Their Lordships took time for consideration.
JUDGMENT
9 February.
Lord Bridge of Harwich.
My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Templeman. I agree with it and, for the reasons he gives, I would dismiss the appeal.
Lord Templeman.
My Lords, on 9 March 1972, the appellants, Smith Kline & French Laboratories Ltd., filed a complete specification for the grant, subsequently made, of a United Kingdom patent for the compound known as cimetidine, a medicinal product. That patent and allied patents conferred on the appellants an effective monopoly of the production, sale and importation of cimetidine for the period of 16 years expiring on 9 March 1988. Cimetidine is a most valuable drug which heals duodenal and gastric ulcers and treats and cures several other gastro-intestinal tract disorders. Cimetidine was first marketed by the appellants in the United Kingdom in November 1976 under the trade mark and brand name of Tagamet. The four year delay between the filing of the patent specification and the first marketing of Tagamet was largely due to the research and development, detailed and expensive, which were required to prove, pursuant to the Medicines Act 1968, that cimetidine was safe and effective and that Tagamet, a brand of cimetidine, would be produced of a consistently high quality.
By section 7(2) of the Act of 1968, no person shall in the course of a business, sell, manufacture or import any medicinal product except in accordance with a product licence granted by the appropriate licensing authority, in this case the Minister of Health. By section 18 of the Act:
"(1) Any application for the grant of a licence . . . shall be made to the licensing authority and shall be made in such form and manner, and shall contain, or be accompanied by, such information, documents, samples and other material, as may be prescribed."
By section 19(1), in dealing with an application for a product licence, the licensing authority shall in particular take into consideration:
"(a) the safety of medicinal products of each description to which the application relates; (b) the efficacy of medicinal products of each such description for the purposes for which the products are proposed to be administered; and (c) the quality of medicinal products of each such description, according to the specification and the method or proposed method of manufacture of the products, and the provisions proposed for securing that the products as sold or supplied will be of that quality."
By section 20(1) of the Act of 1968, as amended by regulation 4(3) of the Medicines (Medicines Act 1968 Amendment) Regulations 1977, on any application to the licensing authority for a licence, the licensing authority:
"(a) may grant a licence containing such provisions as they consider appropriate, or (b) if, having regard to the provisions of this Act and any Community obligation, they consider it necessary or expedient to do so, may refuse to grant a licence. (3) The licensing authority shall not refuse to grant such a licence on any grounds relating to the safety, quality or efficacy of medicinal products of any description, except after consultation with the appropriate committee or, if for the time being there is no such committee, with the Commission."
The Commission mentioned in section 20(3) is the Medicines Commission established by the Minister pursuant to section 2 of the Act of 1968 and comprising experts in the fields of medicine and pharmacy. The appropriate committee mentioned in section 20(3) is a committee established by the Minister under section 4 of the Act to deal with any particular kind of medicinal product and charged under section 4(3), with:
"(a) giving advice with respect to safety, quality or efficacy, or with respect to all or any two of those matters; (b) promoting the collection and investigation of information relating to adverse reactions, for the purpose of enabling such advice to be given."
On 1 January 1973, the United Kingdom became a member of the European Community and pursuant to the European Communities Act 1972, became subject to Community law. Article 100 of the EEC Treaty (Cmnd. 5179-II) provides that the Council of the Community shall:
"issue directives for the approximation of such provisions laid down by law, regulation or administrative action in member states as directly affect the establishment or functioning of the common market."
On 26 January 1965, the Council promulgated Council Directive (65/65/E.E.C.) on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary and medicinal products (the "1965 Directive"). The provisions of the 1965 Directive, as amended and amplified from time to time by subsequent Directives, became binding on the United Kingdom and must be performed and observed by the licensing authority. The 1965 Directive recited, inter alia:
" the primary purpose of any rules concerning the production and distribution of proprietary medicinal products must be to safeguard public health; . . . however, this objective must be attained by means which will not hinder the development of the pharmaceutical industry or trade in medicinal products within the Community; . . . trade in proprietary medicinal products within the Community is hindered by disparities between certain national provisions, in particular between provisions relating to medicinal products . . . and . . . such disparities directly affect the establishment and functioning of the common market; . . . such hindrances must accordingly be removed; and . . . this entails approximation of the relevant provisions; . . . "
Article 3 of the Directive directed that:
"No proprietary medicinal product may be placed on the market in a member state unless an authorisation has been issued by the competent authority of that member state."
