The Court of Justice of the European Union (CJEU) yesterday handed down a landmark ruling that finally ends uncertainty as to the duration of Supplementary Protection Certificates (SPCs). SPCs are critical intellectual property rights granted to biopharmaceutical and agrichemical innovators whose path to market for innovative products is delayed by essential regulatory processes leading to the grant of marketing approvals. The European SPC system seeks to compensate patentees by granting these standalone rights which last for a maximum period of five years after patent expiry.

In this case, Seattle Genetics had applied to the Austrian Patent Office (APO) for, and been granted, an SPC based on the basic patent for brentuximab vedotin (marketed as Adcetris). The APO calculated the term of the SPC starting from the date that marketing authorisation had been granted. Seattle Genetics challenged this, stating that the term should be determined using the date that it was notified of the approval (now common practice in various EU Member States, but not in Austria). Until now, there had been no view from the CJEU on the correct calculation under European law. Yesterday’s decision confirms that the term of an SPC will be determined from the date of notification of the relevant marketing approval to the innovator, rather than from the date of the decision to grant the marketing approval.

The CJEU’s decision is to be applauded because both common and commercial sense has prevailed. The SPC system was expressly set up to compensate innovators whose products could not be placed on the market without first undergoing an often lengthy and expensive regulatory procedure. These processes limit the effective patent protection for products because the 20 year period of patent protection is dramatically cut short by the delays in bringing the product to market.

The CJEU’s decision recognises the compensatory effect of SPCs as a fundamental principle of the SPC system that would be thwarted if the duration of an SPC were to be determined not by the date from which an innovator could start marketing the product but from an earlier date which was only of hypothetical use to an innovator. There is often a short delay between the granting of a marketing approval and the notification of it that is given to the innovator. The effective date of a marketing approval plays an important role in the SPC system to determine the duration of an SPC – the later the date, the longer the duration of the SPC.

While the effect of the decision might be seen as extending the duration of SPCs by only a few days at most, those few days can amount to many millions of Euros of sales of valuable products when assessed across all EU Member States where SPCs are in force. In the Seattle case itself, the decision effectively adds five days on to the period of SPC protection. The decision will have wide ramifications for innovators and generic manufacturers alike, providing greater commercial certainty.