The granting practice for supplementary protection certificates (SPC) in Switzerland was challenged with the intention to harmonize Swiss case law with that of the European Union. Both, the European Union and Switzerland require that a product be protected by a basic patent. The question, however, is answered differently and the Swiss Federal Patent Court declined to apply the case law of the highest court in the European Union in relation to SPC. With this PharmaCircular, we would like to keep you abreast of the law and practice regarding SPC in Switzerland.

What does it mean to be protected by a basic patent?

In Switzerland, a SPC is granted if "the product as such, a process for manufacturing it or a use of it is protected by a patent". Similarly in the European Union the law requires that the product is "protected by a basic patent in force".

Whether the product is protected by a patent is of critical importance for combination products with multiple active ingredients. There are two different approaches when considering this question: The so-called infringement test and the disclosure test. For the infringement test, one is assessing whether the product defined in the SPC would infringe the rights deriving from the basic patent. By contrast, for the disclosure test, one is assessing whether the product is disclosed in the claims of the basic patent. Therefore, for the disclosure test, it is not sufficient that the product infringes the patent claim.

Developments in Switzerland

In Switzerland, the infringement test has been applied ever since the decision of the Federal Supreme Court in Fosinopril on 10 July 1998. In this decision, the Supreme Court held that it is irrelevant whether the product is named or described in the patent or in its claims. It suffices that the product is covered by the scope of the basic patent.

In the European Union, by contrast, the CJEU disapproved of the infringement test, reasoning that all active ingredients must be specified in the claims of the basic patent (C-322/10 Medeva). This holding led to a series of further referrals trying to clarify what level of specificity is required. Unfortunately, each successive referral has only generated more confusion, with the CJEU setting out further unclear and potentially contradictory criteria.

As a result of these different approaches, SPC applications were granted in Switzerland while not in the European Union. These different results prompted the Swiss Federal Institute of Intellectual Property (FIIP) to evaluate whether its granting practice should be aligned with the one of the European Union. Although Switzerland is not a member of the EU, and Swiss courts and authorities are not bound by the CJEU case law, the FIIP was of the opinion that Swiss practice - whenever possible - should be compatible with European law. In addition, the trend to a narrower granting practice should not be ignored. Therefore, the FIIP recommended that the CJEU's disclosure test be applied also in Switzerland, at least for the FIIP's granting practice.

Against this background, Mepha Pharma AG, a Swiss affiliate of Teva, initiated legal proceedings with the Swiss Federal Patent Court (SFPC) to challenge the validity of the SPC relating to Truvada®, an antiretroviral medicationfor the treatment of HIV.[1] Truvada, the "product" comprises two active ingredients, one of which is described in the claims as "optionally other therapeutic ingredients". Between the parties, it was beyond dispute that the subject-matter of the SPC was protected by the basic patent (EP 915 894 B1). Consequently, under the infringement test, the SPC was valid.

With its challenge, Mepha, however, intended to explore whether the Swiss courts would be willing to abandon the infringement test and to adopt in its place the disclosure test, in accordance with the CJEU's case law. In support of its position, Plaintiff Mepha submitted several letters from pharmaceutical organizations, urging the court to render its decision in compliance with the CJEU's case law.

In the UK parallel proceedings Arnold J made another referral to the CJEU seeking once again clarification whether the "optionally other therapeutic ingredients" as claimed in the basic patent provides "protection" for the second active ingredient.

The decision

In its decision of 3 October 2017, the SFPC held that there was no justification to deviate from the well-established infringement test, at least not for the time being. The court noticed that the Medeva rationale was not applicable to Switzerland. With its decision, the CJEU aimed at harmonizing the SPC granting practice in the EU, thereby avoiding obstacles that would affect the functioning of the internal market. Switzerland, however, is not part of the internal market, especially, not for medical products with state-regulated prices. In addition, Switzerland reviews the applications for a marketing authorization independently of the European Union; also the granting of the European Medicines Agency has no effect in Switzerland. Because of these independent systems for granting a marketing authorization, Switzerland has no obligation to have its SPC practice aligned with that of the European Union.

Even if one would consider a "voluntary" alignment with the EU's SPC practice, as the SFPC continued to reason, such a proceeding would improve neither legal certainty nor consistency. On the contrary, the court noted that the CJEU's decision in Medeva raised more questions than it answered, and that this uncertainty has yet to be resolved. In support of its reasoning, the SFPC analyzed a number of CJEU decisions, where the court was asked to provide proper guidance on the disclosure test. In each of these cases, the CJEU proposed a different wording for assessing the question whether a product is 'protected' by the basic patent.

According to the SFPC, it would be an oversimplification to believe that t different terms used by the CJEU, such as "specified", "subject of", "identified", "relate, implicitly but necessarily and specifically" would have the same meaning. These wordings would not just define the "inventive advance" so that they could be construed as a synonym for "the sole subject matter". Rather, the CJEU failed to answer the pertinent question: what constitutes a disclosure in the wording of the claims.

Judgement CJEU

Holding

Medeva

which are not specified in the wording of the claims of the basic patent

Yeda

is not the subject of any claim relating to that active ingredient alone.

Actavis/Sanofi

core inventive advance that is the subject of the basic patent

University of Queensland and Daiichi Sankyo

which are not identified in the wording of the claims of the basic patent

Eli Lilly

the claims relate, implicitly but necessarily and specifically, to the active ingredient in question.

Atavis/Boehringer Ingelheim

the subject-matter of the invention covered which constitutes the sole subject-matter of the invention

In further support of its view, the Swiss court refers also to the pending referral to the CJEU by Justice Arnold in the parallel proceedings in the UK. The SFPC took the fact that the UK courts again seek advice from the CJEU as a further confirmation that there are no clear and consistent legal principles on how to apply the disclosure test.

The SFPC concludes that, unlike the disclosure test, there are no such difficulties with the infringement test. Hence, as long as this terminological muddle persists, departing from the well-established infringement test is not justified: In the absence of clear legal principles, there is no persuasive reason for harmonizing Swiss SPC law and practice with the one of the European Union. There is simply no comprehensible and practicable case-law to align with, even if one were voluntarily to apply the CJEU case law.

Appraisal

In its 5 years of its existence, this is the first SFPC decision dealing with the different approaches in both the EU and Switzerland for assessing the validity of an SPC. The clarification was long in coming and finally arrived just as the Swiss authorities were evaluating whether to harmonize the granting practice with that of the European Union.

With Mepha's appeal there is a lot at stake for the generic drug suppliers in Switzerland: Swiss authorities were already considering a voluntary harmonization with the granting practice of the European Union and the public consultation for the respective legislative proposal was already concluded. In addition, a mere first instance decision would not have prevented any generic drug company to launch a new challenge with the Swiss court in the near future. The chances were intact the SFPC would review the situation afresh, especially after the CJEU decides upon the pending referrals from the UK courts.

This might now be different, if the Supreme Court should confirm the negative verdict of the SFPC. Such decision bears the risk to block the current status quo and forestall any legislative action to align Swiss granting practice with that of the European Union for years.