Merck holds patents in the United Kingdom for a drug for hypertension (Innovace), a drug prescribed in prostate treatment (Proscar) and a drug for glaucoma (Timoptol) whilst Beecham holds a patent for an antibiotic (Augmentin).
Those drugs were marketed by Merck and Beecham in Spain and Portugal at a time when drugs could not be patented in those two States (they became patentable in Spain on 7 October 1992 and in Portugal on 1 January 1992).
Merck and Beecham complain that Primecrown and Europharm have infringed their United Kingdom patents by importing the drugs in question into the United Kingdom from Spain and Portugal, thereby taking advantage of the price difference between those Member States.
The two cases referred to the Court of Justice by the High Court in London therefore concern cases in which drugs are patented in one Member State and the patent holders seek to oppose import of the drugs from another Member State where they could not be patented and where the patent holder was under a legal or ethical obligation to market them.
The Court cites its case-law according to which patent protection may impede free movement of goods only in so far as this is justified in order to safeguard rights constituting the specific subject-matter of a patent, which is, in particular, to guarantee to the patent holder the exclusive right to use an invention with a view to manufacturing products and putting them on the market for the first time.
Once the patent holder decides, in the light of all the circumstances, to market his product, even in a Member State where the law provides no patent protection for the product, he must then accept the consequences his choice has for the free movement of the product within the common market. He cannot oppose importation of a product freely marketed by him in a Member State even if the product was not patentable there.
In the present judgment, the Court reaffirms that balance between the principle of free movement of goods in the Community and the principle of protection of patentees' rights.
The High Court also asked in its reference whether that case-law should be qualified to exclude cases in which the patentee in the Member State of importation has a legal or ethical obligation to put his product on the market in a Member State in which he could not obtain patent protection. In reply, the Court of Justice accepts that, where a patentee is legally bound under either national law or Community law to market his products in a Member State, he cannot be deemed to have given his consent to the marketing of the products concerned and he is therefore entitled to oppose importation and marketing of those products in the State where they are protected.
However, ethical obligations to provide supplies of drugs in Member States where they are needed, even though they are not patentable there, cannot provide a basis for derogating from the rule on free movement of goods.