England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		CaseNo:HC08C00231 Royal Courts of Justice Strand. London. WC2A 2LL
		20th May 2009

1. Synaptech Inc. obtained European patent EP (UK) 0 236 684 which protected galantamine or analogues thereof for treating Alzheimer's disease. That patent expired on 16^th January 2007. However, Synaptech obtained a Supplementary Protection Certificate No. SPC/GB00/033. The SPC is due to expire on 15^th January 2012. Generics (UK) Limited contends that this is wrong. They say that the SPC ought to have expired, at the latest, on 31^st December 2008.
2. Generics brought this action asking the court to determine the correct term for the SPC and to make an order for rectification of the register of patents under section 34 of the Patents Act 1977.
3. The parties agreed that the action should adopt the streamlined procedure. There was no disclosure and no cross-examination. There was one witness statement from Generics from Paul Jenkins setting out as much of the relevant history as Generics could ascertain. From Synaptech there were three witness statements, one from Mr Castle of Covington & Burling relating to the testing required to obtain marketing authorisation under EC Directive 65/65 (the relevance of which I shall come to later), one from Dr Wrbka, an Austrian pharmaceutical consultant dealing with Austrian regulatory law and one from Mr Maassen, a German lawyer dealing with the German equivalent. Synaptech put in witness statements from each of its three witnesses in reply to Generics' evidence. In the event there was no relevant conflict on the evidence. The oral hearing took one day.
4. In order to understand the grounds for Generics' action it is necessary to set out the rationale behind the system of SPCs, the legal framework for their grant and the chronology relating to the marketing authorisation of galantamine in the EU.

Supplementary Protection Certificates - The Rationale

5. SPCs are granted by the national Patent Offices of Member States pursuant to Council Regulation (EEC) No 1768/92 concerning the creation of a supplementary protection certificate for medicinal products (the "SPC Regulation"). The rationale for the extension of the period of protection conferred by a patent in the special case of medicinal products is set out in the Recitals to the SPC Regulation:

1 Whereas pharmaceutical research plays a decisive role in the continuing improvement in public health;

2 Whereas medicinal products, especially those that are the result of long, costly research will not continue to be developed in the Community and in Europe unless they are covered by favourable rules that provide for sufficient protection to encourage such research;

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 the research;

4 Whereas this situation leads to a lack of protection which penalizes pharmaceutical research;

5 Whereas the current situation is creating the risk of research centres situated in the Member States relocating to countries that already offer greater protection;

6. Prior to the SPC Regulation there were national provisions for the granting of SPCs in various Member States. Recital 6 to the SPC Regulation states:

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. The considerations for the duration of the extension to be granted are set out in Recitals 8 and 9:

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 in question 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 be strictly confined to the product which obtained authorization to be placed on the market as a medicinal product.

8. It is apparent from these recitals that the concern that spurred the creation of the SPC system for extending the period of protection for medicinal products arose from the length of time required to achieve marketing authorisation for such products. Marketing authorisation procedure in the EU was harmonised by Directive 65/65/EEC. One might therefore have assumed that by 1992, all relevant marketing authorisations would have been granted under national legislation that was compliant with Directive 65/65. However, such an assumption would be ill-founded, not least because some Member States apparently did not adopt 65/65 compliant marketing authorisation procedures until a much later date.

The Legal Framework

9. In the SPC Regulation, Article 1 sets out various definitions, Article 2 identifies what products may be the subject of an SPC, Article 3 lays out the conditions under which the SPC will be granted, Articles 7 and 8 relate to the application for a certificate and Article 13 determines the term:

Article 1: Definitions

For the purposes of this Regulation:

(a) 'medicinal product' means any substance or combination of substances presented for treating or preventing disease in human beings or animals and any substance or combination of substances which may be administered to human beings or animals with a view to making a medical diagnosis or to restoring, correcting or modifying physiological functions in humans or animals.

(b) 'product' means the active ingredient or combination of active ingredients of a medicinal product

(c) 'basic patent' means a patent which protects a product as defined in (b) 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 certificate

(d) 'certificate' means the supplementary protection certificate.

Article 2: 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 Directive 81/851/EEC may, under the terms and conditions provided for in this Regulation, be the subject of a certificate.

Article 3: 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; for the purpose of Article 19(1)^[1], an authorization to place the product on the market granted in accordance with the national legislation of Austria, Finland or Sweden is treated as an authorisation 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 authorisation to place the product on the market as a medicinal product.

