Since its introduction in 1992 the Supplementary Protection Certificate (SPC) has been the object of litigation in many jurisdictions. The case law has been able to clarify the use of the regulations establishing the SPC, but some issues still have not been resolved.
A major new development in the life of the SPC has been the adoption of the Paediatric Regulation, introducing an extension of the SPC validity by six months as a reward for performing clinical research on the use of medicinal products for children. Finally, the regulation establishing SPCs for medicinal products was codified in 2009, leading to a new legal framework for the SPC.
At the end of the 1980s, the pharmaceutical industry found that the effective protection period of a product patent for medicinal products and plant protection products was reduced to only half of the harmonised period for patents (20 years), due to the growing regulatory requirements for marketing authorisation of these products. It is only after a medicinal product is authorised that the patent is of benefit to the holder, and if the authorisation takes place 10 years after the patent, the remaining time to reap the fruits of the invention is only 10 years. After many national initiatives to restore effective patent protection for these products through national unharmonised certificate systems, the EU-wide SPC was introduced. In this feature, we will focus on the SPC regulation dealing with medicinal products, currently Regulation (EC) No 469/2009 (“SPC regulation”).
Nature of the SPC
Protection of innovation
Innovation is key to the pharmaceutical sector because public health policymakers, healthcare professionals and patients have an interest in the availability of ever-better medicines. The development of new medicinal products is, however, very expensive, and the possibility to earn a good return on investment is limited in time until generic copies of the innovative product can enter the market. In the EU, two different protection mechanisms have been developed to protect innovation: Regulatory Data Protection (RDP) and the SPC.
All protection mechanisms have to be limited in their effects, because at a certain point in time exclusive marketing of a medicinal product should have enabled the innovator to recover its R&D costs and make a sufficient profit. If that time comes, generic industry takes up its role to make copy products available at lower prices.
Both in respect of RDP and the SPC, legislation leaves a lot of room for interpretation.
An SPC extends the market exclusivity offered by a patent, up to a maximum of 15 years from the first marketing authorisation that has been granted in the European Economic Area (EEA). Although the SPC extends the 20-year validity of a patent right, it has to be considered as a sui generis right, to be placed somewhere between RDP on the one hand and intellectual property rights (patent) on the other. The SPC does not protect an invention like a patent does, but rather protects a (medicinal) product, like RDP does. A specific product is protected by an SPC through extension of the same protection offered by the basic patent, once this patent has expired (see table).
System of the SPC Regulation
Patents are still granted by national IP authorities even if they have been applied for through the European Patent Office. Therefore SPCs, extending national patents, are granted by national authorities as well. Once a marketing authorisation for a medicinal product has been granted anywhere in the EEA, the SPC can be applied for until six months after the date of the marketing authorisation. As it is possible that more than one holder of a basic patent exists, an exception to this rule can apply if the holder of the second basic patent is not aware of the granting of the marketing authorisation by the holder of the first basic patent.
(First) marketing authorisation
An SPC can only be granted for a product for which a marketing authorisation has been granted, in the member state in which the certificate is applied for. This marketing authorisation needs to be the first marketing authorisation for the product. The concept of first marketing authorisation refers to the situation that after the first marketing authorisation, line extensions – variations of pharmaceutical form, indication, route of administration, etc – of the original product are authorised. These line extensions are versions of the product for which the marketing authorisation has been granted. This concept is comparable with the ‘global marketing authorisation’ in RDP, providing that no new exclusivity period can be obtained for a new medicinal product falling under the same global marketing authorisation.
The ECJ has ruled that, even if the holder of a marketing authorisation is not allowed to market a medicinal product until decisions have been taken about pricing and reimbursement, for the purpose of the SPC regulation the date of the marketing authorisation has to be used.
Another question that has been raised is whether it is relevant that a marketing authorisation has been granted in accordance with the EU pharmaceutical acquis communautaire. Does a marketing authorisation granted in Liechtenstein – not on the basis of an assessment in accordance with the acquis, but on the basis of a marketing authorisation granted in Switzerland – comply with the concept of the first marketing authorisation? The ECJ says yes, due to the specific Liechtenstein system which allows two types of marketing authorisations (a recognition of a Swiss authorisation and an authorisation granted in accordance with EU pharmaceutical law) to coexist, even though the product was not able to enter any other EEA market than Liechtenstein. The question of under which circumstances a marketing authorisation has or has not been granted in accordance with the acquis, and hence when it can be regarded as a first authorisation in respect of the SPC regulation, is again currently under assessment of the ECJ.
Product is defined as “active ingredient or combination of active ingredients in a medicinal product”. Because the expiry date of the SPC depends on the date the first marketing authorisation has been granted in the EEA, the identification of the product is very important. If a specific active substance is used for the first time in a medicinal product, it is clear what the product is. If an active substance has been used in a veterinary medicinal product or a plant protection product before it is used in a medicinal product for human use, all products are considered to be the same product for the interpretation of the SPC regulation.
The ECJ applies a restrictive interpretation of the regulation and ruled that a product is defined by the active substance that it contains, and the fact that a new application is a major innovation for which a large investment has been done does not outweigh the interest of maintaining the maximum protection period at 15 years.
One medicinal product may be protected by more than one basic patent. A patent that may serve as the basis for an SPC can be either a patent that protects a product itself, or a patent that protects the method to obtain the product or the application of the product. For many medicinal products more than one patent could serve as the basic patent. It is up to the applicant of the SPC to choose which of the patents he holds will serve as the basic patent for that SPC.
