Merck Genéricos - Produtos Farmacêuticos Ldª v Merck & Co. Inc. and Merck Sharp & Dohme Ldª.

• Jurisdiction: European Union
• Celex Number: 62005CC0431
• ECLI: ECLI:EU:C:2007:48
• Date: 23 January 2007
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-431/05

OPINION OF ADVOCATE GENERAL

RUIZ-JARABO COLOMER

delivered on 23 January 2007 ¹(1)

Case C-431/05

Merck Genéricos-Produtos Farmacêuticos Ldª

v

Merck & Co. Inc.

and

Merck Sharp & Dohme Ldª

(Reference for a preliminary ruling from the Supremo Tribunal de Justiça (Portugal))

(Agreement establishing the World Trade Organisation − TRIPs Agreement − Jurisdiction of the Court of Justice − Direct effect)

I – Introduction

1. It has been written of mixed agreements that they inevitably cause complications, because they help to establish a political situation which does so too. (2) The questions referred for a preliminary ruling by the Supremo Tribunal de Justiça (Portuguese Supreme Court of Justice) insist on putting their finger on the spot of that complexity, paradoxically with two straightforward questions, which are easy to read and understand but have the emotional charge of potential disagreements, which arise because they are unavoidable.

2. The context of the referral is familiar: the TRIPs Agreement, one of the conventions concluded in 1994 within the framework of the World Trade Organisation. (3) Although, once again, the dispute concerns the jurisdiction of the Court of Justice to interpret a specific provision and whether the provision has direct effect, this case differs from the previous cases in that the referral relates not to trade mark law but to patent law.

3. It is therefore necessary to analyse in depth the progress made in the former of those fields, so as to ascertain whether it may be applied as it stands, whether it requires substantial modification or even whether it needs complete revision. In any event, it is necessary to point out the important practical effects of this case-law which has changed the way in which Community foreign policy is implemented, avoiding in particular negotiations for mixed agreements. (4)

II – Legal framework

A – The TRIPs Agreement

4. With the aim of effecting a partial harmonisation of intellectual property rights by reason of their incidental impact on international trade, the TRIPs Agreement contains a series of provisions applicable to the various kinds of intellectual property. I shall go on to mention those which affect patents and serve to clarify this matter.

5. Thus, Article 33 of that Agreement, contained in Part II, Section 5, on standards concerning the scope and use of intellectual property rights, under the heading ‘Term of Protection’, states as follows:

‘The term of protection available shall not end before the expiration of a period of 20 years counted from the filing date.’

6. Also, within Part VII of the Annex, which concerns the institutional arrangements and final provisions, Article 70, entitled ‘Protection of Existing Subject Matter’, provides:

‘1. This Agreement does not give rise to obligations in respect of acts which occurred before the date of application of the Agreement for the Member in question.

2. Except as otherwise provided ..., this Agreement gives rise to obligations in respect of all subject matter existing at the date of application of this Agreement for the Member in question, and which is protected in that Member on the said date, or which meets or comes subsequently to meet the criteria for protection under the terms of this Agreement ...

...’

B – The national law

7. Patent law in Portugal was formerly contained in Law 30.679, of 24 August 1940, which in that year approved the Industrial Property Code (‘the 1940 Code’). Article 7 provided that those intangible rights were to fall into the public domain at the end of a term of 15 years from the grant of the patent.

8. Decree-Law 16/95 adopted a new legislative text, which has been in force since 1 June 1995 (‘the 1995 Code’), Article 94 of which provides that a patent is valid for 20 years from the date on which the application was filed.

9. However, in order to remedy situations of transitional law, Article 3 of the 1995 Code was worded as follows:

‘Patents in respect of which applications were filed before the entry into force of this Decree-Law shall remain valid for the period of validity conferred on them by Article 7 of the (1940) Code.’

10. Article 3 of the 1995 Code was subsequently repealed, without retrospective effect, by Article 2 of Decree-Law No 141/96 of 23 August 1996, which has been in force since 12 September 1996. Under Article 1 of this national law:

‘Patents in respect of which applications were filed before the entry into force of Decree-Law No 16/95 of 24 January 1995 and valid on 1 January 1996 or issued after that date shall be covered by Article 94 of the (1995) Code ...’.

11. Article 94 increased the term of protection of those intangible property rights by five years.

12. On 5 March 2003 the current Intellectual Property Code was adopted by Decree-Law 36/2003, Article 99 of which provides:

‘Term

A patent shall be valid for a term of 20 years from the date on which the corresponding application was filed.’

