Pfizer Corporation v Ministry of Health
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WILLMER,LORD JUSTICE DIPLOCK |
| Judgment Date | 16 October 1963 |
| Judgment citation (vLex) | [1963] EWCA Civ J1016-1 |
| Court | Court of Appeal |
| Date | 16 October 1963 |
[1963] EWCA Civ J1016-1
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Willmer
Lord Justice Danckwerts (not present) and
Lord Justice Diplock
THE SOLICITOR-GENERAL (Sir Peter Rawlinson, Q.C.), Mr E.B. STAMP and Mr DOUGLAS FALCONER (instructed by the Solicitor, Ministry of Health) appeared on behalf of the Defendant.
Mr DESMOND ACKNER, Q.C. and Mr JOHN WHITFORD (instructed by Messrs Linklaters & Paines) appeared on behalf of the Plaintiffs.
This is an appeal from an Order made by Mr Justice Lloyd-Jacob on the 22nd January, 1963, following a Judgment delivered by him on the 21st December, 1962, in an action brought by the Plaintiffs as registered legal proprietors of Letters Patent No. 747,779 in respect of a drug called Tetracycline. This is an antibiotic, the use of which has proved to be of great value in the treatment of disease. By their Statement of Claim the Plaintiffs claim against the Ministry certain declarations in relation to the use of Tetracycline for the treatment of in and out-patients in National Health Service hospitals.
In May, 1961, the Minister by public advertisement invited tenders for the supply to National Health Service hospitals of inter alia Tetracycline, promising that if the successful tenderer were not the owner of a patent or the licensee of a patent holder in respect thereof he would be responsible for any payment to which the patent holder might be entitled under Section 46 of the Patents Act, 1949. The successful tenderers for the supply of Tetracycline were Messrs Fraser Chemicals, Ltd., a company carrying on business in the United Kingdom, whose tender however made it clear that the drug would be manufactured in Italy by their suppliers, Messrs Carlo Erba of Milan. Neither Messrs Fraser Chemicals, Ltd., nor their suppliers held any licence from the Plaintiffs to use the invention the subject of the Letters Patent. On the 3rd October, 1961, the Minister accepted the tender of Messrs Fraser Chemicals, Ltd., and entered into a contract with them for the supply of the drug on the terms of the Standard Conditions of Government Contracts for Stores Purchases.
The declarations claimed by the Plaintiffs in their Re-amended Statement of Claim were as follows:- (1) A declaration that the Defendant is not empowered under Section 46 of the Patents Act, 1949, to authorise any person to make, use and exercise the invention the subject of United Kingdom Letterspatent No.747,779 relating to a medicine for the purpose of making and/or supplying medicines to National Health Service hospitals for use in the treatment of In and Out Patients. (2) A declaration that the use by or in the treatment of In or Out Patients in National Health Service hospitals of medicines made in accordance with the invention the subject of United Kingdom Letters Patent No.747,779 is not a use or exercise of the invention the subject of the said Letters Patent for the services of the Crown. (3) A declaration that the making of medicines in accordance with the Plaintiffs, invention the subject of United Kingdom Letters Patent No.747,779 by third persons for supply or the supply of such medicines by third persons for use by or in the treatment of In or Out Patients in National Health Service hospitals is not a making, using or exercising of such patented invention for the services of the Crown. (4) A declaration that the supply of medicines in accordance with the invention the subject of United Kingdom Letters Patent No.747,779 to Out Patients in National Health Service hospitals on payment of a charge or to private In Patient paying hospital maintenance charges is a vending of the invention not authorised (Section 46 of the Patents Act, 1949)
The learned Judge was not prepared to grant any of the declarations sought by the Plaintiffs, but he did grant a declaration limited to medicines imported from abroad, in the following form: "That the authority granted by the Minister to Fraser Chemicals Limited for the year commencing November 1961 in respect of medicines made in accordance with the Plaintiffs' Letters Patent No.747,779 and imported from abroad and to supply the medicines so imported for use by or in the treatment of In and Out Patients in National Health Service hospitals was not within the power conferred by Section 46 sub-section (1) of the Patents Act 1949"
This limited declaration satisfied neither party. The Plaintiffs were dissatisfied because they desired a decision intheir favour on their main contention that the supply of medicines to National Health Service hospitals is not within the powers conferred by Section 46 of the Act at all. The Ministry were equally dissatisfied because, although they succeeded on the main point, the effect of the declaration granted would mean that they had exceeded their powers in relation to this particular contract. The Ministry accordingly appealed, asking by their Notice of Appeal for an Order that the Plaintiffs' action be dismissed. Tre Plaintiffs cross appealed, asking for an Order that declarations be granted in the form claimed in the Statement of Claim.
