CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 4 octobre 1990

.sDD6737AE { font-size:11pt } .s211D6B00 { margin-top:0pt; margin-bottom:0pt; line-height:normal; widows:0; orphans:0; font-size:8.5pt } .sBB9EE52A { font-family:Arial }    AS TO THE ADMISSIBILITY OF   Application No. 12633/87 by SMITH KLINE and FRENCH LABORATORIES LTD against the Netherlands           The European Commission of Human Rights sitting in private on 4 October 1990, the following members being present:                   MM.   C.A. NØRGAARD, President                      F. ERMACORA                      G. SPERDUTI                      E. BUSUTTIL                      G. JÖRUNDSSON                      A. WEITZEL                      H.G. SCHERMERS                      H. DANELIUS                 Mrs.   G.H. THUNE                 Sir   Basil HALL                 Mrs.   J. LIDDY                 MM.   L. LOUCAIDES                      J.C. GEUS                      A.V. ALMEIDA RIBEIRO                      M.P. PELLONPÄÄ                   Mr.   H.C. KRÜGER, Secretary to the Commission             Having regard to Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms;           Having regard to the application introduced on 12 December 1986 by SMITH KLINE and FRENCH LABORATORIES LTD against the Netherlands and registered on 16 December 1986 under file No. 12633/87;           Having regard to:       -    reports provided for in Rule 47 of the Rules of Procedure of the Commission;       -    the observations submitted by the respondent Government on 17 March 1988 and 25 August 1989 and the observations in reply submitted by the applicant on 17 May 1988 and 10 October 1989;       -    the submissions made by the parties at the hearing on 4 October 1990;           Having deliberated;           Decides as follows:   THE FACTS           The facts of the case as they have been submitted by the parties may be summarised as follows:   The particular circumstances of the case           The applicant is a company registered in the United Kingdom with its registered office in Welwyn Garden City, England.   In the proceedings before the Commission it is represented by Mr.   A. Pickford, a barrister employed by the applicant in London.           The applicant is the owner of Netherlands Patent No. 162073 which relates to cimetidine.   This patent relates to the discovery by the applicant of an entirely new class of drugs known as H2 antagonists which are of particular value in treating gastric and duodenal ulcers.   Cimetidine was the first such drug to be commercialised.           The applicant's patent has three claims, respectively claiming a process (and all analogous processes), the substance, and solid compositions (e.g. tablets) containing the substance, all of which relate to cimetidine.           By Dutch Patent No. 171054, a Dutch company, Centrafarm BV, obtained a patent on a process for making a group of compounds, including cimetidine.   The applicant submits that this process uses a known carcinogene, which is also mutagenic, as an intermediate and for this reason cannot be used cheaply and its safe use presents serious problems as it has to be certain that the final product does not contain a residue of the carcinogene.   As a result, this process is not used by any commercial manufacturer of cimetidine.   Patent No. 171054 has a later priority date than Patent No. 162073 (the applicant's patent), and cannot be worked without a licence under Patent No. 162073.   The applicant was unwilling to grant such a licence.           On 29 November 1983 Centrafarm BV petitioned for the grant of a compulsory licence under the applicant's patent pursuant to section 34 (4) of the Patent Act (Rijksoctrooiwet) 1910, as amended by the Act of 13 December 1978 (hereafter "the Patent Act").   This petition was considered by a Special Division of the Patent Office (Octrooiraad) set up by the Central Division and comprising one legally qualified member and two other members expert in the chemical field.   These members had not been involved in the procedure relating to the issue of either the applicant's or Centrafarm's patent.           The applicant sought in separate proceedings before the District Court (Arrondissementsrechtbank) of the Hague to have the Centrafarm BV Patent No. 171054 declared a nullity under section 51 of the Patent Act.   The District Court sought the technical advice of the Patent Office, which sets up a Special Division which fulfils the obligation under section 57 of the Patent Act to provide the court with any necessary information and technical advice.   The Special Division consisted of the same members as those appointed to consider Centrafarm's application for a licence.           On 11 September 1984 the Special Division of the Patent Office allowed the petition by Centrafarm BV and granted the latter a compulsory licence based upon its patent number 171054 in respect of the applicant's patent subject to the condition that annulment by the District Court would entail the lapse of the licence.   The terms of the compulsory licence gave the licensee rights over the applicant's invention of a new chemical substance and of its use in medicinal dosage forms as well as over the applicant's process.   The Special Division of the Patent Office in its opinion to the court expressed a view partially supporting the validity of Centrafarm's patent.   On 18 April 1986, the District Court granted part of the application for nullity but upheld part of the patent.   The applicant appealed to the Hague Appeal Court (Gerechtshof).           The applicant appealed against the grant of the compulsory licence.   