C-258/99

OPINION OF MR JACOBS — CASE C-258/99

OPINION OF ADVOCATE GENERAL JACOBS delivered on 30 November 2000 1

1. After ruling on a number of occasions on impurities. The producer now seeks a the validity and interpretation of Council supplementary protection certificate (here- Regulation (EEC) No 1768/92 of 18 June inafter 'SPC') in respect of the second 1992 concerning the creation of a supple- version of the herbicide, but the competent mentary protection certificate for medicinal Netherlands authority considers that to be products, 2the Court of Justice is in this impossible on the basis that the currently case asked for the first time to interpret the valid marketing authorisation is not the provisions of Council Regulation (EC) first to have been granted in respect of the No 1610/96 of 23 July 1996 concerning product. the creation of a supplementary protection certificate for plant protection products (hereinafter 'the Regulation'). 3

3. The issue turns, therefore, on the inter- pretation of the meaning of the term 'product' in the relevant provisions of the Regulation.

2. The need for interpretation arises in a situation in which a producer has obtained, at a 20-year interval, marketing authorisa- tions in the Netherlands for two different versions of a herbicide which it manufac- tures. Both versions contain the same active ingredient but, as a result of an improved The relevant legal provisions manufacturing process for which the pro- ducer holds a specific patent, the second of the two contains a greater proportion of that ingredient and a lesser proportion of

'Any product protected by a patent in the territory of a Member State and subject, prior to being placed on the market as a plant protection product, to an adminis- trative authorisation procedure as laid d o w n in A r t i c l e 4 of D i r e c t i v e 5. The sale of plant protection products is 91/414/EEC, or pursuant to an equivalent subject to a requirement of marketing provision of national law if it is a plant authorisation. Directive 91/414 6 lays down protection product in respect of which the procedural rules for the grant of such application for authorisation was lodged authorisations. The procedure for obtain- before Directive 91/414/EEC was imple- ing marketing authorisation is strict. The mented by the Member State concerned, applicant is normally required to prepare may, under the terms and conditions pro- and carry out a number of tests and vided for in this Regulation, be the subject analyses, and it may therefore take a of a certificate.' number of years to complete the proce- dure. 7 As a result of that delay, the period in which a patent holder enjoys effective patent protection is shortened considerably, and the opportunity to recover the invest- 7. The Regulation provides an additional 4 — The European Patent Convention, done at Munich on period of protection which takes effect at 5 October 1973. 5 — See, for example, Article 63(1) of the European Patent Convention, cited in note 4. 6 — Council Directive 91/414/EEC of 15 July 1991 concerning 8 — According to figures cited in the Commission's explanatory the placing of plant protection products on the market, memorandum annexed to the proposal for the SPC regula- OJ 1991 L 230, p. 1. tion, the duration of effective patent protection had fallen 7 — The period which elapses between the submission of a from an average of 12 years in 1978 to just over 9 years in patent application and the grant of marketing authorisation 1992. See C0M(94) 579 final, paragraph 15. for a plant protection product is, on average, more than ten 9 — See Article 6 of the Regulation. years. See J.-C. Galloux, "Le certificat complémentaire de 10 — See the third and seventh recitals in the preamble to the protection pour les produits phytopharmaceutiques', La SPC regulation and the discussion below at paragraphs 46 Semaine Juridique, Edition entreprise, no 49 (1996), p. 499. to 56.

(a) the product is protected by a basic patent in force; 9. The legal effects of the SPC are set out in Article 5 of the Regulation. During the period covered by the SPC, the holder 11 — Explanatory memorandum annexed to the proposal for the enjoys the same rights and is subject to SPC regulation, COM(94) 579 final, paragraph 24. the same limitations and obligations as 12 — See the Opinion of Advocate General Fennelly in Case C-392/97 Farmitalia Carlo Erba v Patentamt, cited in note under the basic patent. Thus, although the 2, paragraph 21. SPC is described by the Commission as a 13 — On the equivalent procedural provisions of Regulation No 1768/92, see Case C-181/95 Biogen v Smithkline new and distinct form of intellectual prop- Beecham Biohgicals, cited in note 2.