In the United Kingdom, the authorisation issued by the competent authority consists of a product licence granted by the licensing authority pursuant to its powers under the Act of 1968.
Article 4 of the 1965 Directive, required an application for a product licence to be accompanied by certain specified particulars and documents which were detailed under 11 numbered paragraphs, including the following:
"1. Name or corporate name and permanent address of the person responsible for placing the proprietary product on the market and, where applicable, of the manufacturer.
"2. Name of the proprietary product . . . .
"3. Qualitative and quantitative particulars of all the constituents of the proprietary product in usual terminology . . .
"4. Brief description of the method of preparation.
"5. Therapeutic indications, contra-indications and side-effects.
"6. Posology, pharmaceutical form, method and route of administration and expected shelf life if less than three years.
"7. Control methods employed by the manufacturer (analysis and assay of the constituents and of the finished product, special tests, e.g. sterility tests, tests for the presence of pyrogenic substances, the presence of heavy metals, stability tests, biological and toxicity tests).
"8. Results of: - physico-chemical, biological or microbiological tests; - pharmacological and toxicological tests; - clinical trials. However: (a) a list of published references relating to the pharmacological tests, toxicological tests and clinical trials may be substituted for the relevant test results in the case of: (i) a proprietary product with an established use, which has been adequately tested on human beings so that its effects, including side-effects, are already known and are included in the published references; (ii) a new proprietary product, in which the combination of active constituents is identical with that of a known proprietary product with an established use; (iii) a new proprietary product consisting solely of known constituents that have been used in combination in comparable proportions in adequately tested medicinal products with an established use; . . ."
Thus in the case of an application for a new proprietary product "identical" with that of a known proprietary product with an established use, or in the case of a new proprietary product consisting in medicinal products with an established use which had already been adequately tested, the applicant was not compelled to carry out time consuming and expensive tests and trials provided there was evidence in published references that tests on and trials of the "identical" or "comparable" product had been carried out with satisfactory results. It was for the licensing authority to determine whether two products were or were not "identical" or "comparable" for the purposes of paragraph 8 applying any criteria laid down by the council.
By Directive (75/318/E.E.C.), dated 20 May 1975, the council laid down uniform rules applicable to tests and trials, the compilation of dossiers and the examination of applications for product licences in every member state and specified the data to be provided under article 4.8 of the 1965 Directive. The declared objects of the Directive were to protect public health and to prevent obstruction to the free movement of medicinal products within the Community by different standards and evaluations in different member states. By Council Directive (75/319/E.E.C.), also dated 20 May 1975, further rules were laid down in order to reduce or eliminate disparities between the practices of different member states and in order to facilitate the movement of proprietary medicinal products.
The appellants applied to the licensing authority for a product licence to manufacture and sell cimetidine under the brand name Tagamet. The appellants provided all the particulars and documents specified in article 4 of the 1965 Directive and in compliance with the 1975 Directives. There being no "identical" or "comparable" product, the appellants provided the results of tests and trials carried out by the appellants and complying with point 8 of article 4. A product licence was granted in November 1976. The particulars and documents provided by the appellants to the licensing authority disclosed information acquired by the appellants in the course of their research into and development of cimetidine and information concerning the manufacturing processes of Tagamet. This information had been acquired by the appellants with much ingenuity, care, time and expense, and was, for the most part, unavailable to the public. The information was invaluable to the appellants and would be valuable to any competitor seeking to exploit cimetidine after the expiry of the appellants' patents. In these circumstances, the confidential information supplied by the appellants to the licensing authority, that is to say, information which was not available to the public, could only be used by the licensing authority for the purposes of carrying out their functions under the Act of 1968. Under English law, the courts applying equitable principles would consider that it was unconscionable for the licensing authority to make use of the confidential information, supplied by the appellants, otherwise than for the purpose of carrying out the functions of the licensing authority under the Act of 1968.
