”
Based on this principle, it can be argued that neither the marketing authorization holder nor the distributor are automatically obliged to comply with each order. Rather, if the marketing authorization holder or the distributor is able to demonstrate that the needs of patients in the Czech Republic are saturated or that the applicant does not intend to use the required medicinal products to meet the needs of domestic patients but intends to export them, he should be entitled to reject such an order. The rationale behind this argument will, however, have to be upheld in the decision-making practice.
5. Conclusion
The first year after the adoption of the amendment was marked by extreme legal uncertainty. This is also admitted, among others, by the SIDC according to which these provisions of the Act are unenforceable in practice.
However, the lack of enforcement by the SIDC is criticized by the Czech Pharmacy Chamber which in September 2018 adopted a resolution to bring an administrative action against the SIDC because it allegedly does not sanction distributors who fail to supply medicinal products to pharmacies on time. At the same time, first lawsuits have already been brought by distributors against marketing authorization holders.
Before these questions are clarified by the courts, the scope of the obligations under Section 77 of the Act will still be unclear. This ambiguity is not only related to reasons for refusal to supply but also to other practical problems.
This applies in particular to marketing authorization holders who have to cope with the impact of the Act on their distribution models (e.g. DTP model or exclusive distribution), their capacity planning, optimal stock management, etc.
Solving these issues requires a considerable amount of creativity. At the same time, caution should be taken as a violation of the Act is subject to sanctions of up to CZK 20 million (approximately EUR 770,000).
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Authors: Václav Audes, Roman Barinka
Source: Lexology
An amendment to Act No. 90/2012 Sb., on Companies and Cooperatives (Act on Business Corporations), as amended (“Act”) came into effect on 14 January 2017. The amendment has re-introduced so-called “co-determination”, or mandatory employee participation in corporate bodies of companies having more than 500 full-time employees. Even considering the fact that co-determination is not a novelty in Czech law, one can say that when preparing this re-introduced concept, the legislator did not learn from its problematic development prior to 2014 (in the process of re-codifying corporate law).
Who is subject to the amendment?
The first of the ambiguities of the relatively brief regulation of co-determination (this problematic concept is regulated by only four paragraphs of a single section) is the determination of what types of companies employee participation should apply to. To begin with, we can say with certainty that mandatory employee participation will apply to joint stock companies with dualistic company management that had more than 500 full-time employees as at 14 January 2017. Furthermore, we can state that mandatory employee participation does not apply to limited liability companies, even if the company has a supervisory board. As far as employee participation in the management board of a monistic joint stock company is concerned, the views of experts differ.
Advocates of the view that employee participation also applies to the management board argue that the Act stipulates that the provisions relating to the supervisory board shall apply mutatis mutandis to the management board. In addition, they consider it essential to argue that if co-determination did not apply to the management board, shareholders of joint stock companies would get a convenient tool to avoid the introduction of co-determination – to change the method of the corporate management to monistic and that such a procedure would discriminate against employees of monistic joint stock companies.
However, we cannot agree with this conclusion, especially for the following reasons. The mandatory employee participation was explicitly provided for in the original text of the amendment to the Act also in connection with the management board, but it was removed from the amendment in the course of the legislative process in relation to the management board. If the situation was the opposite, i.e. if co-determination in connection with the management board had never been discussed, we could conclude that this is an (intentional) omission by the legislator. However, in a situation where the legislator has actively omitted a regulation concerning the management board from the text of the amendment to the Act, there can be no doubt that the intention of the legislator was, ultimately, that the mandatory employee participation would not apply to the management board. In addition, unlike the regulation concerning the supervisory board, the Act does not provide for a possibility of electing the supervisory board members by a body other than the supreme corporate body.
Another argument against applying employee participation to the management board is the fact that, unlike the supervisory board, the management board is not a purely controlling body when it also decides on the company’s business management.
It is also worth mentioning the fact that the amendment to the Act currently being prepared does not also include the introduction of co-determination in monistic joint stock companies and provides for employee participation only in relation to the supervisory board.
