Re-examining SPC terms: end of discussion?

On October 4 2017 the Patent and Market Appeal Court handed down eight decisions in cases regarding the re-examination of supplementary protection certificate (SPC) terms. The decisions have been appealed, but the Supreme Court has yet to decide whether to allow leave to appeal. Meanwhile, in Incyte Corporation v Szellemi Tulajdon Nemzeti Hivatala (C-492/16) the European Court of Justice (ECJ) issued a preliminary ruling on the interpretation of Article 18 of EU Supplementary Protection Certificate (SPC) Regulation 469/2009 and Article 17.2 of SPC Regulation 1610/96 (the later also applies to SPC Regulation 469/2009).

The underlying legal cause in Incyte is the same as that underlying the eight cases in Sweden, which relate to Seattle Genetics (C-471/14) and the calculation of SPC term. In Seattle Genetics, the ECJ held that the “date of the first authorisation to place the product on the market in the [European Union]” within the meaning of Article 13.1 of SPC Regulation 469/2009 is the date on which notification of the decision granting marketing authorisation is given to the addressee of the decision. Before Seattle Genetics, many (if not most) EU patent offices had calculated the SPC term from the date on which the marketing authorisation was granted. Patentees have since requested changes to previously issued SPC terms.

While the legal questions before the two courts were different, a comparison seems warranted, as the patentees’ underlying requests were the same (ie, re-calculating the SPC term to meet the correct application of Article 13.1). 

This report identifies three points of divergence in the courts' decisions.

Does the national authority decide the SPC term?
In its decisions, the Patent and Market Appeal Court examined whether the decision to grant SPCs made by the national authority (eg, the Swedish Patent and Registration Office) includes setting the term of the SPC. The Patent and Market Appeal Court held that, although SPC Regulation 469/2009 does not expressively state that the relevant authority must decide SPC terms, it stipulates that the authority must publish information on the term of the certificate. Further, Article 17.2 allows for appeals of the decision to correct SPC terms under certain circumstances. Therefore, the court concluded that national authorities must decide SPC terms.

In Incyte, the ECJ re-read Article 13.1 of the SPC regulation and came to the opposite conclusion. The period during which the granted SPC shall take effect is wholly determined by the application of the detailed criteria set out by that provision, and the relevant authority enjoys no degree of discretion in that regard. The SPC will lapse on the date set out by Article 13 and not on a date determined by the authority which grants the certificate.

Legal certainty
In its substantially reasoned decision on Swedish administrative law, the Patent and Market Appeal Court first considered the character of SPC applications. The Patent and Market Court took the view that decisions on SPC applications are final at the end of the appeal term because they affect third party interests in a way that makes them similar to civil disputes. The Patent and Market Appeal Court disagreed, holding that SPC applications are one-party cases which may be re-examined within the administrative procedure. However, a balance of interests must be struck (ie, the interest of a substantially correct decision must be weighed against the interest of legal certainty for third parties). The court reasoned that, when the patent has expired and the SPC has entered into force, it must be considered that generic companies may have complied with the decision and acted with respect to the assigned expiry date. Therefore, in the interest of foreseeability, an entry into force of an SPC speaks against a rectification of the expiry date; before this time, the interest of the patentee to receive a longer SPC duration generally prevails.

The ECJ decision maintained a different approach to the issue of legal certainty and the balancing of interests. It held that the case at hand did not concern whether the national administrative body in question must review its decision, but whether that body must rectify the certificate’s duration. The balance between the requirement for legal certainty and the requirement for legality under EU law is, in such circumstances, different from matters concerning the review of an administrative decision that has become final (ie, to take account of the interpretation of a relevant provision of EU law which the court has given subsequently). A change, as requested by Incyte Corporation on the basis of Seattle Genetics, is by its nature less capable of affecting legal certainty than the more substantive changes which require a review.

Article 17.2 of SPC Regulation 1610/96
The Patent and Market Appeal Court found that the wording of Article 17.2 in SPC Regulation 1610/96 does not support an interpretation other than a right to appeal a decision of an authority where the date of the first marketing authorisation is incorrect. Neither does the preamble of the SPC regulation or any ECJ decision imply that the objective of Article 17.2 is to provide for administrative re-examination, review or other extraordinary remedy to change a final decision.

The question answered by the ECJ in Incyte had a slightly different focus – namely, whether the date of the first marketing authorisation was incorrect within the meaning of Article 17.2. The court concluded that the date of the first marketing authorisation as stated in an SPC application is incorrect where the date leads to a method for calculating the duration of the certificate which does not comply with the requirements of Article 13(1) after Seattle Genetics. Considering that national authorities have no room for discretion under Article 13 to decide the SPC term and that rectification under these circumstances does not affect legal certainty, the court concluded that an SPC holder may appeal to rectify the duration stated in the certificate only if that certificate has not expired.

Comment
There now appears to be a final and comprehensive route for requesting a recalculation of SPCs after Seattle Genetics. While it would be interesting to get the Supreme Court’s final word on the balance of interests for SPC applications, the main interest of SPC holders has been satisfied by the Incyte judgment.

Unfortunately, the ECJ failed to elaborate why the certificate must not have expired in order for an appeal for rectification to be allowed. Considering that the ECJ firmly believes that the expiration of the SPC term is a function of Articles 14 and 13, without subject to any discretion of the patent authority, and that the matter concerns only a rectification and not a review of the case, additional questions remain unanswered. Specifically, it remains unclear whether it would be possible to enforce a wrongfully calculated SPC to the full extent of the Seattle Genetics term without formal rectification.

For now at least, the burning question over recalculation seems to have been answered.