Synthon BV v Merz Pharma GmbH & Co KGaA (Rev 2) [2009] EWHC 656 (Pat)

[2009] EWHC 656 (Pat)Case No HC 08 C 02210
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 02/04/2009
Before
THE HON MR JUSTICE FLOYD
Between
SYNTHON B.V.ClaimantMERZ PHARMA GmbH & Co. KGaADefendant
Michael Silverleaf QC (instructed by Bird & Bird LLP) for ClaimantAndrew Waugh QC (instructed by Lovells LLP) for DefendantHearing Hearing date: March 3 rd 2009
Judgment
[1]E.C. Council Regulation No. 1768/92 (“the SPC Regulation”) provides for a form of intellectual property protection known as a Supplementary Protection Certificate (SPC). An SPC provides, in defined circumstances, an extension of the life of a basic patent for a medicinal product. It does so in order to compensate the patentee for the lost period of monopoly caused by the time it takes to conduct the necessary safety and efficacy testing to obtain authorisation to place such a product on the market. The requirements for safety and efficacy testing were sought to be harmonised at Community level as long ago as 1965 in Council Directive 65/65/EEC (“65/65”). The question which arises in this action is: can one obtain an SPC in circumstances where the product has been placed on the market in the Community without the need to do safety and efficacy testing as prescribed in 65/65, or indeed at all? The defendant Merz Pharma GmbH & Co. KGaA (“Merz”) says that you can. The claimant Synthon B.V. (“Synthon”) says that you cannot.[2]Merz is the proprietor of SPC No GB 02/046 (“the SPC”) granted on 14th August 2003 in respect of a compound called memantine. Although the SPC was granted on the basis of EU wide marketing authorisations granted in 2002, memantine had already been on the market in Germany (but not in the UK) for a quarter of a century. By this action Synthon seek revocation of the SPC on a number of grounds, or a declaration that it has zero term.

The SPC Regulation

[3]The SPC Regulation recites the following, amongst other, matters:
“(3) Whereas at the moment the period that elapses between the filing of an application for a patent for a new medicinal product and authorization to place the medicinal product on the market makes the period of effective protection under the patent insufficient to cover the investment put into research; … (4) Whereas the situation leads to a lack of protection which penalizes pharmaceutical research; (6) Whereas a uniform solution at Community level should be provided for, thereby preventing the heterogeneous development of national laws leading to further disparities which would be likely to create obstacles to the free movement of medicinal products within the Community and thus directly affect the establishment and the functioning of the internal market; (7) Whereas, therefore, the creation of a supplementary protection certificate granted, under the same conditions, by each of the Member States at the request of the holder of a national or European patent relating to a medicinal product for which marketing authorization has been granted is necessary; … (8) Whereas the duration of the protection granted by the certificate should be such as to provide adequate effective protection; whereas, for this purpose, the holder of both a patent and a certificate should be able to enjoy an overall maximum of fifteen years of exclusivity from the time the medicinal product first obtains authorization to be placed on the market in the Community; (9) Whereas all the interests at stake, including those of public health, in a sector as complex and sensitive as the pharmaceutical sector must nevertheless be taken into account; whereas, for this purpose, the certificate cannot be granted for a period exceeding five years; whereas the protection granted should furthermore by strictly confined to the product which obtained authorization to be placed on the market as a medicinal product.”
[4]Article 1 of the Regulation defines a “medicinal product” as including “any substance or combination of substances for treating or preventing disease in human beings”, whereas the term “product” means the “active ingredient or combination of active ingredients of a medicinal product”. A “basic patent” means “a patent which protects a product [as defined] as such, a process to obtain a product or an application of a product, and which is designated by its holder for the purpose of the procedure for grant of a [SPC].”[5]The following are the articles of the SPC Regulation of principal relevance to the dispute. Firstly, Article 2 defines the scope of the Regulation. This forms the basis for Synthon’s argument that the present facts fall outside the scope of the Regulation altogether. It reads as follows:
“ARTICLE 2 6. Scope Any product protected by a patent in the territory of a Member State and subject, prior to being placed on the market as a medicinal product, to an administrative authorization procedure as laid down in Council Directive 65/65/EEC or 81/851/EEC may, under the terms and conditions of this Regulation be the subject of a certificate.”
[6]Article 3 sets out the conditions for obtaining an SPC in a given member state. It is common ground that the words “in the Member State in which the application is submitted” qualify each of the following sub-paragraphs. It reads:
“ARTICLE 3 8. Conditions for obtaining a certificate A certificate shall be granted if, in the Member State in which the application referred to in Article 7 is submitted and at the date of that application: (a) the product is protected by a basic patent in force; (b) a valid authorization to place the product on the market as a medicinal product has been granted in accordance with Directive 65/65/EEC or Directive 81/851/EEC, as appropriate; (c) the product has not already been the subject of a certificate; (d) the authorization referred to in (b) is the first authorization to place the product on the market as a medicinal product.”
[7]Article 7 requires the application for the SPC to be filed within 6 months of the date of the authorisation referred to in Article 3(b), i.e. the authorisation in that Member State, or within 6 months of the grant of the basic patent if that is after the authorisation.[8]Article 8 of the Regulation sets out what must be contained in the application for a certificate.

