C-350/92

OPINION OF MR JACOBS — CASE C-350/92

OPINION OF ADVOCATE GENERAL JACOBS delivered on 9 March 1995 *

1. In these proceedings the Kingdom of encourage such research. The implication is Spain seeks the annulment of Council Regu- that there may be a risk of research centres lation (EEC) N o 1768/92 concerning the cre- relocating to third countries thus undermin- ation of a supplementary protection certifi- ing the development of medicines in Europe. cate for medicinal products (hereafter Before the adoption of the Regulation, referred to as 'the Regulation'). 1The Regu- according to the French Government, the lation provides for a longer period of patent laws of Japan and the United States offered protection in the case of medicinal products better protection than the laws of most which require authorization prior to being Member States. The problem lies in the lapse placed on the market. Spain claims, first, that of time between the filing of an application the Community has no competence to act in for a patent and the marketing authorization, the area of patent law and, as a subsidiary making the period of effective protection argument, that the Regulation could only be under the patent insufficient to cover the adopted on the basis of Article 235 of the investment put into the research. Treaty and not, as was done, on the basis of Article 100a. Greece has intervened in sup- port of Spain; France and the Commission have intervened in support of the Council.

3. The preamble also states that a uniform solution at Community level should be pro- vided for, since disparities in national law The Regulation would be likely to create obstacles to the free movement of medicinal products and thus directly affect the establishment and func- tioning of the internal market. That explains the choice of a regulation as the most appro- priate legal instrument for laying down rules regarding: ·

'Subject to the provisions of Article 4, the certificate shall confer the same rights as conferred by the basic patent and shall be subject to the same limitations and the same obligations.' 5. Article 3 lays down the conditions for obtaining a certificate, including the con­ dition that in the Member State of applica­ tion the product is protected by a basic patent in force; that a valid marketing autho­ Article 6 confirms that only the holder of the rization (as defined in Article 2) has been basic patent or his successor in title is enti­ granted; that the product has not already tled to a certificate. been the subject of a certificate; and that the authorization referred to above is the first authorization to place the product on the market as a medicinal product. 7. Article 13 determines the duration of the certificate. It takes effect at the end of the 2 — OJ, English Special Edition 1965-1966, p. 20, as last amended lawful term of the basic patent, and is valid by Council Directive 89/341/EEC, OJ 1989 L 142, p. 11. for a certain period, calculated by reference 3 — OJ 1981 L 317, p. 1, as last amended by Council Directive 90/676/EEC, OJ 1990 L 373, p. 15. to the period which elapsed between the date

I-1989

OPINION OF MR JACOBS — CASE C-350/92

on which the application for a basic patent 11. In that respect, Spain refers to the judg­ was lodged and the date of the first authori­ ment in Parke, Davis ν Centrafarm, where zation to place the product on the market in the Court drew a distinction, in the context the Community: the latter period, reduced of Articles 85 and 86 of the Treaty, between by five years, is the duration of the certifi­ the existence and exercise of patent rights. cate, with a maximum of five years.

influence whatever of Community law on those circumstances it is for the national leg­ the exercise of national industrial property islature to determine the conditions and rules rights.' regarding the protection conferred by pat­ ents.'

12. Spain also points to Ν old ν Commission, where the Court stated in relation to rights of ownership in general: 7

14. Spain deduces from that case-law that the Community is not competent to regulate what the applicant calls substantive patent law, but may only harmonize those aspects 'Within the Community legal order it like­ relating to the exercise of industrial property wise seems legitimate that these rights rights which are capable of having some should, if necessary, be subject to certain influence on the realization of the general limits justified by the overall objectives pur­ objectives of the Treaty. The adoption of the sued by the Community, on the condition Regulation is said to go beyond the Commu­ that the substance of these rights is left nity's competence, since in effect it extends untouched.' the duration of patent protection, which is considered to be part of the substance of patent law.

13. Lastly, Spain finds confirmation of its views in the Court's judgment in Case C-30/90 Commission ν United Kingdom, where the Court held: 8

16. In its reply to the Council's defence, cites is not limited to patent law, and there is Spain also points out that the Court of First no indication that it does not apply to all Instance has observed that, in the present such rights. Therefore, in so far as that case- state of Community law, powers in the field law supported the argument that the Com­ of intellectual and commercial property have munity lacks competence, it would extend to not been transferred to the Community. 9 all action affecting the substance of intellec­ That observation was made in the context of tual property law. That, in turn, would mean that Court's answer to arguments based on that a number of other Community acts an alleged infringement of the Berne Con­ would also be affected by lack of compe­ vention, to which the Community is not a tence. I will refer to just one example: Coun­ party. cil Directive 93/98/EEC harmonizes the term of protection of copyright and certain related rights, 10 which, if Spain's views are correct, goes to the substance of copyright, and is therefore not within the Community's competence.

