Pfizer Corporation v Ministry of Health
| Jurisdiction | England & Wales |
| Judge | Lord Reid,Lord Evershed,Lord Pearce,Lord Upjohn,Lord Wilberforce |
| Judgment Date | 01 February 1965 |
| Judgment citation (vLex) | [1965] UKHL J0201-2 |
| Date | 01 February 1965 |
| Court | House of Lords |
[1965] UKHL J0201-2
House of Lords
Lord Reid
Lord Evershed
Lord Pearce
Lord Upjohn
Lord Wilberforce
Upon Report from the Appellate Committee, to whom was referred the Cause Pfizer Corporation against Ministry of Health, that the Committee had heard Counsel, as well on Wednesday the 11th, as on Thursday the 12th, Monday the 16th, Tuesday the 17th and Wednesday the 18th, days of November last, upon the Petition and Appeal of Pfizer Corporation, of Calle 15 1/2 Avenida Santa Isabel, Colon, Republic of Panama, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 16th of October 1963, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of the Ministry of Health, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 16th day of October 1963, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The Appellants' own Letters Patent No. 747,779 for making inter alia the antibiotic drug Tetracycline. The drug is used in the National Health Service and up to 1961 the necessary supplies were obtained by the Respondents from licensees of the Appellants. In 1961 the Respondents decided to invite tenders from various firms, relying on the provisions of section 46 of the Patents Act 1949 and offering protection to tenderers. The successful tender was submitted by Fraser Chemicals, Ltd. They obtained supplies manufactured in Italy. In the present action the Appellants seek declarations that the Respondents had no power under that section to authorise this method of supply. The validity of the patent is not in issue in this case and, if section 46 does not cover this case, there has admittedly been infringement.
Section 46 (1) is in the following terms:
"46 (1) Notwithstanding anything 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."
Admittedly the Respondents are a Government department within the meaning of this section and they gave to Frasers written authority. The Respondents supply the drug to National Health Hospitals for administration both to in-patients and out-patients and the main question in the case is whether this use of the drug is "for the services of the Crown" within the meaning of the section. The Appellants argue that it is not because the drug is being used for the benefit of the patients and not for the benefit of any service of the Crown. The Respondents argue that the drug is used in these hospitals for the services of the Crown because it is used by servants or agents of the Crown in performance of their duties and that it is irrelevant to consider who benefits by or from its use. The Appellants do not now deny that the doctors and nurses in these hospitals are or are to be treated as servants or agents of the Crown, and it is therefore unnecessary for me to analyse the provisions of the National Health Service Act 1946 or to determine the precise relationship of hospital doctors and nurses to the Crown or the Minister. It is however desirable to deal briefly with the events which led up to the passing of section 46 of the Patents Act.
The Statute of Monopolies 1623 permitted the Crown to grant monopolies subject to well known limitations. The regular form of Letters Patent granted to inventors was hardly a model of good draftsmanship, and the decisions in two cases gave rise to difficulties and criticisms. In Feather v. Reg (1865) 6 B. & S.257 it was held that the Crown had retained full right to make use exercise and vend the invention for which a patent had been granted. In Dixon v. London Small Arms Co. 1 App. Cas. 632 it was held that a contractor who had contracted to supply to the Army rifles which incorporated a patented device, was not protected by reason of the fact that the rifles were to be used by servants of the Crown in the Army. Section 27 of the Patents, Designs, and Trade Marks Act 1883 was obviously passed to alter these decisions. On the one hand the Crown agreed to be bound by patents, but on the other hand limited protection was afforded not only to the Crown but also to such contractors. Section 27 (2) provided that "the officers or authorities administering any department of the service of the Crown may, by themselves, their agents, contractors, or others, … use the invention for the services of the Crown on terms. …" It will be seen that the differences between this subsection and section 46 (1) of the 1949 Act are little more than verbal.
Consideration of that background confirms me in my view, which I think I would have reached in any event, as to the meaning of the phrase in the 1949 Act—"the services of the Crown". In Victorian times they were the armed services—the Navy and the Army—the Civil Service, the foreign colonial and consular services, the Post Office, and perhaps some others. Now there are many more Government activities which are staffed and operated by servants of the Crown and are subject to the direction of the appropriate Minister. But it is not suggested that for this purpose any distinction is to be made between the older and the newer services, and it is not argued that the hospital service is not a service of the Crown.
In view of some observations in the judgments in the Court of Appeal I should perhaps add that in addition to the services of the Crown in that sense, there are a number of bodies carrying out services for the public benefit which are not services of the Crown and whose servants are not Crown servants. The Respondents do not suggest that those bodies are entitled to take advantage of this provision in the Patents Act. Indeed the drug with which we are concerned is also provided and used in the administration of the general medical services by general practitioners and chemists who are not servants or agents of the Crown but the Respondents do not contend that this is covered by section 46. It may seem anomalous that there should be this distinction depending on the nature of the organisation which Parliament has set up and not on its purposes. But I think that it is now well recognised that, by reason of the structure of their organisation, the nationalised industries for example are not services of the Crown.
The Respondents relied to some extent on Mersey Docks and Harbour Board v. Cameron L.R. 11 H.L. 443. I think that cases of that kind are quite irrelevant. Crown property is exempt from rating and the Crown exemption has for reasons there explained been extended to apply to some independent bodies carrying out certain kinds of functions. But there is no question in the present case of extending the ambit of section 46 to include anything beyond services of the Crown in the strict sense.
The real controversy in the present case turns on the meaning of the word "for"—what is meant by " for the services of the Crown"? I think that it is a false dichotomy to treat some patented articles as made or used for the benefit of the Department or Service which uses them, and others as made or used for the benefit of those persons outside the service who may derive benefit from their use by the service. And moreover I think that such a distinction would be unworkable in practice. Most, if not all, activities of Government departments or services are intended to be for the benefit of the public, and few can be regarded as solely, or even mainly, for the benefit of the department or of members of the service. Let me take the use of drugs as an example. Some may be used simply to make the patient more comfortable, but the effect may be also to ease or facilitate the work of the doctors and nurses. And the use of others may shorten the stay of the patient in hospital and thereby greatly benefit the service by setting free beds and the services of doctors and nurses so that more patients can be treated without increasing hospital accommodation. I know little of the purpose or effect of using Tetracycline but there is certainly no evidence enabling one to compare the benefits which the patients and the service derive from its use.
It appears to me that the natural meaning of use for the services of the Crown is use by members of such services in the course of their duties. Sometimes, as in the case of the armed services, that use will or is intended to benefit the whole community: sometimes such use will benefit a particular section of the community: and sometimes it will benefit particular individuals. I cannot see any good reason for making a distinction between one such case and another. It is true that the proliferation of Government services may have impaired the protection given to inventors by patents, by increasing the number of cases in which patents can be used by the Government without the consent of the patentee. But if that has created any legitimate...
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