It will be convenient to deal with the cross-appeal first because, if the Plaintiffs are entitled to the declarations in the wide form claimed in the Statement of Claim, the question raised by the appeal would not arise, and there would be no occasion for the grant of a declaration limited to medicines imported from abroad
In support of the cross-appeal two main submissions have been advanced, as follows: (1) The supply of medicines the subject of Letters Patent for the treatment of In or Out Patients in National Health Service hospitals is not a use or exercise of the patented invention for the services of the Crown within the meaning of Section 46(1) of the Patents Act, 1949. (2) In so far as a charge for medicines is levied on (a) private in-patients who pay hospital maintenance charges and (b) out-patients, this would constitute a "vending" of a patented product (or the product of a patented process) which is not within the powers conferred on a Government department by Section 46(1) of the Act
Section 46(1) of the Patents Act, 1949 , is the legislative successor of Section 27 of the Patents, Designs and Trade Marks Act, 1883, and Section 29 of the Patents and Designs Act, 1907, as amended by Section 8 of the Patents and Designs Act, 1919, and is in the following terms: "Notwithstandinganything in this Act, any Government department, and any person authorised in writing by a Government department, may make, use and exercise any patented invention for the services of the Crown in accordance with the following provisions of this section".
It will be desirable to refer also to Section 46(6) and Section 49(1), not because they are immediately relevant to the claims put forward in this action, but because they have been much relied upon in argument as affording aid in the construction of Section 46(1). Section 46(6), as substituted" by Section 1(1) of the Defence Contracts Act, 1958, provides: "For the purposes of this and the next following section 'the ssrvices of the Crown' shall be deemed to include - (a) the supply to the government of any country outside the United Kingdom, in pursuance of an agreement or arrangement between Her Majesty's Government in the United Kingdom and the government of that country, of articles required - (i) for the defence of that country; or (ii) for the defence of any other country whose government is party to any agreement or arrangement with Her Majesty's said Government in respect of defence matters; (b) … and the power of a Government department or a person authorised by a Government department under this section to make, use and exercise an invention shall include power to sell to any such government… any articles the supply of which is authorised by this subsection, and to sell to any person any articles made in the exercise of the powers conferred by this section which are no longer required for the purpose for which they were made"
Section 49, which is the legislative successor to a Defence Regulation promulgated in 1941 and subsequently re-enacted by Section 2 of the Patents and Designs Act, 1942, provides for the exercise of special powers during any period of emergency. Sub-section (1) thereof is in the following terms: "During any period of emergency within the meaning of this section, the powers exercisable in relation to an invention by aGovernment department, or a person authorised by a Government department under section forty-six of this Act, shall include power to make, use, exercise and vend the invention for any purpose which appears to the department necessary or expedient - (a) for the efficient prosecution of any war in which His Majesty may he engaged; (b) for the maintenance of supplies and services essential to the life of the community; (c) for securing a sufficiency of supplies and services essential to the well-being of the community; (d) for promoting the productivity of industry, commerce and agriculture; (e) for fostering and directing exports and reducing imports, or imports of any classes, from all or any countries and for redressing the balance of trade; (f) generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community; or (g) for assisting the relief of suffering and the restoration and distribution of essential supplies and services in any part of His Majesty's dominions or any foreign countries that are in grave distress as the result of war; and any reference in that section or in section forty-seven or section forty-eight of this Act to the services of the Crown shall be construed as including a reference to the purposes...
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