17. Greece, intervening in support of Spain, is also of the view that the Community is not endowed with competence in relation to patent law. It does not, however, submit any additional arguments.

cited, most of which are dealt with by the 23. It is true that the Simmenthal case-law Commission in its observations. only deals with Article 36 of the Treaty, and not with the Community's competence in general. However, in its Opinion of 15 November 1994, relating to the Commu­ nity's competence to conclude the Agree­ ment establishing the World Trade Organiza­ tion, 1 6 the Court considered more general 21. As is rightly pointed out by the Council, arguments to the effect that the Community by the Commission and by the French Gov­ was incompetent in relation to certain ernment, the Court's case-law in no way aspects of intellectual property law. Some suggests that regulating the substance of Member States had indeed argued that the intellectual property law is not within the provisions of the Agreement on Trade- Community's province. Related Aspects of Intellectual Property Rights (TRIPs) relating to the measures to be adopted to secure the effective protection of intellectual property rights — such as those ensuring a fair and just procedure, the rules regarding the submission of evidence, the 22. In the leading case of Simmenthal ν Ital­ right to be heard, the giving of reasons for ian Minister for Finance the Court very decisions, the right of appeal, interim awards clearly stated that Article 36 of the Treaty: 15 and the award of damages — fell within the competence of the Member States. The Court rejected that argument, again in very clear terms: 17

'is not designed to reserve certain matters to the exclusive jurisdiction of Member States but permits national laws to derogate from the principle of the free movement of goods to the extent to which such derogation is and continues to be justified for the attainment of the objectives referred to in that article.'

24. Of course, that part of the Opinion does to consider whether there was an obligation not deal with the 'substance' of intellectual on Member States to enact a particular rule property rights, but with enforcement issues. relating to trade marks; the rule in question, It seems to me, however, that Opinion which would have precluded the assignment 1/94 provides authority for the view that, as of a national trade mark in respect of only a matter of principle, the Community may part of the Community, plainly concerned regulate all aspects of intellectual property the substance of the right. The Court said: law, in so far as that is necessary for achiev- ing one of its objectives. The Court did not say so expressly, because the question dealt with was whether the Community had the exclusive competence (and not just the com- petence) to conclude the TRIPs Agree- ment. 18 But it did state, in another section of the Opinion, that: 19 'It is for the Community legislature to impose such an obligation on the Member States by a directive adopted under Article 100a of the EEC Treaty, elimination of the obstacles arising from the territoriality of national trade marks being necessary for the establishment and functioning of the internal market, or itself to enact that rule directly by a regulation adopted under the '... the Community is competent, in the field same provision.' of intellectual property, to harmonize national laws pursuant to Articles 100 and 100a and may use Article 235 as the basis for creating new rights superimposed on national rights, as it did in Council Regu- lation (EC) N o 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1).' As has been seen above, there is no reason to distinguish, in respect of the Community's legislative competence, between trade mark rights and patent rights.

the distribution of powers between the cle 128(5) (cultural policy), Article 129(4) Community and its Member States. The (public health), all expressly excluding 'any Community may only act within the limits harmonization of the laws and regulations of of the powers conferred upon it by the the Member States'. There are, however, no Treaty and of the objectives assigned to it such provisions referring to patent law, or to therein (see now Article 3b of the Treaty, intellectual property law in general. inserted by the Treaty on European Union). The most significant Community power which comes to mind in connection with these proceedings is of course laid down in Article 100a of the Treaty, concerning the establishment and functioning of the internal 28. Spain appears to claim that Article 222 of market. I will return to that provision in the the Treaty ought to be interpreted as exclud­ next section, since it was used — and is con­ ing harmonization of the substance of intel­ tested — as the legal basis for the Regulation lectual property rights. Article 222, it will be in issue in these proceedings. I will simply remembered, provides that the Treaty 'shall observe at this stage that the application of in no way prejudice the rules in Member States governing the system of property Article 100a generally leads to Community ownership'. Spain's interpretation of that legislation touching the most diverse areas of provision is in my view erroneous. A similar national law, such as the protection of the argument was advanced by the United King­ environment, 2 1 of public health, of the con­ dom Government in Commission ν United sumer, and indeed the protection of intellec­ Kingdom, 22 where that government took the tual property. view (and it was supported by Spain) that the obligation to produce products protected by a patent in the national territory was part of a system of (industrial) property owner­ ship within the meaning of Article 222 of the Treaty, that 'the rules relating to the very existence of industrial property rights fall within the sole competence of the national legislature', 23 and that therefore Article 30 of the Treaty could have no effect upon such rules. The Court rejected that argument in 24 the following terms:

