Fordham 27 (Report 12): SPCs

Towards the end of the second day of the patent track at the Fordham IP Conference was the inevitable session on Supplementary Protection Certificates.   As conference organiser Hugh Hansen had joked earlier in the day:  “All I know is they must be important because every year people push for them to be included on the program here!”

Over to guest Kat, Amy Crouch (Simmons & Simmons) who reports on the session:

"The SPC panel was moderated by Oliver Jan Jüngst (Bird & Bird LLP, Düsseldorf) and first to take the stage was Marleen van den Horst (BarentsKrans, The Hague) who presented on SPC Reform in the EU.  The Max Plank Institute (MPI) Report published on 28 May 2018 (at no less than 700 pages and 7 annexes) was a comprehensive legal review of the SPC system.  It involved fact finding through consultation of all stakeholders and made a total of 33 recommendations:




The MPI report found that the purpose of the SPC legislation was to compensate patent holders for the time lost in obtaining regulatory approval for products containing new active substances.  The original intention of lawmakers was to grant one SPC per product or combination, authorised for the first time.  Further, it found that the CJEU has extended the scope to more SPCs per product, SPCs for new formulations and second medical indications, not insisting on the first MA.   This calls for a political decision which, according the MPI, could be achieved by (i) amendment of the SPC Regulation, (ii) Implementing Regulations (EC) and/or (iii) “soft law” in the form of guidelines, although query what weight mere guidelines would have?

In Marleen’s view the response of the European Commission had been sub-optimal.  They commissioned the MPI report and then decided to ignore all but one of its recommendations: the “SPC manufacturing waiver”, which is expected to enter into force in July 2019 and will apply to all new SPC applications.   The waiver allows making of medicinal products (i) for export to non-EU countries, (ii) for stockpiling in the EU 6 months prior to SPC expiry and (iii) any related acts necessary to achieve the same.   This will be strictly regulated and product will need to be labelled as for export.

Laëtitia Bénard 

Laëtitia Bénard (Allen & Overy LLP, Paris) then moved to Recent Developments on SPCs, in particular the CJEU decision in the Teva v Gilead case.   In that case Gilead’s SPC was for tenofovir plus emtricitabine, whereas the relevant patent claimed tenofovir and optionally “other therapeutic ingredients”.  There was no other SPC on tenofovir and emtricitabine had only been disclosed after the patent was filed.  Teva’s invalidity claim was referred to the CJEU and, somewhat unsurprisingly, the meaning of Article 3(a) of the SPC Regulation remains unclear as the extent of protection is referred to and not the infringement test.  This is disappointing as this was the first time the Grand Chamber of the CJEU had heard such a case; this was their chance to clarify Article 3(a) once and for all.  Instead they set out two instances where the Article 3(a) requirement would be met, namely when the product is either expressly mentioned in the claims of the patent or those claims relate to that product “necessarily and specifically”.

The subsequent decisions of national courts show the lack of clarity as to how to apply the CJEU’s decision, starkly illustrated by those concerning an SPC held by Merck for the combination product of ezetimibe and simvastatin.  The French court found the SPC to be valid in light of the CJEU’s judgment in Gilead, as there is now no requirement that the combination should be the subject matter of the invention, and found that the CJEU’s judgment had no impact on Article 3(c).   The German (Düsseldorf) and Dutch courts found the opposite and concluded that Article 3(c) was not met.   It is concerning that after the CJEU’s decision - which is meant to harmonize the law - we are seeing extremely diverging decisions in Europe in relation to the validity of SPCs.

Brian W. Gray (Brian Gray Law, Toronto) dealt with “Canada’s Certificates of Supplementary Protection (“CSP”): One Year Later”.  Prior to 2017, Canada had been the only G7 nation not to provide patent term extension for pharmaceutical products and was pressured into adopting this by the EU.  Major differences between Canada's regime and other SPC regimes are that protection is capped at 2 years, the application must be filed within one year of the first regulatory submissions and that there can only be one CSP per drug.

The first case concerned GSK’s CSP application for the vaccine Shingrix, which was rejected because the claim covered adjuvants, which were deemed to be “non-medicinal ingredients”.  The same result is likely in the EU but Brian queried, where the composition gives practical effect to a beneficial medicinal composition, is there any compelling reason not to allow patent term extension?  The second case was ViiV Healthcare v Minister of Health, where a judicial review was filed earlier this year.  ViiV obtained an MA to market a combination of two separately patented drugs.  This is a different concern to Shingrix where the claim did “necessarily and specifically” (i.e. the test set down by the CJEU in Teva v Gilead) cover the product but included non-medicinal ingredients.    Brian again queried if it can be right not to allow an SPC for combination products in this scenario.  Surely this is discouraging parties from combining to create inventions?  The system now is not protecting what the patentee actually invented due to Canada adopting the “same stupid rules” as Europe!

