The Advocate General's clarification of the 'Specific Mechanism' in Pfizer Ireland Pharmaceuticals v Orifarm
One of the key principles upon which the European Union ("EU") is founded is the free movement of goods. This has resulted in the development of a pan-European doctrine of exhaustion of rights, which restricts patentees from bringing proceedings for infringement in a member state where the patentee has already marketed or consented to the marketing of its goods in another member state.
A difficulty with this doctrine was identified when the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia (“new member states”) sought to join the EU. Prior to their accession to the EU in 2004, the level of protection afforded to holders of some patents and SPCs for pharmaceutical products was lower than that enjoyed by them in existing member states.
Pharmaceutical companies were facing the prospect of parallel importation of their products from new member states to existing member states in circumstances where equivalent patent or SPC protection had been unavailable in the new member states. To remedy this problem, the specific mechanism was introduced as a specific derogation to the doctrine of exhaustion of rights, whereby the holder of a patent or SPC for a pharmaceutical product can prevent the parallel importation of that product from any of the new member states, provided that: (i) no equivalent protection was available in the new member state; and (ii) the product is still protected in the member state(s) into which the product is being imported.
Pfizer Ireland Pharmaceuticals v Orifarm (C-681/16) concerned parallel imports of etanercept (a drug used for treating arthritis) from new member states into Germany. The claimant sought an injunction prohibiting such parallel imports during the term of the German SPC, as this SPC was based on a German patent filed at a time when patent protection was not available in the relevant new member states. Despite SPCs theoretically being available in the new member states at the date of filing the German SPC, in reality, such SPCs could not be sought as there was no underlying patent in those countries. The referring court asked the CJEU for guidance on the scope of the specific mechanism. Click here to review the questions and guidance provided by Advocate General Tanchev.