(a) (iii) and (iv), (b) and (c) are as follows:

“ARTICLE 8 11. Content of the application for a certificate 1. The application shall contain: (a) a request for the grant of a certificate, stating in particular: (iii) the number of the basic patent and the title of the invention; (iv) the number and date of the first authorization to place the product on the market, as referred to in Article 3(b), and, if this authorization is not the first authorization for placing the product on the market in the Community, the number and date of that authorization. (b) a copy of the authorization to place the product on the market, as referred to in Article 3 (b), in which the product is identified, containing in particular the number and date of the authorization and the summary of the product characteristics listed in Article 4a of Directive 65/65/EEC or Article 5a of Directive 81/851/EEC; (c) if the authorization referred to in (b) is not the first authorization for placing the product on the market as a medicinal product in the Community, information regarding the identity of the product thus authorized and the legal provision under which the authorization procedure took place, together with a copy of the notice publishing the authorization in the appropriate official publication.” (a) a request for the grant of a certificate, stating in particular: (iii) the number of the basic patent and the title of the invention; (iv) the number and date of the first authorization to place the product on the market, as referred to in Article 3(b), and, if this authorization is not the first authorization for placing the product on the market in the Community, the number and date of that authorization. (b) a copy of the authorization to place the product on the market, as referred to in Article 3 (b), in which the product is identified, containing in particular the number and date of the authorization and the summary of the product characteristics listed in Article 4a of Directive 65/65/EEC or Article 5a of Directive 81/851/EEC; (c) if the authorization referred to in (b) is not the first authorization for placing the product on the market as a medicinal product in the Community, information regarding the identity of the product thus authorized and the legal provision under which the authorization procedure took place, together with a copy of the notice publishing the authorization in the appropriate official publication.”
[9]Article 13 is concerned with the duration of the certificate. The duration depends on the length of time between the date of the application for the basic patent and the date of the first marketing authorisation in the Community. This period, less 5 years, is the length of protection afforded by the certificate, subject to an overall maximum of 5 years. It is expressed in this way:
“ARTICLE 13 13. Duration of the certificate 1. The certificate shall take effect at the end of the lawful term of the basic patent for a period equal to the period which elapsed between the date on which the application for a basic patent was lodged and the date of the first authorization to place the product on the market in the Community reduced by a period of 5 years. 2. Notwithstanding paragraph 1, the duration of the certificate may not exceed five years from the date on which it takes effect.”
[10]Thus, if the first marketing authorisation in the Community is obtained 5 (or less) years after the date of application for the basic patent, the term will be zero. On the other hand if the authorisation is obtained 10 or more years after the application for the patent, the term will be the maximum of 5 years. It is important to note that, in this way, the objective of a maximum of 15 years exclusivity (referred to in recital 8) is obtained. That maximum period is based on an unspoken assumption that the product could not be on the market before the first authorisation is granted.[11]The need to calculate the duration of the certificate explains why, in Article 8, the applicant for an SPC is required to produce not only its marketing authorisation in the state where it is making the application, but also (if the application in the member state in question is not the first authorisation to place the product on the market in the Community) the first authorisation in the Community.[12]It might be thought that, as the duration of the certificate is determined by the period of time between the application for the basic patent and the date of first authorisation in the Community, the only authorisation of importance would be the first Community authorisation. A national authorisation, if it is not the first Community authorisation cannot affect things one way or the other. Nevertheless, the national authorisation is plainly made an essential pre-condition of grant: see Article 3(b). Moreover, an argument to the effect that a certificate could be granted where no such national authorisation existed was rejected by the Court of Justice in Yamanouchi Pharmaceuticals Co. Ltd. v Comptroller [1997] RPC 844, a case decided on a reference from this Court. At paragraph 26 the Court said this:
“…it is the authorization referred to in Article 3(b) of the regulation which confers entitlement to the certificate. That principle is borne out by Article 4, according to which the protection conferred by the certificate extends only to the product covered by the marketing authorization in respect of the corresponding medicinal product. Entitlement to the certificate is strictly linked, therefore, to the existence of a marketing authorization granted in the Member State in which the application is submitted and to the date of that application.”
[13]Article 15 provides, so far as material, that the certificate shall be invalid if it was granted contrary to the provisions of Article 3.[14]Transitional provisions are provided in Article 19:
“ARTICLE 19 19. Transitional provisions “1. Any product which on the date of accession is protected by a valid patent and for which the first authorization to place it on the market as a medicinal product in the Community or within the territories of Austria, Finland or Sweden, was obtained after 1 January 1985 may be granted a certificate… 2. An application for a certificate as referred to in paragraph 1 shall be submitted within six months of the date on which this Regulation enters into force.”
[15]Plainly the transitional provisions are designed, by implication, to exclude from the scope of the Regulation products which were first authorised before 1 January 1985 Other dates (both earlier and later) apply in certain member states, a discrimination which survived a challenge in Hässle v Ratiopharm at [31] to [47] .[16]Article 19 is to be read subject to, and not so as to derogate from Article 3. It provides for an additional condition which applications for SPCs must fulfil in order to be valid. An SPC granted for a product which was first authorised in the Community before the relevant date is invalid, notwithstanding the limited grounds for invalidity in Article 15: see the decision of the ECJ in Hässlev Ratiopharm Case C-127/00 at [92].[17]As discussed below, one of the questions at the heart of this case is what sort of authorisation will count as an authorisation for the purposes of Article 19. An attempt in Hässle to say that that it required something more than an authorisation under Council Directive 65/65/EEC failed. The question here is whether anything less will do.