Tom Mitcheson

Panellist Tom Mitcheson (Three New Square, London) offered three reasons as to why there is so little harmonisation: (1) the drafters of the original legislation simply didn’t have any of the issues we are currently facing in mind; such as vaccines, combinations, antibodies/breadth limitations and the third party issue, (2) the CJEU is not at all familiar with patent law and is reluctant to cast aside previous judgments – as has been shown in relation to Article 3(a), and (3) as is clear from the MPI report, many of the issues are policy issues and which should be dealt with by legislation and not by judges.   The original legislation should have been clear and we now need revised legislation.  It is not possible for judges to square the circle and come up with a solution.  Whilst the unitary patent and SPC will help, further legislation is needed as an impossible task exists as things stand.

Fellow panellist Hans van Walderveen (District Court of The Hague), speaking in his personal capacity, commented that the situation is certainly not clear yet in light of the CJEU’s decision.  What “necessarily and specifically” means – nobody is 100% sure.  Another issue is that the new test requires the product to be identifiable “on the basis of the prior art”.  This would seem to be a slip of the pen and surely should instead read “on the basis of the CGK”.  If “prior art” is correct then that would mean many more SPCs could be issued – it is a very different thing.   It is also unclear how SPCs could now be granted on the basis of Markush formula claims – how should such claims be drafted to allow applicants to get an SPC?

Final panellist Jürgen Dressel (ex- Novartis Pharma AG) explained that, going back to basics, the SPC is meant to be a reward for R&D and there should be legal certainty and a harmonised situation for the international market.  As the legislation is written it covers every type of industry whereas in reality different issues arise.  For example, for vaccines and agriculture, combinations are hugely important for the majority of products, but that is not the case for everything.

Each time the CJEU looks at things they tend to add a new point of lack of clarity!  They have now said that they don’t want the infringement test, which was by far the clearest and easiest option.  Part of the reason why it is so difficult to apply their decisions is that the CJEU is frankly not very diligent in choosing their words.  Analysing what they meant by “stated” vs “specified” in the claim is unlikely to assist at all.

Perhaps a better option is to return to the origins of only having one SPC per product and that an SPC should only be allowed with the agreement of the MA holder – i.e. so there would be no third party SPCs without consent.   For second medical use and combinations, which are of course valuable inventions, perhaps SPCs are just not the best instrument and something else is needed such as regulatory data protection. 

Views from the SPC panel

In some ways it is not surprising that the European Commission only took the SPC waiver forward from the MPI report recommendations.   Many parties are concerned about re-opening the SPC Regulation in an era when IP is under attack in the event that the result is even less protection.

Hans responded that, whilst he agreed that the CJEU case law is not yet clear, it is in his view getting clearer.   The CJEU itself now thinks that the situation is perfectly clear, to the extent that they actually recently asked German and Dutch courts to withdraw pending referrals – which they both refused to do.

From the audience, Rian Kalden (Court of Appeal of The Hague), speaking in her personal capacity, noted that at the MPI meeting in November, the long term SPC CJEU advisor had commented that as far the CJEU is concerned there should be no need for any further referrals.  In response to Hans’ earlier point, it seemed that the CJEU was not completely clear on patent concepts - having asked what the difference was between prior art and common general knowledge.  Amidst this background, it was commented during the session, that the re-introduction of the infringement test seemed sensible.  Laëtitia agreed with this:  the infringement test is by far the easiest test for the non-specialist CJEU judges to apply.

Trevor Cook (WilmerHale, New York) asked if simply the best way forward is for a group of European patents judges to agree the position and effectively side line the CJEU?   Hans did not think this would be possible.  Instead questions will just need to continue being referred – including setting out how the various courts think Article 3(a) is best applied – until the position does finally become clear.

Klaus Grabinski (Federal Court of Justice, Karlsruhe) explained that he was never convinced by the infringement test, instead preferring the approach taken by Sir Robin Jacob in the original Takeda decision and also the approach put forward by Peter Meier-Beck relating to applying Article 69 as a scope of protection test (although as Laëtitia noted, this approach was in fact raised in Gilead and still the diverging decisions followed).  This is clearly a very difficult issue but introducing a further definition, or extra wording into Article 3(a), would be likely make the confusion even worse.  Klaus remained of the view that eventually we will get the clarity that is needed."