By the Patents Act 1977, the term of a patent was increased from 16 to 20 years. A patent granted after 1 June 1967, and before the passing of the Act of 1977, for a term of 16 years, obtained the benefit of an extension from 16 to 20 years but at the end of the 16th year, the Act of 1977 provided that such a patent should be subject to licence of right provisions whereby any person might exploit the patent on terms to be settled by the comptroller in default of agreement between the proprietor of the patent and the licensee. The appellants' patents relating to cimetidine became subject to the exercise of licences of right powers between 10 March 1988 and 9 March 1992.
After the 1965 Directive had been amplified and amended in 1975 and further experience had been gathered, the European Commission reported to the Council and recommended further amendments to point 8 of article 4 of the 1965 Directive: Report (Explanatory Memorandum). Under the 1965 Directive as originally promulgated, the first applicant for a product licence relating to a medicinal product was bound to produce all the particulars and documents required by article 4 of the 1965 Directive. In the present case, the appellants were bound to prove that cimetidine was safe and effective and that Tagamet would be cimetidine of consistently high quality. A second applicant for a product licence, for the same or a similar medicinal product, where the first applicant was not protected by a patent or where the first applicant's patent had expired, was also bound to produce all the particulars and documents required by article 4. Where, however, the second application related to a product which was "identical" or "comparable" and fulfilled the requirements of point 8(a) of article 4 of the 1965 Directive, the second applicant was not bound to carry out and repeat all the tests and trials specified in point 8, but could rely on published literature. The Commission reported, at paragraph 14, that where a licensing authority was satisfied that the products of the two applicants were "identical" or "comparable" but the published literature was incomplete or inappropriate, then:
"certain national authorities have tended not to be too demanding as regards the bibliographical evidence submitted by the second applicant. This practice seriously penalises the innovatory firm which has had to meet the high cost of clinical trials and animal experiments, while its product can be copied at lower cost and sometimes within a very short period. Protection of a medicinal innovation by means of a patent is not in fact always possible or effective, as for example in the case of a natural substance or of a substance which is already known but on which additional research has been carried out with a view to a new therapeutic use."
It appears, therefore, that some member states were more willing than others on a second application to dispense with tests and trials by accepting published literature which other member states found to be inadequate. To achieve uniformity, the Commission proposed that the 1965 Directive should be amended so that if the second applicant was, in effect, copying the product of the first applicant, he would not be obliged to carry out the tests and trials required by point 8 of article 4 of the 1965 Directive, provided that 10 years had elapsed since the grant of a product licence to the first applicant. The second applicant could rely on the tests and trials carried out by the first applicant, provided that the first applicant had been able to market his product for 10 years. The Commission stated in paragraph 15 that: "This 10-year period will enable the partial recovery of the research investment, which might not be protected otherwise, for example by a patent." In the present case, the appellants were protected by a patent and were able to recover their costs of research and investment during a period of 12 years between 1976, when the appellants obtained a product licence from the licensing authority to market cimetidine under the brand name of Tagamet, and 1988 when, for the first time, a second applicant became entitled under a patent licence of right to apply for a product licence to market cimetidine under some other brand name. The tests and trials carried out by the appellants, pursuant to point 8 of the 1965 Directive together with the other particulars and documents furnished by the appellants, were sufficient to satisfy the licensing authority in 1976 that cimetidine was safe, effective and could be produced with a consistent high quality. Provided nothing had happened since 1976 to cast doubts on the results of these tests and trials, the Commission's proposals meant that a second applicant in 1988 would not have to prove by further tests and trials that cimetidine was safe and effective and could be produced of good quality. The second applicant must, however, satisfy all the other requirements of the 1965 Directive in order to prove that his brand of cimetidine was as safe and effective as Tagamet and of comparable quality.
