Ana-Maria Baciu September 5 2022 Unitary SPCs – overview of future developments SIMION & BACIU | Intellectual Property - European Union Ana-Maria Baciu Intellectual Property IntroductionWhat are SPCs?Objectives behind change in EU pharma patent legislationProposed unified SPC landscapeCommentIntroductionSupplementary protection certificates (SPCs) can be based on a national patent or a national validation of a European patent. Currently, there is no other legal way to obtain protection throughout the territory of the European Union.As preparations for the Unified Patent Court and pan-European unitary patents move ahead – and it looks like these instruments are close from a practical perspective, the anticipated introduction of the new system expected to take place in first quarter of 2023 – the European Commission is still exploring how the new system can include unitary SPCs.While the emergence of the Unified Patent Court and unitary patent and unitary SPC instruments is still pending, it remains to be seen whether the European Commission, as publicly announced, will amend the existing SPC regulations for pharmaceutical and plant protection products before 2023.Ultimately, it will be of great interest to see how this new system will be greeted by interested players – especially those in the pharmaceutical and medical technology industries.What are SPCs?SPCs are an idiosyncratic class of IP rights that extend the term of a patent's protection by up to five years for specific innovative medicinal and plant protection products, with the potential for a further additional six months of protection available for medicines that have been tested for paediatric use. That is, the duration of market exclusivity of a general patent can usually be extended for up to five years, but a six-month extension may be obtained by responding to a request for paediatric trials.SPCs are used to encourage particularly pharmaceutical innovation by compensating for the long time needed to obtain regulatory approval for drugs.The requirements for an SPC are set out in the SPC regulations for the grant of medicinal or plant protection products. In all EU countries, the conditions for obtaining SPCs are governed by these same regulations, so these are available for European patents granted by the European Patent Office and national patents granted in each member state.Currently, applications for an SPC must be made in each member state in which a basic patent is in force, and the current system is not necessarily characterised as uniform. Besides, the problem of the lack of "unity" or "uniformity" of the SPCs is linked not to the legislative framework, but of its practical applicability in the different member states, which differs in aspects such as granting procedures, the length of the examination and SPC expiry dates. This leaves the possibility of territorial variations in the grant procedure open and can sometimes have a major impact on the scope of SPCs across the European Union.Objectives behind change in EU pharma patent legislationIn early 2022, the European Commission advocated for new rules on SPCs to create a unitary SPC right across participating states and for a "unified" procedure for granting national SPCs. A unitary SPC is said to be providing patent protection in all participating states (in the same way as a unitary patent), with a single registration, without the need for national validation.Having as its aim putting in place a unitary SPC and/or a unified procedure for granting national SPCs, the main objectives are to make SPCs more accessible (ie, reducing the cost and burden of obtaining and maintaining SPC protection in each of the EU member countries) and efficient (ie, increasing legal certainty about the procedure for granting SPCs, among other things).Such a proposal is manifestly not viable under the existing legislation, but the current available information suggests with almost certainty that these changes will come gradually in the very near future (hopefully before the unitary patent system becomes operational, or very soon thereafter). The new system, though, would imperatively infer harmonising the legal administrative facets involved in the grant and revocation of SPCs by providing a centralised mechanism for obtaining SPC protection across the European Union.Proposed unified SPC landscapeWhile it seems that part of the industry still views the new system with scepticism, it cannot be ignored that disparities between member states – such as those regarding health products (mainly based on innovative technologies) – are far too common. For example, patent offices in France, Italy, Denmark, Poland, Portugal and Spain consider that medical devices are not products (within the meaning of the SPC regulation), whereas in the Netherlands and Germany, SPCs for medical devices have been granted with ease.