ECJ declines to give Community-wide direct effect to the provisions of TRIPS relating to patent terms

31 October 2007

Manuel Lobato, Mary Smillie

On 11 September 2007 the European Court of Justice gave a ruling on a reference from the Portuguese Court in the case of Merck Genéricos – Produtos Farmacêuticos Lda v. Merck & Co. Inc., Merck Sharp & Dohme Lda (Case C-431/05).

Merck Genéricos had launched a generic version of Renitec® (enalapril), during the transition period, before the 20-year patent term period under TRIPS was in place. Merck & Co. sued Merck Genéricos in 1996, claiming that a process patent had been infringed. Merck Genéricos claimed that the patent had expired on 9 April 1996. The Old Portuguese Decree was still effective, which only granted a 15-year patent protection period to Merck & Co. Merck & Co. disagreed, and considered that under the TRIPS Agreement, which came into force on 1 January 1995, patent terms should be no less than 20 years. The case was appealed to the Portuguese Supreme Court, which stated that the 1995 industrial property code, settling patent terms at 20 years, could not be applied in this case and that the patent expired in April 1996. However, the court commented that if Article 33 had a direct effect, the outcome would be different and Merck & Co. would be able to claim protection of the patent.

The question referred by the Portuguese court was whether the Court of Justice had the jurisdiction to interpret Article 33 of the TRIPS Agreement, and if the answer was affirmative, whether national courts must apply that article, on their own initiative or at the request of a party, in proceedings pending before them?

The ECJ said that Community law did not extend to patent matters and the Member States could choose whether or not to apply Article 33 of the TRIPS agreement. This makes it clear that patent terms are a question for national courts and although in the future it could lead to inconsistencies in how Article 33 should be interpreted, it is now clear that the ECJ is not taking control over patent affairs insofar as they are a matter of international conventions rather than Community legislation.

The outcome to this case may have relevance in Spain, where there is currently an on-going discussion regarding the direct effect of TRIPS. A second instance court (Madrid High Court) has applied Article 70(7) directly and considered changes to an atorvastatin patent valid. A decision of the Barcelona High Court, which is under appeal, considered product claims in an olanzapine patient valid. However, several first instance courts have rejected the validity of addition of product claims to the losartan patent, rejecting the application of Article 70(7) TRIPS and again these decisions too are subject to appeal.