SPC system – simple, transparent and easy to apply?

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Patent term extensions for human and veterinary medicaments and plant protection products are available in Europe through the grant of supplementary protection certificates (SPCs), which effectively extend the term of a granted patent in relation to a particular product that is the subject of a marketing authorisation. SPCs are sui generis rights intended to compensate patentees for the time taken between filing a patent application and obtaining regulatory approval to bring such products to market.

An SPC comes into force only after the expiry of the corresponding patent. It has a five-year maximum duration, but can be extended a further six months when the SPC relates to a human medicinal product for which data from clinical trials conducted in accordance with an agreed paediatric investigation plan has been submitted.

As the European Commission’s Explanatory Memorandum to EU Regulation 469/2009 (the SPC Regulation) makes clear, the SPC system is intended to be a “simple, transparent system which can easily be applied”. Further, the national patent offices should be able to conduct the grant procedure without being subject to an “excessive burden”. In this chapter we examine recent court decisions and consider whether these objectives are being achieved.

When is a product protected by a basic patent?

SPCs are granted for a product which is the active ingredient, or combination of active ingredients, of a medicinal product for which a marketing authorisation has been granted. A fundamental condition for obtaining an SPC is that the product must be protected by a basic patent in force (Article 3(a) of the SPC Regulation).

To a patent lawyer, guided by Article 69 of the European Patent Convention (EPC) and its protocol, the concept of what a patent ‘protects’ is not complex, so it might be expected that an assessment for determining whether to grant an SPC would be relatively straightforward. However, situations arise where it is not so simple. In particular, combination products have proved difficult to fit into this regime, as mismatches can arise between the active ingredients in the medicinal product covered by a marketing authorisation and the claims of the basic patent said to protect those active ingredients. Questions have also arisen where patent claims define the coverage of active ingredients functionally or by Markush formulae.

In a line of decisions starting with Medeva (C-322/10), the European Court of Justice (ECJ) has considered when a product is protected by a basic patent, stating that a product is protected only if it is ‘specified’ or ‘identified’ in the wording of the patent claims. Early cases concerned combination products, the key issue being whether it was sufficient for the patent claims to focus on just one of the active ingredients (on the basis that dealings in the combination product would infringe) or whether each of the active ingredients would need to fall within the scope of the claims. The ECJ opted for the latter approach. However, requiring the active ingredients to be specified or identified in the wording of the patent claims has resulted in further confusion, since patent claims do not necessarily identify specific active ingredients, but seek to define the limits of a monopoly. This has resulted in a flurry of further cases seeking to ascertain how much specificity is required, including three ECJ referrals in the past year.

Gilead – Truvada

Before Medeva, Gilead obtained SPCs in respect of Truvada (tenofovir and emtricitabine). Gilead’s patent discloses a range of new compounds said to be useful in treating HIV. Tenofovir is specifically identified in the patent claims, but emtricitabine is not referred to anywhere in the patent. In arguing that the combination was protected, Gilead relied on a claim that covered a pharmaceutical composition comprising a compound according to any one of the earlier claims (which included tenofovir) together with a pharmaceutically acceptable carrier “and optionally other therapeutic ingredients”.

When the case came before the English Patents Court, Mr Justice Arnold considered the ECJ case law and decided that the test for determining whether a product is protected by a basic patent remains unclear. He noted that national courts were interpreting Article 3(a) differently. He therefore decided to once again refer the following 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?” The judge also suggested his own preferred answer, namely that the combination product must “embody the inventive advance” (or technical contribution) of the basic patent. The ECJ hearing took place on February 20 2018 (C-121/17).

The judge-proposed ‘inventive advance’ test could be said to be inconsistent with the objective of a simple, transparent and easily applied SPC system. However, patent examiners routinely assess the inventive advance of patent applications, so are well positioned to undertake such analysis. Despite its complications, including such a requirement would assist in ensuring that SPCs are granted only in respect of products that are genuinely at the heart of the patented subject matter.

Searle – Prezista

Whether SPCs can be granted by reference to claims consisting of Markush formulae has also been uncertain since Medeva. In January 2018 the English Court of Appeal referred to the ECJ the question of whether, for Markush claims, all the compounds defined by the claimed formula satisfy the requirements of Article 3(a), or whether the only compounds that satisfy the requirements are those within the claimed formula whose substituents could be derived by the skilled person from a reading of the patent claims based on their common general knowledge.