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(b) a valid authorisation to place the (d) destroy undesirable plants; product on the market as a plant protection product has been granted in accordance with Article 4 of Direct- ive 91/414/EEC or an equivalent pro- vision of national law;

(c) the product has not already been the subject of a certificate; 2. "substances": chemical elements and their compounds, as they occur nat- urally or by manufacture, including any impurity inevitably resulting from the manufacturing process; (d) the authorisation referred to in (b) is the first authorisation to place the product on the market as a plant protection product.'

3. "active substances": substances or micro-organisms including viruses, having general or specific action:

of which at least one is an active 14. The applicant in the main proceedings, substance, intended for use as plant BASF AG, is the producer of a number of protection products; plant protection products. The present proceedings concern two herbicides in which the active substance is a chemical compound known as 'chloridazon'. 14

8. "product": the active substance as defined in point 3 or combination of active substances of a plant protection 15. Chloridazon is a compound which product; appears in different isomeric forms. That is, while all chloridazon consists of mole- cules with the same chemical formula, C 10 H 8 CIN 3 O, the physical structure of those molecules varies. There are two isomers in the chloridazon produced by 9. "basic patent": a patent which protects the applicant: 4-amino-5-chloro-1-phenyl- a product as defined in point 8 as such, pyridazon-6 ('isomer 1') and 5-amino-4- a preparation as defined in point 4, a chloro-1-phenyl-pyridazon-6 ('isomer 2'). process to obtain a product or an Those isomers have different chemical application of a product, and which is properties. While isomer 1 is an active designated by its holder for the purpose substance, isomer 2 has little or no effect as of the procedure for grant of a certifi- a plant protection product. Isomer 2 may cate; therefore be regarded as an impurity which occurs as an unavoidable result of the production of isomer 1.

...'

The facts and questions referred 16. The applicant has sold herbicides based on chloridazon in the Netherlands, and in other Member States, for several years, and

19. The defendant refused that application in a decision of 26 September 1997 on the grounds that the conditions set out in 17. The higher concentration of the active Article 3(1)(d) of the Regulation had not substance in Pyramin DF was the result of a been fulfilled. Its decision was based on the new process for the preparation of chlor- following reasoning. The phrase 'product' idazon which had been developed by the in Article 3(1) of the Regulation must, in applicant. On 23 June 1982, the applicant accordance with Article 1(2), 1(3) and 1(8), was granted a European patent (EP 0 026 be understood as a reference to the active 847) in respect of that process valid for 10 substance in the plant protection product. designated countries, including the Nether- Since the active substance in the plant lands. The applicant had previously, on protection products which were granted marketing authorisations on 19 January 1987 (Authorisation 9582 N) and on 15 — The applicant also explained in its written submissions and 27 February 1967 (Authorisation 3594 N) at the hearing that Pyramin DF contains other (inactive) is isomer 1 of chloridazon, the two plant impurities than isomer 2. That information is however not confirmed by the order for reference, and I will therefore protection products are identical 'products' proceed on the assumption that the chloridazon produced for the purposes of Article 3(1) of the by the applicant contains no other chemical compounds than isomer 1 and isomer 2 of chloridazon. Regulation. The fact that the authorisation