The Central Division set up an Appeal Division to consider the appeal, which comprised two legally-qualified ordinary members, two ordinary members with expertise in the chemical field, the legally-qualified extraordinary member (the former President of the European Patent Office and former President of the Patent Office). None of these members had been involved in any of the earlier procedures relating to the patents of the applicant and Centrafarm. By a decision of 8 September 1986, the Appeal Division of the Patent Office rejected the applicant's appeal and affirmed the decision of the Special Division of the Patent Office in respect of the compulsory licence application.   As a result of the grant of this compulsory licence, the applicant lost the exclusive right to its patent.           The applicant's appeal to the Hague Court of Appeal was never decided, since to avoid the threat of the compulsory licence, the applicant accepted Centrafarm's offer to pay 50.000 Dutch Guilders for the surrender of Centrafarm's patent.   Relevant domestic law and practice           The grant and enforcement of patents in the Netherlands is governed by the Patents Act 1910, as amended by the Act of 13 December 1978 (hereafter "the Patent Act").   A patent is granted for a new product or process if the invention was not an obvious development given the current state of the art and is capable of industrial application.           A patent is deemed, subject to the provisions of the Patents Act, to be personal property, assignable and otherwise transferable in full or joint ownership (section 37).           Subject to the provisions of the Act, a patent confers on its proprietor the sole right, inter alia, to make, use, put on the market, hire out or deliver the patented product or, when applicable, to apply the patented process in aid for his business or to make, use, put on the market, resell, hire out or to deliver the product obtained directly from the application of the patented process (section 30). The proprietor of a patent may enforce his patent vis-à-vis any person who, without being entitled to do so, performs any of the acts referred to in section 30 (section 43).           By section 33, the right to perform acts prohibited to any other person other than the proprietor of the patent may be acquired from the proprietor by means of a licence.           By section 34(4), the proprietor of a patent shall be obliged to grant a licence required for the working of another patent granted in respect of an application which has the same or a later filing date.   Such licence should not extend beyond that which is necessary for the working of the patented invention of the licensee.   The licensee is obliged to grant a reciprocal licence under his patent to the proprietor of the dominant patent.   The licence shall be granted at the request of the party concerned by the Patent Office if the Patent Office determines that the obligation to grant it has not been met (section 34(5)).           Pursuant to section 34(9), the Patent Office may be requested by the parties to fix the amount of remuneration payable.   In the absence of such request and the agreement of the parties as to the appropriate sum, the Court may be called upon to fix the amount.           The Patent Office is empowered by the Patent Act to grant patents (section 13).   It consists of a Central Division, Examining Divisions, Appeal Divisions and Special Divisions (section 14).   Its organisation and procedure are regulated by Order in Council (section 15).           Pursuant to the Patent Rules of 1921 (as amended by Order in Council of 6 January 1979), the Patent Office consists of a maximum of 90 ordinary and deputy members divided into legally qualified and technically qualified members and of at least 12 extraordinary members appointed for five year periods.   There are no rules governing the dismissal of extraordinary members before completion of their five year period in office, except for the internal departmental guideline pursuant to which the Patent Office does not recommend the appointment or reappointment of persons over 67, and the Central Division of the Patent Office does not nominate persons of 69 or over as extraordinary members of Divisions.   Members are appointed by the Crown.   The ordinary and deputy members are appointed from among the technical and legal staff of the Patent Office.   Their appointments remain valid until retirement.   The extraordinary members are appointed for a five year period, which may be extended for five years at a time.   They are recruited on the basis of expertise in a particular field and, in general, are university professors in one of the technical or applied sciences.   No members may take part in proceedings in which they have a direct or indirect interest or in which they are in any way involved (section 3 of the Patent Rules). On taking up their duties, members are required to take a pledge of diligence, confidentiality and impartiality.           The Central Division of the Patent Office is responsible for the formation of the Divisions (Examining Divisions, Special Divisions and Appeal Divisions).   The Central Division comprises five members (and five deputy members).   The President of the Patent Office is an ex officio member of the Central Division.   The other members and deputy members are appointed by the Minister for Economic Affairs from among the ordinary members of the Patent Office, on the basis of a wide-ranging knowledge of the various specialist fields.           Appeal lies from the decision of an Examining Division to an Appeal Division.   