The agreed facts

[18]The action has been conducted without written or oral evidence under the streamlined procedure in the Patents Court. The principal facts which are nevertheless agreed (as opposed to assumed) are as follows.[19]Before September 1976 memantine was on the market in Germany. Under the relevant domestic German law of 16th May 1961, no testing of medical products for safety or efficacy was required.[20]Council Directive 65/65/EEC imposed common European rules for the granting of marketing authorisations for medicinal products which included ensuring the product was tested for safety and efficacy. Member States were permitted by Article 24 of Directive 65/65 to introduce the requirements of 65/65 progressively.[21]In Germany, by Article 3 of Schedule 7 of the German domestic Act on Restructuring of Medicinal Product Law of 24th August 1976, products already on the market and which remained on the market on 1st January 1978 were automatically granted continuing authorisation without further enquiry, subject to a requirement of notification. Provided notification occurred within 6 months of 1st January 1978, the deemed authorisation was to remain in force for 12 years, that is to say until January 1990. Merz and memantine met these requirements and memantine was accordingly treated as authorised without going through the procedures required under Directive 65/65, either in Germany or Luxembourg.[22]In Luxembourg, the Luxembourg Medicines Act of 1983 implemented the provisions of Directive 65/65 into Luxembourg law. It came into effect on 11th April 1983, and detailed regulations under it were made by Grand Ducal Regulation on 29th April 1983. On 30th June 1983, after the Act and Regulation had come into force, Merz applied for marketing authorisation for memantine. Despite the fact that the Grand Ducal Regulation was in force, the marketing authorisation was in fact granted on 19th September 1983 without independent investigation by the Luxembourg authorities of the safety or efficacy of memantine. Instead, the Luxembourg authority relied on the earlier deemed authorisation in Germany.[23]Both the German and Luxembourg authorisations were withdrawn when EU wide authorisations were obtained on 15th May 2002 (“the 2002 authorisation”). Merz were therefore never required to submit safety and efficacy data to the German authorities. These subsequent EU wide authorisations were compliant with 65/65. They were the first authorisations to be granted following an assessment of data as required by that Directive to place the product memantine on the market in the EU.[24]On 14th April 1989 Merz applied for European Patent 0,392,059 (“the basic patent”). It was granted in 1993 and would expire without the benefit of the SPC on 14th April 2009. The basic patent is in respect of a second medical use of memantine: a fact which explains why it was granted despite the earlier commercial availability of memantine.[25]On 13th November 2002 Merz applied to the Patent Office in the United Kingdom for the SPC in suit. It was granted on 14th August 2003. In its application, Merz identified the basic patent. It also identified the 2002 authorisation, but not the earlier Luxembourg or German authorisations.[26]The period between the application for the basic patent and the grant of the 2002 authorisation (1989-2002), less 5 years, was such that, pursuant to Article 13, the SPC was granted for the maximum term of 5 years. This was notwithstanding the fact that memantine was on the market in the EU long before the application for the basic patent was made.

The issues

[27]The parties’ submissions require the resolution of the following issues: i) was Merz’s Luxembourg authorisation an authorisation in accordance with Directive 65/65? If so the SPC is invalid. ii) if Merz’s Luxembourg or German authorisations were not in accordance with 65/65, can they nevertheless be taken into account in applying Article 19 and calculating the term of the SPC under Article 13? iii) are products which are authorised to come on the market for the first time in the EEC without needing to go through an administrative procedure as laid down in 65/65 within the scope of the Directive at all?[28]This case is not the first to touch on questions of interpretation of this Regulation. There are two important decisions of the ECJ in Hässlev Ratiopharm Case C-127/00 and in Novartis v Comptroller and Ministre de L’Économie v Millennium Pharmaceuticals Inc. Joined Cases C-207/03 and C-252/03 [2005] RPC 831. There are also three decisions of national courts to which I have been referred. I will summarise the relevant parts of these decisions before turning to the parties’ arguments.

