In Merck v The Comptroller-General of Patents, the Court of Appeal was asked to consider whether supplementary protection certificates (SPCs) should be available in the UK to extend the duration of protection provided by "second medical use" patents. It is implicit from this short-hand description of such patents that they protect a new (second) use of an active pharmaceutical ingredient (API) which has already been authorised for an old (first) use. The Court of Appeal, following a perfectly orthodox approach, concluded that they should not. In doing so, the Court also declined the invitation to depart from a decision of the Court of Justice of the European Union (CJEU) on this point.
Background
Pharmaceutical companies patent their drugs to recoup research and development costs through monopoly pricing. However, they cannot sell their drugs without regulatory authorisation. Sometimes it takes years to get the authorisation, so the effective period of their monopoly is shortened. The purpose of an SPC is to compensate the patentee for this by extending the duration of protection under the relevant patent.
The SPC Regulation, retained as effective law in the UK after Brexit, requires that any application for an SPC for a patent protecting a "product" must be made within six months of its authorisation. It also provides that if a "product" is, or was, already the subject of an old authorisation, then no SPC will be available for a patent protecting that "product". Therefore, a critical question is how "product" is defined.
The definition in the SPC regulation is straightforward. A "product" is an API or a combination of APIs. Importantly, how the API(s) is formulated, or otherwise used, simply does not come into it. Three old CJEU decisions, namely Pharmacia Italia (2005), MIT (2006) and Yissum (2007), reinforced this straightforward interpretation. A product is a thing. A thing used in one way does not become a different thing when it is used in another way. Calcium carbonate is calcium carbonate, whether it is in rocks or seashells (or antacid).
However, the CJEU famously threw a curve ball in 2012, in its decision in Neurim, a reference from the Court of Appeal. In that case it applied a "teleological" approach to interpretation of the SPC Regulation and concluded that the way a "product" was used was relevant to its definition. It decided (without reference to Pharmacia Italia, MIT or Yissum) that an API used to treat one disease could be one "product", and the same API used to treat another disease could be a new and different "product". Unfortunately, it did not provide any proper explanation of how this might take place. As a result, national courts and patent offices throughout Europe struggled to apply the SPC Regulation, and came up with different, inconsistent ways.
After years of uncertainty, in July 2020 in Santen, the CJEU expressly overruled its own decision in Neurim, holding that the teleological approach it had applied was wrong and should not be followed.
More recently, back in the UK, in Newron Pharmaceuticals v The Comptroller , the Court of Appeal approved of the CJEU's decision in Santen.
Court of Appeal decision
Merck asked the Court to rule that its SPC, based on a 2017 marketing authorisation for a patent relating to the use of cladribine to treat multiple sclerosis was valid, even though cladribine was the API in two medicines that had been authorised for use in the treatment of leukaemia many years earlier.
To succeed in its appeal, Merck had to convince the Court of Appeal that (a) it had not already followed Santen in Newron, (b) that it had the power to depart from Santen, and (c) that it should depart from Santen.
However, Merck failed at the first hurdle. Birss LJ (with whom Arnold and Lewison LLJ agreed) put it this way:
"In other words, in Newron this court was presented with a choice, to follow Neurim (and another earlier CJEU case along similar lines Medeva v Comptroller Case C-322/10 [2012] RPC 25 which applied a broad teleological approach to combinations), or to follow Santen; and the decision which this court made was to follow Santen. In my judgment therefore Newron is a decision which applies Santen and it does so as part of the ratio decidendi."
In respect of the second and third questions, the Court considered the implications of the European Union (Withdrawal) Act 2018 and implementing regulations, in so far as they extended to the Court of Appeal the Supreme Court's power to depart from one of its own decisions (set out in the 1996 Practice Statement on Judicial Precedent).
In this context Lewison LJ (with whom Birss and Arnold LLJ agreed) explained that the legislation only gave a relevant court power to depart from retained EU case law if there were no post-transition case law binding on it, that had modified or applied that law. However, this power didn't apply because of its decision in Newron, and so the Court of Appeal was bound by Santen.
Finally, the Court held that, even if it had not been bound by Newron, it would not have been appropriate to depart from Santen. Birss LJ viewed Merck's criticisms of Santen as unsound. He added:
"Santen is a decision which brought to the scheme of the Regulation back into a measure of coherence, and substantially reduced the legal uncertainty caused by Neurim … However, the real problem with Neurim was that it did not face up to the wholesale reorganisation of the way the [SPC] Regulation would need to be interpreted in order to provide a consistent scheme in which cases like Neurim and Merck led to SPCs."
It is possible that Merck will seek permission from the Supreme Court to appeal. However, the likelihood that the Supreme Court will review or change the outcome seems very small.