New judgment by the CJEU concerning SPCs for combinations of pharmaceutical products

The Court of Justice of the European Union has issued new judgment interpreting Articles 1, 3, and 13 of Regulation (EC) No. 469/2009 concerning the supplementary protection certificate (SCP) for medicinal products.

The judgment (Case C-577/13) was issued in the context of a dispute between the Actavis and Boehringer Ingelheim pharmaceutical companies. The question referred to the CJEU for a preliminary ruling basically comes down to whether an SPC may be sought for a combination of two products included in the claims after the initial grant of the basic patent, subsequent to amendment of the said patent. The combination was composed of: (i) an active ingredient claimed as the sole subject matter of the invention, for which the holder had already obtained a first SPC (telmisartan) and (ii) a second substance (hydrochlorothiazide) within the public domain.

In response to the questions from the referring court, the CJEU made the following preliminary observations:

- First, the expression "as such" as used in Article 1(c) and Article 3(a) of the EU Regulation is to be interpreted autonomously in light of the objectives pursued by that Regulation and the "subject matter of the invention" covered by the basic patent.

- Second, where a patent claims several products, it may be possible to obtain several SPCs for the different products, provided that each of the said products "as such" is protected by the basic patent and constitutes the "subject matter of the invention" covered by the patent.

On that basis, the CJEU ruled that a second SPC may not be obtained for a product comprising a combined product composed of an active ingredient that is the sole "subject matter of the invention" for which an SPC has already been obtained in combination with another substance. In the CJEU's view, in the case that concerns us here the combination of the active ingredients telmisartan and hydrochlorothiazide, the latter being in the public domain, is not the true "subject matter of the invention" covered by the basic patent.

The CJEU based its decision in this case on the requirement to balance the interests of the pharmaceutical industry and those of public health, since unlimited entitlement to multiple SPCs for subsequent marketing of an active ingredient by combining it with another ingredient or substance that is not the subject matter of the invention as originally protected would tip the balance in favour of the former.

The CJEU thereby upheld previous case law set forth in earlier judgments concerning SPCs for combinations of products (see cases Actavis vs Sanofi – C-443/12 – and Georgetown University II – C-484/12). The judgment leaves undecided the question as to whether a patent may be amended after grant so as to insert claims for a combination of products that could comply with the requirements for obtaining an SPC. However, while this question was not expressly addressed, the CJEU appears to be implicitly opposed to that possibility.

Authors: Enrique Armijo Chávarri -- María Cadarso

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Resale royalty right for works by visual artists – Who pays?

The resale royalty right benefiting the author of original artwork, traditionally known as the droit de suite, is, as its name implies, the right of visual artists to remuneration in the form of a royalty on subsequent resale of their works. The purpose of this right is quite clear: to enable artists to profit from the economic success of their works and thereby offset any disproportionate difference between the price at which works are sold by an artist and the price subsequently fetched at resale involving art market professionals.

This right has traditionally existed in the legal systems of most European Union countries, and a Directive to harmonize the right was issued in 2011 (Directive 2001/84/EC). The purpose of the Directive was two-fold: to ensure that visual artists effectively benefited from the right in all EU countries and to eliminate differences in the laws of the EU countries that resulted in different treatment of artists depending on where their works were sold, which ultimately was a factor contributing to distortion of the functioning of the internal market. Nevertheless, Community harmonization did not encompass all aspects of the operation of this right. Such issues as the beneficiaries of the right, the transactions and artworks subject to the right, the calculation basis, and the persons responsible for payment were addressed, but the Directive did not define, or did not clearly define, who was ultimately liable for bearing the cost of the royalty. Article 1.4 of the Directive provides that: "The royalty shall be payable by the seller. Member States may provide that one of the natural or legal persons referred to in paragraph 2 other than the seller shall alone be liable or shall share liability with the seller for payment of the royalty."

In this situation a clause in the general conditions of sale of the French art auction house Christie's France SNC for 2008 stipulated that the buyers were required to pay the house a sum equivalent to the royalty due on sales made through the said auction house that were subject to payment of the royalty  Christie's France SNC took the money on behalf of the seller and subsequently paid it to the collective management organization in charge of collecting the royalty. A competing association, the SNA, claimed that sales made by Christie's France under the aforesaid contested clause constituted unfair competition and were in breach of national law regulating the resale royalty right. The clause was voided by the Paris Cour d'Appel, and Christie’s appealed to the Cour de Cassation, which stayed the proceedings while it referred the question of whether Article 1.4 of Directive 2001/84 should be interpreted to mean that it is the seller who is definitively liable for bearing the cost of the royalty to the CJEU for a preliminary ruling.