The Council by Directive (87/21/E.E.C.), dated 22 December 1986, implemented some of the recommendations of the Commission's report. The Directive recited:
"experience has shown that it is advisable to stipulate more precisely the cases in which the results of pharmacological and toxicological tests or clinical trials do not have to be provided with a view to obtaining authorisation for a proprietary medicinal product which is essentially similar to an authorised product, while ensuring that innovative firms are not placed at a disadvantage;"
The Directive amended the 1965 Directive by replacing point 8 so that it now reads:
"8. Results of: - physico-chemical, biological or microbiological tests, - pharmacological and toxicological tests, - clinical trials. However, and without prejudice to the law relating to the protection of industrial and commercial property: (a) The applicant shall not be required to provide the results of pharmacological and toxicological tests or the results of clinical trials if he can demonstrate: (i) either that the proprietary medicinal product is essentially similar to a product authorised in the country concerned by the application and that the person responsible for the marketing of the original proprietary medicinal product has consented to the pharmacological, toxicological or clinical references contained in the file on the original proprietary medicinal product being used for the purpose of examining the application in question; (ii) or by detailed references to published scientific literature presented in accordance with the second paragraph of article 1 of Directive (75/318/E.E.C.) that the constituent or constituents of the proprietary medicinal product have a well established medicinal use, with recognised efficacy and an acceptable level of safety; (iii) or that the proprietary medicinal product is essentially similar to a product which has been authorised within the Community, in accordance with Community provisions in force, for not less than six years and is marketed in the member state for which the application is made; this period shall be extended to 10 years in the case of high-technology medicinal products within the meaning of Part A in the Annex to Directive (87/22/E.E.C.) or of a medicinal product within the meaning of Part B in the Annex to that Directive for which the procedure laid down in article 2 thereof has been followed; furthermore, a member state may also extend this period to 10 years by a single decision covering all the products marketed on its territory where it considers this necessary in the interest of public health. Member states are at liberty not to apply the above mentioned six-year period beyond the date of expiry of a patent protecting the original product. However, where the proprietary medicinal product is intended for a different therapeutic use from that of the other proprietary medicinal products marketed or is to be administered by different routes or in different doses, the results of appropriate pharmacological and toxicological tests and/or of appropriate clinical trials must be provided."
In a written parliamentary answer, dated 30 June 1987, the Government of the United Kingdom announced that the 10-year period allowed by point 8(a)(iii) of the Directive would be extended to all medicinal products marketed in its territory. Thus by the amended point 8 of the 1965 Directive, as applied in the United Kingdom, a second applicant for a product licence in respect of a product which is "essentially similar" to a product licensed less than 10 years before the second application can only dispense with the tests and trials specified by point 8, if the first applicant consents to the pharmacological, toxicological and clinical references contained in the file on the first applicant's medicinal product being used for the purpose of examining the second application. This is the effect of the amended and the first applicant has been in possession of a product licence for 10 years or more, the second applicant need not carry out and supply the results of pharmacological and toxicological tests and clinical trials. This is the effect of the amended point 8(a)(iii).
Point 8(a) of article 4 of the 1965 Directive, as amended, is expressed to be "without prejudice to the law relating to the protection of industrial and commercial property." These words cannot create a restriction where none existed. The quoted words suffice in the present case to preserve the English law of confidentiality which prevents the licensing authority from using the appellants' confidential information for purposes other than the performance by the licensing authority of its functions under the Act of 1968.
On 16 January 1987, the first intervener, Generics (U.K.) Ltd. ("Generics"), applied to the Comptroller-General of Patents, Designs and Trade Marks to settle the terms of a licence of right for Generics as from 9 March 1988 to make, import and sell cimetidine compound and its products defined as pharmaceutical formulations containing cimetidine as the sole active ingredient. The terms were settled by the comptroller on 15 March 1988 and included payment to the appellants of a royalty of #178 per kilo, of the compound manufactured or imported. On 10 June 1987, Generics applied to the licensing authority for a product licence in respect of cimetidine. That application was not supported by the results of tests and trials pursuant to point 8 of the 1965 Directive, as amended, such tests and trials being unnecessary in view of point 8(a)(iii). "Essential similarity" between Tagamet and Generics' brand will appear because both products will contain cimetidine as the sole active ingredient and a comparison between the information supplied by the appellants and the information supplied by Generics will demonstrate whether the two brands are similarly safe, effective and of good quality.
