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1 April 2013BiotechnologyJaap Mannaerts

Biotech threats in the SPC system

At the time the supplementary protection certificates (SPC) regulation was draft ed, the legislator was well aware of the risk of SPCs becoming an instrument in ‘evergreening’ tactics—the ways in which pharmaceutical patent owners use the law and related regulatory processes to extend their IP rights.

A variety of safeguards were built into the system to assure a fair balance between additional protection for the pharmaceutical companies on one hand, which was necessary to stimulate pharmaceutical research, and the public interest, which required a strict maximum duration of the supplementary protection, on the other.

While the regulation, in principle, appeared fit to accomplish a well-balanced system in the reasonably simple and transparent manner envisaged, rulings by the Court of Justice of the EU (CJEU) in the past few years have made things increasingly complicated.

The referred questions in these cases arose out of typical combination product issues. The answers by the CJEU, which have surprised quite a few, were clearly intended to apply generally. A further series of referrals has now been made, aptly demonstrating the confusion that has arisen.

It is intriguing to see that the way the system is now evolving, as prompted by the manner in which the CJEU decided to safeguard the fair balance in the specifi c cases presented to it, appears to make it particularly difficult for companies/institutions involved in biotechnological drug development to obtain the rewards the SPC system should off er them. Certain aspects akin to biotechnological drug development have, so far, received little attention in CJEU case law.

One such aspect concerns the fact that a biotechnological active pharmaceutical ingredient (API) is quite seldom the direct result of a single invention, as is more oft en the case with small molecule APIs. Many examples are known where several patented (breakthrough) inventions were required before a useful biological API finally became available.

To make things even more complicated, often those inventions do not originate from one and the same company or institution. Typical examples can be found, for example, in relation to antibody-based products and vaccines. In these situations, diff erent companies/institutions cooperate, with one company developing and marketing the product while compensating the other companies/institutions holding a relevant patent by paying royalties.

It would seem logical, in view of the original scheme of the SPC regulation, that such a status quo can be continued using the SPC system, for the appropriate period of time, without discriminating between the various companies/institutions.

A different outcome

The requirement imposed by the CJEU in Medeva that the product should be ”identified in the wording of the claims”, under the strict approach now adopted by various national IP offices (nearly equating the requirement to specific disclosure), however, is likely to result in a totally different outcome.

In the situation where several consecutive patents cover a biotechnological API (usually with an increasing degree of specificity), as a matter of principle only the youngest one can be a suitable basic patent applying the (strict) Medeva test.

“UNTIL MEDEVA THERE SEEMED TO BE SOME SORT OF CONSENSUS THAT THE CJEU HAD PROBABLY MEANT TO SAY THAT ONLY ONE SPC COULD BE GRANTED PER PRODUCT, PER PATENT HOLDER.”

For once a product is “identified in the wording of the claims”, it should not normally be possible for a further claim to be granted covering that same product. This means that the company/institution that already has the longest period to reap its rewards (ie, from the date of authorisation of the product until expiry of the patent) would actually be the only one to get the SPC.

It is not immediately evident what purpose would be served by such an outcome, especially since by definition it does not result in the product becoming free for generic competition any earlier.

Further referrals

Looking at the two forces in play—rewarding pharmaceutical research and protecting the public interest—the rationale for this outcome is hard to find. The issue of interpretation of the Medeva test has been raised in two further CJEU referrals, one of which concerns a small molecule API combination (C-443/12) and one of which concerns antibody products (C 493/12).

The cases will probably be dealt with separately by the CJEU, the small molecule case being decided first. This again is not very reassuring to those involved in biotechnological research.

A related issue is that of a patented biotechnological invention proving essential to a plurality of biological APIs, as is quite often the case in, for example, antibody technology and vaccines. Logically, a company/institution holding a relevant patent can get its reward for each API incorporating the invention, through royalties during the life span of the patent.

It was generally assumed that such a situation could be maintained under the SPC system. Again, this is not the type of situation where the system is likely to give rise to unwarranted results such as evergreening, because it will not normally affect the date on which a given API falls free for generic competition.

The CJEU’s Medeva ruling, according to some IP offices, suggests however that this practice may no longer be permissible. In the Medeva ruling, the CJEU reiterated that according to the regulation only one SPC can be granted per basic patent. This ‘one SPC per patent’ rule originated from the much older Biogen ruling and has been the subject of much debate ever since.

Until the Medeva ruling there seemed to be some sort of consensus that the CJEU had probably meant to say that only one SPC could be granted per product, per patent holder. Since, however, neither Biogen nor Medeva provided any real guidance on the principle, further referrals were unavoidable and indeed two have been made.

The first one (C-443/12) concerns a small molecule API case, where two SPCs had been granted with different dates of expiry, one for a single API and one for a combination containing that same API with another one. The second case (C-484/12) concerns a multivalent vaccine, where the patent holder requested different SPCs for different APIs on the basis of the same patent and authorisation, all with the same date of expiry.

Since the small molecule case, which will probably be decided first, does bear a semblance of evergreening, the CJEU will conceivably feel inclined to adopt the more restrictive approach. There is a risk that the peculiarities of different types of cases will not receive sufficient consideration and a general rule will be devised, again to the detriment of (among others) certain biotechnological cases.

It does not take a lot of imagination to envisage a situation where certain types of biotechnological patents, concerning inventions enabling the development of one or even several APIs, will not be a suitable basis for supplementary protection.

If this becomes reality, the onus will be on those drafting the patent applications and those designing the patent filing strategies to try, as much as is reasonably possible, to clear the hurdles at a very early stage. Although it is difficult to predict exactly how this will work out, things are bound to become more and more complicated.

Jaap Mannaerts is a Dutch and European patent attorney and a partner at Nederlandsch Octrooibureau (NLO). He can be contacted at: mannaerts@octrooibureau.nl