The decisions of the Court of Justice in Hässle and Novartis

[29]Hässle v ratiopharm Case C-127/00was a case concerned with the transitional provision, Article 19. The application for the SPC was made in Germany where the relevant date for the Article 19 transitional provision was 1st January 1988. Hässle had obtained 65/65 compliant marketing authorisations in Germany after that date. The product had also been authorised in France and Luxembourg before that date, in April and November 1987 respectively. Those earlier authorisations were, it appears, 65/65 compliant.[30]The basic patent in Hässle was dated April 1979. If the French authorisation was the first authorisation in the Community, the potential SPC period would have been the period 1979-1987, i.e. 8 years, less 5 years, that is to say 3 years.[31]In an effort to extend this potential 3 year SPC, Hässle argued that there was no relevant first marketing authorisation within the Community for the purposes of Article 19 of the regulation until it was possible in fact to place the product on the market in accordance with local law. It argued that, for the purposes of Article 19, something more than the 65/65 authorisation was required, in this case the subsequent authorisation under national pricing legislation which it argued constituted the relevant authorisations for this purpose. This would have taken the relevant date to March 1988, gaining their product, omeprazole, an extra year of protection.[32]The Court of Justice rejected Hässle’s argument at [52] to [61]. The Court considered that the argument involved giving to the words “authorization to place … on the market” a different meaning in Article 3 and Article 19. Moreover, Hässle’s argument that it should be compensated for the real time which elapsed before it was able in fact to place the product on the market, was met by saying that the regulation did not pursue the objective of compensating in its entirety the loss of protection conferred by a patent as a result of long lead times. Finally, it considered that any other interpretation would violate the requirements for legal certainty. Whereas the marketing authorisation procedure provided for by Directive 65/65 had been harmonised at Community level, the same was not true for the later authorisations relied upon by Hässle. It was in this context that the Court of Justice held at [61] that:
“It follows that the “first authorisation to place … on the market’ mentioned in Article 19(1) of [the SPC Regulation] refers only to the marketing authorisation relating to provisions on medical products in accordance with Directive 65/65.”
[33]It is important to note that the question at issue in Hässle was whether something additional to a 65/65 authorisation was required. That is different from the question in this case, which is whether something less will do.[34]In Novartis v Comptroller and Ministre de L’Économie v Millennium Pharmaceuticals Inc. Joined Cases C-207/03 and C-252/03 [2005] RPC 831, the question posed to the Court by the Patents Court was:
“(1) Is the date of granting of the marketing authorisation in Switzerland, which is automatically recognised in Liechtenstein, to be considered as the first authorisation to place the product on the market, for the purpose of calculating the term of a supplementary protection certificate in Article 13 of the [SPC Regulation], (as amended by the EEA Agreement)?”
[35]The EEA Agreement is the Agreement signed in Porto in 1992 which had as its aim the creation of a homogeneous economic area consisting of the territories of the then members of the European Communities and those of the Member States of the European Free Trade Association (“EFTA”). The area thus created included in principle Liechtenstein and Switzerland, which were members of EFTA, but Switzerland decided not to ratify the EEA Agreement.[36]By Article 7(a) of the EEA Agreement, Community Regulations are binding on the Contracting Parties. One of the Regulations specifically applied by the EEA Agreement was the SPC Regulation. By virtue of Annex XVII of the EEA Agreement as amended by Decision 7/94 of the EEA Joint Committee, Article 3(b) of the SPC Regulation is amended so as to provide that an authorisation to place a product on the market granted in accordance with the national legislation of the EFTA State shall be treated as an authorisation granted in accordance with Directive 65/65 EEC. Similar amendments are made to Articles 19(1) and 13(1).[37]The Court rejected the argument advanced by Novartis and others that the Swiss authorisation, automatically effective in Liechtenstein, should be ignored. They did so essentially on the basis of the special provisions of the EEA agreement. They reasoned as follows:
“Such an interpretation of that provision is, moreover, consistent with the purpose of [the SPC Regulation], set out in the eighth recital in the preamble thereto, as it is to be read for the purposes of the EEA Agreement and according to which the holder of both a patent and an SPC should not be able to enjoy more than 15 years of exclusivity from the time the medicinal product concerned first obtains authorisation to be placed on the market in the EEA. Indeed if a marketing authorisation issued by the Swiss authorities and automatically recognised by the Principality of Liechtenstein under that State’s legislation were precluded from constituting a first marketing authorisation for the purposes of Article 13 of [the SPC Regulation], the duration of SPCs would have to be calculated by reference to a marketing authorisation issued subsequently in the EEA. Thus there would be a risk of the period of 15 years of exclusivity being exceeded in the EEA.”
[38]Despite the rather narrow basis of the decision, it is noteworthy that in paragraphs 49 and 50 of the Opinion of Advocate General Ruiz-Jarabo Colomer, he says this:
“The purpose of the regulation is not to standardise marketing authorisations but to set up a single system of extended protection and, as regards ensuring that the period of exclusive use lasts for the same time throughout the EEA, the decisive factor is the date on which that use commences, namely the date from which the drug can be lawfully marketed in a part of the EEA, regardless of where, and regardless of the enabling document – it could be a national authorisation issued by a Member State under [65/65], it could be a centralised authorisation granted under Council Regulation (EC) No 726/2004), or it could be another document which, under the legislation in force, enables it to be lawfully marketed. The latter category includes, as I have explained in points 17-19 above, both authorisations granted by the EFTA States under the various national laws, which are not in conformity with sectoral directives, and authorisations granted by the Swiss authorities, which clearly do not comply with the requirements of Community law either, because both types of authorisation allow the medicinal products to be marketed in part of the EEA. … The reference point is the fact – the legally relevant fact – that the medicines can be lawfully marketed in a part of the EEA…”
.