granted in 1987 related to a plant protec- different product whenever the ratio tion product with a different, and better, between active substance and impurities ratio of active substance and impurities is changes. Second, the applicant points out irrelevant in this regard. The authorisation that it was required, under Netherlands granted on 19 January 1987 cannot, there- law, to obtain a separate marketing author- fore, be considered to be the first marketing isation for the more concentrated chlorida- authorisation within the meaning of Art- zon (sold as Pyramin DF). That shows, of icle 3(1)(d). itself, that a new product is involved. Third, the applicant maintains that process patents would be inadequately protected, and the purpose of the Regulation under- mined, if SPCs could be granted only in respect of products which contained a different or new active substance. 20. The applicant appealed against that decision in a letter dated 7 November 1997. Having heard the applicant's oral submissions, the defendant rejected the applicant's objections by a decision of 19 February 1998. The applicant chal- lenged the latter decision in the Arrondis- sementsrechtbank 's-Gravenhage (District Court, The Hague), claiming that the defendant's refusal to grant it an SPC was 22. Having regard to the arguments of the based on an incorrect interpretation of the parties, the Arrondissementsrechtbank 's- Regulation. According to the applicant, the Gravenhage has sought a preliminary more concentrated chloridazon, which is ruling on the following questions: manufactured according to the procedure described in the patent from 1982 and sold under the name Pyramin DF, is a different 'product' from the less concentrated chlor- idazon previously produced and sold under the name Pyramin. The marketing author- isation which was granted in 1987 should therefore be considered to be the first marketing authorisation within the mean- ing of Article 3(1)(d) of the Regulation. 'La. In the light of the definitions laid down in Article 1.2, 1.3 and 1.8 of Regula- tion (EC) No 1610/96 ("the regula- tion"), must "product" within the meaning of Article 3 of the regulation be understood as meaning an active 21. The applicant advanced three main substance or the combination of active arguments in support of that claim. First, substances, as described in more detail the reference to 'product' in Article 3(1) in Article 1.3, as they occur naturally must be understood as a reference to the or by manufacture, including any active substance (or substances) and impur- impurity inevitably resulting from the ities taken as a whole. There is therefore a manufacturing process@

Analysis II. Are the conditions laid down in Art- icle 3(1 )(a) and (d) of the regulation satisfied if a plant protection product has been produced by means of a patented process, as a result of which 25. By its questions the referring court it contains a lower amount of unavoid- seeks to ascertain, essentially, whether two able impurities than an existing plant plant protection products, containing the protection product with the same same active substance and the same impur- active substance, a new authorisation ity, must be considered as different 'pro- has been obtained for that new plant ducts' for the purpose of Article 3(1) of the protection product, and the patent Regulation where the only difference covering the manufacturing process in between them is that one contains a higher question was designated as the basic percentage of the active substance than the patent within the meaning of Art- other because it is produced according to a icle 3(1), opening passage and subpara- new method described in a process patent graph (a)?' held by the producer.

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31. With these comments in mind, I will answer the referring court's questions by 29. Third, the definition of 'basic patent' in examining the definition of 'product' in Article 1(9) of the Regulation includes Article 1 of the Regulation, the purpose of the Regulation, and the relationship between the Regulation and the marketing 16 — Cited in note 2. See the 4th and 17th recitals in the preamble to the SPC regulation. authorisation regime. 17 — See, in particular, Case C-392/97 Farmitalia Carlo Erba v Patentamt, cited in note 2. 18 — See Article 4 of the Regulation, cited in paragraph 8. 19 — See similarly the Opinion of Advocate General Fennelly in 20 — See, for example, the description of 'cyhalothrm' and Case C-392/97 Farmitalia Carlo Eba v Patentamt, para- 'lambda-cyhalothrin' in C. Tomlin et al., Pesticide Man- graph 23. ual, cited in note 14, pp. 252 to 255.

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The definition of 'product' in Article 1 of 'chemical elements and their compounds, the Regulation as they occur naturally or by manufacture, including any impurity inevitably resulting from the manufacturing process'.

32. Article 1(8) of the Regulation defines the 'product' as

33. BASF AG argues that the definition of 'substances' in Article 1(2) should be read 'the active substance as defined in point 3 into the definition of 'active substances' in or combination of active substances of a Article 1(3) and thus into the definition of plant protection product'. 'product' in Article 1(8). In so far as Article 1(2) defines substances as chemical compounds including impurities resulting from the manufacturing process, the 'pro- duct' must be understood as the active substance and impurity in the plant protec- In Article 1(3), 'active substances' are tion product taken as a whole. Two plant defined as protection products containing different levels of the same impurity are, therefore, different products for the purposes of the Regulation.