The second intervener, Harris Pharmaceuticals Ltd., ( "Harris") in March 1987 applied to the comptroller to settle the terms of a licence of right for cimetidine and they were settled on 8 April 1988 on terms identical with those decided in the case of Generics. There have been other applications for licences of right in respect of cimetidine. In July 1987, Harris applied to the licensing authority for a product licence in respect of cimetidine. That application also was not supported by the results of tests and trials pursuant to point 8 of the 1965 Directive, as amended, in view of point 8(a)(iii).
On 2 October 1987, the appellants instituted judicial review proceedings against the licensing authority claiming a number of declarations prohibiting the licensing authority from making use of any of the information contained in the appellants' 1976 application for a product licence without the consent of the appellants.
As a result of these proceedings the applications of Generics and Harris for product licences for their brands of cimetidine have not yet been granted or refused by the licensing authority.
On 23 February 1988, Henry J. made a declaration that:
"in considering an application for a product licence in respect of a medicinal product containing cimetidine made pursuant to the abridged procedure provided for by article 4.8(a)(iii) of Council Directive (65/65/E.E.C.), as amended, the [licensing authority] may not for the purpose of such application use refer or have recourse to any confidential information supplied to it by the [appellants] in connection with any application by the [appellants] for a product licence in respect of such a product except with the express consent of the [appellants]."
Counsel for the appellants did not, on this appeal, seek to support this declaration in so far as it precluded the licensing authority from using information relevant to the protection of the public from unsafe medicinal products. Nevertheless, counsel submitted that the appellants' file of information in the possession of the licensing authority should be sealed up and that no person concerned with the grant of a product licence relating to cimetidine to the appellants should deal with any application by Generics, Harris or anyone else for a product licence in case that person should recollect or be unconsciously influenced by anything which he had learned from the appellants' application.
On 29 June 1988, the Court of Appeal (Dillon, Balcombe and Staughton L.JJ.) [1988] 3 WLR 896 set aside the order made by Henry J. The appellants now appeal to this House.
In my opinion the first and only question which requires to be answered on this appeal is whether English law prohibits the licensing authority from having recourse to the confidential information provided by the appellants in the course of their application for a product licence relating to cimetidine for the purpose of considering whether to grant or reject an application by Generics or Harris or anyone else for a product licence in respect of cimetidine.
The licensing authority are advised by experts in the field of medicinal products. The information available to the licensing authority consists of the knowledge obtained by these experts based on long experience, the information available in published literature and, over the years, the vast amount of information provided by large numbers of applicants for product licences, such information being partly confidential and partly available to the public. The principal task of the licensing authority is to protect the public. But in performing its functions, the licensing authority must treat all applicants fairly and equally. The standard which it requires from the first applicant for a product licence for cimetidine must be required of the second and subsequent applicants. If the licensing authority sanctions the first application, notwithstanding the presence of certain impurities, the same deviations from purity must be allowed to second and subsequent applicants. If the information disclosed by a first applicant when compared with the information disclosed by the second applicant leads the licensing authority to conclude that the second application ought to be allowed, then the licensing authority must act accordingly. Conversely, if the information supplied by the second applicant casts doubt on some aspect of the product of the first applicant, then the licensing authority must consider whether to exercise the power conferred upon the licensing authority by the Act of 1968 to revoke the first applicant's product licence. It is for the licensing authority, comparing the information received from the first applicant and the information received from the second applicant, and taking into account all other information available to the licensing authority, from whatever source, and whether confidential or not confidential, to decide in the case of any particular application whether it shall be declined or granted. There may be, there will be, in the case of a popular medicinal product many applications by many different applicants. It is essential for the licensing authority to compare the applications of the first and subsequent applicants in order to satisfy themselves that both products are similar, safe, effective and reliable. The licensing authority cannot discharge its duty to safeguard the health of the nation and its duty to act fairly and equally between applicants without having recourse to all the information available to the licensing authority, confidential or otherwise. Indeed it would not be practicable and it would be highly dangerous for the licensing authority to attempt to segregate in the case of each applicant the information which was confidential to that applicant and to forget or ignore that information when carrying out any function imposed upon the licensing authority by the Act of 1968 in the interests of the public.