By when do companies have to comply with the amendment?
Companies that are subject to mandatory employee participation, which, in our opinion, are only dualistic joint stock companies that had more than 500 full-time employees as at 14 January 2017, are obliged, by 14 January 2019, not only to amend their articles of association so that they are compliant with the discussed amendment to the Act, but also to ensure that the structure of their supervisory boards is also compliant with the amendment as at that date (i.e. a validly elected supervisory board member appointed by the employees).
Right to elect
An active electoral right, i.e. the right to elect an employee representative to the supervisory board, is limited to the company’s full-time employees. Those employees who perform work under agreements on performance of work outside employment shall not therefore participate in the election of employee representatives to the supervisory board.
A passive electoral right, i.e. the right to be elected as an employee representative to the supervisory board, may not be limited by the company in any way. At this point, it turns out again that when drafting the amendment to the Act, the legislator did not take into account at all the development of theory, practice or case law from the period before 2014, when the passive electoral right was limited only to the company’s employees. Although Section 448(4) of the Act, the second sentence, (which states that the “provisions of paragraph 3 shall apply mutatis mutandis to the recall of an employee from the supervisory board”) could cause some ambiguities, we suppose that in this case it is not the legislator’s intention to limit the passive electoral right but rather an administrative error.
However, a supervisory board member elected by the employees must meet all the requirements imposed on any member of the corporate body – i.e. legal capacity, legal age, and clean criminal record pursuant to the Trade Licensing Act. In addition, if a corporate body member, for example, needs a security clearance to perform the function, this will not be a limitation of the passive electoral right if the company determines that a supervisory board member elected by the employees must prove to the company the obtaining of such clearance.
What if a joint stock company does not introduce co-determination?
The registry court will call on the joint stock company to remedy the situation, and if the company fails to do so, this may result in the dissolution of the company as an extreme sanction. However, it should be noted that such a situation should not happen if the company has taken all necessary steps to introduce employee participation, but, for example, due to the absence of employees in the election, a new supervisory board member has not been elected.
Our services
Our corporate law legal team is ready to assist you with all the steps to implement employee participation, including:
In addition to the above changes, we can also analyse and implement alternative solutions for clients so that the amendment to the Act does not apply to the respective joint stock company.
In view of the fast-approaching statutory deadline, we strongly recommend that you do not wait to implement the above-mentioned in whatever form.
Authors: Ondřej Florián, Alexandra Parnaiová
Source: Lexology
In response to the current regulation on mandatory electronic prescriptions, the Ministry of Health of the Czech Republic drafted an amendment1 to the Czech Act on Medicines2 . The amendment primarily aims to create a legislative basis for the electronic prescription information system (the “ePrescription System”) and to regulate patients’ medicine records, thus enabling physicians and pharmacists, among other persons, to inspect data in the system in connection with medicines prescribed and dispensed to patients. Apart from that, the draft also introduces other changes, such as the specification of price as a mandatory identifier of medicines, broader authorisation of pharmacy assistants, and new sanctions reflecting the proposed adjustments.
Need for an amendment
The existing Act on Medicines only allows for issuing electronic prescriptions and dispensing prescribed medicines, but it does not address the technical details of the electronic prescription and the possibility to use in any way the data contained within the system on prescribed and dispensed medicines when providing health services to individual patients.
In response to the existing situation, the Ministry of Health drafted an amendment introducing a number of changes connected as well as unconnected with the valid and effective mandatory e- prescription regulations.
The draft amendment has already gone through the comment procedure in individual ministries and other relevant bodies, and on 10 October 2018, the government submitted it to the Chamber of Deputies3 . Provided the proposed wording is passed, in the best-case scenario, the draft is expected to come into effect on 1 January 2019. Given the lengthy law-making process, the date of effect will probably have to be postponed
ePrescription System and the role of the State Institute for Drug Control
The draft amendment lays down the ePrescription System, an information system enabling and supporting electronic prescriptions for medicines. The founder, operator and administrator of the eRecept system is going to be the State Institute for Drug Control4 , according to the amendment.5
The actual ePrescription System is to comprise a range of components, namely (a) a central depositary of e-prescriptions, (b) a registry of medicines with restrictions, (c) a medicine record, (d) administration of consents, (e) an activity log, (f) web and mobile app services for physicians, pharmacists and patients, and (g) services providing statistical data from an anonymised database kept within the ePrescription System, containing data that does not enable the identification of the specific individual.
