In the case C-681/16 - Pfizer Ireland Pharmaceuticals, Operations Support Group, the Court of Justice of the European Union ("CJEU") will have the possibility to clarify some questions on the so-called “Specific Mechanism” as the Dusseldorf District Court (docket no. 4b O 48/15) referred four questions on the issue to the CJEU.

What does the “Specific Mechanism” say?

The Specific Mechanism was first established in the Act of Accession of the Accession Treaty dated 16 April 2003 (Annex IV – list referred to in Article 22 of the Act of Accession – No. 2. Company Law) regarding the 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. It states that:

"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 abovementioned 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.

Any person intending to import or market a pharmaceutical product covered by the above paragraph in a Member State where the product enjoys patent or supplementary protection shall demonstrate to the competent authorities in the application regarding that import that one month's prior notification has been given to the holder or beneficiary of such protection."

Consequently, the Specific Mechanism creates a primary-law exemption from the principle of pan-European exhaustion of patent and SPC rights. It was created by the Union legislator to balance disadvantages of right holders due to the fact that in the new Member States mentioned in the Specific Mechanism there had not always been the possibility to obtain patent protection for pharmaceutical substances corresponding to Western European standards. Consequently, Malta and Cyprus were excluded from the Specific Mechanism as in these countries respective patent protection for pharmaceutical products had already been implemented for a sufficiently long period.

Without the Specific Mechanism after accession to the European Union of the mentioned new Member States – where no patent protection according to Western European standards could be obtained for pharmaceutical substances in the past – due to the principle of pan-European exhaustion of patent rights a right holder would have had no possibility to take action against parallel imports of (then off-patent) pharmaceutical products from these new Member States to other EU Member States. The Specific Mechanism therefore seeks to achieve a balance between effective protection of patent or SPC rights and the free movement of goods (CJEU, C-539/13, Merck Canada Inc., Merck Sharp & Dohme Ltd/Sigma Pharmaceuticals plc, margin no. 25).

When Bulgaria and Romania joined the European Union in 2007 and Croatia joined the European Union in 2013, the Specific Mechanism was extended to cover these countries as well.

In short, according to the Specific Mechanism, a patent holder or holder of a supplementary protection certificate ("SPC") when faced with parallel import of pharmaceutical products from EU Member States can nevertheless rely on his patent or SPC and sue the parallel importer for patent infringement if:

  • the parallel import of pharmaceutical products relates to a Member State mentioned in the Specific Mechanism;
  • the claimant is the holder or beneficiary of the patent or SPC for the respective pharmaceutical product; and
  • the application for the patent or SPC for the pharmaceutical product was filed at a time when such protection could not be obtained in the Member State mentioned in the Specific Mechanism.

The last bullet point makes clear that there is no uniform date when the application for the patent or SPC for the pharmaceutical product has had to be filed but that the situation when patent and/or SPC protection was available in the Member States mentioned in the Specific Mechanism has to be clarified separately for each of these Member States.

Facts of the case before the Dusseldorf District Court

The holder of the SPC for the product etanercept – a biopharmaceutical tumor necrosis factor (TNF) inhibitor – sued a parallel importer for a pharmaceutical product containing etanercept (the “Product”) for patent infringement before the Dusseldorf District Court (the “Court”). The application for the basic patent for the SPC had been filed on 31 August 1990, claiming priority of 12 September 1989 and two further priorities of early 1990. The application for the SPC was filed on 26 June 2003. Having normally expired on 1 February 2015 according to Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products (the “SPC-Regulation”), a six-month extension of the term of the SPC was granted on the basis of Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006 on medicinal products for paediatric use (so-called “Paediatric Extension”), so that the SPC only expired on 1 August 2015.

During the protection period for the SPC the sued parallel importer imported the Product to Germany from Estonia and Latvia. In April 2015, packages of the Product were available in Germany that had been manufactured for Poland, Slovenia, Lithuania and Croatia and named the defendant as parallel importer.

When the application for the basic patent was filed, no protection could be obtained for pharmaceutical products in the accession states involved. However, SPCs could be obtained in all accession states with the exception of Croatia when the application for the SPC in dispute was filed in 2003.

Whereas the SPC holder argues that the SPC and the Paediatric Extension should form one uniform right to be covered by the Specific Mechanism, it is the sued parallel importer’s position that the Specific Mechanism cannot take effect in the present case as there was the possibility to obtain SPCs for pharmaceutical products in Estonia and Latvia when the application for the SPC was filed. In particular, the basic patent and the SPC should be treated and assessed separately. In view of the other accession countries, this separate assessment should also apply in view of the Paediatric Extension. In all accession countries mentioned in the Specific Mechanism with the exception of Croatia, there was the possibility to obtain a Paediatric Extension since 10 September 2012.