My Lords, I am satisfied that it is the right and duty of the licensing authority to make use of all the information supplied by any applicant for a product licence which assists the licensing authority in considering whether to grant or reject any other application, or which assists the licensing authority in performing any of its other functions under the Act of 1968. The use of such information should not harm the appellants and even were it to do so, this is the price which the appellants must pay for cooperating in the regime designed by Parliament for the protection of the public and for the protection of the appellants and all manufacturers of medicinal products from the dangers inherent in the introduction and reproduction of modern drugs.
The appellants asserted that they had no intention of obstructing the licensing authority in its onerous task of protecting the public but their proceedings and the order made by Henry J., would have that effect. The appellants relied on three English authorities and one Australian authority. In Metropolitan Asylum District Managers v. Hill (1881) 6 App.Cas. 193, this House determined that an Act of Parliament which authorised an asylum did not authorise the asylum to commit a nuisance. Lord Blackburn said, at p. 208:
"It is clear that the burden lies on those who seek to establish that the legislature intended to take away the private rights of individuals, to show that by express words, or by necessary implication, such an intention appears."
In the present case, the Act of 1968 does not take away any private rights. If the appellants choose to apply for a product licence under the Act, they choose to provide information to the licensing authority for the purposes of the Act. It is not unconscionable for the licensing authority to make use of that information in the public interest for the purposes of the Act, although it would be unconscionable for the licensing authority to disclose that information to third parties for other purposes. In In re Keene [1922] 2 Ch 475, a debtor was obliged to disclose to his trustee in bankruptcy secret formulas for the making of certain proprietary articles. In Butler v. Board of Trade [1971] Ch 680, the Board of Trade were not allowed in criminal proceedings to put in evidence the copy of a letter written by a solicitor to his client, the plaintiff, which was a privileged letter. I am unable to derive any assistance from these authorities in the present circumstances; the appellants have voluntarily provided information to the licensing authority for the purposes of the Act. In Castrol Australia Pty. Ltd. v. Emtech Associates Pty. Ltd. (1980) 51 FLR 184, in the Supreme Court of New South Wales, Rath J., perhaps surprisingly, held in interlocutory proceedings, that a report furnished by Castrol to the Trade Practices Commission in order to persuade the Commission that Castrol's advertisements were justified in claiming that tests on Castrol oil showed an improvement in fuel consumption could not be used by the Commission in prosecuting Castrol for publishing misleading advertisements. In that case, however, the Commission had expressly undertaken to Castrol to treat the report as confidential. The judge recognised that, at pp. 209-210: "in some cases public interest in disclosure will prevail over public interests in the preservation of confidence." But he concluded that "the public interest does not require that the Commission, at this stage, should be excused from breaking the confidence that on the present evidence was reposed in it." In the present case, the licensing authority gave no undertaking to the appellants and do not propose to break any confidences but only to make use of information supplied under the Act for the purposes of carrying out their duties under the Act.
Section 118 of the Act of 1968 provides:
"(1) If any person discloses to any other person - . . .(b) any information obtained by or furnished to him in pursuance of this Act, he shall, unless the disclosure was made in performance of his duty, be guilty of an offence."
This section reinforces the view which I have formed that information obtained under the Act may be used by the licensing authority and that even disclosure is lawful if the disclosure is made in the performance by the licensing authority of its duty under the Act.