Members involved in the examination of an application or in any of the proceedings of an Examining Division, which decides on whether a patent should be granted, are not allowed to take part in proceedings before the Appeal Division (section 24). Section 24 A lays down the formal requirements for the appeals procedure:   the parties must be given a hearing, a written reasoned decision must be produced, and the members of the Appeal Division must not have been previously involved in the case.           Pursuant to section 6 subsection 1 of the Patent Rules and section 8 of the Patent Rules, the Central Division sets up an Appeal Division drawn from the ordinary or extraordinary members of the Patent Office.   The Appeal Division normally has three members, though the number may be extended to five if this is justified by the nature of the issue.           In cases where the Patent Office is called upon to examine an application for a compulsory, the Central Division sets up a Special Division with members drawn from the ordinary, extraordinary or deputy members of the Patent Office, pursuant to section 6 subsection 2 of the Patent Rules.   They are nominated on the basis of their expertise in the relevant field.   Section 9 subsection 2 of the Patent Rules states that the Special Division shall always comprise two technically qualified members and one legally qualified member, or, if the case mainly involves a point of law, two legally qualified members and one technically qualified member.   The application is sent to the person under whose patent the licence is being requested.   This person is obliged to observe a deadline in producing a written reply to the application.           The Division does not arrive at a decision until the parties have been heard, or at any rate summoned in the proper manner.   The parties' pleadings are followed by a discussion of the issues with members of the Division, who then retire to confer in chambers.   The decision, which is given in writing, sets out reasons.   These procedural requirements are laid down in section 34 subsections 6 and 7 of the Patents Act.           Patent legislation does not provide for the proceedings before the Patent Office to be open to the public.   At no time has the public been admitted.   The argument advanced in defence of this established practice is that arguments based upon confidential company matters and expertise which must not be made public are often used to convince the Division of a particular point of view.   It is for the same reason that the reports of the sessions held by the Divisions of the Patent Office are not placed among the documents which are open to inspection.           A patent shall be annulled if it should not have been granted under the provisions of the Patent Act or if it is in contravention of any other patent granted to a person entitled thereto under the Act (section 51).   The District Court of the Hague has exclusive jurisdiction with regard to all actions for annulment or invalidation of a patent as well as actions in respect of the fixing of remuneration (section 54).           Pursuant to section 57, the Patent Office shall be required to provide the court with all the information and technical advice the court may require to reach a decision.   A Special Division is formed for this purpose.   It is provided that this advice shall have the same effect as advice given by experts as referred to in sections 222-236 of the Netherlands Code of Civil Procedure.           Appeal lies from the District Court to the Hague Court of Appeal.   COMPLAINTS   1.       The applicant alleges a breach of Article 6 of the Convention. It submits that its right to Patent No. 162073 is a civil right and that the decisions by the Special Division and Appeal Division on the dispute between the applicant and Centrafarm constituted a determination of the applicant's rights.   However the applicant complains that the Patent Office does not constitute an independent tribunal within the meaning of Article 6 para. 1 of the Convention and its decision to uphold the compulsory licence is not subject to review by any court or other judicial body.   2.       The applicant also complains that the grant of the compulsory licence interfered with the applicant's peaceful enjoyment of its patent and deprived it of the exclusive right to the use of the patented invention contrary to Article 1 of Protocol No. 1.   The applicant complains that the licence was not in the public interest and that the relevant law does not require the public interest to be taken into account.   The applicant further submits that even if the licence could have properly been granted, it should have been restricted to the scope required by the process and not extended to medical use or to the manufacture and sale of the substance and compositions containing the substance.   3.       The applicant also invokes Article 13 of the Convention, in that the decision of the Patent Office is not subject to review or appeal by any judicial body or court.   The applicant submits that provisions for royalties from the compulsory licencee are inadequate compensation for deprivation of the sole right to exploit their product and the substantial investment and research put into the development of the product.   PROCEEDINGS BEFORE THE COMMISSION           The application was introduced on 12 December 1986 and registered on 16 December 1986.   On 12 December 1987, the Commission decided to invite the respondent Government to submit observations on the admissibility and merits of the application.   