National Decisions

[39]I was referred to one national decision on the effect of Article 2 of the SPC Regulation, and to two conflicting decisions on the effect of Article 13.[40]I turn first to the decision on Article 2, a decision of the Bundespatentgericht (German Federal Patent Court) dated 11th December 2007 in Neuraxpharm Arzneimittel and others v Merz Pharma. I should note that the decision concerns the corresponding German designation of the basic patent in issue here, and the corresponding German SPC. The Bundespatentgericht held the underlying patent invalid on conventional patent law grounds, which is itself a ground of invalidity of the SPC: see Article 15(1)(c) of the SPC Regulation. It was therefore not necessary for the court to go on to consider arguments relating specifically to the validity of the SPC. Nevertheless it proceeded to do so. The court first rejected an argument that the SPC was invalid under Article 3(d) because the 2002 authorisation was not the first authorisation. Whilst accepting that there was a much earlier authorisation in Germany, the court considered that the earlier authorisation was not one pursuant to Directive 65/65.[41]The Court nevertheless held that the SPC was invalid. Basing itself on its finding that the product was one which did not have to undergo a 65/65 compliant authorisation in Germany before being placed on the market, the court held that the application for the SPC was outside the scope of the Regulation. Reading Article 2 as a further pre-condition for the grant of a certificate, the Court held:
“According to recitals 3 and 4 of the Regulation, the certificate is meant to provide an economic compensation for the period which elapses between the filing of an application for the basic patent for a new medicinal product and the authorisation to place the same medicinal product on the market during which the exclusive right cannot be economically used, i.e. the period of effective patent protection is reduced by the period of the authorisation procedure … An extension of the period of effective patent protection is not justified in cases where a product whose use as a medicinal product for the treatment of a specific disease [is] protected by a patent at the time of filing of an application for the certificate could already be placed on the market as a medicinal product under the application of rules issued already prior to Directive 65/65/EEC and whose authorisation did not require any procedure pursuant to the Directive.”
[42]In a further decision of the Bundespatentgericht in Merck v Almirall of 18th July 2006, the applicant for an SPC in Germany had identified for the purposes of Article 3(d) of the Regulation a marketing authorisation in the United Kingdom dated 24th April 1995. There were in fact two earlier authorisations in Portugal and Spain granted in 1990 and 1991 respectively, at times when neither country had implemented Directive 65/65/EEC into its respective national law.[43]The German Patent Office held that the relevant date was that of the Portuguese authorisation. On appeal, the Bundespatentgericht took the decision of the ECJ in Hässle as determinative. As the expression “first authorisation to place it on the market as a medicinal product in the Community” had been construed for the purposes of Article 19 as referring only to a 65/65 compliant authorisation, it followed that the expression “first authorization to place the product on the market in the Community” in Article 13 had to be construed in the same way. It followed that the Portuguese and Spanish authorisations did not count.[44]I was provided with two translations of the judgment. In the first, the judgment is translated as having said:
“The only possible basis for calculating the validity period in accordance with Article 13 … is therefore an authorisation in the sense of or in accordance with Directive 65/65.”
[45]In the second, the translation is:
“Accordingly, only an authorisation within the meaning of or pursuant to Directive 65/65/EEC can be considered as a basis for the calculation of the period under Article 13.”
[46]I do not think there is much difference between them, but it is a pity that the parties could not have agreed a translation.[47]By contrast to the German case Merck v Almirall, a decision of the Court of First Instance of Brussels dated 15th June 2007 went the other way in relation to the validity of the Belgian SPC for the same drug. The SPC was again granted on the basis that the UK authorisation was the first. The earlier Portuguese authorisation was cited again. This time the Court held, relying on the passages I have cited from the Opinion of the Advocate General in Novartis, and the fact that the Swiss marketing authorisation was not in fact granted pursuant to 65/65, that national marketing authorisations can be taken into account.