Questions referred to the CJEU

The Court referred four questions to the CJEU. The questions read (in English translation):

1. Can the holder of a supplementary protection certificate issued for the Federal Republic of Germany rely on the Specific Mechanism to prevent the importation of products into the Federal Republic of Germany from the accession States the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia, Slovakia, Bulgaria, Romania …* and Croatia (Annex IV to the 2003 Act of Accession, OJ 2003 L 236, p. 797, as amended in OJ 2004 L 126, p. 4, for Estonia, Latvia, Lithuania, Poland, Slovenia, Hungary, Slovakia, the Czech Republic; Part I of Annex V No. 1 to the 2005 Act of Accession, OJ 2005 L 157, p. 268, for Romania and Bulgaria; Annex IV to the 2011 Act of Accession, OJ 2012 L 112, p. 60, for Croatia) if the supplementary protection certificate was applied for in the Federal Republic of Germany at a point in time at which the laws for obtaining such a supplementary protection certificate already existed in the respective accession States but could not be applied for by, or issued to, the holder of the supplementary protection certificate issued for the Federal Republic of Germany because the basic patent required for the issuing of the supplementary protection certificate did not exist in the accession State?

2. Does it make any difference to the answer to Question 1 if it was merely at the time of the filing of the application for the basic patent issued for the Federal Republic of Germany that such protection through a basic patent could not be obtained in the accession State but, by the time of publication of the application on which the basic patent issued for the Federal Republic of Germany was based, it could be so obtained?

3. Can the holder of a supplementary protection certificate issued for the Federal Republic of Germany rely on the Specific Mechanism to prevent the importation of products into the Federal Republic of Germany from the accession States the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia, Slovakia, Bulgaria, Romania…* and Croatia if those products are imported after the expiry of the term of the supplementary protection certificate stipulated in the original decision to grant the patent but before the expiry of the six-month extension of the term of the supplementary protection certificate that was granted on the basis of Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006 on medicinal products for paediatric use and amending Regulation (EEC) No 1768/92, Directive 2001/20/EC, Directive 2001/83/EC and Regulation (EC) No 726/2004?

4. Does it make any difference to the answer to Question 3, in the case of Croatia, that, on account of the accession of Croatia in 2013, the Specific Mechanism did not come into force until after the entry into force on 26 January 2007 of Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006 on medicinal products for paediatric use and amending Regulation (EEC) No 1768/92, Directive 2001/20/EC, Directive 2001/83/EC and Regulation (EC) No 726/2004 – unlike in the other Member States, which acceded prior to 26 January 2007, namely the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia, Slovakia, Bulgaria [and] Romania …*?

* note: omissions are due to double mentioning of Bulgaria in referral questions

Reasons for the referral provided by the Court

a. Referral questions 1 and 2

Referral questions 1 and 2 deal with the issue how to proceed in a situation when the possibility for SPC protection was established in accession states at the time a SPC was filed in a Member State but could in fact not be granted because a basic patent could not be obtained in the past.

According to the Court the fact that the existence of a basic patent is indispensable for the grant of a SPC according to the SPC Regulation is an important argument to consider the filing date of the basic patent application to be decisive for the question whether the Specific Mechanism is applicable also in case the right holder sues a parallel importer for infringement of a SPC. Although the basic patent and the SPC are separate rights the SPC was established to prolong the protection period of the basic patent in order to compensate the basic patent holder for his effective loss in patent protection due to the regulatory procedures in view of the pharmaceutical. Consequently, the exemption from the principle of pan-European exhaustion provided by the Specific Mechanism should not be limited to the basic patent, but also take effect in case the protection period of the basic patent is prolonged by an SPC. Besides, although mentioning the basic patent and the SPC the wording of the Specific Mechanism explicitly refers to a certain pharmaceutical product.

On the contrary, the Court refers to the CJEU decisions C-539/13 (Merck Canada Inc., Merck Sharp & Dohme Ltd/Sigma Pharmaceuticals plc), and C-267/95 and C-268/95 (Merck/Primecrown) to highlight that provisions in an Act of Accession which permit exceptions to or derogations from rules laid down by the EU Treaties – as the Specific Mechanism – must be interpreted restrictively with reference to the EU Treaty provisions in question and must be limited to what is absolutely necessary to attain the objective pursued. As the Specific Mechanism at least mentions both, the basic patent and the SPC, one might argue that it should be decisive whether there was the mere possibility to obtain a basic patent or a SPC in an accession state.

b. Referral questions 3 and 4

Referral questions 3 and 4 deal with the question whether the Specific Mechanism is also applicable for the time period a SPC holder benefits from a Paediatric Extension.

According to its wording, the Paediatric Extension does not grant a separate right but prolongs the protection period of the SPC (Art. 36 para. 1 Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006 on medicinal products for paediatric use – the “Paediatric Regulation”). The Accession Acts do however not mention the Paediatric Regulation although the Paediatric Regulation was already in force for several years when Croatia joined the EU. It is therefore unclear if – as held by the Danish Supreme Court in April 2016 – the Specific Mechanism also applies in case a Paediatric Extension is granted.

The referral questions of the Court aim to clarify important issues regarding the applicability and interpretation of the Specific Mechanism. In view of the desirable future EU enlargement, these questions will retain their relevance for decades. It is hoped that the CJEU will provide helpful guidance soon.