The Government submitted their observations on 17 March 1988 and the applicant submitted its observations in reply on 17 May 1988.           The Commission considered the application further on 10 July 1989 and decided to invite the parties to submit further observations on the admissibility and merits of the complaints made under Article 6 of the Convention.   The Government submitted their further observations on 25 August 1989 and the applicant submitted its observations on 10 October 1989.           The Commission resumed its examination of the admissibility of the application on 5 March 1990 and decided to invite the parties to make further submissions on the admissibility and merits of the application orally at a hearing.           At the hearing, which was held on 4 October 1990, the parties were represented as follows:           For the Government           Mr.   K. de Vey Mestdagh,          Agent, Ministry of Foreign                                         Affairs         Mr.   I.W. van der Eyk,            Ministry of Economic Affairs         Mrs.   M.W.J. Bechger,             Ministry of Justice           For the applicant           Mr.   A. Pickford,                 barrister         Mr.   D.H. de Witte,               lawyer.   THE LAW           The applicant alleges a breach of Article 6 para. 1 (Art. 6-1) of the Convention in relation to the grant by the Patent Office of a compulsory licence in respect of one of its patents.   The applicant also complains that the grant of the compulsory licence interfered with its peaceful enjoyment of its patent contrary to Article 1 of Protocol No. 1 (P1-1) and that it had no remedy for its complaints contrary to Article 13 (Art. 13) of the Convention.   Article 26 (Art. 26) of the Convention           The respondent Government contend that the applicant has not exhausted domestic remedies in respect of its complaints since it has not pursued its appeal before the Hague Appeal Court in its action challenging the validity of Centrafarm's patent.   The applicant submits that these proceedings did not allow it to challenge the grant of the licence itself.           The Commission recalls that Article 26 (Art. 26) of the Convention only requires the exhaustion of such remedies which relate to the breaches of the Convention alleged and at the same time can provide effective and sufficient redress.   An applicant does not need to exercise remedies which, although theoretically of a nature to constitute a remedy, do not in reality offer any chance of redressing the alleged breach (cf. No. 9248/81, Dec. 10.10.83, D.R. 34 p. 78).           It is furthermore established that the burden of proving the existence of the available and sufficient domestic remedies lies upon the State invoking the rule (cf. Eur. Court H.R., Deweer judgment of 27 February 1980, Series A No. 35 p. 15, para. 26, No. 9013/80, Dec. 11.12.82, D.R. 30 p. 96, p. 102).           The Commission notes that the invalidating of Centrafarm's patent in the court proceedings would also have the effect of extinguishing the compulsory licence.   The grant of a compulsory licence however under the Patent Act involved an assessment of whether the licence was necessary for the operation of Centrafarm's patent. The applicant also complains that even if the licence was properly granted, the terms of the licence exceed what is necessary.   These matters cannot be brought before the courts in the proceedings challenging the validity of Centrafarm's patent.   The Government have not satisfied the Commission that any other effective remedies exist before the courts.           In these circumstances, the Commission finds that the application cannot be declared inadmissible for non-exhaustion of domestic remedies.   Article 6 (Art. 6) of the Convention           The applicant complains of being deprived of the exclusive right to exploit its patented drug as a result of the grant of a compulsory licence to Centrafarm.   The applicant complains that the Patent Office in effect determined its civil rights in respect of its patent but did not constitute an independent or impartial tribunal within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention, which provides, inter alia:           "In the determination of his civil rights and         obligations or of any criminal charge against him,         everyone is entitled to a fair and public hearing         within a reasonable time by an independent and         impartial tribunal established by law."           The Government submit that the right to a licence is automatically conferred by the Patent Act itself and the procedure by which the Patent Office grants a licence does not determine any civil rights within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention. They also submit that in any case the Patent Office is an independent and impartial tribunal within the meaning of that provision.           The Commission has made a preliminary examination of the parties' observations on the merits of these complaints.   It considers that they raise questions of fact and law which are of such complexity that their determination should depend upon an examination of the merits.   It follows that this part of the application cannot be declared manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention, but must be declared admissible, no other ground for declaring it inadmissible having been established.   Article 1 of Protocol No. 1 (P1-1) to the Convention           The applicant also complains that the grant of a compulsory licence to Centrafarm has interfered with its rights under Article 1 of Protocol No. 1 (P1-1) to the Convention, which provides:           "Every natural or legal person is entitled to the peaceful         enjoyment of his possessions.   