Product patent or usage patent
If an SPC is linked to a product patent, the full protection of the product patent is extended during the validity of the SPC. No generic product may be marketed until the SPC expires. If a more limited patent, eg, a second medicinal use patent, is used as the basic patent, the protection of this limited patent is offered by the SPC. This means that generic competitors cannot be stopped from entering the market with a generic version of the product, only from infringing the usage patent. As medicinal products are often used off-label, and pharmaceutical legislation allows deletion of patented indications from the official product information, the protection of such an SPC is much weaker: only if the patented use is the only authorised indication, generic introduction is blocked by the SPC. If more indications are authorised a generic could be authorised for a non-patented indication, after which it could be used off-label for the patented indication.
More patent holders
Two or more companies can hold patents that might serve as basic patent for an SPC. Even though the SPC regulation stipulates that only one SPC can be granted for one specific medicinal product, the regulation does not provide a solution for the situation, often occurring in practice, that more than one patent holder is eligible for an SPC. The ECJ has ruled that, in this case, both patent holders can apply for an SPC because the SPC regulation does not provide a preference for one or the other holder of a basic patent. A new SPC can even be applied for after a certificate has been granted to another patent holder.
Validity and expiration
An SPC is valid from the day the basic patent expires, until 15 years after the grant of the first marketing authorisation in the EEA, with a maximum of five years unless a paediatric extension applies. This means that if the first marketing authorisation is granted within five years of the basic patent, no SPC is granted. If the first marketing authorisation is granted between five and 10 years after the basic patent, the SPC will be valid from the expiry date of the basic patent until 15 years after the grant of the first marketing authorisation. If the first marketing authorisation is granted more than 10 years after the basic patent, the SPC will be valid for five years after the expiry of the basic patent.
Of course, an SPC also loses its validity if the basic patent is invalidated in the concerned member state, if the fees are not paid in a timely manner or if the medicinal product is no longer authorised on the market.
Because of the small size of the target population and ethical concerns about performing clinical trials on children, many medicinal products are not authorised for use by children. As the EU finds that children, like adults, are entitled to medicinal products that meet high regulatory standards, new legislation has been adopted. The Paediatric Regulation aims at the promotion of clinical research in the paediatric population. One of the instruments used to achieve this goal is the offer of a reward in the case that clinical trials of children are performed in accordance with a previously approved Paediatric Investigation Plan (PIP). The reward is an extension of the validity of the SPC by six months.
Applicants for a marketing authorisation for a new medicinal product or a line extension of an authorised medicinal product can only lodge their application if they receive, prior to the submission date, approval of a PIP from the EMA’s Paediatric Committee, or if the committee grants a waiver or deferral for the performance of clinical trials on children. Once the marketing authorisation is granted or extended the holder can request its reward, whether the paediatric trials showed benefit in children or not.
For already-authorised medicinal products which are still protected by a patent or SPC, the paediatric extension can be obtained if paediatric research is performed on a voluntary basis.
To obtain the paediatric extension for a product that already has been on the market – either in case of a new indication or on a voluntary basis – the holder of the SPC relies on the actions of many different authorities: the EMA’s Paediatric Committee has to certify compliance with the PIP; all competent authorities for the granting of the marketing authorisation of the product have to approve the paediatric variation to the marketing authorisation; and the competent authorities for patents have to grant the extended certificate. As the time frame to get all these steps taken is rather narrow, and some of the competent authorities struggle with backlogs, this process could go wrong. In national decisions on late applications of the paediatric extension, competent authorities have decided that this risk cannot be transferred to the applicant and that the paediatric extension can be granted even before all formal steps have been fulfilled.
Negative term SPC
Introduction of the paediatric extension has led to a new question, because the six-month extension could extend the validity of an SPC which would expire before it would become valid beyond this expiry date. For this reason, applications have been made for SPCs that have a negative term. Competent authorities have taken different decisions allowing a negative SPC (UK and the Netherlands), rejecting a negative SPC (Portugal, Slovenia and Germany) and allowing a zero-term SPC (Greece).
Interpretation of the legislation
The legislation with regards to the SPC has left a lot of interpretation to national courts and the ECJ. The text of the regulations did not really aim at regulating all scenarios that can occur. Apparently the legislator trusted the courts to interpret SPC legislation.
In this interpretation, a main trend can be determined. The courts tend to take a formal approach to the SPC – as is common in respect of (other) intellectual property rights – in the interest of transparency: a competitor needs to be able to rely on the expiration of protection. This restrictive interpretation limits protection of innovation to those cases that completely comply with relevant legislation, even if strict interpretation leads
to a decision that seems unreasonable or contrary to the intention of the legislation.
If the fact that a formal criterion has not been met is beyond the control of the SPC applicant, this non-compliance will not be held against the applicant by competent authorities and courts.
Protection of innovation
The SPC has proven an effective instrument in protecting innovation for medicinal products. The most important difference with the instrument of RDP is the duration of the protection. Both RDP and SPC use the first marketing authorisation date as the starting point for the protection period, but RDP is limited to 10 or 11 years, and an SPC can stay valid until 15 years have elapsed.
A disadvantage of both SPC and RDP is that both use the first original marketing authorisation for a specific medicinal product as the basis for protection. The major importance of incremental development of medicinal products after their first marketing is not recognised by either protection mechanism. This may lead to ‘orphaning’ of medicinal products, which could have been extremely useful for different applications other than the one they were originally authorised for, because it is difficult for industry to invest in know-how that will not lead to additional returns.