Patient’s medicine record
The medicine record is part of the ePrescription System and enables not only patients (or their legal representatives), but also physicians, pharmacists and other persons defined by law to inspect certain data kept in the system in connection with prescribing and dispensing medicines to individual patients.
Physicians and pharmacists
Physicians and pharmacists may inspect patients’ medicine records only in connection with providing health services to individual patients.6 For this purpose, information in patients’ medicine records will be accessible for a period of 1 year, and it will be possible to ascertain data on prescribed medicines as well as to identify physicians or pharmacists. It will also be possible to determine generic substitutes for medicines prescribed.
Physicians and pharmacists will no longer have to rely solely on information provided by their patients, which could in turn lead to enhanced selection of suitable treatment, prevention of contraindications and the overall improvement of the health services provided7
Digitalisation of paper prescriptions
To ensure that the patients’ medicine records contain comprehensive information, the amendment imposes a duty upon pharmacists to transfer data from paper prescriptions to electronic prescriptions. Data from the paper prescription will appear in the patients’ medicine records, and the file will thus be complete. The date of effect of the digitalisation provisions will be postponed until 1 January 2020.
Consent
The draft amendment implies that patients automatically give their consent to physicians’ and pharmacists’ inspection of data displayed in patients’ medicine records (opt-out principle). Nevertheless, patients may opt out from this general consent or give their consent only to selected physicians or pharmacists.
Activity log
In medicine records, patients may inspect not only their data displayed to physicians and pharmacists but also all data relating to them including the activity log. The log displays and maintains information on all activities performed by entities registered in the eRecept system. Patients may also find out who viewed their data.
Additional changes
The amendment also introduces other changes besides those mentioned above. These include namely the transfer of the provision laying down exemptions from the duty to issue e-prescriptions and essential elements of e-prescriptions8 to the wording of the Act on Medicines; moreover, the prescription of medicines for veterinary care will be regulated in a separate regulation.
Last but not least, the amendment introduces changes that do not directly relate to e-prescriptions. These include namely a broader authorisation for pharmacy assistants who can dispense medicines upon request and broader mandatory identifiers of medicines, which already include codes and names allocated by the State Institute for Drug Control and will also include the price of the medicine under the amendment. This will namely affect the marketing authorisation holders, distributors and pharmacies.
In relation to the envisaged changes, the amendment also contains new sanctions (e.g. up to CZK 20 million in relation to the information system data protection) and a proposal for a change in the authorisation of bodies in charge of offences linked to the forgery and other abuse of medical prescriptions. The amendment proposes the State Institute for Drug Control as the authority in charge.
Conclusion
Despite being a mere draft, the amendment proposes a number of changes that will have an impact on the majority of entities in the pharmaceutical market. Entities affected will include information system suppliers and health service providers in connection with the changes necessary to ensure compatibility of information systems.
To conclude, it is worth pointing out that the Act on Medicines is not the only regulation that will undergo changes in connection with e-prescriptions. The explanatory report relating to the amendment has already envisaged changes in the related implementing decrees9 which will lead to other changes in the industry.
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Authors: Václav Audes, František Neuwirth
Source: Lexology
HAVEL & PARTNERS, the largest Czech-Slovak law firm, has followed up on its success in the years 2015 and 2017 by being awarded the Law Firm of the Year 2018 in the Domestic Law Firm category. In addition to the main award, in this 11th year of the prestigious competition, which is regularly organized by EPRAVO.CZ under the auspices of the Czech Bar Association and the Czech Ministry of Justice, HAVEL & PARTNERS has also won in the Corporate Law and Intellectual Property categories and has placed among the best ranked law firms in other specialised categories. Considering the total number of titles and nominations in all previous years of the Czech and Slovak Law Firm of the Year competition, HAVEL & PARTNERS remains the most successful law firm with the most comprehensive services in the Czech Republic and Slovakia.
