The aim of an SPC is to compensate for delays that the patent holder experiences in bringing a drug to market that are caused by the time taken to gain regulatory approval. In the European Union,an SPC can grant up to a 5-year extension on market exclusivity after an underlying patent has expired. Prior to the current case, it was generally accepted that a new SPC would not be granted if a product that contained the same active ingredient had already received any prior marketing approval.

The case before the Court of Justice of the European Union (CJEU) related to uses of the hormone melatonin. Neurim Pharmaceuticals held a patent related to formulations and uses of melatonin to treat insomnia (melatonin per se is not patented), which protects their product Circadin (prolonged-release melatonin). The company's request for an SPC for Circadin was refused on the grounds that a marketing authorization had already been granted for the use of melatonin as a veterinary drug for regulating breeding activity in sheep (marketed as Regulin).

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