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Unified Patent Court: Supplementary Protection Certificates (SPCs)

December 15, 2015

Crowell & Moring's series of alerts provides practical information and professional comment on all the ramifications regarding the introduction of the Unified Patent Court (UPC). For further information, please see our UPC leaflet PDF or contact the lawyers listed near the bottom of each alert. To view other alerts in this series, please click here.

Besides patents, supplementary protection certificates (SPCs) are an important protection mechanism for innovative medicinal products for both humans and animals. SPCs are regulated by the SPC Regulation (EC) 469/2009. SPCs were introduced to compensate for the effective shortening of a product's patent term as a result of the sometimes lengthy delays caused by the complex procedures to obtain regulatory product approval. SPCs are national sui generis rights that extend the patent term protection for the approved product for up to five years (or five years and six months in the case of a pediatric extension under the Pediatric Regulation 1901/2006).

In order to obtain an SPC, the product in question must be protected by a patent already in force. In addition, a marketing authorization (MA) to place the active ingredient on the market as a pharmaceutical product must have been granted in accordance with Directive 2001/83. SPCs are awarded by the intellectual property office of the EU member state that granted the original national patent. In the case of a European patent, the appropriate office is that of the EU member state in whose territory the patent is in effect and in which the MA was obtained.

A similar regulation applies for plant protection products.

Perhaps contrary to what one might expect, given that SPCs are national sui generis rights, the Unified Patent Court (UPC) system will also affect SPCs. The European legislator has even announced its intention to introduce a new type of SPC, which would have a unitary effect across all UPC contracting states. In this alert we take a closer look at the prima facie incompatibility between SPCs and the UPC.

1. The UPC Agreement and SPCs: what are the rules?

The new UPC system will be applicable to SPCs: Article 3(b) of the UPC Agreement states that the UPC Agreement shall apply to any SPC issued for a product protected by a European Patent or a Unified Patent (UP) (although, see below concerning the current situation with SPCs attached to a UP). When defining SPCs, Article 2(h) of the UPC Agreement explicitly refers to the SPC Regulation 469/2009 (as well as the SPC Regulation 1610/96 relating to SPCs for plant protection products). To be clear, SPCs based on a national patent are not concerned as such patents are not part of the UPC system.

Moreover, Article 30 of the UPC Agreement explicitly confirms that an SPC confers the same rights as conferred by the patent and is subject to the same limitations and obligations.

After the transitional period of seven to 14 years (the opt-out period) the UPC will be exclusively competent for infringement and invalidity actions relating to SPCs issued for a European Patent or a Unitary Patent. During the transitional period, as with European Patents, it will be possible to opt out of this exclusive jurisdiction. If a patent and related SPC are opted out, the "classic" scenario with litigation in the various EU member states, will apply.

2. Opting out: what are the SPC specific issues?

As a rule, an application by a patent proprietor to opt out (or to withdraw an opt-out) extends to the SPC based on the European patent (Rule 5.2). It is in any case recommended that the patent proprietor and the SPC proprietor, if different, discuss their UPC strategy as soon as possible and carefully review whether they want to opt out of the UPC system. 

Indeed, if an SPC has already been granted at the date of lodging the application to opt out (or the application to withdraw), the proprietor of the SPC, if different from the proprietor of the European patent, must lodge the application to opt out or to withdraw together with the proprietor of the European patent (Rule 5.2(a)). It is important to note that this is also the case if the underlying European patent has already expired.

The patent and SPC proprietors should thus discuss their UPC strategy as soon as possible. Indeed, Article 83(3) UPC Agreement and Rule 5.2(c) combined with Rule 5.7 confirm that an opt-out is no longer possible if a court action is pending before the UPC. If national proceedings are pending, then an SPC can no longer be litigated before the UPC (Rule 5.2(c) combined with Rule 5.9). SPC and patent proprietors should therefore decide on their UPC strategy sooner rather than later, to avoid the decision effectively being made by their competitors.

On the other hand, where the SPC is granted subsequent to lodging the application to opt out, the opt-out shall take effect automatically on the grant of the SPC in question (Rule 5.2(b)).

The Rules of Procedure finally confirm "for the avoidance of doubt" that it is not possible to opt out SPCs, whether granted by the authorities of a member state or otherwise, based on a UP. However, as discussed below, it is not yet possible to obtain an SPC based on a UP. This will require amendments to the SPC Regulation (and possibly the UPC Agreement).

3. Why is it not yet possible to obtain an SPC based on a Unitary Patent?

The UPC Agreement and the Rules of Procedure are not only innovative, they are also somewhat futuristic. This is particularly true as regards the rules relating to "unitary SPCs". Indeed, the existing legal framework as discussed in part 1 does not provide for a "unitary SPC". Such an SPC is to be understood as one SPC covering all UP contracting states or a bundle of national SPCs based on a single Unitary Patent (such as under the current European patent system).

However, in a joint industry proposal of July 3, 2015, the European Federation of Pharmaceutical Industries and Associations, the European Crop Protection Association and the European Animal Health Industry, strongly supported the concept of a unitary SPC. These associations moreover proposed that unitary SPCs on the basis of a UP be granted by a virtual body composed of SPC experts from national patent offices, thus avoiding the need to build a new agency from scratch.

In its communication of October 28, 2015 entitled "Upgrading the Single Market: more opportunities for people and business," the European Commission seemed to agree and announced, in a move towards more certainty, the possible creation of a unitary SPC title. It seems the European Commission will also explore a 'recalibration' of certain aspects of patent and SPC protection more generally, noting that an SPC manufacturing waiver could lead to significant new job creation in the EU and that an update of the scope of the patent research exemption would lead, among other things, to a smooth supply of active pharmaceutical ingredients throughout the Single Market.

4. What should you already keep in mind?

SPCs are an important protection mechanism, closely related to patent protection. It is therefore not surprising that the UPC Agreement provides for specific rules relating to SPCs. The UPC system is thus clearly relevant for SPC proprietors, even if they are not the proprietor of the patent on the basis of which the SPC was granted.

Together with the patent proprietor, the SPC proprietor should pro-actively decide on its UPC strategy. In particular, the question of whether or not to opt out of the UPC system must be discussed. Where an SPC has already been granted, the application to opt out should be lodged by both the owner of the SPC and the proprietor of the European patent (Rule 5.2(a)), even if the European patent has already expired. Considering that it is no longer possible to opt out a patent and SPC once litigation is pending before the UPC, all proprietors wishing to exercise their right to opt out should act as soon as possible.

It is not only for the SPC and patent proprietors to take action, the European legislator should do so as well. The UPC Agreement does not provide for any rules on how to obtain an SPC on the basis of a UP: the current rules only provide for the granting of SPCs by national patent offices. In view of the importance of SPCs for innovative industries, it seems logical to provide for a "unitary" SPC. This would only increase the attractiveness of the UPC system.

The European Commission has announced that it will get "the endgame right," including addressing the present uncertainties concerning SPCs. In its October 28, 2015 communication the European Commission went so far as to propose the recalibration of certain aspects of patent and SPC protection, such as the scope of the patent research exemption. Patent holders, as well as other players in the relevant sectors, should therefore closely monitor the initiatives taken by the European Commission in this regard in order to safeguard their interests.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Jan-Diederik Lindemans
Partner – Brussels
Phone: +