Article 7: Application for a certificate

1. The application for a certificate shall be lodged within six months of the date on which the authorization referred to in Article 3(b) to place the product on the market as a medicinal product was granted.

2. Notwithstanding paragraph 1, where the authorization to place the product on the market is granted before the basic patent is granted, the application for a certificate shall be lodged within six months of the date on which the patent is granted.

Article 8: Content of the application for a certificate

1. The application for a certificate shall contain:

(a) a request for the grant of a certificate, stating in particular:

....

(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 of 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.

Article 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 authorisation to place the product on the market in the Community^[2] reduced by a period of five years.

2. Notwithstanding paragraph 1, the duration of the certificate may not exceed five years from the date on which it takes effect.

10. Directive 65/65 referred to in Article 3(b) was the provision in European law intended to harmonise the granting of marketing authorisations of medicinal products. It has since been replaced by Directive 2001/83. Directive 81/851 is the equivalent provision for veterinary products.
11. Article 3(b) specifically identifies the required marketing authorisation as an "authorization to place the product on the market as a medicinal product has been granted in accordance with Directive 65/65/EEC". Articles 7(1), 8(l)(a)(iv) and 8(1)(b) refer to "the authorization referred to in Article 3(b)" or the "authorization to place the product on the market, as referred to in Article 3(b) " On the other hand, Article 8(l)(c) refers to "the first authorization for placing the product on the market as a medicinal product in the Community" and 13(1) refers simply to "the first authorization to place the product on the market in the Community". Thus, whenever the SPC Regulation is referring to the first marketing authorisation in the relevant Member State where the application for the SPC is being made that is clearly stated to be in accordance with Directive 65/65 whereas, whenever it is referring to the first marketing authorisation within the Community, it does not refer to Directive 65/65. Moreover, Article 8(i)(c) requires the applicant to identify the legal provision under which the first authorisation for placing the product on the market as a medicinal product in the Community took place.
12. An application for an SPC in the United Kingdom is made to the Comptroller. The basic information to be provided is the identification of the basic patent, the UK authorisation to place the product on the market as a medicinal product and the date of the first authorisation to place to product on the market in the Community. The UK authorisation is a necessary condition for the grant of an SPC under Article 3(b) and it must be the first such authorisation in the UK. The date of the first authorisation to place the product on the market in the Community is necessary to calculate the term of the SPC under Article 13(1).
13. Essentially Generics' case is that the first marketing authorisation referred to in Article 13(1) is just that. It does not have to be one that was granted in accordance with Directive 65/65. It is the apparent distinction in the SPC Regulation between the marketing authorisation which is necessary for the product to qualify for an SPC and the marketing authorisation which is used to calculate the duration of any SPC that is granted that is the basis for Generics' case.
14. This distinction might be seen as a powerful indication that compliance with Directive 65/65 was not required for the purpose of this Article of the SPC Regulation. However, particularly bearing in mind that this is a European Regulation and not UK domestic legislation, such analysis of the language used is merely one factor in the overall appreciation of the construction of the SPC Regulation which necessarily includes a consideration of the rationale and purpose of the SPC Regulation.
15. It is important also to note the distinction between "medicinal product" which is any substance for treating or preventing disease and "product" which is the active ingredient of a medicinal product. The basic patent can protect a product or an application of a product. Thus, although the product is the active ingredient the basic patent can be for a second medical use of the active ingredient. However, the marketing authorisation that must be identified under Article 13(1) must be the first authorisation to place the active ingredient on the market and not the first authorisation to put the medicinal product protected by the basic patent on the market. Thus the first marketing authorisation could be for a medicinal product that is not covered by the "basic patent". Where the basic patent is for a second medical use of a known active ingredient, a marketing authorisation for the active ingredient in a first medical use could be a relevant marketing authorisation under the SPC Regulation.