“The year 2018 is associated not only with the change of our name to HAVEL & PARTNERS, but also with the redefinition of the strategy of the services we provide, focusing on as many complex legal cases as possible, including solving complex disputes, and also on the development in international transactions. The very fast implementation of this strategy has led to the additional rapid growth of the firm while further enhancing the quality of our services. We are very pleased that for the third time in the last four years we have been awarded the Law Firm of the Year in the Domestic Law Firm category. For this extraordinary success we would like to particularly thank our clients, who engage us with trust to address both their business and private matters. We appreciate not only their trust in us but also our stable team of top colleagues and their extraordinary work commitment that they have maintained throughout the year,” says Jaroslav Havel, managing partner of the firm, on receiving the main award.
The firm has achieved another big success in the Corporate Law category. After the previous seven rankings among the highly recommended law firms in the years 2011–2017, this year HAVEL & PARTNERS has become the winner of this category. “This year’s victory underlines the fact that the creation of a unique, dedicated corporate law team, which also provides a comprehensive legal and tax service to private clients, was a courageous and correct decision. Every year, we are involved in the most interesting domestic and cross-border corporate transactions and in the implementation of very private assignments. Clients appreciate our experience, innovation and our top-notch legal and tax team,” says David Neveselý, a partner co-leading the largest and most internationally recognized Czech-Slovak team specialising in corporate law, which is currently comprised of about 70 lawyers.
Our law firm has in its portfolio the largest corporate and private clientele in the Czech Republic and Slovakia, including about 70 of the 500 largest global companies according to Fortune 500, almost 50 companies in the Czech Top 100 ranking, and a third of the richest Czechs and Slovaks. For many years, we have also carried out the largest number of corporate transactions on the Czech market and have been an advisory leader for private clients and family businesses, helping them to set up private (family) holdings, trust funds, etc.
HAVEL & PARTNERS has also become the Law Firm of the Year 2018 in the Intellectual Property category. Intellectual property law is one of the most important and constantly growing legal specialisations of the firm. The legal team of 15 lawyers led by firmpartner and co-founder Robert Nešpůrek and partner Ivan Rameš is among the largest advisory groups with this specialisation in the Czech Republic and Slovakia. “Successfully building a brand and developing innovative ideas also includes their legal protection. We are very pleased that the know-how we have developed over the years is being sought by more and more clients – whether they are domestic companies expanding abroad, major global corporations or entrepreneurs combating counterfeits. We are delighted that this successful cooperation has been reflected in our victory in the Intellectual Property category,” says Robert Nešpůrek.
In 14 other specialised categories, the firm has been ranked among the highly recommended (top tier) law firms. In the remaining Criminal Law category, law firm SEIFERT A PARTNEŘI, with which HAVEL & PARTNERS exclusively cooperates in the field of criminal law legal advice, ranked among the top rated firms. “These excellent results demonstrate our versatility and the outstanding quality of all our specialised teams. At present, we advise clients in all areas of their business and private lives,” Jaroslav Havel summarizes the comprehensive scope of the firm.
The complete results of the 11th official ranking of Czech law firms, the Law Firm of the Year 2018, were published by the organizer of the competition, EPRAVO.CZ, during an award ceremony held at Žofín Palace in Prague on 5 November 2018. The list of all the awards is also available at: http://www.pravnickafirmaroku.cz
(The ePrescription System: Draft amending the Act on Medicines is under discussion in the Parliament)
HAVEL & PARTNERS, the largest Czech and Slovak law firm, has participated as an adviser in another major cross-border transaction. As a legal services subcontractor for the international law firm Heuking Kühn Lüer Wojtek, HAVEL & PARTNERS advised Hengst Group on the acquisition of DELBAG, the leading manufacturer of air filtration products for commercial, industrial and residential use since its establishment in 1909. DELBAG is a member of FläktGroup, the seller in the transaction. The value of the transaction has not been disclosed.