The key issue underlying the CJEU's ruling (Case C-41/14) is doubtless the difference between the person liable for payment and the person who must definitively bear the cost. According to the CJEU, the Directive merely makes provision specifying the first issue, whereas it is silent about the second. In this regard the CJEU has held that a clause like the one in Christie's France's general conditions of sale stipulating that the cost of the royalty is to be borne by the buyer is not contrary to Community law. Basically what the CJEU has held in this judgment is that the essential objective of harmonizing the droit de suite in the Community is to ensure that artists effectively receive remuneration, and the issue of who may or should in actuality definitively bear the cost is left to the discretion of the Member States.

Author: Patricia Mariscal

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CJEU rules on importation of patented pharmaceutical goods from new EU Member States

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

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ELZABURU: 150 Years in 150 Words

At ELZABURU we do not look back, we forge ahead. We know that the blaze of the past lights up the future, and we believe that a Firm's professional identity is neither a blank page nor a page set in stone, but rather a page written day by day by the zeal and enthusiasm of its entire staff.

Here is our secret: cheer in our work, mutual regard, commitment to a common cause. In seeking the best solutions for our clients, we like to think that we see things no-one else has seen in the things everyone sees. Still, we know that it is a very fine line dividing self-confidence from arrogance. Humility is the better part of greatness!

I won't be here to say it in 150 years. So I'll say it now: it is an honour to head this Firm, it is an honour to strive for our clients.

Alberto de Elzaburu

*With quotes from José Manuel Caballero Bonald and Paul Valéry

New ruling of the CJEU on the interpretation of articles 1 and 3 of Regulation (EC) 469/2009 concerning the supplementary protection certificate for medicinal products

On 15 January 2015 the Eighth Chamber of the Court of Justice gave a judgment in response to a request for a preliminary ruling relating to the interpretation of articles 1 (b) and 3 (a) and (b) of Regulation (EC) 469/2009 concerning the supplementary protection certificate (SPC) for medicinal products (Case C-631/13).

The request was put to the Court of Justice within the following factual framework:

- A dispute arose between the Austrian Patent Office and the owner of a European patent relating to Protein D.

- Protein D is present in a pneumococcal vaccine for paediatric use called Synflorix, for which the necessary marketing authorization (MA) had been obtained.

- Protein D is not contained as such in Synflorix, but is covalently bonded to other active ingredients.

- Aside from being part of that covalent bond, Protein D  has a therapeutic effect of its own as a vaccine against the Haemophilus influenzae bacterium. However, the Synflorix MA describes Protein D only as a carrier and makes no specific reference to that therapeutic effect.

In response to the questions raised by the Austrian referring court, the Court of Justice states:

- First, the Community Regulation does not preclude the possibility that an active ingredient can give rise to the grant of an SPC where the active ingredient is covalently bound to other active ingredients which are part of a medicinal product.

- Second, the Regulation does, on the other hand, preclude the grant of an SPC for an active ingredient whose effect does not fall within the therapeutic indications covered by the wording of the MA. The CJEU reasons that, since no trial or data concerning the therapeutic effects of Protein D against Haemophilus influenzae was integrated into the marketing authorisation procedure, that procedure could not have delayed the commercial use of the basic patent. In such circumstances, the grant of an SPC would have been contrary to the aim pursued by the Regulation, which is to offset, at least in part, the delay to the commercial use of a patented invention on account of the time needed for the first MA in the European Union to be granted.

- Third, the Regulation must be interpreted as meaning that a carrier protein conjugated with a polysaccharide antigen by means of a covalent binding may be categorised as an active ingredient only if it is established that it produces a pharmacological, immunological or metabolic action of its own which is covered by the therapeutic indications of the MA. That is a matter for the referring court to determine in the light of all the circumstances of the case.

In the second and third replies the CJEU rejects the contentions of the applicant for the SPC with respect to Protein D and upholds the views taken by the European Commission.

Author: Enrique Armijo Chávarri

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European Patent Office revises its Guidelines for Examination

The European Patent Office (EPO) has released a 2014 edition of its Guidelines for Examination. Although the Guidelines are not legally binding, they are the official text on proper application of the European Patent Convention (EPC) and its Implementing Regulations. This latest edition of the Guidelines took effect on 1 November 2014.

European Patent Office

What has changed?