It is true that that case related to the applica­ tion of substantive Treaty rules to national patent law, and did not deal with the extent The reference to undertakings is not found of the Community's regulatory powers in in Article 222, perhaps because the EC the area of patents. It seems to me, however, Treaty also applies to individuals. I nonethe­ that that difference is immaterial for the less think that both provisions formulate a present purposes. The Court made it clear similar concern. that the argument of exclusive national com­ petence for matters covered by Article 222 of the Treaty is not correct, and I see no reason why that conclusion should not also be valid for the exercise of Community competence. If Article 222 of the Treaty does not prevent 30. In his Opinion in Hauer ν Land certain national rules (namely those requir­ Rheinland-Pfalz Advocate General Capo- ing that products protected by a patent be torti considered Article 222 in the context of produced within the national territory) from the relationship between the fundamental being considered incompatible with Arti­ right to private property and Community cle 30 of the Treaty, and therefore invalid, I law. That is indeed the proper context, it do not see how it could preclude the Com­ seems to me, for applying Article 222. The munity from exercising its competences in Advocate General took the view that: 2 6 the field of patents.

'... the rule expressed in Article 222 of the EEC Treaty ... makes it impossible to hold

29. Most commentators appear to agree that 25 — Mégret, Le droit de la CEE, Vol. 15, Brussels, 1987, p. 421; Article 222 of the Treaty essentially expresses Groeben, Thiesing, Ehlermann, Kommentar zum EWG- Vertrag, Baden-Baden, 1991, pp. 5577-5578; Smit and Her- the neutrality of the Treaty towards national zog, The Law of the European Economic Community, New-York, pp. 6-216.61; Grabitz, Kommentar zum EWG- 'systems' of property ownership, including Vertrag, München, section on Article 222. phenomena such as nationalization and 26 — Case 44/79 [1979] ECR 3727, paragraph 7 of the Opinion.

34. Spain contends that the Regulation, by 31. It may also be noted that the Regulation extending the duration of patent protection, in issue does not 'prejudice' the rules in also extends the compartmentalization of the Member States governing the system of internal market, and does not eliminate dis­ property ownership: it merely extends patent tortions of competition, because it will protection in the case of medicinal products remain possible to invoke Article 36 of the subject to a marketing authorization. More­ Treaty. Moreover, because the certificate can­ over it does so only to compensate for the not be dissociated from the basic patent, shorter period of effective protection which which is governed by national law, its appli­ results from the need for marketing authori­ cation will vary from Member State to Mem­ zation. ber State. One of those differences in appli­ cation, according to Spain, is the duration of the patent, which depends on the date on which the application for the basic patent was filed. It follows that the subject-matter of the protection afforded by the certificate, as well as its duration, may differ from Member State to Member State.

32. The Council argues that the issue of Community competence cannot be dissoci­ ated from the issue whether Article 100a is the proper legal basis for the adoption of the Regulation. That is entirely correct, and if 35. Spain refers also to a statement allegedly Spain had not argued that, as a matter of made by the Council's Legal Service, accord­ principle, the Community lacks competence ing to which the proper legal basis of the to adopt the contested Regulation, I would Regulation was Article 235 of the Treaty. only have considered the latter issue, to The Council asks the Court not to consider which I now turn. that argument, because it has not authorized

'... in the context of the organization of the powers of the Community the choiceof the legal basis for a measure may not depend simply on an institution's conviction as to the objective pursued but must be based on objective factors which are amenable to judi- 36. Spain adds that the Regulation does not cial review.' contribute to the achievement of the objec- tives set out in Article 8a (now 7a) of the Treaty, and that in reality it only aims at cor- recting insufficiencies in the protection of pharmaceutical research. Spain's conclusion Among those factors are the aim and content of the measure, 3 0but they do not include 27 — At the material time, Rules of Procedure adopted by the Council on 24 July 1979 (79/868/ECSC, EEC, Euratom), OJ 1979 L 268, p. 1, Article 18; see now Council Decision 93/662/EC of 6 December 1993 adopting the Council's Rules of Procedure, OJ 1993 L 304, p. 1, Arti- 29 — Case 45/86 Commission v Council [1987] ECR 1493, para- cle 5. graph 11 of the judgment. 28 — Compare Case 155/79 AM&S v Commission [1982] 30 — Case C-300/89, cited above in note 21, paragraph 10 of the ECR 1575, paragraphs 18 et seq. of the judgment. judgment.