The Facts

16. The facts of the present case are as follows: Galantamine has been on sale in Europe as a medicine for more than 40 years. The compound has been known since the 1950's and was used in Eastern Europe to treat neuromuscular conditions. There was a marketing authorisation for it as a treatment for polio in the 1960's under the trade mark "Nivalin" in Austria and Nivalin went on to be authorised in West Germany in 1978. In 1994 Austria joined the EEA and Nivalin continued to be marketed there after Austria's accession. Nivalin was on sale in Germany and Austria until 1999.
17. The history of the authorisation in Germany is relevant. Germany attempted to implement Directive 65/65 in the form of the AMG 1976. This came into force on the 1^st of January 1978. It included a provision that products which were on the market on that date were deemed to be approved under the AMG pending a review as long as they had been in circulation on 1^st September 1976. This has been termed a "fictitious" approval in this case as it was argued before me. Any qualifying products had to be notified to the Federal Health Office within 6 months of the AMG coming into force, i.e. by 30^th June 1978. The review was to be carried out by 31^st December 1989, subsequently extended to 30^th April 1990.
18. Generics submits that these marketing authorisations are relevant to the calculation of the term of the SPC under Article 13 of the SPC Regulation. However, Synaptech deny this. They say that the only relevant "first authorisation to place the product on the market in the Community" within the meaning of Article 13 of the SPC Regulation was a Swedish authorisation granted in 2000 in accordance with Directive 65/65. That is the one on which the application was based when it was made to the UK Patent Office. The Patent Office was not told about the earlier authorisations in Germany and Austria which, for the purposes of this action, are accepted by Generics not to have been Directive 65/65 compliant. Based on the Swedish authorisation the SPC term was the maximum allowed under the SPC Regulation - 5 years expiring in 2012.
19. The issue that I have to decide in this case is whether the marketing authorisation that must be identified under Article 13(1) of the SPC Regulation must be Directive 65/65 compliant or whether any prior marketing authorisation will count to start the clock counting for the purpose of determining the length of any SPC to be granted.
20. Both parties relied on Judgments of the Court of Justice of the European Communities which, they submitted, meant that I had to find in their favour. Synaptech rely on the judgment in Hässle AB v Ratiopharm GmbH Case C-127/00, BAILII: [2003] EUECJ C-127/00 which concerned the interpretation of the same wording as appears in Article 13(1) where it appears in the transitional provisions in Article 19(1). Hässle were arguing that although they had received marketing authorisations in France and Luxembourg in accordance with Directive 65/65 those authorisations did not enable them to put the product on the market until they were included in the list of proprietary medicinal products authorised for sale in Luxembourg of the list of medicinal products eligible for reimbursement to persons insured under the social security scheme in France. These "authorisations", which required an approval of the price to be charged for the products, were obtained some time after the Directive 65/65 authorisations. Hässle therefore argued that the relevant date under Article 19(1) was the later date when they could actually put the product on the market.
21. The relevant part of the question referred to the ECJ was:

For the purpose of applying the transitional provision in Article 19(1) of the Regulation, in so far as that provision refers to the "first authorisation to place ... on the market... in the Community" before a specified relevant date, does that refer exclusively to an authorisation within the meaning of Directive 65/65/EEC or Directive 81/851/EEC as the case may be, or may another authorisation granted later (after the relevant date) relating in particular to the prices of the medicinal product also be material in this respect, if

(aa) without such a further authorisation, for example one for price-law purposes, marketing of the medicinal product is not permissible under the law of the Member State concerned, or

(bb) without such a further authorisation the medicinal product may in principle be marketed in the Member State concerned, but effective marketing is nevertheless not possible, in particular because the sickness funds reimburse the costs of the medicinal product only if the further authorisation, in particular for price-law purposes, has been granted or a determination of the price eligible for reimbursement has been made.

22. Synaptech rely in particular upon paragraphs 57 and 58 of the judgment of the ECJ:

57 There is nothing to justify the words 'authorisation to place... on the market' being interpreted differently depending on which provision of Regulation No 1768/92 they appear in. In particular, those words cannot be construed as having a different meaning according to whether they appear in Article 3 or Article 19, especially when it is apparent from Article 8(l)(a)(iv) and (c) that the marketing authorisation referred to in Article 3(b) may also be the first marketing authorisation in the Community.

58 It follows therefrom that the first authorisation to place... on the market... in the Community', mentioned in among others, Article 19(1) of Regulation No 1768/92, must, like the 'authorisation to place... on the market' mentioned in Article 3 of that regulation, be a marketing authorisation issued in accordance with Directive 65/65.

