Prior to joining the European Union, Spain did not provide product patent protection for new pharmaceutical products. As part of the Treaty of Accession, Spain was required to rectify this and it was provided that for a period of three years after Spain had provided for patent protection for pharmaceutical products, patents in other EU countries could be used to prevent importation of pharmaceuticals produced in Spain without the benefit of patent protection, notwithstanding case law of the European Court of Justice holding that once a product had been put on the market somewhere within the EU by a patentee or with its consent, patents in other EU countries could not be used to prevent importation, sale or use of such a product. (The case of Merck v. Stephar held that such a "first sale doctrine" applied even if there was no patent in the country in which that first sale occurred. An earlier case Parke Davis v. Probel had held that there was no such exhaustion of rights if there was no patent in the country of first sale but this was effectively reversed in Merck v. Stephar.)

The three-year term provided for in Spain's Accession Treaty to the EU expired in 1995. Attempts by Germany, Austria, Belgium, Denmark, France, Ireland and the United Kingdom to have the three-year term extended or to provide some other form of safeguard in respect of products coming from Spain were rejected by the European Commission.

This left only one possibility for preventing imports into other countries of the EU of pharmaceuticals first marketed by the patentee or with its consent in Spain (where they were sold at a relatively low price as unpatented goods), namely a direct challenge to the European Court of Justice's case law on the question of patent exhaustion. This has now occurred in the case of Merck & Co v. Primecrown Ltd. This case was brought before the English Patents Court and has been referred to the European Court of Justice for a preliminary opinion. Merck argued that it was wrong to apply what is in essence a theory of exhaustion to a situation where there were no rights to exhaust in the country of first sale (this argument being directly contrary to the earlier decision of the ECJ in Merck v. Stephar) and secondly that it had an ethical obligation to continue sales in Spain so that the sales to the Spanish market should not be regarded as being made with its consent for the purposes of the application of the prior case law.

The Advocate General, in giving his opinion to the Court, indicated that in his view patentees should not be put at risk by the free flow of goods doctrine in cases where, at the time the invention was made, they were unable to secure patent protection in a country from which the infringing goods are later released on to the market. However, it remains to be seen whether the Court itself will follow this opinion.