Searle had obtained a UK SPC in relation to Prezista (darunavir). The patent disclosed and claimed a wide range of compounds, identified by means of Markush formulae, which were said to be retroviral protease inhibitors suitable for treating HIV. Darunavir is not mentioned in the specification, but falls within the scope of protection of the claims when applying Article 69 of the EPC and the protocol. There was evidence that darunavir contained an unusual substituent, which was not disclosed in the patent and which did not form part of the skilled team’s common general knowledge at the priority date.

The Court of Appeal’s provisional conclusion was that darunavir is protected and that it should be unnecessary to further assess whether its substituents are among those that the skilled person could derive, based on common general knowledge, from reading the patent claims. Such an approach seems at odds with the objective of the SPC system being simple, transparent and easily applied by patent offices.

Royalty Pharma – Januvia

The application of Article 3(a) to functionally defined claims was addressed in Lilly v HGS (C-493/12). The ECJ confirmed that it is unnecessary for an active ingredient to be identified by a structural formula in the patent claims, provided that the claims relate “implicitly but necessarily and specifically” to the active ingredient. While the English courts and many national patent offices have simply applied Article 69 of the EPC to determine this question, some patent offices have nonetheless declined to grant SPCs where the product has not been specifically identified in the claims.

Royalty Pharma applied for a German SPC in relation to Januvia (sitagliptin) based on its patent disclosing the use of inhibitors of the enzyme dipeptidyl-peptidase IV (DPP IV) in the regulation of blood glucose levels in diabetes, the relevant claim being to “an activity lowering effector [of DPP IV] for use in lowering the blood glucose level”. Sitagliptin, which satisfies this functional definition, is not disclosed in the patent and was developed after its filing date.

The German Patent Office, having adopted a practice of allowing SPCs only where the active ingredient in question is disclosed in the patent as a specific embodiment, refused Royalty Pharma’s SPC application. On appeal, the Federal Patent Court noted the diverging approaches to the application of Article 3(a) to such claims across Europe and referred several questions to the ECJ relating to the German Patent Office’s approach, while also stating that it considers the English Patents Court’s ‘inventive advance’ concept to be relevant only to Article 3(c), not to Article 3(a).

It is hoped that the ECJ will provide clear guidance on the application of Article 3(a) in response to these referrals. If the SPC system is to be simple, transparent and easily applied, it would greatly assist users if a consistent approach to Article 3(a) is adopted across the board, including for combination products, Markush formulae and functional claims.

Has a relevant marketing authorisation been granted?

Another requirement for obtaining an SPC is that a marketing authorisation has been granted in accordance with EU Directive 2001/83/EC (the Medicines Directive), or the veterinary equivalent, to place the product on the market as a medicinal product (Article 3(b) of the SPC Regulation). Generally, it is straightforward to determine whether this condition is satisfied, but two recent cases have raised issues in this regard.

In Case C-567/16 Merck Sharp & Dohme (MSD) had relied on an end of procedure notice under Article 28(4) of the Medicines Directive in support of its UK SPC application for Atozet (ezetimibe and atorvastatin), as the UK marketing authorisation had not been granted by the deadline for filing the SPC application. MSD subsequently filed a copy of the UK marketing authorisation when granted, but the application was rejected. In an unsurprising decision, the ECJ decided that an end of procedure notice may not be treated as equivalent to a marketing authorisation, and the absence of such authorisation at the time of filing the SPC application does not constitute an irregularity that can be cured. Although delays in the filing and assessment of marketing authorisation applications can therefore be fatal to SPC applications, this decision provides clarity as to what is necessary for obtaining an SPC.

In Case C-527/17 the German Federal Patent Court referred questions to the ECJ in relation to an SPC application filed by Boston Scientific for paclitaxel as a medicinal component of a paclitaxel coated-stent. Boston Scientific relied on a CE mark issued by the notified body following a formal assessment under EU Directive 93/42/EEC (the Medical Devices Directive). Although the German Patent Office rejected the application, the German Federal Patent Court’s view was that the CE mark should be treated as equivalent to a marketing authorisation granted under the Medicines Directive, consistent with the purpose of the SPC Regulation to reward innovative research undertaken by patentees. The ECJ’s decision will hopefully provide much-needed clarity in SPC protection for drug-device combinations.

Can SPCs be obtained for the new formulation of an old active ingredient?

Case C-443/17 is a ECJ referral from the English Patents Court concerning whether an SPC can be granted for a new formulation of an old active ingredient. The case relates to Abraxis Bioscience’s UK SPC application in respect of Abraxane, which comprises paclitaxel in a new formulation, namely as albumin bound nanoparticles or nab-paclitaxel. Abraxis faced two difficulties in obtaining an SPC for its new formulation.