Accordingly, there is no principle of confidentiality in English law which prevents the licensing authority from making use of the information supplied by the appellants for any of the purposes for which the licensing authority was established. Article 30 of the EEC Treaty prohibited quantitative restrictions on imports and all measures having equivalent effect between member states, but by article 36, the provisions of article 30 do not preclude prohibitions or restrictions on imports justified on grounds inter alia of the protection of industrial and commercial property. Article 36 did not impose on member states any Community obligation of confidentiality. The Directives to which we were referred did not impose on member states any Community obligation of confidentiality. Article 4.8 of the 1965 Directive, as amended by Council Directive (87/21/E.E.C.) is expressed to operate "without prejudice to the law relating to the protection of industrial and commercial property." The only relevant law in the present case is English law and for the reasons which I have indicated, English law does not protect the appellants against the use by the licensing authority of confidential information supplied by the appellants to the licensing authority for the purposes of the Act of 1968. The appellants suggested that it was necessary or might be useful to refer to the European Court of Justice for a ruling under article 177 of the EEC Treaty questions concerning the ambit of the expression "without prejudice to the law relating to the protection of industrial and commercial property." In m{ opinion no question of Community law arises in connection with confidentiality or otherwise. The 1965 Directive, as amended, authorises the licensing authority to grant a product licence to Generics and Harris without requiring Generics and Harris to produce the results of pharmacological and toxicological tests and clinical trials, provided that Generics and Harris furnish all the particulars and documents required by the 1965 Directive with the exception of the results of such tests and trials and provided that the licensing authority, after comparing the applications of Generics and Harris with the earlier applications of the appellants and after considering all other information in their possession, is satisfied that the Generics and Harris products of cimetidine are essentially similar to Tagamet and are safe, efficient and reliable. Point 8(a) of article 4 of the 1965 Directive as amended and as applied to the United Kingdom, would have required a second applicant for a product licence of cimetidine to produce the results of the relevant tests and trials if the second application had been made before November 1986 unless the appellants consented to the use of their files which contained results of the relevant tests and trials. Point 8(a) does not require a second applicant to produce the results of the relevant tests and trials after November 1986. Generics and Harris may, without the consent of the appellants, rely on the fact that the appellants produced satisfactory results relating to cimetidine when the appellants obtained a product licence for Tagamet.
The argument most pressed by the appellants was that Generics and Harris cannot comply with point 8 of the 1965 Directive, as amended, unless they "demonstrate" that the cimetidine, for which they seek product licences, is "essentially similar" to Tagamet by carrying out the very tests and trials which are expressly rendered unnecessary by point 8(a)(iii). The applications of Generics and Harris must be in respect of a formulation which contains cimetidine as the sole active ingredient. In support of those applications Generics and Harris must supply all the information which they are bound to supply under points 1 to 7 of article 4 of the 1965 Directive, as amended, and any other information required by the Directive or by regulations made under the Act of 1968. It will be the duty of the licensing authority to compare the applications made by Generics and Harris for product licences for their brands of cimetidine with the application made by the appellants in 1976 for their Tagamet brand of cimetidine in order to determine whether the licensing authority is satisfied that the Generics and Harris brands are, in the opinion of the licensing authority, "essentially similar" to Tagamet. The declared objects of Generics and Harris are to copy Tagamet and to equal or improve on Tagamet. The licensing authority will decide whether Generics and Harris succeed or fail without obliging Generics or Harris to demonstrate in 1988, (as the appellants were perforce constrained to demonstrate in 1976), by the tests and trials required by point 8 of article 4 of the 1965 Directive, that cimetidine is capable of being mcnufactured in a form which is safe, effective and of high quality.