The team of HAVEL & PARTNERS managed by the firm’s partner Pavel Němeček (M&A) and lawyers Veronika Filipová (M&A) and Monika Čermáková (Corporate) carried out a legal due diligence exercise on the Czech company FläktGroup Czech Republic a.s., from which the DELBAG division is to be spun off to the newly established company DELBAG s.r.o. The legal advice also included a review of the draft terms and the entire process of the spin-off as well as a partial review of selected transactional documents.
The transaction is being undertaken in six European jurisdictions in total: besides the Czech Republic, in Germany, France, Austria, Poland and Luxembourg. In these countries, relevant assets, employees and activities comprising DELBAG are spun off into newly established companies that will be later transferred to the buyer, Hengst Group.
The Czech jurisdiction is also important to the transaction due to the fact that DELBAG’s key factory is located in Liberec.
More information about the acquisition is available on the website of Heuking Kühn Lüer Wojtek here.
HAVEL & PARTNERS’s practice group specialising in information technology, telecommunications, media, e-commerce, and personal data protection (now especially in connection with the General Data Protection Regulation – GDPR) has been extended to include lawyer Tomáš Havelka. Within the team – which is one of the largest with this specialisation in the Czech Republic and Slovakia – Tomáš will primarily advise clients on intellectual property law, complex IT and licensing agreements, and legal solutions for comprehensive IT projects. Thanks to his knowledge of Dutch and French, he will also focus more on clients from the Netherlands and Belgium.
“Tomáš is a great addition to our team with experience from abroad where he intensively dedicated himself to IT law not only during his studies but also during his practice in law and public administration. At our firm he will advise major information technology clients and investors who focus on investing in technology companies when expanding their portfolios,” says head of the team and partner Robert Nešpůrek on the new addition.
Tomáš Havelka earned a Master’s degree in Law and Legal Science and a Bachelor’s degree in Political Science and European Studies at Palacky University Olomouc. At the same time, Tomáš attended the Master’s program Internet, intellectuele eigendom en ICT at Vrije Universiteit Amsterdam and completed a study program at the Katholieke Universiteit in Leuven, Belgium. As a trainee, he worked in Brussels at the Permanent Representation of the Czech Republic to the European Union and also completed a traineeship at the Czech Business Representation to the EU (CEBRE) in Brussels.
Prior to joining HAVEL & PARTNERS, Tomáš worked first as a legal trainee, then as an attorney at Heyninck & Partners. He has gained foreign legal practice at ICTRecht B.V., the leading Dutch law firm specialising in ICT law. In addition to his native Czech,
Tomáš also speaks fluent English, Dutch, and French.
HAVEL & PARTNERS, the largest Czech-Slovak law firm, has appointed its senior associate Natalija Traurigova as a Counsel. Natalija has worked at the firm since 2007. Her career advancement is further evidence of our long-term efforts to maintain capable and hardworking lawyers who can get to the management of the firm and have a direct impact on its direction, usually faster than at our competitors.
Natalija specialises in general commercial and corporate law, legal audits and legal due diligence investigations, mergers and acquisitions, real estate law, energy and transportation law. She also coordinates the firm’s Russian advisory group – she is primarily responsible for providing comprehensive legal services to Russian-speaking clients as well as Czech and foreign clients entering or already doing business in the markets in Russia and other CIS countries. She advises them on making strategic investments, formation and management of joint ventures, arrangement of contractual relations, and dispute resolution.
Prior to joining HAVEL & PARTNERS, Natalija worked for seven years at the international law firm Freshfields Bruckhaus Deringer and subsequently at its successor Czech law firm. While there, she focused on corporate law, mergers and acquisitions, energy law and international (including aviation) transportation and forwarding law. In her previous practice, she also dealt with project financing, for instance in connection with a pilot B.O.T. motorway construction project in the Czech Republic and a large-capacity paper mill construction project concurrently designed in the Czech Republic and Germany.