First, ECJ case law is clear that the product for which an SPC can be obtained is the active ingredient. Abraxis contended that the active ingredient of Abraxane is nab-paclitaxel, but the Patents Court rejected this, holding that the active ingredient is paclitaxel and that albumin is a carrier.

Second, as marketing authorisations had been granted previously for paclitaxel, Abraxis ran into problems with Article 3(d), which requires the marketing authorisation relied on to be the first marketing authorisation to place the product on the market as a medicinal product. Abraxis drew an analogy between new formulations and second medical uses, arguing that the approach adopted in the earlier ECJ decision in Neurim (C-130/11) should also be applied to new formulations. In that case, Neurim had applied for an SPC for melatonin, relying on a marketing authorisation and a basic patent for the use of melatonin for treating insomnia, but a marketing authorisation had previously been granted for a veterinary use of melatonin. The ECJ held that “the mere existence of the earlier [marketing authorisation (MA)] obtained for a veterinary medicinal product does not preclude the grant of an SPC for a different application of the same product for which an MA has been granted, provided that the application is within the limits of the protection conferred by the basic patent relied upon for the purposes of the application for the SPC”. Nevertheless, the court referred this issue to the ECJ, stating that the scope of the Neurim decision remains unclear and noting divergent decisions across Europe for Abraxis’s Abraxane SPC applications.

Whether new inventive formulations of old active ingredients justify SPC protection is a contentious issue. From the perspective of a simple, transparent and easily applied system, having to investigate the formulations in earlier marketing authorisations adds complexity, arguably more so than having to check the indications in earlier marketing authorisations (as required following Neurim). However, from a policy perspective, it is unclear why inventive new formulations should not be deemed worthy of SPC protection.

Amending SPC term to correct marketing authorisation date

In C-492/16 (Incyte) the ECJ confirmed that patent offices must allow appeals to rectify SPC duration, following Seattle Genetics (C 471/14), where the ECJ held that the date the decision to grant the first marketing authorisation was notified to the marketing authorisation applicant should be used to calculate SPC duration, not the date that the marketing authorisation was actually granted.

Since there have been inconsistent approaches across Europe as to whether national patent offices would amend SPC terms to reflect Seattle Genetics, this ECJ decision provides clarity for SPC owners.

The future

The European Commission is consulting on the SPC system, particularly in relation to creating a unitary European SPC and a proposed waiver for generic manufacturing during the SPC term. The outcome of the consultation is awaited with some trepidation from those within the industry. There is concern that any re-negotiation of the SPC Regulation at this stage may serve to introduce additional uncertainty rather than improve clarity. However, the creation of a unitary European SPC would greatly assist in simplifying the SPC system, particularly in the context of the intended creation of a unitary patent and unified patent court. Since the implementation of this new European patent system continues to suffer setbacks, there may yet be an opportunity to resolve the issues surrounding the grant of a unitary SPC before the new system comes into effect.

Penny Gilbert assisted in the preparation of this chapter.

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Peter Damerell
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Peter Damerell is a partner of Powell Gilbert LLP, a London-based specialist IP law firm. He specialises in IP litigation, advising clients on disputes across a diverse range of technologies, including pharmaceutical products and formulations, biotechnology and medical devices. He has extensive experience in handling complex and high-value patent litigation before the UK courts, as well as in formulating and coordinating multi-jurisdictional patent litigation strategies. Mr Damerell’s scientific background provides him with a firm understanding of technical issues. He has particular experience in providing freedom-to-operate advice to pharmaceutical companies in relation to patent matters and advising on SPC filing strategies, notably where such applications are contested.

Ayesha Raghib

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Ayesha Raghib is an associate at Powell Gilbert LLP, a London-based specialist IP law firm. She advises on European medicines regulatory law and IP law. Dr Raghib obtained a PhD in pharmacology from University College London and has also worked as a research scientist in pharmacology and molecular biology in the United States and United Kingdom. Her scientific background enables her to understand complex technical issues readily. She has also gained valuable commercial experience having worked in the pharmaceutical and biotech industry as a research scientist and lawyer.

William Hillson
[email protected]

William Hillson is an associate at Powell Gilbert LLP, a London-based specialist IP law firm. He has worked on a range of contentious IP matters. Dr Hillson obtained a BSc in biochemistry from the University of Birmingham, including one year of study at the University of Montpellier, France, and a DPhil in molecular pathology from the University of Oxford following research in the field of immunology and vaccine design.

His experience includes multi-jurisdictional patent litigation in the life sciences sector, including patent and SPC validity and infringement analysis, litigation strategy in light of patent lifecycle management, preliminary injunctions and coordinating the activities of local counsel across Europe.

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