No one shall be deprived of         his possessions except in the public interest and subject         to the conditions provided for by law and by the general         principles of international law.           The preceding provisions shall not, however, in any way         impair the right of a State to enforce such laws as it         deems necessary to control the use of property in         accordance with the general interest or to secure the         payment of taxes or other contributions or penalties."         The Commission notes that under Dutch law the holder of a patent is referred to as the proprietor of a patent and that patents are deemed, subject to the provisions of the Patents Act, to be personal property which is transferable and assignable.   The Commission finds that a patent accordingly falls within the scope of the term "possessions" in Article 1 of Protocol No. 1 (P1-1).           The Commission has therefore examined whether there has been any interference with the applicant's rights under Article 1 of Protocol No. 1 (P1-1).           The Government submit that patents are granted subject to the provisions of the Patent Act which expressly limits the scope of the patent owners' rights by providing for the grant of compulsory licences to dependent patent-holders.   The grant of such a licence can therefore not constitute an interference within the meaning of the above provision.   The Commission however recalls that a patent initially confers on its owner the sole right of exploitation.   The subsequent grant of rights to others under that patent is not an inevitable or automatic consequence.   The Commission finds therefore that the decisions of the Patent Office, conferring on Centrafarm a right of compulsory licence in respect of the applicant's patent, constituted a control of the use of property.   The Commission must therefore consider whether this control is lawful, in accordance with the general interest and pursues a legitimate aim in a proportionate manner (Eur. Court H.R., Tre Traktörer AB judgment of 7 July 1989, Series A no. 159, pp. 22-24, paras. 56-63).           The Commission recalls that the exclusive rights of a patentee are limited in many of the Contracting States and that provision for other persons to make use of a particular patented product or process is commonly made for the purpose of preventing the long term hampering of technological progress and economic activity.   The Commission notes that Centrafarm was granted a compulsory licence under the applicant's patent since, otherwise, it could not work under another patent which it held.   Pursuant to the Patent Act, the dependent patent would only have been granted if it was considered to introduce a new product or process that was not an obvious development given the current state of the art and was capable of industrial application.   The Commission is satisfied that the grant of the compulsory licence was lawful and pursued a legitimate aim of encouraging technological and economic development.           As regards proportionality, the Commission notes that the provision only comes into effect where such licence is necessary for the working of a patent of the same or later date and the licence should be limited to what is required for the working of the patent. Further, the owner of the dominant patent is entitled to royalties in respect of each compulsory licence granted under the legislation and receives reciprocal rights under the dependent patent.   While the Commission recalls that the Patent Office is not required to investigate in each particular case whether the grant of the compulsory licence is necessary in the general interest, the Commission finds that the framework imposed by the legislation is intended to prevent abuse of monopoly situations and encourage development and that this method of pursuing that aim falls within the margin of appreciation accorded to the Contracting State.   The Commission accordingly finds that the control of use in the circumstances of this case did not fail to strike a fair balance between the interests of the applicant company and the general interest and is in accordance with the requirements of Article 1 of Protocol No. 1 (P1-1) to the Convention.           It follows that this part of the application is manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.   Article 13 (Art. 13) of the Convention           The applicant complains of not having an effective remedy in respect of its complaints contrary to Article 13 (Art. 13) of the Convention, which provides:           "Everyone whose rights and freedoms as set forth in         this Convention are violated shall have an effective         remedy before a national authority notwithstanding that         the violation has been committed by persons acting in         an official capacity."           The complaint under Article 13 (Art. 13) of the Convention is closely linked to the complaint under Article 6 (Art. 6) of the Convention.   It should therefore also be declared admissible.           For these reasons, the Commission           by a majority, DECLARES THE APPLICATION ADMISSIBLE,         with regard to the applicant's complaints under Article 6         para. 1 and Article 13 (Art. 6-1, 13) of the Convention,         without prejudging the merits;           unanimously,         DECLARES THE REMAINDER OF THE APPLICATION INADMISSIBLE.       Secretary to the Commission          President of the Commission               (H.C. KRÜGER)                        (C.A. NØRGAARD)