23. Generics reply that the ECJ is really considering whether the marketing authorisation is 'of the nature' of an authorisation in accordance with Directive 65/65 and is not considering a distinction between authorisations which are strictly Directive 65/65 compliant as opposed to authorisations which perform the same function but, for instance, are not as rigorous as required for Directive 65/65 compliance. This appears to be borne out by paragraph 53 of the judgment:

53 It is therefore appropriate to ascertain whether the words first authorisation to place... on the market' in Article 19(1) of Regulation No 1768/92 refer solely to a marketing authorisation in accordance with Directive 65/65 or whether they also refer to an authorisation required under national legislation on the fixing of prices of or reimbursement for medicinal products, such as the authorisation granted on 17 December 1987 to Hässle by the Luxembourg authorities in the case of the main proceedings.

24. Thus, although the ECJ says that the words 'authorisation to place... on the market' must be given the same meaning wherever they appear in the SPC Regulation and that they require a marketing authorisation issued in accordance with Directive 65/65, that was being said in contradistinction to some other authorisation of a completely different nature, such as a 'price-law' authorisation. I do not believe that the ECJ Judgment should necessarily be understood as holding that an authorisation, similar in nature to one issued in accordance with Directive 65/65 but less rigorous, does not fall within the meaning of those words as they appear in Article 13(1).
25. Synaptech also referred me to the Explanatory Memorandum presented by the Commission with the proposal for the SPC Regulation. The draft Regulation is not identical to the form in which it was adopted but Article 3 is substantially the same, Article 6 in the draft corresponds to Article 8 of the Regulation and Article 8 corresponds to Article 13 of the Regulation. So far as the references to the first marketing authorisations are concerned they have the same format of referring to Directive 65/65 in Article 3 but not in the other Articles.
26. So far as I can see, the Explanatory Memorandum does not distinguish between the different uses of 'authorisation to place the product on the market'. It refers to the purpose of requiring the information about the first authorisation to place on the market in the Community so that the duration of the SPC is the same in all Member States. This would appear to support Synaptech, but is not conclusive.
27. Generics referred me to the judgment in Novartis v Comptroller-General Case C-207/03 [2005] RPC 33 where the Patents Court in London was considering whether the relevant marketing authorisation for the purpose of calculating the duration of an SPC under Article 13(1) of the SPC Regulation could be a marketing authorisation issued by the Swiss authorities, Switzerland not being a Member State of the EU.
28. The Court was considering the case where a marketing authorisation had been issued by the Swiss authorities. Because of the customs union between Liechtenstein and Switzerland, this enabled the product to be marketed in Liechtenstein. Lichtenstein was part of the EEA. The Swiss marketing authorisation was not Directive 65/65 compliant.
29. The ECJ held that the Swiss authorisation was the first authorisation to place the product on the market within the meaning of Article 13 of Regulation 1768/92. At first blush this would appear to be a clear indication that the marketing authorisation on which the duration of the SPC is to be calculated under Article 13(1) need not be Directive 65/65 compliant. Synaptech pointed out that the Court's decision was based on the following provision:

5 Point 6 of Annex XVII to the Agreement on the European Economic Area of

May 2,1992; hereinafter "the EEA Agreement", as amended by Annex 15 to Decision No 7/94 of the EEA Joint Committee of March 21, 1994 states that for the purposes of that Agreement, the following is to be added in Art 3(b) of Regulation No 1768/92:

"for the purpose of this subparagraph and the Articles which refer to it, an authorisation to place the 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... "

