Patent holders' right to prevent drug imports from 'new' EU countries into 'old' ones not automatic, rules CJEU

The Court of Justice of the EU (CJEU) said that the 'specific mechanism' does not require patent holders or beneficiaries to "give notification of his intention to oppose a proposed importation before invoking his rights" to prevent that activity.

However, patent holders that do not give this notification to prospective importers could find that their patented products are marketed against their wishes, according to the CJEU's judgment.

"The … specific mechanism … must be interpreted as not requiring the holder, or beneficiary, of a patent or supplementary protection certificate to give notification of his intention to oppose a proposed importation before invoking his rights under … that mechanism," the CJEU judgment said. "However, if such a holder or beneficiary does not indicate such an intention during the one-month waiting period laid down in … the mechanism, the person proposing to import the pharmaceutical product in question may legitimately apply to the competent authorities for authorisation to import the product and, where appropriate, import and market it."

"The specific mechanism thus denies that holder or his beneficiary the possibility of relying on his rights under … the mechanism with regard to any importation and marketing of the pharmaceutical product carried out before such an intention was indicated," it said.

The specific mechanism is a framework that is designed to balance patent rights with EU trade rules.

Whilst EU rules promote the free movement of goods in the EU and prevent intellectual property rights holders from controlling the sale of goods they hold rights for after they are first sold in the EU, the specific mechanism gives drugs companies the right to prevent imports of their medicines from an EU accession state, such as Poland or the Czech Republic, to a more established member state of the EU if the drugs companies hold patent rights for those products in those 'old' EU countries.

Patent holders can only prevent importers from importing drugs from accession states into a country where they hold patent rights for those products if the level of patent protection in those accession states was not equivalent to that which applied in the EU country where the patent rights apply at the date a which their patent application was filed.

The basis of the specific mechanism regime is that parallel importers must ensure that there is notification given of their intention to import drugs from an EU accession country into another EU country where patent rights in those drugs are enjoyed.

In its ruling, the CJEU confirmed that the notifications do not have to be sent by the parallel importers themselves "provided that it is possible from the notification to identify that person clearly". However, the notifications must be sent to the patent holder, it ruled. The CJEU said it is not sufficient for such notifications to be made to another company within the same group that the patent holder business belongs to.

"To accept that notification may be given to other persons on the ground that such persons form, together with the holder, or beneficiary, of the patent or SPC (supplementary protection certificate), a single undertaking, or that, as a result of their conduct or status as holder of the marketing authorisation for the relevant pharmaceutical product, those persons give the appearance of being the holder’s beneficiary, would be liable to undermine the effectiveness of the specific mechanism, which is based on prior notification being given of the proposed importation," the CJEU said.

"Such an interpretation might place the person enjoying the protection conferred by the patent in a position of legal uncertainty, at odds with the objective pursued by the specific mechanism," it said.

The CJEU was addressing issues that stem from a legal dispute before the Court of Appeal in London between drugs company Merck Canada and importer Sigma.

In the dispute, Merck has argued that it did not receive notice of Sigma's intention to import drugs from Poland into the UK where Merck held patent rights in those drugs. The notification was sent to Merck's UK operating business but Merck argued that the notice was invalid because it was not sent to the address of the patent holder, Merck Canada.

Merck has also objected to the fact that the notification sent to its UK business did not come from the prospective importer, Sigma, but from Sigma's sister company which was the licenced parallel importer of the drugs.