Issue (i): The Luxembourg Authorisation

(i) : The Luxembourg Authorisation

[48]Synthon contend that the Luxembourg authorisation was one granted in accordance with 65/65, because it was granted under the Luxembourg law in force at the time, that is to say Luxembourg’s national implementation of Council Directive 65/65. That legislation is 65/65 compliant. Synthon contends that this court should not go behind that authorisation and enquire into whether the authorisation in fact carried out was a proper investigation into safety and efficacy as laid down by Directive 65/65.[49]Merz contends that it is not sufficient to ask whether the law under which the authorisation was granted complied with 65/65. There is, it contends, a further factual question as to whether the investigation in fact conducted complied with Directive 65/65. In the present case they say it is common ground that no independent testing of safety and efficacy was carried out: the Luxembourg authority simply relied on the prior German authorisation which was not 65/65 compliant.[50]The dispute raises a question of Community law which I will call “Question 1”:
“1. For the purposes of Articles 13 and 19 of Council Regulation (EC) No 1768/92, is an authorisation a “first authorization to place … on the market in the Community”, if it is granted in pursuance of a national law which is compliant with Council Directive 65/65/EEC, or is it necessary that it be established in addition that, in granting the authorisation in question, the national authority followed an assessment of data as required by the administrative procedure laid down in that Directive?”
[51]As I explain below, the question is determinative of the validity of the SPC. For reasons which I explain below, I have formed the view that the issues of Community law in the present case justify a reference to the Court. Nevertheless I will state my view.[52]I prefer Synthon’s submissions. It seems to me that once it is clear that the national legal provision under which an authorisation is granted is one which gives effect to Council Directive 65/65, and the authorisation is not one which is specifically excepted by law from the administrative procedure laid down in that Directive, then questions of the extent to which the national authority properly carried out its obligations under its own law are not relevant.[53]An obvious reason why this should be so is that the SPC granting authority in one Member State is not equipped to examine whether the examination of data by the health authorities of another Member State did or did not comply or fully comply with the procedure laid down in 65/65. It is therefore sensible that the Regulation should adopt a legislative as opposed to a factual assessment of the nature of the authorisation. In accordance with that being the right assessment, Article 8(d) merely requires, in the case of the first authorisation to place the product on the market in the Community, identification of the legal provision under which the authorisation took place. In that way the national SPC granting authority can check whether the legal provision is one which gives effect to 65/65, but not whether the examination of the data which in fact took place complied with the procedure laid down in that Directive.[54]It follows that I have formed the provisional view that the Luxembourg authorisation was the first authorisation to place the product on the market. If it was, the SPC is invalid. The SPC was not made within 6 months of the authorisation (or the basic patent) and any application for an SPC would fall foul of Article 19 because the first authorisation in the Community would be before 1st January 1985. Moreover the term of the SPC based on the basic patent in 1989 and a marketing authorisation in 1983 would be zero under Article 13.

Issue (ii): Can non-compliant authorisations be taken into account?

[55]For the purposes of this issue, and the next, I assume that the German and Luxembourg authorisations are not 65/65 compliant.[56]Synthon argues that this does not matter. Synthon contends that the phrase in Article 19 “and for which the first authorization to place it on the market as a medicinal product in the Community … was obtained after 1 January 1985” excludes products which were on the market before that date (as memantine was) as a result of an authorisation which is permitted by national law to co-exist with a 65/65 authorisation regime. Such authorisations should be treated as equivalent, for the purposes of the Regulation, to 65/65 authorisations.[57]Synthon also argues that the phrase “the first authorization to place the product on the market in the Community” in Article 13 includes authorisations of the character identified in the last paragraph.[58]Synthon contends that when the term-setting provision, Article 13 refers to the “first authorisation to place the product on the market in the Community”, it means any authorisation equivalent to a 65/65 compliant authorisation. When the Regulation means to refer to a specific kind of authorisation, such as one which is compliant with Directive 65/65, it says so expressly, as it does in Article 2, 3(b), and 8(1)(b). Other articles, like Article 7, do so by cross-referring to the authorisation in Article 3(b). On the other hand, when the Regulation means to refer to authorisations more generally, it does not refer to Directive 65/65 either expressly or by cross-reference. Indeed in Article 8(1)(c), which requires the term-setting first authorisation in the Community to be supplied, it expressly asks the applicant to identify the legal provision under which the authorisation procedure took place. Thus there is a strong indication that the term-setting article, Article 13, is using the term in the wide sense.[59]Merz contends that the phrase should be construed to mean the first such authorisation granted pursuant to Directive 65/65. It contends that the reference in Article 8(1)(c) to the legal provision under which the authorisation takes place is not there for the purpose of opening the door to authorisations which do not comply with 65/65: instead it is there to identify the relevant national provision, to ensure that it is a provision which implements Directive 65/65.[60]If Synthon is right one takes into account the authorisations granted in Germany and Luxembourg. On this basis its SPC would have a zero term, or be invalid under Article 19.[61]This dispute also raises a question of Community law which I will call “Question 2”:
“2. For the purposes of Articles 13 and 19 of Council Regulation (EC) No 1768/92, does the expression “first authorization to place … on the market in the Community”, include authorisations which had been permitted by national law to co-exist with an authorisation regime which complies with Council Directive 65/65/EEC?”
[62]I intend to refer this question as well to the ECJ, but will again express my preliminary view.[63]It seems to me that the problem facing Synthon is that the Court of Justice has already held that the only type of marketing authorisation to which article 19 refers is a marketing authorisation under 65/65: Hässle at [61]. It has also held that “there is nothing to justify the words “authorisation to place … on the market” being interpreted differently depending on which provision of Regulation 1768/92 they appear in: Hässle at [57].[64]It is true that the factual situation which the Court of Justice faced in Hässle was one in which it was being argued that a marketing permission of an entirely different type (financial) was sought to be included. There was room for an interpretation of Article 19 which restricted it to safety authorisations of a wider class than purely 65/65 compliant authorisations. But the Court of Justice did not go down that road.[65]Although the opinion of the Advocate-General in Novartis provides some basis for a retreat from this position, the judgment of the Court itself provides no such basis. The decision was based on specific amendments to the Regulation introduced by the EEA agreement. There is nothing equivalent to that in the present case.[66]Nevertheless, in view of the conflicting decisions of my colleagues in Belgium and Germany, the fact that this point is related to the other points which arise, and the wider basis of the argument of the Advocate-General in Novartis , I will refer this question as well to the Court of Justice.

