Why chasing grandma to combat counterfeit is wrong

On April 19 and 20 Seoul, Korea hosted the International Conference on Customs Protection and Enforcement of IP. As the title suggests the main theme was the increasing number of counterfeited goods in the world market and the efforts of right holders and customs to combat these knock offs. On the menu were lots of presentations lamenting about an enhanced counterfeit industry, China and India being the great sources of counterfeit and Louis Vuitton bragging about their success in making new laws in Italy fining tourists coming back home with a counterfeit Vuitton bag. However, as is often the case with IP conferences on counterfeits, new ideas or innovative ideas were scarce, I would say absent). Mainly songs being sung for years, that counterfeit is on the rise, that customs needs to get even more officers to combat the increase in counterfeited products. No one denies that counterfeit is a serious problem. However, water flows to the lowest point: right owners seem to think that aiming the end-user of the counterfeited products is part of the solution. Fine the user or buyer of counterfeited goods. This tendency of right owners to take the easiest way – aim at the end of the production line, the consumer – is a dangerous one. Not only is it unfair to attack the old lady buying a Gucci bag on a popular market in Florence and fine here for 5,000 euro –a practice that is said to take place in France and Italy, initiated by the LVMH’s of this world - it further undermines the public’s trust in the working of intellectual property. IP is already under serious attack (pharmaceutical industry by failing to making expensive medicines available to countries in need using their IP to block such attempts, music industry associations serving thousands of court complaints writs against young downloaders of online music, anti IP feelings against rules protecting software solutions, you name it. In a time when many feel that IP is stifling innovation rather than promoting it, it’s a dangerous policy to go after the users of counterfeited goods. Why not concentrating on the transport sector, shipping companies that ship the counterfeited goods. That’s is more likely to give great success. Manufacturers in China may be difficult to trace and once traced, they disappear equally easy as they have been found. So one end of the production line, the manufacturers, is difficult, the other end –the consumer, is dangerous. So how to combat counterfeit? By setting up a compliance program together with the shipping industry. Taking the low margins for container handlers, a container with counterfeited goods that is being held in Rotterdam harbor upon entering the EU, is a headache and a financial burden for the shipping company. So they would be more than willing to think how to cooperate with right owners to fight where it is most effective: at the point of transport: e.g. Chinese harbors, points where goods are being shipped to the rest of the world. If right owners provide for the shipping companies means to easy detect and remove counterfeited products –and such techniques are widely available – combating counterfeit will become more successful and consumers do not need to be bothered.

ECJ SPC Judgement in Re: MIT

Last Friday, May 5, 2006, the ECJ gave its judgement in Massachusetts Institute of Technology (C-431/04) concerning SPC (supplementary protection certificates) and the meaning of "combination of active ingredients" in article 1(b) of EU Regulation 1768/92.

The ECJ did not follow the Opinion of Advocate-General Léger of on 24 November 2005.

The Issue
The drug in question had two elements: an active ingredient, carmustine, and a polymeric, biodegradable excipient, polifeprosan. The national (German) courts held that no SPC could be granted for carmustine on its own since that active ingredient was already covered by a marketing authorisation and had been for a long time.

MIT had also requested that an SPC be granted for carmustine in combination with polifeprosan, arguing that the drug used the excipient as a necessary form of administration of the active ingredient in order to avoid toxic effect. Effectively, did use of this excipient together with the active ingredient amount to a combination of active ingredients? This was the issue referred to the ECJ by the German courts.

The Judgment
In a concise, 32 paragraph, judgment, the ECJ ruled that:

“Article 1(b) of Regulation 1768/92 must be interpreted so as not to include in the concept of “combination of active ingredients of a medicinal product” a combination of two substances, only one of which has therapeutic effects of its own for a specific indication, the other rendering possible a pharmaceutical form of the medicinal product which is necessary for the therapeutic efficacy of the first substance for that indication.”

This goes against A-G Léger's Opinion who advised that:

“The concept of “combination of active ingredients of a medicinal product” within the meaning of Article 1(b) of Regulation 1768/92 must be interpreted as meaning that it does not preclude the grant of a supplementary protection certificate to a combination of two substances, one of which is a known substance with pharmacological properties of its own for a specific therapeutic indication and the other is necessary for the therapeutic efficacy of the first substance, for this indication.”

The Questions Referred
The questions referred by the German Bundesgerichtshof were:

1. Does the concept of “combination of active ingredients of a medicinal product” within the meaning of Article 1(b) of Regulation [No 1768/92] mean that the components of the combination must all be active ingredients with a therapeutic effect?

2. Is there a “combination of active ingredients of a medicinal product” also where a combination of substances comprises two components of which one component is a known substance with a therapeutic effect for a specific indication and the other component renders possible a pharmaceutical form of the medicinal product that brings about a changed efficacy of the medicinal product for this indication (in vivo implantation with controlled release of the active ingredient to avoid toxic effects)?