Positon of Counsel
The position of Counsel is the second highest managerial level of the organizational structure of HAVEL & PARTNERS after the partner level. It was created together with the economic and personnel development of the firm, when it was necessary to extend the competence of managing associates in some areas.
At HAVEL & PARTNERS in addition to Natalija Traurigová, Petra Sochorová, head of a team of employment law specialists, Jiří Kmec, a specialist in judicial, administrative and arbitration proceedings, insolvency, restructuring, and criminal liability of legal persons (compliance), and Richard Otevřel, head of the practice group providing comprehensive legal services in the field of personal data protection and personality protection, also work in the position of Counsel at HAVEL & PARTNERS.
HAVEL & PARTNERS, the largest Czech and Slovak law firm, has provided comprehensive legal advice to Windeln.de Group, one of the largest online sellers of baby and toddler products in the European and Chinese markets. The advice was related to the sale of a 100% share in the Polish company Feedo Spółka z o.o. and its Czech subsidiary MyMedia s.r.o., operating the largest Czech specialised e-shops selling infant food and baby and toddler products: Feedo.pl, Feedo.cz and Feedo.sk. The companies have been acquired by Dětská galaxie s.r.o., a member of the AGS 92 group owned by Czech businessman Zdeněk Žáček.
The transactional team of HAVEL & PARTNERS was managed by senior associate Silvie Király and associate Juraj Petro, working closely with the law firm’s partners Jan Koval, Petr Sprinz and associate Jiří Rahm of the Banking & Finance practice group. The complexity of the transaction also required the involvement of HAVEL & PARTNERS’ tax specialists under the lead of managing associate Josef Žaloudek.
More information about the transaction is available in the press release published on the website of Windeln.de.
The protection of personal data under the General Data Protection Regulation (“GDPR”) in the field of clinical trials is an extensively-discussed topic, even more so in the absence of a specific statutory provision, or at least a relevant methodology in this respect. The Czech State Institute for Drug Control (“SUKL”) has recently issued a GDPR-related notice to sponsors of clinical trials, advising them not to submit documents concerning the processing and protection of personal data together with the application for authorisation / notification of clinical trials. Despite that notice, however, there still remain multiple unanswered questions in this respect, concerning in particular the legal basis for, and a more detailed legal definition of, transfers of personal data of the clinical trial subjects between the investigators and the sponsor
SUKL notice to clinical trial sponsors
SUKL published a notice1 on its website on 30 July 2018, advising sponsors not to submit documents concerning the processing and protection of personal data together with the application for authorisation / notification of clinical trial. SUKL will not review and assess such documents.
Documents pertaining to the processing and protection of personal data should be submitted to the ethics committees and data subjects as separate documents. In addition, it is also necessary to separately submit to the ethics committees a declaration stating that in data transfers, personal data protection required by the GDPR will be ensured. However, the ethics committees will not give any opinion regarding those documents.
The notice in the context of the opinion statement of the Office for Personal Data Protection
The Czech Office for Personal Data Protection (“UOOU”) published its opinion on this matter in May 2018 to the effect that “it is not permissible to mix a consent with the conduct of a clinical study in patients or healthy volunteers and a consent with personal data processing”, and that the processing of personal data under applicable legislation is a responsibility of the controller.
As far as the possibility, within a clinical trial, of processing personal data without the data subject’s consent for scientific purposes (cf. Art. 9(2)(j) GDPR) is concerned, UOOU merely states on its website that this question has not been fully answered yet, and refers to the upcoming adaptive legislation (i.e. the proposed Bill on data processing currently being discussed by the Czech Parliament) which should offer clear answers.