Issue (iii): Is memantine outside the scope of the Regulation altogether?

[67]Synthon submits that Article 2 is to be interpreted so that an SPC is not available if the product in question is one which was not subject, prior to being placed on the market in the Community as a medicinal product, to an administrative procedure as laid down in Council Directive 65/65. On these facts, if Merz is right that memantine was authorised to be placed on the market without going through a 65/65 procedure, no SPC is available for memantine by virtue of Article 2. It is simply outside the scope of the Regulation. An SPC granted for a product outside the scope provided for by Article 2 is invalid.[68]Synthon’s argument is supported by a number of considerations: i) Firstly, if Article 2 is indeed creating an additional requirement to any specified in Article 3, it should follow that it provides a ground of invalidity. Synthon argues this point by analogy with the ECJ’s decision in Hässle, which accepted that an SPC wrongly granted under the transitional provision, Article 19, would provide a ground for invalidity, notwithstanding the fact that it is not mentioned as such in Article 15; ii) Secondly, as the recitals make clear, the purpose of the Regulation is to compensate for the lost time in getting a product on the market due to the need to obtain a marketing authorisation. Although it may fairly be said that Article 13 is only concerned with duration of the SPC, what is being compensated for is the time it takes to obtain the first 65/65 authorisation in the Community (less 5 years and subject to a maximum of 5). It is logical to suppose that the framers of the legislation thought that, where no 65/65 authorisation was necessary to place the product on the market for the first time in the Community, the product should receive no corresponding compensation; iii) Thirdly, Article 2 itself. The only requirements it specifically imposes (as opposed to incorporating by reference to “the terms and conditions provided for in this Regulation”) are(a) a product protected by a patent in a Member State and(b) a product which is subject to a 65/65 authorisation procedure before being placed on the market. If all that is required is that the product be subject to a 65/65 authorisation procedure in the Member State where the application is made, Article 2 adds nothing to Article 3. Requirement (a) is the same as Article 3(a) and Requirement (b) will be satisfied if a marketing authorisation has been granted in the member state in accordance with Article 3(b). On the other hand, if requirement (b) is intended to exclude products which came onto the market without 65/65 authorisation, then the Article is given both content and purpose. iv) Fourthly, if all that is required by Article 2 is that the product be subject, prior to being placed on the market, to a 65/65 authorisation procedure in the Member State in which the application is made, then the Regulation will have different scope in different territories. For example, if the decision in Neuraxpharm Arzneimittel and others v Merz Pharma is correct, an SPC will be available in the UK, but not in the Germany because the product was not authorised in the UK before the 2002 authorisation. v) Fifthly, the overall limit of exclusivity of 15 years from the date of first authorisation in the Community referred to in recital 8 works on the assumption that it is not possible to obtain a certificate where the product has been on the market before the first marketing authorisation in the Community. If it were possible to have a product on the market by virtue of a non-65/65-compliant authorisation for the first 10 years of the life of a patent, and then obtain an SPC based on a 65/65 compliant authorisation, the overall period of exclusivity would be 25 years. vi) Finally, Article 19. On its face, it seeks to cut out from the scope of the Regulation products which were first authorised in the Community before 1st January 1985. On a strict application of the ECJ’s decision in Hässle this means that products which had a 65/65 compliant authorisation somewhere in the Community before that date are excluded. If that is so, Article 19 simply does not deal with products which were first marketed in the Community before that date by virtue of other provisions. Article 19 therefore provides no barrier to the grant of a certificate in respect of a product on the market before January 1985 which had not had to go through a 65/65 compliant authorisation procedure, provided some subsequent authorisation is obtained which is compliant with 65/65. It would be an odd conclusion if products which had been through a 65/65 authorisation to get on the market before 1st January 1985 were not eligible for an SPC, but those which had not had to go through 65/65 compliant testing were eligible. This would place the less deserving case at an advantage. Of course, if Article 2 is interpreted so as to exclude products which do not have to go through 65/65 authorisation before being placed on the market for the first time in the Community, then the absence of any attempt to deal with them by way of transitional provision is perfectly explicable.[69]Merz contends that all that Article 2 requires is that the product be subject to a 65/65 procedure in the Member State in question. That occurred in the UK, where the 2002 authorisation was not only the first 65/65 compliant authorisation; it was the first time the product could be marketed in the UK at all.[70]In support of Merz’s position are the following arguments: i) Where the Regulation intends to refer to the first authorisation to place the product on the market in the Community it says so: see e.g. Article 8(1)(a)(iv); 8(1)(c); 9(2)(e); 11(e); 13(1) etc. In Article 2 there is no such reference and it should be assumed, therefore, to be referring, like Article 3, to the authorisation procedure in the Member State in question. ii) Article 2 immediately precedes Article 3. Once it is accepted, as it must be, that Article 3(b) is referring to the authorisation to place the product on the market in the Member State where the application is made, then to come to a different conclusion in respect of the adjacent Article 2 would require clear words. iii) There would also seem to be a practical problem with this approach to the interpretation of Article 2 if the ECJ’s uniform approach to the interpretation of “authorisation to place the product on the market” is correct. The national office dealing with the application will, on that basis, only be supplied under Article 8 with 65/65 compliant authorisations. It would have no means of knowing whether the application fell outside Article 2 by virtue of an earlier non-compliant authorisation. The applicant would not be bound under Article 8 to supply earlier marketing authorisations which were not in accordance with Directive 65/65. The legislature cannot have intended to equip the national office with less information than it would need in order to determine whether an SPC can be validly granted.[71]On the question of whether Article 2 provides a ground of invalidity, Merz’s position is that the question is academic. Article 2 will be complied with if Article 3 is complied with, so the question will never arise.[72]These arguments raise the following questions of Community law, which I call “Question 3 and “Question 4”:
“3. Is a product which is authorised to be placed on the market for the first time in the EEC without going through the administrative procedure laid down in Council Directive 65/65/EEC within the scope of Council Regulation (EC) 1768/92 as defined by Article 2? 4. If not, is an SPC granted in respect of such a product invalid?”
[73]I have come to the conclusion that the proper course is to refer these questions to the Court. I will again express my provisional view, in case it assists.[74]I prefer Synthon’s submissions. It seems to me that to construe the Regulation as applying to products which, prior to being placed on the market for the first time in the Community were not subject to any authorisation procedure as laid down in Council Directive 65/65 is to give the Regulation a scope which extends beyond its intended purpose.[75]Whilst it is correct, as Merz contends, that when the Regulation refers to marketing authorisations it is careful to distinguish between the first authorisation in the Community and an authorisation, or the first authorisation in a Member State where the application is made, Article 2 is an example where such care has not been taken. In order to determine which authorisation is being referred to, it is necessary to look at the context and purpose of the provision.[76]It seems to me, that once one lifts one’s eyes from purely linguistic or bureaucratic points, the arguments in favour of Synthon’s interpretation become more compelling. Article 2 constrains the operation of the Regulation to cases where, in order to obtain the first marketing authorisation in the Community, the need to go through the administrative procedure under Council Directive 65/65 arose. Where no such need arose, there is no need for compensation for lost time.[77]I am not convinced by Merz’s answer that it had to go through a 65/65 compliant procedure in order to obtain the 2002 authorisation, and as a result it is deserving of the additional protection provided by an SPC. The SPC Regulation is not set up to grant such protection in every case where a 65/65 authorisation is obtained. It is common ground that where there is an earlier 65/65 compliant authorisation in another Member State, that may reduce or extinguish any protection which is afforded to the applicant who can satisfy the national requirements of Article 3. If that protection is rendered unavailable by an earlier 65/65 compliant authorisation, I can see more powerful reasons for it not being available where the product was allowed to be placed on the market in the Community without the need for such authorisation at all.[78]If Synthon is right as to the effect of Article 2, it would be bizarre if it did not provide a ground of invalidity of the SPC. On the other hand if Merz is correct, Article 2 is otiose, and provides no ground of invalidity over and above that provided by Article 3.