Some of the most important amendments to the Guidelines are, as might be expected, reflections of the latest changes to the Rules regulating time limits for submitting new divisional applications and the availability of additional searches for international applications facing objections on grounds of lack of unity of invention.

Other changes address the admissibility of claims relating to second or further medical uses of known pharmaceutical products, the relationship between method claims and the rule of one claim per category, as well as revision of the principles concerning multiple applications referring to the same invention by the same applicant.

However, what appears to be the most significant change refers to the question of added subject matter. Pursuant to Article 123 (2) EPC, a European patent application or European patent may not be amended such that it contains subject matter extending beyond the content of the application as filed.

Under the EPO's current interpretation, the effect of this provision is for amendments to be deemed admissible only when their wording can be directly and unambiguously derived from the subject matter of the application as filed. The Board of Appeal has sought to maintain that this should not be taken to mean that literal support for the amendment in the original application is required, yet even so objections that amendments submitted by applicants add subject matter simply because they lack a strictly literal – that is, word for word – basis in the application as initially filed are not unusual.

The new paragraph included as H-IV 2.3 of the Guidelines states as follows:

“When assessing the conformity of the amended claims to the requirements of Art. 123(2), the focus should be placed on what is really disclosed to the skilled person by the documents as filed as directed to a technical audience. In particular, the examiner should avoid disproportionally focusing on the structure of the claims as filed to the detriment of the subject-matter that the skilled person would directly and unambiguously derive from the application as a whole.”

Accordingly, this new paragraph may be taken to indicate that the subject matter no longer corresponds strictly to the literal wording used in the application but more freely to what a person skilled in the art understands by those words viewed as a whole. However, though many are hoping that this signifies an end to objections based on the absence of literal support for amendments, the fact is that the paragraph in question does not appear to say anything truly new.

The Guidelines have also added in paragraph H-III 2.1 that the requirement to identify the amendments and indicate their basis "should be understood as an opportunity for the applicant to provide convincing arguments ... as to why the amendment(s) is/are directly and unambiguously derivable from the application as filed. [These arguments] ... are particularly important ... where literal support for the amendment(s) is not present in the application as filed."

This paragraph thus appears to underscore the need to provide detailed arguments with a view to justifying amendments lacking literal support and that, by extension, such amendments would be acceptable.

It remains to be seen whether this update to the Guidelines will actually bring about a change in EPO examiners' interpretation of Art. 123 (2)EPC in practice or whether it will simply turn out to add some nuance to the Office’s current approach, which appears more likely, given that amendments do require literal support in the application as initially filed.

Author: Ruth Sánchez

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Court of Justice rules on the validity of the three-dimensional Tripp-Trapp trademark

The 18 September 2014 ruling by the Court of Justice of the European Union (CJEU) (C-205/13, "Tripp-Trapp" case) has added definition to the interpretation of specific three-dimensional shapes for registration as trademarks.

Tripp-Trapp is the name given to a children's highchair created by the Danish designer Peter Opsvik and sold by the Stokke company since 1972. The highchair is designed so that the height of the chair can be regulated as the child grows The originality of the design is not disputed, as demonstrated by the fact that the proceedings that prompted the request for a preliminary ruling as well as parallel proceedings in Germany both concluded that the chair in question fulfils the originality requirement for entitlement to copyright protection. However, the issue of trademark rights is a different matter.

As we all know, trademark protection is virtually indefinite, which is why, on occasion, rightholders of industrial designs and even copyright in product shapes may find it attractive to try to perpetuate protection by means of trademarks. Lawmakers were aware of this when the First Council Directive 89/104/EEC to approximate the laws of the Member States relating to trademarks was drawn up to include, under Article 3(1)(e), specific grounds for the refusal or invalidity of signs consisting exclusively of:

- the shape which results from the nature of the goods themselves, or

- the shape of goods which is necessary to obtain a technical result, or

- the shape which gives substantial value to the goods.

As a result, when the German company Hauck GmbH & Co. KG ("Hauck”) began to market its Alpha and Beta chairs using a design that was very similar to that of the Tripp-Trapp chair, Stokke decided to take action on grounds not only of copyright but also of its three-dimensional trademark registered in 1998:

Hauck subsequently filed a countersuit claiming that the said trademark was invalid because the design ensues from product function rather than acting as an indicator of business origin. On appeal the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) decided to stay the proceedings to refer a series of questions dealing with how to interpret the said ground for refusal to the CJEU for preliminary rulings.