Legal basis for processing
SUKL states on its website that the content of the trial subject’s consent to personal data processing is irrelevant for good clinical practice (GCP); what is relevant, however, is the fact that information about the legal basis for processing has been provided to the trial subject. Nevertheless, SUKL also states on its website that the lawfulness of processing is likely to be based particularly on Art. 6(1)(c), (e) or (f) GDPR (compliance with a legal obligation, performance of a task carried out in the public interest, or for the purposes of legitimate interests, where general processing of personal data is concerned), in conjunction with Art. 9(2)(i) or (j) GDPR (processing of personal data is necessary for reasons of public interest in the area of public health, or for scientific purposes, where processing of special categories of personal data is concerned).
Hence, personal data in clinical trials may be processed on the basis of the data subject’s consent, and also on the basis, with regard to the specific form of processing, of all the legal bases mentioned above. The choice of the legal basis for the processing is the responsibility of the data controller. The legal basis must be unambiguously defined.
Ambiguous interpretation of personal data transfers
Notwithstanding the clarifying notice by SUKL, the question of transfers of personal data between the investigators and the sponsor still remains unanswered. Indeed, neither SUKL nor UOOU offers any detailed explanation of which of the legal bases mentioned above, and under which circumstances or subject to which conditions, would be acceptable to the Czech supervisory authorities.
The European Medicines Agency (“EMA”) has previously published its opinion in this regard2 , noting that while personal data are transferred between an investigator and the sponsor, privacy of trial subjects should be protected and respected. However, EMA does not stipulate, or indicate by way of example, on what basis such transfers should be effected; instead, EMA merely makes a reference to national regulations in the respective Member States. However, Czech legislation does not offer any specific answer in this respect.
Clinical trials in EU Member States
The issue of the processing of personal data in clinical trials has been widely discussed across the European Union. It has become apparent that opinions differ from Member State to Member State, which naturally has an adverse impact on multicentric clinical trials performed simultaneously in several Member States.
Take the United Kingdom, the Netherlands, and Germany as an example. The Netherlands and Germany currently tend to favour the approach that the consent to the processing of personal data must always be obtained from data subjects in clinical trials.
On the other hand, the prevailing viewpoint in the United Kingdom in this case is that the consent is not the best option, and that the processing of special categories of personal data should be perceived as processing necessary for reasons of public interest in the area of public health or for scientific purposes.
Conclusion
The notice published by SUKL does constitute a long-awaited statement by Czech governmental authorities, even though it does not, despite the list of statutory provisions potentially applicable to clinical trials, provide any specific guidance on how to make the choice. Neither SUKL nor UOOU expressly favours any of the options suggested.
Although SUKL refers to Art. 9(2)(i) and (j) GDPR (the UK alternative), it is probable that obtaining the consent from patients will continue to be the prevailing practice, for reasons of legal certainty on the part of clinical trial sponsors and investigators, although this may have adverse consequences or result in deadlock situations when the patient withdraws his/her consent without simultaneously requesting termination of his/her participation in the clinical trial. The good news thus could be that SUKL will not assess compliance of the documents with the requirements set out in the GDPR, which could make the work easier for SUKL and speed up the process.
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Author: Richard Otevřel
Source: Lexology
In practice cases are encountered in which an entitled person under a permit issued pursuant to the Building Code – typically a zoning decision or a building permit (“permits”) – transfers the ownership of a property for which the permit was issued to another person before the relevant placed and permitted structure is finished. These cases do not necessarily have to involve transfer of an ownership title to a particular property on the basis of a purchase, donation or exchange agreement though. Often a property is transferred during a transformation to a successor company as the new owner without the transfer of the rights under the permit to the successor company being covered in the draft terms of transformation. In our practice, we are often asked by our clients about the entitled person under such a permit – whether it is still the person who applied for the permit as the previous owner and to whom the permit was issued as the original owner or whether the entitled person under the permit is the new property owner. A correct answer is important for further use of the transferred property if, for example, the new owner wants to apply for a building permit based on a zoning decision issued for the previous property owner or wants to build a structure under a building permit issued for the previous property owner.
