Luxembourg: CJEU decision delivered on the Specific Mechanism (C-539/13)

Summary of Decision

The CJEU has recently clarified when patent and SPC rights can be relied on under the Specific Mechanism to prevent parallel imports within the EU.

The holder or beneficiary of the patent/SPC is free to rely on such rights to prevent importation and marketing from “accession states” subject to the following.  If the holder/beneficiary receives a compliant notification that a parallel importer intends to import and market a pharmaceutical product protected by the patent/SPC, the holder/beneficiary has one month to object to the import and marketing.  Failure to object in time will prevent the holder/beneficiary from invoking its rights to prevent such import and marketing before any subsequent objection is raised.  However, the CJEU makes it clear that the holder/beneficiary remains free to oppose future importation and marketing.

A compliant notification is one which (i) identifies the person that will carry out the import and/or marketing (although the notification need not be sent by such person), and (ii) is given to the holder or beneficiary of the patent or SPC, the beneficiary being any person enjoying the rights conferred by law on the patent holder.

Background

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) provides a derogation to the principle of free movement of goods, whereby patent and SPC holders can continue to assert these rights to prevent parallel imports of their product from certain “new” Member States which did not allow patenting of pharmaceutical products prior to accession to the EU.

This case was a reference from the Court of Appeal of England and Wales. It concerned the parallel importation of the asthma treatment, Singulair, from Poland (which joined the EU in 2004) into the UK. In 2011, Merck Canada Inc. (of Montreal, Canada) and its UK affiliate Merck Sharpe & Dohme Limited brought an action against Sigma alleging that Sigma’s parallel importation and marketing of Singulair infringed its rights in breach of the Specific Mechanism.  The current dispute related to whether Sigma had provided adequate notice of proposed imports as required under the Specific Mechanism, and whether the Claimants had dealt appropriately with notifications.

The Court of Appeal referred three groups of questions concerning the interpretation of the Specific Mechanism to the CJEU, specifically:

  1. the conditions which must be satisfied before a patent holder may bring infringement proceedings (if any);
  2. he identity of the person who must give the notice of an intention to parallel import; and
  3. the identity of the person to whom such notice must be given.

In October 2014 we reported that Advocate General Niilo Jääskinen’s had delivered his opinion in this case on the interpretation of the Specific Mechanism.

The CJEU (with a Chamber consisting of M. Ilešic, C.G. Fernlund, C. Toader, E. Jarašiunas, A. Ó Caoimh) has now handed down their official judgment and their decision is broadly in line with that opinion albeit that their reasoning on the first and second questions differs.

Findings

With respect to the first of these questions, the CJEU found that:

The second paragraph of the Specific Mechanism ….. must be interpreted as not requiring the holder, or beneficiary, of a patent or supplementary protection certificate to give notification of his intention to oppose a proposed importation before invoking his rights under the first paragraph of that mechanism. However, if such a holder or beneficiary does not indicate such an intention during the one-month waiting period laid down in the second paragraph of the mechanism, the person proposing to import the pharmaceutical product in question may legitimately apply to the competent authorities for authorisation to import the product and, where appropriate, import and market it. The Specific Mechanism thus denies that holder or his beneficiary the possibility of relying on his rights under the first paragraph of the mechanism with regard to any importation and marketing of the pharmaceutical product carried out before such an intention was indicated.”

This differs slightly from the position AG Jääskinen took in his opinion, which concluded:

“a patent owner, duly notified, of an intention to import or market pharmaceutical products covered by the Specific Mechanism …. is required to respond to such notification and demonstrate an intention to oppose the proposed import and marketing”.

On the identity of the person who must give the notice, the CJEU found that:

“The second paragraph of the Specific Mechanism is to be interpreted as not requiring the person intending to import or market the pharmaceutical product in question to give notification himself, provided that it is possible from the notification to identify that person clearly.”

Finally on the identity of the person notified, the CJEU found that:

“The second paragraph of the Specific Mechanism must be interpreted as meaning that the notification must be given to the holder, or beneficiary, of the patent or the supplementary protection certificate, the latter term designating any person enjoying the rights conferred by law on the holder of the patent or the supplementary protection certificate”.

Comment

The CJEU’s decision provides welcome clarification as to the application of the Specific Mechanism.  The decision will require many parallel importers to tighten up their practices, ensuring that notifications make it clear who will carry out import and marketing under the parallel import licence, and that notifications are correctly targeted to the rights holder or beneficiary, rather than any related group company of the holder/beneficiary.   Similarly, pharmaceutical companies will have to be alert to notifications from parallel importers to ensure that they respond promptly to safeguard their rights, but now have certainty that the Specific Mechanism has not been complied with when the notification has not been addressed to the relevant part of the group.

Judgment:

A full copy of the judgment can be found here: Merck Canada Inc. and Merck Sharp & Dohme Ltd v Sigma Pharmaceuticals Plc, Case C-539/13, 12 February 2015 (Curia)