30. Therefore, Synpatech submit, this Judgment by the ECJ does not hold that Article 13 of the SPC Regulation is not limited to Directive 65/65 compliant marketing authorisations because the Swiss marketing authorisation is to be treated as Directive 65/65 compliant. In fact, of course, Article 13(1) is not an Article which refers to Article 3(b), however the ECJ have treated it as though it were such an Article. The ECJ therefore seem to have assumed that Article 13(1) does require Directive 65/65 compliance. This would be consistent with the Hässle case which suggests that the words have the same meaning wherever they appear in the Regulation.
31. I have been referred to three decisions of the national courts of Member States, two German decisions and one Belgian. The first of these is a decision of the German Federal Patent Court on appeal from the German Patent and Trade Mark Office on an application for an SPC by Almirall-Prodesfarma SA. The applicant had identified the first authorisation to place the relevant product on the market in the Community as an authorisation issued in the UK on 24^th April 1995. It had obtained authorisations in Portugal on 19^th March 1990 and in Spain on 24^th May 1991 but argued that neither of these were to be understood as the first authorisation in the Community since, at the relevant dates, neither Portugal nor Spain had implemented Directive 65/65/EEC. The German Patent and Trade Mark Office granted the SPC calculated on the basis that the Portuguese authorisation was the relevant one for calculating the duration of the SPC.
32. The German Federal Patent Court applied the ECJ decision in Hässle and held that the interpretation of Article 19 of the SPC Regulation must also apply to Article 13 and accordingly only an authorisation "within the meaning of or pursuant to Directive 65/65/EEC"^[3] can be considered as a basis for the calculation of the period under Article 13. The Court went on to hold that "within the meaning of in the terminology of the ECJ has the meaning of "pursuant to". Since Portugal had not implemented Directive 65/65 by the relevant date, the authorisation was not relevant for the purposes of Article 13. The German Patent and Trade Mark Office had assumed "equivalence" of the Portuguese procedure with Directive 65/65. The German Federal Patent Court held that, even if "equivalence" were the correct test, it could not be assumed and would have to be investigated and established. Synaptech relied on this judgment in support of its interpretation of the ECJ judgment in the Hässle case.
33. Generics countered with a decision of the Brussels Court of First Instance in a case in which Merck challenged the duration of an SPC granted for the same product as in the German case. The SPC had been granted on the basis that the Portuguese and Spanish marketing authorisations were to be ignored for the purposes of Article 13 of the SPC Regulation.
34. The Belgian Court referred to Hässle, Novartis (including particularly the Judgment of the Advocate General in that case) and the German decision referred to above. It relied on the fact that in Novartis reliance was placed on the marketing authorisation granted by the Swiss authorities as being within the meaning of the marketing authorisation referred to in Article 19. This, it said, was "undeniably not granted pursuant to Directives 65/65/EEC or 81/851/EEC but according to their own law."^[4] It does not seem that the Court's attention was drawn to the fact that, as set out above, there was a specific insertion into the SPC Regulation for the purposes of the EEA Agreement effectively deeming such marketing authorisations to have been granted under Directive 65/65/EEC.
35. The Belgian Court refers, briefly, to the German Court's decision but dismisses it on the grounds that it is not a definitive or final decision and that the German Court was not referred to the ECJ's judgment and the Advocate General's Opinion in the Novartis case. It also refers to the fact that the applicant for the SPC in the UK identified the Portuguese marketing authorisation as the first marketing authorisation in the Community and to the fact that SPCs granted in Netherlands, Sweden and Italy all relied on the Portuguese marketing authorisation to calculate the duration of the SPCs.
36. The third decision to which I was referred is from the Federal Court and concerns SPC No 194 75 025.6. The Federal Court held that a marketing authorisation granted in Sweden in 1994, before Sweden joined the European Community, was effective as the first marketing authorisation under Article 13 of the SPC Regulation. However, as with the Novartis decision of the ECJ, the Court relied on the provisions by which marketing authorisations granted in EFTA states were equated with Directive 65/65 compliant authorisations.
37. As I have stated above, I do not believe that the ECJ judgment in the Novartis case has the effect argued for by Generics and given to it by the Belgian court. If that is correct then the only ECJ authority on the point is the Hässle case. Although the court in Hässle was considering a different argument, the wording of the judgment is clear and is binding on me. I can see no basis on which it would be permissible for me not to apply that judgment.
38. It was argued on behalf of Generics that the Austrian marketing authorisation in this case should also be deemed to be Directive 65/65 compliant. However, it would appear from Article 19(1) of the SPC Regulation, as amended, that this would apply only to marketing authorisations issued after 1^st January 1985. In the present case the Austrian marketing authorisation was granted long before that date and so is not deemed to be Directive 65/65 compliant.
39. Accordingly I find that the Defendant's construction of the wording of the SPC Regulation is correct and I dismiss the Claimant's action.

Note 1   Article 19 contains various transitional provisions.    [Back]

Note 2   The eighth adaptation provided by Protocol 1 on horizontal adaptations in Annex XVII of the EFTA Agreement signed on 2 May 1992 ensures that the reference to "Community" is to be taken to be in effect the territories of the EEA.    [Back]

Note 3    There is no agreed translation of the judgment. The words quoted here are from the translation provided by the Claimant. The Defendant's translation is "in the sense of or in accordance with Directive 65/65/EEC". Whilst this wording conveys a different meaning in English the effect of and reasoning of the judgment is the same in both translations. Therefore I shall quote only from the Claimant's translation    [Back]

Note 4    Again, there is no agreed translation. I have used the words in the Claimant's translation but there does not appear to be any difference of substance from the Defendant's translation.    [Back]