Friday, 14 of December of 2018

The supplementary protection certificate for medicinal products (“SPC”) is an IP right currently foreseen on Regulation 469/2009 of the European Parliament and of the Council, of 6 May 2009 (hereinafter the “SPC Regulation”). It is a sui generis right that aims to extend the patent protection period granted to a medication, in order to compensate for the period of patent protection lost due to the time that elapses between the filing of the patent application and obtaining the marketing authorization for said medication. Such loss substantially reduces the useful period of patent protection, which becomes insufficient to cover all the R&D investments made to obtain the medicine.

Although the SPC is foreseen in the EU regulations, it is actually a national right granted by the patent offices of the Member States, effective only within the borders of the national territory of each Member State and effective from the date of expiration of the basic patent. In Spain, the SPC application and grant procedure is managed by the SPTO and is regulated in articles 45 to 47 of the Patents Act (Law 24/2015), and in articles 54 to 57 of its Implementing Regulation (RD 316/2017).

The art. 3 of the SPC Regulation establishes the requirements that must be met for a Member State to grant a SPC. In this regard, a SPC will only be granted if in the Member State in which the application is filed and on the application date: a) the product is protected by a basic patent in force; b) a valid authorization to place the product on the market as a medicinal product has been granted; c) the product has not already been the subject of a certificate; and d) that authorization is the first authorization to place the product on the market as a medicinal product.

Art. 4 of the SPC Regulation determines that, within the limits of the protection conferred by the basic patent, the protection conferred by the SPC shall extend only to the product covered by the marketing authorization of the corresponding medicine and for any use of the product as a medicine that has been authorized before the expiry of the SPC. And concerning the rights contents, art. 5 provides that the SPC shall confer the same rights as conferred by the basic patent and shall be subject to the same limitations and the same obligations.

The duration of the SPC, according to art. 13 of the SPC Regulation, shall take effect at the end of the lawful term of the basic patent for a period equal to the period which elapsed between the date on which the application for a basic patent was filed and the date of the first authorization to place the product on the market in the EU, reduced by a period of five years. Likewise, the duration of the SPC is limited to a maximum period of five years.

The European Commission presented on 28.05.2018 a proposal to amend the SPC Regulation, which revolves around the introduction of a limitation to the scope of the protection of the SPC, excluding from its scope of protection the manufacture made for the sole purpose of exporting to third countries outside the EU where patent protection has expired or never existed.

For the application of this limitation, the Commission proposed in summary that the manufacturer of the generic or biosimilar product should inform this circumstance to the competent authorities of the Member State at least 28 days in advance, along with additional information such as: the identification of the manufacturer, the address where the manufacturing will take place, the date on which it will start manufacturing, the identification of the relevant SPC, the protected product and its marketing authorization, and the list of countries to which the medicine shall be exported. Furthermore, the manufacturer is obliged to inform third parties with whom it has a contractual relationship that placing the product on the market within the EU will infringe the SPC in question.

According to the press release of the European Commission, the reasoning for this amendment is to promote the market for generic and biosimilar medicines in the EU by avoiding SPCs from putting EU based manufacturers of generics and biosimilar at a disadvantage with non-EU based industry, thereby preventing further innovation and job creation in the EU. In fact, according to the current regime, during the protection period conferred by a SPC, EU-based manufacturers of generic and/or biosimilar-related products cannot currently manufacture for any purpose, not even for exporting to third countries outside EU where SPC protection has expired or does not exist, while manufacturers based in those non-EU countries can do so. This major competitive disadvantage entails a risk of delocalization of manufacturing and loss of investment in the EU.

Last 30.10.2018, the European Parliament’s Committee on Legal Affairs has submitted a series of amendments to the text originally proposed by the European Commission. The amendments proposed are quite substantial and, in summary, the 5 most significant changes are the following:

(i) The manufacturer of the generic or biosimilar product that intends to benefit from the export manufacturing waiver while manufacturing to export to a third country outside the EU, not only must notify the national patent office of the respective EU Member State where the manufacture will take place, but must also inform its intention in writing to the SPC right holder.

(ii) This obligation to inform applies not only to the intention to manufacture a protected medicine, but also to any subsequent change (such as the list of countries to which the medicine is intended to be exported), which must also be notified both to the respective national patent office and to the SPC right holder.

(iii) Notification to the corresponding national patent office and to the SPC right holder must be made at least 3 months before the estimated date the manufacturing shall start (instead of 28 days in advance, as mentioned in the original proposal of the European Commission).

(iv) Confidential or commercially sensitive information notified to the corresponding national patent office shall not be published, nor shall be necessary to include it in the notification provided to the SPC right holder.

(v) An extended transition period is introduced by providing that the export manufacturing waiver shall apply to all SPCs which the basic patents expire on 01.01.2023 or thereafter (instead of the 3 months after the entry into force of the amended Regulation, as mentioned in the original proposal of the European Commission).

It remains to be seen how the proposed amendment to the SPC Regulation will continue to evolve throughout the European legislative procedure, and when and with what contents it will be approved. The next step is the approval of a proposal of amendment in the European Parliament’s Committee on Legal Affairs (which should take place in January 2019) and subsequently the corresponding report will be submitted to a plenary session of the European Parliament. We will continue to follow the development of this relevant regulation.