interpreted so as to mean the same thing in 39. Article 1(4) of the Regulation defines Article 1(2) and 1(3). The Community 'preparations' as 'mixtures or solutions legislature cannot have intended to confer composed of two or more substances, of a different meaning on the same term in which at least one is an active substance'. different parts of the same article of the That wording indicates that a distinction Regulation. must be drawn between impurities and non-active substances (which may them- selves contain impurities). While impurities occur inevitably as a result of the produc- tion of an active substance, non-active substances are substances which are added by the producer in order to dilute or otherwise prepare the active substance for 36. I consider, therefore, that the 'product' sale to the final consumer. The meaning of is to be understood as the active substance the phrase 'active substances' must be including any impurity inevitably resulting interpreted in the light of that distinction. from the manufacturing process. It follows that while the word 'active' in Article 1(3) and 1(8) excludes non-active substances from the notion of 'product', it does not exclude impurities.

components including any impurity inevi- which the application is lodged is taken tably resulting from the manufacturing into account for the purposes of the process. In my view, the word 'including' Regulation . . . ' .22It follows that 'if the same is not decisive. It is more natural to stress active substance is used in different forms the word 'any', in which case Article 1(2) (powder, liquid, etc.), only one certificate would seem to mean that substances are can be issued... The certificate protects the chemical compounds, including any impur- active substance which is contained in the ity, whatever that impurity might be. That different forms or presentations of the argument applies to all the language ver- product ...' 23 and that 'although one and sions of the Regulation. For example, in the the same substance may be the subject of French version of the Regulation sub- several patents and several authorisa- stances include 'toute impureté résultant tions ..., the supplementary protection inévitablement du procédé de fabrication'; certificate will be granted for that sub- in the German version substances include stance only on the basis of a single patent 'einschliesslich jeglicher bei der Herstellung and a single authorisation ..., namely the nicht zu vermiedenden Verunreinigung'. first granted in the State concerned'. 24 Thus, while it is true that 'substances' include impurities resulting from the pro- duction process, it does not follow from that premiss that two substances containing different levels of impurity constitute dif- ferent substances under Article 1(2).

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wider sense, but in the narrower sense of 47. A producer will normally be required, product used in patent law which, when under Directive 91/414 or under provisions applied to the chemical and pharmaceutical of national law, to apply for a new market- field, means the active ingredient'. 27 That ing authorisation where the concentration statement is relevant for the present case of active substance in a plant protection because the Regulation and Regulation product changes due to a new patented No 1768/92 contain virtually identical pro- production process. The authorisation pro- visions which should be given a similar cedure limits the effective period of enjoy- interpretation. 28 ment of the process patent in the same way as it limits that period for product patents. In contrast to product patents, however, process patents typically concern processes for the preparation of known active sub- stances which have already been authorised for marketing as plant protection products. It follows that if the 'product' is defined as 45. I consider for those reasons that, on the the active substance including impur- interpretation of the term 'product', the ities — the level of impurities being imma- Commission's interpretation of the Regula- terial — holders of existing process tion is correct. The product is the active patents will very rarely be able to benefit substance including any impurity inevitably from the SPC system because the first resulting from the manufacturing process. marketing authorisation requirement in Two plant protection products containing Article 3(1)(d) of the Regulation will not the same active substance in different be fulfilled. That outcome is, according to concentrations are however identical pro- BASF AG and the German Government, ducts for the purposes of the Regulation. contrary to the wording of Article 1(9) of the Regulation and to the purpose of the Regulation.

process patent holders may therefore ben- (4) Whereas the competitiveness of the efit from the SPC regime. However, in plant protection sector, by the very order to benefit from that regime, the nature of the industry, requires a level substantive conditions laid down in Art- of protection for innovation which is icle 3 of the Regulation must be fulfilled. equivalent to that granted to medicinal The fact that those conditions — com- products by Council Regulation (EEC) bined with the definition of 'product' in No 1768/92 of 18 June 1992 concern- Article 1(8) ·— may in practice exclude ing the creation of a supplementary many process patents from the SPC regime protection certificate for medicinal pro- is not contrary to the wording of Art- ducts; icle 1(9). For, as the Commission points out, process patent holders may still be granted SPCs in cases where the relevant active substance has not been the subject of a previous marketing authorisation. That might happen in a situation in which the proprietor of a product patent decided not to go through the costly process of applying (5) Whereas, at the moment, the period for a marketing authorisation because the that elapses between the filing of an relevant product could not be produced application for a patent for a new plant and sold with a profit on the basis of the protection product and authorisation production process known at the time. to place the said plant protection product on the market makes the period of effective protection under the patent insufficient to cover the investment put into the research and to generate the resources needed to maintain a high level of research;