(1)Another example comes from the litigation realm, where revocation actions for SPCs granted for the same drug patent (such SPCs being characterised by relatively minor differences stemming from dissimilar practices and speed of reactions of the national patent offices) have completely different outcomes. A recent example is that of the SPC for sitagliptin/metformin, which was revoked by the Romanian competent court (in the first instance for the time being), while in the Czech Republic such revocation was rejected.Admittedly, at least for countries where patent law and regulatory education is often unsatisfactory for the professionals operating in the sector and any patent reforms are only achieved by means of EU-wide amendment processes, the unified SPC landscape could prove to be a solution to the lack of expertise of administrative and judicial bodies in such countries. Also, it could prove to solve the problem of lengthier procedures in some member states compared with others. It is common knowledge that it takes longer for generic companies to enter the market in some countries than others, most often for this reason.Further, it would be much easier and more functional for companies' internal regulatory departments to operate under such a system, since the geographic extent of unitary protection would be determined by the member states participating in the unitary patent system at the date of patent grant (ie, the relevant countries that have already acceded or will accede to the Unified Patent Court Agreement).The future body entrusted with granting unitary SPCs should therefore bring together highly trained and carefully selected experts who hold expertise not only in regulatory and administrative patent procedures but in the specific conditions of granting SPCs. Besides, various associations and federations in the pharmaceutical industry have proposed to the European Commission that the new examining body should rely on the existing expertise at national level instead of trying to build a new agency from scratch, regardless of whether the new body is a standalone institution or attached to an EU agency or body already in existence.CommentNotwithstanding the above, for litigators in the broader field of patent law, it is clear that the advantage of the unitary system is the ability to obtain injunctions, enforcement and damages for a much larger market simultaneously. While some lawyers and patent attorneys may see unitary jurisdiction as a major risk, closing any possibility for safeguarding their clients' interests at least with respect to infringement and revocation claims, some may believe the exact opposite – namely, that this new jurisdiction will compress the expertise of specialists across Europe.Although the decisions obtained before the local or regional divisions of the Unified Patent Court will have effect in all countries participating in this system, the new jurisdiction should be thought of as facilitating the procedure and not complicating it. In addition, although it is true that litigation relies heavily on the tactics and skills of the litigators, the substantive issues to be litigated are likely to be handled with more professionalism and independence in such a jurisdiction.Therefore, for now at least, it would be hazardous to assume that if a mainline pharma company opts for unitary patents and/or SPCs in its portfolio from now on, there will be a higher risk of these rights being subject to revocation across all European countries part of the system at once. The current system leads to parallel proceedings, contradictory judgments, and multiplication of legal costs, whereas the new system has several notable advantages, which derive precisely from the shortcomings of the current one.Nevertheless, for now, the new system constitutes just an alternative made available as a benefit of the European Union, since unitary patents will coexist with, and be an alternative to, national patents and – until the transition period elapses – an alternative to classic European patents as well. The Unified Patent Court will have exclusive jurisdiction for disputes relating to infringement and validity of European patents, unitary patents and unitary SPCs. Therefore, the litigation before this body will therefore sit alongside national patent litigation.It goes without saying that the above only concerns the territorial scope of the states that have ratified or will ratify the Unified Patent Court Agreement, so patent and SPC proceedings will run in parallel as before in the member states that have not ratified the Agreement, and in the United Kingdom (which withdrew following Brexit).Ultimately, as the option remains open for countries not to ratify or to withdraw from the Agreement, the current SPC system will continue in parallel and the current legislative frameworks (ie, Regulations No. 469/2009 and No. 1610/1996) will not be replaced, but only amended or rather supplemented with the special provisions referring to the emerging system. In this context, it cannot be overlooked that the new system will also impact SPC filing and enforcement strategies for businesses in these sectors.While plenty of outstanding topics and questions remain unanswered on the part of the European Union about the unitary patent/SPC system, interested parties (especially pharma businesses) should at least consider sketching their internal policies and strategies on how the regulatory and litigation aspects are to be handled under the new layout.For further information on this topic please contact Cristiana Prodescu or Ana-Maria Baciu at Simion & Baciu by telephone (+40 31 419 04 88) or email ([email protected] or [email protected]). The Simion & Baciu website can be accessed at simionbaciu.ro.Endnotes(1) Information extracted from Table 18.7, "Study on the Legal Aspects of Supplementary Protection Certificates in the EU, Final Report, Annexes I-VI, May 2018", available for consultation here.