The appellants object, understandably, to Tagamet being copied by Generics, Harris or any one else. The appellants' submissions are, in essence, based on the proposition that if a product is worth copying, the law should protect the product against being copied. My Lords, that is not the law. In British Leyland Motor Corporation Ltd. v. Armstrong Patents Co. Ltd. [1986] AC 577, this House declined to allow the law of copyright to be exploited and rejected the argument that a motor car manufacturer was entitled to a perpetual monopoly in spare parts and could prevent the copying of spare parts which were no longer protected by a patent. In In re Coca-Cola Co. [1986] 1 WLR 695, this House declined to allow trade mark law to be exploited and rejected the argument that the manufacturer of a beverage sold under a trade name had established a perpetual monopoly in and could prevent the copying of the shape of a bottle which was no longer protected by the Registered Designs Act 1949. In Interlego AG v. Tyco Industries Inc. [1988] 3 WLR 678, the Privy Council declined to allow the law of copyright in Hong Kong to be exploited and rejected the argument that a manufacturer of a toy was entitled to a perpetual monopoly in the toy and could prevent the copying of the shape of the toy which was no longer protected by the Registered Designs Act 1949. In Reg. v. Comptroller-General of Patents, Designs and Trade Marks, Ex parte Gist-Brocades N.V. [1986] 1 WLR 51 and in Allen & Hanburys Ltd. v. Generics (U.K.) Ltd. [1988] 2 All ER 454, proprietors of patented drugs sought to obstruct and delay the settlement of terms of licences of right by the comptroller and met with some success until the European Court of Justice ruled that the comptroller had no power to prohibit imports from Community countries.
In the present case, the appellants seek to enlist the law of confidentiality and to extend their patent monopoly beyond the term granted. The appellants seek to harass and obstruct the licensing authority in the determination of the applications by Generics and Harris and others of their applications for product licences in respect of cimetidine. The campaign began with parliamentary questions and debate which sought to inhibit the licensing authority from making use of information derived from product licence applications. At the same time, lawyers' letters interrogated the licensing authority with regard to its practice, refused to agree terms of licences of right, threatened Harris with actions for breach of patent and threatened the licensing authority with judicial review proceedings. The advisers of the Minister of Health, in his parliamentary role and in his role as licensing authority, were anxious to appease their critics and made statements some of which were inept and confusing and which wrongly accepted that the powers of the licensing authority were much more restricted than I hold them to be. The soothing attitude on the part of the licensing authority did not prevent the appellants from issuing judicial review proceedings, and obtaining interlocutory injunctions and undertakings. The practical effect has been that the applications of Generics and Harris and others for product licences have not yet been determined and one year of the licence of right term will shortly expire.
My Lords, the patent term of 14 years authorised by the Statute of Monopolies in 1623 was increased in 1919 to 16 years and in 1977 to 20 years. The effective term of the patent monopoly afforded to the appellants in respect of cimetidine from 1976 when Tagamet was first sold until 1988, was 12 years and in addition the appellants are entitled to royalties under the licence of right provisions for a further four years. The appellants have been able, for 12 years, to establish their trade mark of Tagamet and to establish the reputation of their product with the medical profession and the public. The appellants still possess, and always will possess, advantages over other producers of cimetidine and will only suffer the hardship of competition from which they have hitherto been protected by their patent. The obstructions which the appellants now seek to place in the path of the licensing authority in the consideration by the licensing authority of other applications for product licences would apply not only during the period of licences of right but also after all patent protection has expired. The appellants are seeking to prolong their monopoly beyond the statutory term. Of course, the appellants and their supporters are entitled to mount campaigns in Parliament, in the press and elsewhere and they are entitled to institute such legal proceedings as they may be advised. But in my opinion the licensing authority should not be deterred from exercising its rights and powers so as to ensure public safety and to ensure fairness to all applicants whether or not they resort to campaigns and litigation. The courts should be reluctant to criticise the practices of the licensing authority or to grant injunctions or orders or declarations against the licensing authority which is endeavouring reasonably and conscientiously to discharge the onerous duties imposed by Parliament and is acting in good faith. I would dismiss this appeal.
Lord Ackner.
My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Templeman. I agree with it and, for the reasons given by my noble and learned friend, I, too, would dismiss this appeal.
Lord Oliver of Aylmerton.
My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Templeman, and would dismiss the appeal for the reasons which he has given.
Lord Lowry.
My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Templeman. I entirely agree with it and, for the reasons given by my noble and learned friend, I, too, would dismiss this appeal.
ORDER
Appeal dismissed.
Appellants to pay authority's costs and one set of costs to be shared between interveners.
Crown Copyright acknowledged
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