North American and Japanese counter- chances of recovering what has been spent parts.' on research and development, it may also inhibit the free movement of goods and increase the price of plant protection pro- ducts to the detriment of the farmers who use those products and the consumers of agricultural products. 30 The rules concern- ing the scope, the duration, and the sub- 51. Those recitals must be read in conjunc- stantive conditions for grant of SPCs repre- tion with the 12th recital which acknow- sent a delicate balance between those ledges that 'all the interests in a sector as conflicting interests. complex and sensitive as plant protection must be taken into account' and the Commission's explanatory memorandum which states that the Regulation 'aims to strike a fair balance between what is needed to achieve the [its] objectives and what can reasonably be accepted by society'. 29 54. One of the key elements of that balance is the rule in Article 13(2) which limits the duration of SPCs to five years, and the first authorisation rule in Article 3(1 )(d) which aims to prevent attempts at bypassing that five-year limitation. 31 The effectiveness of the five-year rule would, as the Commis- 52. It is clear from all of those statements sion and the United Kingdom Government that while the main purpose of the Regula- emphasise, be undermined if the same tion is to extend patent protection in the active substance could — in different field of plant protection products and to forms, presentations, or concentrations — prevent distortions of competition resulting be the subject of more than one SPC. 32 from disparate national patent laws, that purpose must be balanced against a number of competing political, social, and eco- nomic interests.

56. That view is furthermore supported by The relationship between the Regulation the fact that the Commission calculated, in and the marketing authorisation rules its explanatory memorandum, how many products would qualify for an SPC. 33 It found that 37 products on the European market satisfied the relevant conditions. That number would presumably have been 58. In its question I.c, the referring court higher if the Commission had taken the asks in substance whether the fact that a view that the Regulation applied to a new marketing authorisation must under product which, owing to a new production Netherlands law be obtained for a plant process, contains a higher concentration of protection product which is, owing to a an active substance which has previously new production process, more concen- been granted marketing authorisation as a trated than an existing product has any plant protection product. It appears that bearing on the interpretation of the term the number of valid process patents relating 'product' in the Regulation. to existing plant protection products is considerable, and that most patented pro- cesses result in changes in the level and nature of impurities.

59. The answer to that question follows from what has been said above. The fact that a more concentrated version of a plant protection product requires marketing authorisation does not, in itself, mean that there is a new 'product' within the context 57. Accordingly I conclude, having regard of the Regulation. It may be added that the to the wording and purpose of the Regula- conditions for grant of SPCs cannot depend tion, first, that the 'product' within the on requirements of national law. That meaning of Articles 1 and 3 must be would jeopardise the uniform interpreta- understood as the active substance includ- tion of the Regulation and thus be contrary ing any impurity inevitably resulting from to the objective — set out in the ninth recital in the preamble to the Regulation — of creating 'a uniform solution at Commun- 33 — COM(94) 579 final, paragraphs 46 and 51 to 54. ity level'.

I.e. The issue of whether a new authorisation must be obtained for a new plant protection product has no bearing on the answer to Question Lb.

II. The conditions laid down in Article 3(1)(a) and (d) of the regulation are not satisfied if a plant protection product has been produced by means of a I - 3662

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patented process as a result of which it contains a smaller proportion of unavoidable impurities than an existing plant protection product with the same active substance, a new authorisation has been obtained for that new plant protection product, and the patent covering the manufacturing process in question was designated as the basic patent within the meaning of Article 3(1)(a).

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