III – Facts giving rise to the dispute

13. Merck & Co. Inc. (‘Merck’) is the holder of invention patent Nº 70 542, issued on 8 April 1981, with priority as from 11 December 1978, entitled ‘process for the preparation of derivatives of amino acids as hypertensives’, in order to develop the chemical compound ‘Enalapril’ and manufacture ‘Maleate of Enalapril’. The pharmaceutical composition at issue has been marketed since 1 January 1985 under the trade mark ‘Renitec’.

14. Merck Sharp & Dohme Lda. (‘MSL’) obtained a licence to exploit that patent in order to use, sell or in any way dispose of Renitec products in Portugal, together with powers to defend that patent.

15. In 1996 Merck Genéricos-Produtos Farmacêuticos Lda. (‘Merck Genéricos’) placed a product on the market under the trade mark Enalapril Merck at prices substantially lower than those of Renitec and promoted its use by doctors, stating that it was the same product.

16. Merck and MSL brought proceedings against Merck Genéricos seeking an order that the latter should refrain from using, directly or indirectly (importing, manufacturing, preparing, handling, packaging or selling), either in Portugal or for export, the pharmaceutical product Enalapril Merck, even under another commercial description, which contains the active substances ‘Enalapril’ or ‘Maleate of Enalapril’, without their express and formal authorisation. They also claimed compensation for material and non-material damage in the amount of ESC 32 500 000.

17. In its defence, Merck Genéricos argued that patent No 70 542 had reverted to the public domain on 8 April 1996, on the expiry of the term of 15 years provided for by Article 7 of the 1940 Code pursuant to the transitional provisions established by Article 3 of the 1995 Code.

18. MSL maintained, on the basis of Article 33 TRIPs, that the patent had not become invalid until 4 December 1999.

19. The action was dismissed at first instance

20. At second instance, the Tribunal da Relação (Court of Appeal), Lisbon, upheld the appellants’ claim and ordered Merck Genéricos to pay compensation for the damage caused by the infringement of patent No 70 542 on the ground that, in accordance with Article 33 of the TRIPS Agreement, which has direct effect, the patent had not expired on 9 April 1996, as the respondent to that appeal maintained, but five years later.

21. Merck Genéricos brought an appeal against that judgment before the Supremo Tribunal de Justiça, denying that Article 33 had direct effect.

22. The Portuguese supreme court observes that, although Article 94 of the 1995 Code had extended the validity of patents to 20 years, that provision was not applicable to this case because patent No 70 542 had expired on 8 April 1996, at the end of the 15-year period laid down by Article 7 of the 1940 Code. Thus, application of Article 33 of the TRIPs Agreement, which grants patents a minimum duration of 20 years, would lead to a finding in favour of MSL.

23. The Supremo Tribunal considers that, in accordance with the principles governing the interpretation in Portugal of international agreements, Article 33 of the TRIPs Agreement has direct effect and can be relied on in proceedings by one individual against another individual.

24. However, being uncertain as to the extrapolation to the field of patents of the Community case-law on the TRIPs Agreement in respect of trade marks, as regards both the substance and the interpretative jurisdiction of the Court of Justice, the national court has stayed proceedings and referred the following questions for a preliminary ruling pursuant to Article 234 EC:

‘(1) Does the Court of Justice of the European Communities have jurisdiction to interpret Article 33 of the TRIPs Agreement?

(2) If the first question is answered in the affirmative, must national courts apply that article, on their own initiative or at the request of one of the parties, in proceedings pending before them?’

IV – The proceedings before the Court of Justice

25. The order for reference was lodged at the Registry of the Court of Justice on 5 December 2005.

26. Written observations were submitted, within the period laid down in Article 23 of the Statute of the Court of Justice, by Merck and MSL jointly, Merck Genéricos, the Portuguese Government, the French Government and the Commission.

27. At the hearing, held on 28 November 2006, the representatives of the parties in the main proceedings, and the representatives of the French Government, the United Kingdom and the Commission respectively, presented oral argument.

V – Analysis of the questions referred for a preliminary ruling

A – Approach

28. By its first question, the national court wishes to know whether the Court of Justice has jurisdiction to comment on the TRIPs Agreement and, in particular, Article 33 thereof.

29. In their observations Merck and MSL maintain that, in accordance with settled case-law, (5) that...