SPCs: a deep dive into CJEU case law

The European Supplementary Protection Certificate (SPC) Regulation incentivises pharmaceutical research and development by providing an extension to patent protection to compensate for time lost in obtaining a marketing authorisation (MA).

It has proved a challenge to interpret and has been responsible for a steady stream of referrals to the Court of Justice of the European Union (CJEU) since its inception. Although the CJEU has managed to settle some of the debates about SPCs, several remain live.

Protected by the basic patent in force

Article 3(a)  of the SPC Regulation requires that, for an SPC to be granted, “the product is protected by a basic patent in force”.

Around ten years ago a series of references to the CJEU1 sought to settle the interpretation of this provision. These cases held that a product is “protected by a basic patent” if it is “specified” or “identified” in the wording of the claims of the patent.

Unfortunately for the CJEU, and those in the life sciences sector, this did not settle the matter. Particular areas of open interest were (i) combination products; and (ii) functional claims and Markush formulae. The CJEU has since given two further decisions, Teva (C-121/17) in 2018 and Royalty Pharma (C-650-17) in April 2020, which seek to provide more certainty in the interpretation of Art 3(a).

Combination products

The Teva referral stemmed from the UK and related to Gilead’s SPC for its Truvada combination product (tenofivir disoproxil/emtricitabine). Mr Justice Arnold (as he was then) heard the case and noted that Gilead’s SPC had been litigated around Europe with differing results, and concluded that article 3(a) was therefore not subject to a uniform test and required a further referral.

In its decision on that referral, the CJEU held that, for a combination product to be “protected” by the basic patent under article 3(a), the claims need not expressly mention the combination but must relate to it necessarily and specifically. To determine whether they do, the national court needs to make two cumulative findings:

In making that determination, the court is required to assume the position of the skilled person having regard to the prior art at the filing or priority date, and the patent specification.

While providing some clarity for combination products, this decision is confusing and there are still unanswered questions and scope for different interpretations of the decision. Indeed, it is worth noting that when the case returned to the English court both parties argued that the CJEU had ruled in their favour.

Functional claims and Markush formulae

In its 2014 judgment in Eli Lilly (C-493/12) the CJEU stated that where the active ingredient is covered by a functional formula in the claims, it is sufficient if it is: “possible to reach the conclusion on the basis of those claims, interpreted inter alia in the light of the description of the invention, as required by article 69 of the Convention on the Grant of European Patents and the Protocol on the interpretation of that provision, that the claims relate, implicitly but necessarily and specifically, to the active ingredient in question, which is a matter to be determined by the referring court”.

However, questions still arose on the interpretation of article 3(a) in respect of these types of claim. That led to the Federal Patent Court of Germany (Bundespatentgericht) making a reference to the CJEU in Royalty Pharma in 2017.

The case concerned Royalty Pharma’s patent for the use of DP-IV inhibitors in the treatment of diabetes. Royalty Pharma sought an SPC in Germany based upon its patent and the authorisation of a DP-IV inhibitor, sitagliptin, as the product. However, sitagliptin was independently developed and brought to market by Merck Sharp & Dohme, which has a subsequent compound patent for sitagliptin.

Although sitagliptin falls within the scope of Royalty Pharma’s patent, it is not specifically claimed or disclosed. The German court referred three questions to the CJEU, asking whether a product is protected by a basic patent in force when it is:

In a short decision, the CJEU held that the relevant test for article 3(a) had been set by the CJEU in Teva and that this test applied to all products, not just the combination products which were the subject of that reference.

The court dealt with the first two questions together, and the decision reinforces the primacy of the claims as interpreted in light of article 69 of the European Patent Convention for an article 3(a) assessment. It states that a functional claim is not precluded from covering a product, provided that the claims can be understood, in light of the description of the invention, to relate “implicitly but necessarily” to the product in question (paragraph 36). This assessment is undertaken by the skilled person at the priority date in light of their “general knowledge” as well as the “state of the art”.

The CJEU also stated that it “follows that the granting of an SPC is in principle not ruled out even if the product that is the subject of the SPC cannot be taken individually as a specific embodiment from the teaching of the basic patent” (paragraph 41). A product which is not a specific embodiment is not excluded if the skilled person can nonetheless specifically identify it at the priority date on the basis of their general knowledge, the state of the art and the information in the patent.

In light of this analysis, the CJEU stated that the Teva test must be applied to the Royalty Pharma patent and sitagliptin to identify whether there is basis for a valid SPC.