It is necessary to realise that a permit places or permits the construction of a property which by its nature can pass or be transferred to another person (owner) that is different from the original applicant/owner. The legal theory is based on this fact as it understands such permits as so-called decisions in rem. This means that the permits apply only to a certain thing, i.e. a particular property, but not to a particular person (applicant). This conclusion follows from the Code of Administrative Procedure1 pursuant to which if a right to a movable or immovable thing is decisive for the rights and obligations of parties attached to a movable thing or real estate, the enforceable decision is binding also for legal successors of the parties.
Thus, in the case of passage or transfer of an ownership title to the relevant property, entitlement under the permit automatically “passes” to the new property owner under the law given the very nature of these permits. The new owner is the legal successor of the original owner as the entitled person under the permit and, therefore, after acquiring an ownership title to the property, the new owner is automatically regarded from the legal perspective as the entitled person under these permits.
In practice a legal successor can be a person who acquired a property on the basis of a purchase, exchange or other agreement, a donee under a donation agreement, an heir, an acquirer determined by a court decision or other person on the basis of facts laid down by law such as a successor company to which assets (including the property which the permit applies to) were transferred as a consequence of a transformation.
These conclusions are also confirmed by case-law. As regards the question of legal successorship in the case of zoning decisions, the Supreme Administrative Court2 inferred that a zoning decision is tied to the land plot to which it relates, so it passes to transferees of that land plot upon the transfer of the ownership title. As regards the legal successor in the case of a builder under a building permit, the Supreme Court concluded3 that a person that acquires an unfinished structure as a new owner becomes the builder even if the building permit has not been issued to them and that such a person also takes over the obligations under public law attached to the ownership of the structure. It is then at the discretion of this legal successor to determine what kind of work needs to be carried out or whether the structure will be completed at all.
In connection with building permits the Supreme Administrative Court4 also commented on the question of legal successorship. In addition to the aforementioned, the Court concluded that it does not matter whether a legal successor of the original builder acquired an ownership title to a property to which a permit was issued by way of originary (primary) or derivative acquisition. The difference between these two ways of acquisition is that in the case of originary (primary) acquisition an ownership title is created independently from the previous owner of a thing. This can be for example an ownership title acquired upon the fall of the hammer in an auction. On the other hand, derivative acquisition of a thing involves the transfer of an ownership title, typically under a purchase agreement. Thus, according to the Supreme Administrative Court, the only requirement is that a new owner acquires a property for which a building permit has been issued; at the same time it is not relevant how such property was acquired. Given that a zoning decision has the same character as a building permit (i.e. they are both decisions in rem), the conclusions of this decision can also be applied to a zoning decision.
Under the law, a new owner of a property in relation to which the permits have been issued automatically becomes the entitled person under the permit without any other acts or arrangements (such as an agreement on the transfer of rights and obligations under the permits, an express mention in the draft terms of the transformation in the case of a transformation, etc.) being required in this connection. As a matter of fact, these permits are public decisions which by definition cannot be changed or otherwise dealt with under a private contract. Therefore, according to the Supreme Court, it is not possible to assign the rights and obligations under a permit by an agreement concluded pursuant to the Civil Code as such an agreement would be invalid5 . In contrast, it is necessary for a legal successor to secure their rights to the project documentation that are required for the permit and without which the project could not be implemented or changed by means of private law even if they automatically become the new entitled person under the permit.
Although the situation described above is easy to solve by interpreting legal regulations and case-law, in some cases the building authority requests for example an agreement with the original property owner on the assignment of rights and obligations under a permit which was issued for the original owner. However, such approach of the building authority is incorrect in light of the legal regulations and case-law.
Despite the fact that the issue outlined in this article (transfer or passage of a property to which a permit issued in favour of the original property owner applies) may be seen as clear and simple from the legal point of view, complicated situations may be encountered which always need to be considered on an individual basis while taking into account all aspects of the relevant agreements. This will be necessary in particular if a permit was issued in favour of a third party (rather than in favour of the property owner) on the basis of the property owner’s consent or on the basis of another contractual relationship with the property owner, or if the permit relates to several properties owned by different persons. We recommend that such cases always be thoroughly considered before the intended transaction.
Authors: Lukáš Syrový, Jan Fikar
Source: Lexology
