Supplementary Protection Certificate (SPC) and exception to the parallel imports of medicine

Case C-681/16 ; Pfizer Ireland Pharmaceuticals, Operations Support Group V Orifarm GmbH – 8 February 2018

February 8, the advocate general before the ECJ (European Court of Justice) gave his opinion (C-681/16 darts-772-792-E-en) on the scope of the exception to the principle of Community exhaustion, which will have a huge impact on the free movement of goods and parallel imports of medicine from new Member States.

By principle, according to the principle of Community exhaustion, the exclusive rights granted by a patent or an SPC cannot be invoked for the products protected by the patent that are marketed in another Member State in a legal manner by the patent holder himself or with his consent, even if the product is imported from a Member State where it is not patentable.

However, the Acts of Accession of new member states published in 2003, 2005 and 2012, under the term of ‘Specific Mechanism’, have codified a rule according to which the holder of a patent or SPC may, under certain conditions, rely on its rights to prevent the import of medicinal products from the new Member States concerned.

The principal condition for this Specific Mechanism to apply is that equivalent protection was not obtainable in these new Member States at the time when the patent or SPC was filed in the state of import.

As it constitutes an exception to free movement of goods within the European Union, the Specific Mechanism needs to be interpreted narrowly. That is why the referring court asks the ECJ to clarify the scope of application of the Specific Mechanism in the present case where an SPC as such was available in the Accession State at the relevant time but the requisite basic patent did not exist.

In other words, the referring court (i.e. Landgericht Düsseldorf) asks whether a situation where the plaintiff invokes his SPC to prevent parallel imports from new Member States falls within the scope of application of the Specific Mechanism, although :

  • at the time when he filed for the SPC in Germany (i.e. on 26 June 2003), laws for obtaining an SPC already existed in all of the respective Accession States ;
  • at the time when he filed for the basic patent (i.e. on 31 august 1990), the basic patent itself could not have been obtained in all of the respective Accession States ;

The answer to this question is, according to the advocate general, yes if the basic patent itself could not have been obtained in all of the respective Accession States. This means that in a situation where, at the time, an holder of a patent had simply not made the effort of seeking patent protection in the relevant Accession States, although that protection would have been available, he cannot rely on the Specific Mechanism.

This opinion from the advocate general seems to be relevant and fit the purpose of the Specific Mechanism.

The Specific Mechanism seeks to achieve a balance between effective protection of patent or SPC rights and the free movement of goods. For that purpose the Specific Mechanism enables the patent owner to rely on his exclusive rights against importers in situations in which these rights would otherwise be exhausted under the ECJ’s case-law.

This is deemed justified for a limited period during which an interim regime takes into account the special situation created by an accession of new Member States: typically, the level of patent protection in Accession States has, prior to the accession, been lower than the protection prevalent in the old Member States, especially with respect to patents for pharmaceutical products.

The Specific Mechanism’s aim is to prevent a situation where full application of internal market principles after the accession would lead to a situation in which the patent owner would be exposed to parallel imports from new Member States without having been able to protect his invention there and, as a result, without having received adequate compensation.

In view of the purpose mentioned above, the restriction of the Specific Mechanism to situations where the lack of protection in the new Member State is not imputable either to the holder of the SPC or to the holder of the basic patent makes sense. This is because that is the only situation which the Specific Mechanism seeks to remedy, namely where the SPC holder or the respective holder of the basic patent is unable to protect his invention in the new Member State.

If, conversely, the holder of the German basic patent had just refrained from protecting, or not taken care to protect his right in the Accession State, a lack of adequate compensation is imputable to him or his successor.

As the Specific Mechanism is explicitly limited to cases where protection ‘could not be obtained’, there is no reason to apply that mechanism to cases where the unobtainability of the protection sought (the SPC) is due to the lack of a requisite basic protection which was, in itself, in fact obtainable but which the respective holder failed to apply for.

This would constitute an expansion of the protection granted by the Specific Mechanism and be contrary to the above mentioned obligation to give it a narrow interpretation…

Authors Notes and specific references:

1. Sentence 1 of Annex IV No 2 to the Act of Accession 2003 (2) states in the first paragraph: ‘SPECIFIC MECHANISM With regard to the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia or Slovakia, the holder, or his beneficiary, of a patent or supplementary protection certificate for a pharmaceutical product filed in a Member State at a time when such protection could not be obtained in one of the above mentioned new Member States for that product, may rely on the rights granted by that patent or supplementary protection certificate in order to prevent the import and marketing of that product in the Member State or States where the product in question enjoys patent protection or supplementary protection, even if the product was put on the market in that new Member State for the first time by him or with his consent.’

2. Sentence 1 of Annex V No 1 to the Act of Accession 2005 (3) in the first paragraph provides: ‘SPECIFIC MECHANISM With regard to Bulgaria or Romania, the holder, or his beneficiary, of a patent or supplementary protection certificate for a pharmaceutical product filed in a Member State at a time when such protection could not be obtained in one of the above mentioned new Member States for that product, may rely on the rights granted by that patent or supplementary protection certificate in order to prevent the import and marketing of that product in the Member State or States where the product in question enjoys patent protection or supplementary protection, even if the product was put on the market in that new Member State for the first time by him or with his consent.’

3. Sentence 1 of Annex IV No 1 first paragraph to the Act of Accession 2012 (4) is worded as follows: ‘SPECIFIC MECHANISM With regard to Croatia, the holder, or the holder’s beneficiary, of a patent or Supplementary Protection Certificate (SPC) for a medicinal product filed in a Member State at the time when such protection could not be obtained in Croatia for that product, may rely on the rights granted by that patent or SPC in order to prevent the import and marketing of that product in the Member State or Member States where the product in question enjoys patent or SPC protection, even if this product was put on the market in Croatia for the first time by the holder or with the holder’s consent.’