Reference

[79]In those circumstances Merz sought a reference to the ECJ. Synthon opposed a reference on the basis that delay would harm it commercially. Whilst I have taken that factor into account, I have come to the conclusion that the right course is for the law to be clarified at the level of the Court of Justice as soon as that can be achieved. I consider that this is a proper case in which to exercise my discretion to refer the questions of law which arise to the ECJ.[80]Firstly, whilst I have a stronger view in relation to some of the questions than others, the questions are all closely interrelated and should all be referred or not referred.[81]Secondly I do not consider that the answer to any of the Questions I have posed in this judgment is clear.[82]Thirdly, it is not possible to decide the action without deciding the questions: the answers to the questions will also be determinative of the action.[83]Fourthly, Question 1 raises an issue on which there is no guidance from the ECJ. Question 2 is the subject of conflicting decisions of national courts on the basis of the same evidence (the two Almirall decisions). Questions 3 and 4 raise a question of whether a further ground of invalidity of an SPC exists, a matter on which one national court has already expressed an affirmative view.[84]Finally the implications of this decision will extend beyond the immediate parties to this case. In all those circumstances I consider that this is an appropriate case to seek guidance from the ECJ.

Conclusion

[85]For the reasons I have given I will exercise my discretion to refer the questions of law which arise on the interpretation of the SPC Regulation to the ECJ. I invite the parties to make submissions as to the wording of the reference, following which I will make an order directing a reference to the Court. I draw the attention of the parties to paragraph [80] of the judgment of Arden LJ in Horvath v Secretary of State for Environment etc. [2007] EWCA Civ 620.

Cited in 1 later judgment