On 12 February 2015 the CJEU issued its ruling (in Case C-539/13) on interpretation of the Specific
Mechanism provided for in Chapter 2 of Annex IV to the Act concerning the
conditions of accession of the Czech Republic, the Republic of Estonia, the
Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the
Republic of Hungary, the Republic of Malta, the Republic of Poland, the
Republic of Slovenia, and the Slovak Republic and the adjustments to the
Treaties on which the European Union is founded ("the 2003 Act Accession").
The provision prescribes a mechanism enabling the holder of a
patent or supplementary protection certificate (SPC) for a pharmaceutical
product to oppose importation of the said product from the new Member States
in which protection of the product could not be obtained at the time the patent
or SPC was filed. That is, the mechanism lays down an exception to the principle
of exhaustion of a patent right. The exception consists of the requirement for
whoever is going to import or market a pharmaceutical product from the new
Member States into or in a Member State where the product is protected by a
patent or SPC to give the holder or beneficiary of the said patent or SPC one
month's prior notification of intent to do so.
The ruling ensues from a dispute over parallel import of a
pharmaceutical product named Singulair from Poland into the United Kingdom. Merck Canada, Inc. ("Merck Canada") are the holders of a patent and
an SPC for the active ingredient used in Singulair. Merck Sharp and Dohme
("MSD") are the exclusive licensees for the said patent and SPC.
Pharma XL Ltd (a company associated with Sigma) notified MSD of their intention
to import Singulair from Poland into the United Kingdom. Three months after
first giving notice, Sigma began to import Singulair from Poland. Merck did not
manifest their opposition to importation until several months later, whereupon
Sigma ceased importing Singulair from Poland. Even so, Merck Canada and MSD
commenced infringement proceedings against Sigma for the sales of Singulair
Sigma had made to that time. The matter reached the Court of Appeal (England
and Wales), which stayed the proceedings to refer a question concerning
interpretation of the said Specific Mechanism provided for in Chapter 2 of
Annex IV to the 2003 Act of Accession to the CJEU. Several questions
were referred, the main one being, in summary: does the holder or beneficiary
of a patent or SPC who wishes to prevent the importation in question have to
demonstrate its intention previously and, if so, what form should the
opposition take?
The wording of the applicable provision is ambiguous and thus
susceptible to contradictory interpretations. This was the situation in the
main proceedings, in which the positions put forward by the parties can
be summarized as follows:
- Sigma contended that
the legal provision dealing with the importer's obligation to furnish the
holder of the patent or SPC with one month's prior notification of its
intention to import the protected product meant that where the holder or
beneficiary of protection did not invoke its rights within one month from the
time notification was furnished, the importer was entitled to import and market
the said product in the Member State concerned after it had obtained
authorization from the competent authorities. It consequently maintained that
the time period set by the provision implied for the holder or beneficiary
of the patent a requirement to exercise its rights in good faith and to give
notification of its intention to exercise its rights within the said term,
because otherwise the importer would be left in a state of legal uncertainty
detrimental to its legitimate interests and expectations.
- Merck, in turn,
contended that the said Special Mechanism did not impose any requirement on
the holder or beneficiary of the patent or SPC to furnish prior notification of
its intention to prohibit parallel imports and that if any such requirement
existed, both the requirement as such and the means of discharging it would
have been expressly laid down.
The CJEU's ruling held that: (i) the holder or beneficiary of a
patent who intends to prohibit parallel imports of a pharmaceutical product is
not required to demonstrate its opposition to importation within one month
under the aforesaid Specific Mechanism to be able to enforce its rights over
the said product; however, (ii) where the holder or beneficiary does not indicate
its opposition to importation within the one-month time limit, the parallel
importer may commence importation and marketing after first obtaining
authorization from the competent authorities; consequently, (iii) the holder
or beneficiary of a patent of SPC may not rely on its rights with regard to any
importation and marketing of the pharmaceutical product in question carried out
before it intention has been expressly indicated.
Thus, this ruling helps
define the meaning and scope of the Specific Mechanism provided for in the 2003
Act of Accession as it relates to parallel imports of patented pharmaceutical
products, striking a balance between the rights conferred by patents and SPCs
and the principle of the free movement of goods in the European Union.
Authors: Enrique Armijo Chávarri -- María Cadarso