The CJEU’s answer to question (iii) noted that allowing post-filed data into an assessment of whether a product is covered by a patent for the purposes of granting an SPC could unduly benefit the patentee, and that rewarding research leading to a separate invention made after the patent filing undermined the fundamental purpose of the SPC regime.

The CJEU therefore held that a product which is developed after the priority date of the basic patent in question as the result of an “independent inventive step” cannot be considered to be protected by that basic patent for the purposes of article 3(a). This is irrespective of whether it falls within the scope of protection conferred by a functional definition.

Given the importance of SPCs to the life sciences industry, it already seems clear that there will be debate over the words “independent inventive step” (or “autonomous inventive step” as the phrase is translated into English from some of the languages of the decision).

Royalty Pharma therefore achieves three things: it affirms the Teva test whilst providing some needed gloss; it approves the principle of SPCs based upon functional and Markush claims; and finally it throws a curveball by stating that products which result from an “independent inventive advance” over the claims of a functional patent may not use that functional patent as the basis for an SPC.

Third-party products

The question of whether a patentee is able to obtain an SPC based upon the MA of a third party without that party’s consent is a hotly debated aspect of the SPC Regulation.

An attempt by Mr Justice Arnold (as he then was) in Eli Lilly v Genentech (2019) EWHC 388 (Pat) last year to resolve this point by a reference to the CJEU was rebuffed. The CJEU refused to rule on the referral, stating that on the facts of the case the question was only hypothetical.

The question therefore remains to be answered, although it is possible there is a hint in the thinking of the CJEU in its answer to the third Royalty Pharma question.

Second medical use

Second medical use SPCs had historically seemed precluded by articles 3(c) and 3(d) of the SPC Regulation: article 3(c) prevented them by requiring that the product had not previously been the subject of an SPC, and article 3(d) stated that an entity could obtain an SPC for a product only if the MA being used as the basis for the application was the first authorisation to put that product on the market within the EU.

However, in the 2012 Neurim decision (C-130/11), the CJEU took a purposive approach holding that the first MA to place a product on the market as a medicinal product must fall within the limits of protection of the basic patent relied upon as the basis for the SPC application.

Therefore, an earlier MA does not preclude the grant of an SPC on the basis of a later MA, provided that the earlier MA would not fall within the limits of the patent which forms the basis for the SPC application.

More recently in 2019’s Abraxis (C-443/17) the Advocate General (AG) proposed a response to the referred question which was widely interpreted as suggesting that Neurim be overruled. The CJEU declined to do so and also avoided criticising the Neurim decision, instead making the narrow statement that a MA “concerning a new formulation of an old active ingredient, cannot be regarded as being the first MA for the product concerned”.

Further references pending may shed more light on this area. In Santen (C-673/18), the AG’s January 2020 opinion strongly criticises Neurim, suggesting again that CJEU should abandon Neurim and return to a strict interpretation of article 3(d). The AG alternatively suggests that if the CJEU maintains Neurim, it should allow SPCs for any new therapeutic indication or use in which the active ingredient demonstrates a new pharmacological, immunological or metabolic action.

Whether this is likely to be played out in the decision remains to be seen. Given the CJEU’s aversion to criticising its past decisions, and the outcome of Abraxis, it may seem unlikely.

A similar reference is pending from the Swedish Patent and Market Court, addressing the article 3(c) aspect of second medical use. Novartis (C-354/19) asks the CJEU to consider whether, in circumstances where a previous SPC has been granted in respect of a product, that product may nonetheless be the subject of a further SPC which is limited to a new therapeutic indication and a new basic patent which is specifically limited to that product and indication.

An optimistic view holds that between Santen and Novartis the CJEU will confirm that second medical use SPCs are in principle allowable, provided that the scope of protection conveyed by the new basic patent is strictly limited to the second medical use, but the post-Neurim environment for second medical use SPCs remains unknown.

Conclusions

Pending substantial reform of the SPC Regulation at the legislative level, it appears unlikely that the issues it causes businesses in the life sciences sector will be alleviated in any meaningful way. Each CJEU judgment seems to open up more questions, and while certain new interpretations will help some entities in the industry, the uncertainty caused by diverse and inconsistent interpretation of the legislation is unhelpful and undermines the purpose of the SPC Regulation.

Katie Cambrook is a senior associate at Bristows. She can be contacted at:  katie.cambrook@bristows.com

Ben Millson is an associate at Bristows. He can be contacted at:  ben.millson@bristows.com

Endnotes

1Medeva (C-322/10), Georgetown (C-422/10), Yeda (C-518/10), Daiichi (C-6/11) and Queensland (C-630/10).