At the end of last week, whilst heads were turned by the UK Prime Minister’s pre-dawn flight to Brussels and EU Brexit negotiators tweeting pictures of white smoke billowing from Vatican chimneys, the CJEU handed down its decision in the Merck Sharp & Dohme Corporation v Comptroller General of Patents, Designs and Trade Marks case. For those unfamiliar with the background, this was a reference from Mr Justice Arnold in the English High Court relating to the Merck product “Atozet”, which is a cholesterol treatment consisting of a combination of ezetimibe and atorvastatin. The basic patent covering Atozet (EP 0,720,599) had an expiry date of 13 September 2014. As at that date, Merck had received an End of Procedure Notice from the German national regulatory authority in relation to its marketing authorisation (MA) application for Atozet. Further, Merck had been granted an MA by the French regulatory authority on 12 September 2014, the day before the basic patent expired. Also on 12 September 2014, Merck had filed an application for an SPC with the UK Intellectual Property Office relying on the End of Procedure Notice for the purposes of satisfying Article 3(b) of the SPC Regulation. This was necessary because, as at the date of its SPC application, the UK’s regulatory authority (MHRA) had not yet acted on the End of Procedure Notice and so Merck remained unable to market Atozet in the UK.

The UK IPO rejected Merck’s SPC application for failure to satisfy Art 3(b), which it did not consider an irregularity capable of being cured under Art 10(3) of the SPC Regulation. Upon on appeal to the High Court, Mr Justice Arnold was inclined to agree with the UK IPO but referred the matter to the CJEU. Consequently, the CJEU had two questions to consider. First, whether an End of Procedure Notice is equivalent to “a valid authorisation to place the product on the market as a medicinal product” in Art 3(b). Second, if the answer to the first question is “no”, whether an SPC applicant can subsequently supply an MA once granted and thus cure any “irregularity” under Art 10(3). In the end, the CJEU’s response to both questions was “no”.

So what of the decision and its implications? A couple of points stand out. It is often the case that, even if the reasoning isn’t clear, the policy arguments underlying the CJEU’s judgments are discernible. However, it isn’t at all clear (at least on the face of the judgment) what drove the CJEU to find against Merck in this case. Indeed, the CJEU adopted an uncharacteristically literal approach to construction when analysing the relevant provisions of the SPC Regulation. In particular they held that the word “granted” could only refer to an action that has already been completed. Therefore, as Merck was unable to market Atozet in the UK on the date when the application was made, the marketing authorisation could not have been “granted” as at that date for the purposes of Art 3(b) of the SPC Regulation.

The CJEU’s decision does seem a little harsh on Merck, both on its facts and from a policy perspective. The French regulatory authority was able to grant Merck’s MA before expiry of the basic patent. Had the MHRA done the same then Merck would have been able to satisfy Art 3(b) and obtain an SPC in the UK. The fact that the MHRA did not do so was entirely outside Merck’s control and it seems counter-intuitive that a right which is supposed to be harmonised across the EU should potentially be available to an applicant in one Member State, and not another, based solely on the efficiency and administrative workload of that Member State’s national regulatory body. Further, one of the other reasons (specifically mentioned by the CJEU) which led to Merck only filing its MA application in 2013 was the fact that the Atozet combination was difficult to formulate. This suggests that greater time, and therefore expense, was required to develop the medicinal product than Merck perhaps expected at the outset. From a policy perspective there is certainly an argument (supported by Recitals 4 and 5 of the SPC Regulation) that this is exactly the kind of investment that SPCs were brought in to protect.