I - 1998

SPAIN ν COUNCIL

considerations of national sovereignty. Such ing new rights superimposed on national considerations may determine the division of rights, as it did in the Regulation on the powers between the Community and its Community trade mark. 3 3 However, the Member States on the occasion of amending Regulation in issue in the present case does the Treaties; they cannot, however, affect the not create new Community rights superim­ choice of the legal basis for a specific Com­ posed on national rights; resort to Arti­ munity act. cle 235 was not therefore necessary.

31 — Case 45/86, cited above in note 29, paragraph 13 of the judgment. 32 — See note 19. 33 — Cited above, paragraph 24.

I-1999

OPINION OF MR JACOBS — CASE C-350/92

41. On the first point, the Council recalls In the Council's view, the effect of a supple­ that before it adopted the Regulation two mentary protection certificate on the condi­ Member States, France and Italy, had insti­ tions of competition is undeniable. Any dis­ tuted a supplementary protection certificate parities in the granting of such a certificate for medicinal products, and that in one are liable to distort competition in the inter­ Member State, namely Belgium, there was a nal market if one takes into account the well- proposal to that effect. It follows that the known effects of patent protection on com­ Regulation, by establishing uniform condi­ petition in the market of the products tions for the grant of such a certificate, concerned. The Council adds that since the including a uniform term of protection, certificate protects certain products, it in the approximates national legislation, whether end also favours the free movement of those extant or envisaged. products.

42. On the second point, the Council refers to the conditions of competition in the mar­ ket for pharmaceutical products. It mentions 43. O n the basis of those considerations the Case C-300/89 Commission ν Council, where Council argues that the Regulation clearly the Court stated: 3 4 contributes to achieving the objectives set out in Article 8a (now 7a) of the Treaty (the third point).

medicinal products; it does not even achieve 45. Such a state of affairs obviously contrib the full harmonization of the extended pro utes more to the free movement of products tection granted by the supplementary pro protected by a patent than the situation tection certificate, as the scope of that pro existing before the adoption of the Regu tection is determined by national patent law lation, where in some Member States there Full harmonization, and full free movement was extended protection and in others there of products protected by a patent, could was not. 36 Moreover, measures adopted on only be achieved by creating uniform patent the basis of Article 100a of the Treaty need law replacing the national patent systems, as not contribute directly to the free movement the Commission points out. At this stage of of products. In the above-cited Commission European integration, however, that is appar ν Council case, the Court ruled that a direc tive imposing obligations concerning the ently not possible. The Regulation nonethe treatment of waste from the titanium dioxide less achieves some degree of uniformity, to production process should have been the extent that it introduces uniform rules on adopted on the basis of Article 100a of the supplementary protection.

A 46. Finally, Spain submits that the real hypothetical example may clarify this. Sup objective of the Regulation is to improve the pose the application for patent protection competitive position of Community pharma was lodged in 1990 in Member State A, and ceutical companies on world markets. That in 1991 in Member State B, patent protection objective, which does appear to underlie the expiring respectively in 2010 and in 2011. Regulation, could be seen as an industrial The authorization to market the product is policy objective. I do not see, however, why first given in Member State C, in 1998. That that should not be permissible.

36 — EMI Electrola, cited ahove in note 35. 35 — Case 341/87 [1989] ECR 79, paragraph 10 of the judgment. 37 — Sec above, paragraph 42.

I - 2001

OPINION OF MR JACOBS — CASE C-350/92

on industry, according to which the action of ment of the objectives set out in para- the Community and of the Member States graph 1 through the policies and activities it shall also be aimed at 'fostering better pursues under other provisions of this Trea- exploitation of the industrial potential of ty'. I have no doubt that those consider- policies of innovation, research and techno- ations, now expressly stated, could also logical development' (Article 130(1)). In guide the Community's action before the Article 130(3) it is further stated that the entry into force of the Treaty on European Community 'shall contribute to the achieve- Union.

Conclusion

47. I conclude that the Spanish Government's application should be dismissed. Spain should accordingly be ordered to pay the costs of the Council, in accordance with Article 69(2) of the Rules of Procedure. However, under Article 69(4) of those Rules, the French Government, the Greek Government, and the Commission must, as interveners, bear their own costs.