Teva v Gilead: Swiss court bashes ECJ on SPC "mess"

As reported on the SPC Blog, on 3 October 2017, the Swiss Federal Patent Court issued a judgment confirming the validity of Gilead’s Supplementary Protection Certificate (SPC) for a composition containing tenofovir disoproxil with emtricitabine (marketed as TRUVADA). The UK arm of the same dispute has led Arnold J to refer a question to the ECJ ("What are the criteria for deciding whether 'the product is protected by a basic patent in force' in Article 3(a) of the SPC Regulation?", [2017] EWHC 13 (Pat)).

Teva (or rather Mepha, its Swiss subsidiary) sought a declaration of invalidity of Gilead’s Swiss SPC for the combination of tenofovir disoproxil and emtricitabine. It did not attack the validity of the base patent EP 915 894. Neither was it disputed that a generic of TRUVADA would infringe the (expired) base patent and that Gilead’s SPC was therefore valid under the infringement test.

The base patent explicitly mentions tenofovir disoproxil, but not emtricitabine. Teva argued that Switzerland should abandon the infringement test traditionally employed (BGE 124 III 375 - Fosinopril) in favour of the ECJ’s “core inventive advance” test. Applied to the combination of tenofovir disoproxil and emtricitabine, this would lead to the nullity of the SPC (Arnold J concurs).

Gilead responded that both the statutory text and legal certainty required taking into account the situation at the time of application for the SPC. At that time, in 2006, there was only the infringement test, since the Medeva decision of the ECJ (EU:C:2011:773) putting the infringement test to rest only issued in 2011. A change of practice was uncalled for because there was no need for harmonization given the lack of market access due to regulatory law in the pharmaceutical sector and the unclear case law of the ECJ which led to confusion rather than clarity.

Taken from the judgment. Kernaussage = "quintessence"

For the court, the case seemed simple: Article 140b(1)(a) Patent Act only required that the product (Erzeugnis) for which an SPC is applied for was protected by a patent. "Protected" meant protected in the sense of patent law (infringement test). There was no room for further requirements. While it was correct that the Swiss SPC was introduced to harmonize Swiss law with the (then) relevant European legislation regarding Supplementary Protection Certificates, this did not compel Swiss courts to interpret Swiss law in accordance with the ECJ’s jurisprudence. Harmonization was unnecessary in particular because it would not lead to better market access (free movement of goods). Switzerland was not part of the EU regulatory framework for the approval of pharmaceuticals. Drugs approved in Switzerland need separate approval in the EU, and vice-versa. Regulatory law therefore impeded the free movement of pharmaceuticals irrespective of whether SPC law was harmonized.

The court could have left it at this, but it went on to assess whether applying the ECJ’s case law would benefit legal certainty. And boy, was the answer a resounding NO. The court summarizes the various decisions of the ECJ concerning SPCs and concludes, to put it mildly, that it was a mess (see table). Teva’s argument that the different phrasing used in the different decisions was not to indicate a different standard, but only referred to the same concept of “inventive advance” in different terms was found unconvincing. While Gilead’s suggestion that the jurisprudence was a “salad” was equally incorrect, “terminological mess” (“terminologisches Durcheinander”) was an appropriate term for the ECJ’s activities in this area of law. The court also notes that the ECJ’s case law was apparently so unclear that Arnold J, “a renowned expert in the area of SPC law” was forced yet again to submit a question to the ECJ (referring to [2017] EWHC 13 (Pat)).

The judgment will undoubtedly be appealed to the Swiss Supreme Court, so the saga is not over.

Disclosure: the law firm I am working for represented Gilead in the proceedings. I was not personally involved in the case.