No. 34
February 2014

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Judgment of the Court of Justice of the EU Grand Chamber
18, July, 2013, Case C-414/11
Daiichi Sankyo Co.   v.  DEMO Anonimos Viomikhaniki kai
Sanofi-Aventis Deutschland   Emporiki Etairia Farmakon

(Article by Catherine Mateu, Catherine Mateu, Paris, France)
The case was heard upon referral from the Court of First Instance in Athens, in a case in which the patent owner and its distributor (“the Plaintiff”) were opposed to a party (“the Defendant”) that had received an authorization to market generic medicines. The Plaintiff's patent application, filed in 1986 and extended by a supplementary protection certificate (“SPC”) in 2006, contained claims for the protection of a chemical compound and for the process of its manufacture. However, Greek courts ruled that, based on reservations to the European Patent Convention (“EPC”), Greece's Industrial Property Office was prohibited from granting patents on pharmaceutical products.

The CJEU was asked whether, in light of the TRIPS Agreement and in particular Article 27, which provides for the patentability of pharmaceutical products, the SPC also covered the pharmaceutical product itself.

According to the referring court, Greek courts disagree on the TRIPS provisions regarding the patentability of pharmaceutical products. Also, the referring court was uncertain whether the CJEU should interpret these provisions.

In its judgment, the CJEU decided (1) that article 27 of the TRIPS Agreement is covered by the Common Commercial Policy and therefore falls within exclusive EU competence, (2) that pharmaceutical products are patentable, and (3) that articles 27 and 70 of TRIPS do not grant a right to extend the patent to the protection of the product itself if an application was granted for the manufacturing process only.

This referral has broad implications for Community competence on substantive patent law, and on conflict of law rules over time.
  1. COMPETENCE

    The first issue raised was whether article 27 of TRIPS falls within the primary competence of EU member states, and if so, whether national courts may grant direct effect to this provision.

    Contrary to the Advocate General's observations, the CJEU held that article 27 falls within the exclusive competence of the EU, including the Common Commercial Policy and particularly “commercial aspects of intellectual property.” The Court also noted that its opinions prior to treaty modifications were no longer applicable.

    Based on these findings, the CJEU stated that there was no need to consider whether national courts may accord direct effect to Article 27.

    This is a major decision in respect of international intellectual property law within the EU because all the TRIPS provisions may fall within the exclusive competence of the EU.

    First, with regard to the eventual “direct effect” of TRIPS, it is no longer a question of national laws of member states (as held in case C-431/05). From now on, presumably, member states will not be able to give direct effect to TRIPS provisions, but can interpret Community law “as far as may be possible in the light of the wording and purpose” of TRIPS (Dior case C-300/98 and 392/98, and Merck case C-431/05), as the CJEU had held that TRIPS had no direct effect (Dior case C-300/98 and 392/98).

    Second, all TRIPS provisions may fall within the exclusive competence of the EU. Certainly, many provisions of intellectual property law have been harmonized, restricting the competence of member states to a very narrow field. However, this finding may lead, as the Advocate General wrote, to “the general and immediate ' expulsion' of the Member State from the negotiations of such agreements”, and to affect indirect harmonisation. As a result, almost no intellectual property law provisions are left to EU member states.

  2. THE PATENTABILITY OF PHARMACEUTICAL PRODUCTS

    The second question, which raised fewer issues, was whether the invention of a pharmaceutical product, is patentable subject matter in the sense of Article 27 of TRIPS.

    The CJEU held that Article 27 must be interpreted as meaning that the invention of a pharmaceutical product can be patentable subject matter.

  3. TEMPORAL EFFECTS

    The third question was whether, based on TRIPS, a patent granted only for the process of manufacture of a pharmaceutical product protected the pharmaceutical product itself.

    The CJEU held that a patent obtained for a manufacturing process, following an application claiming the invention of both a product and its manufacturing process, did not automatically grant patent protection on the product.

    Because of the Greek reservation to the EPC, the Plaintiff, which had filed a patent application for both a pharmaceutical product and its manufacturing process, could obtain a patent on the process only. Patent protection was extended by an SPC.

    In 1995, the year when TRIPS entered into force, the patentability of pharmaceutical products was possible in Greece, as its reservation had expired in 1992.

    The fundamental issue was whether the SPC granted to the Plaintiff in 2006 also covered the pharmaceutical product itself.

    The CJEU noted that the SPC was subject to the same limitations as those affecting the basic patent, and that it was for the referring court to verify whether the reservations to EPC applied to national patents.

    The CJEU held that TRIPS provisions could not grant to a patent effects it never had. This non-retroactive application of intellectual property laws appears quite common to practitioners.

    Considering that reservations to EPC on patentability of pharmaceutical products were made only by Austria, Spain and Greece (the last ones expired in 1992), and that patent protection is granted for 20 years from the date of its application, the consequences of this particular issue appear limited.



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