Zero or negative term SPCs give rise to a unique disunity amongst the granting authorities in the European Member States. This report provides an overview.

SPC Regulation

Pursuant to the SPC Regulation (European Regulation 1768/92 of 18 June 1992 concerning the creation of a supplementary protection certificate for medicinal products), a patentee can under certain conditions obtain a supplementary protection certificate (SPC), which is a sui generis right extending the term of protection of his ‘basic patent’.

It follows from article 1, paragraphs b and c of the SPC Regulation that a basic patent is a patent that protects an active ingredient or combination of active ingredients of a medicinal product (the ‘product’), a method of obtaining the product, or a use of the product, and which is designated by the patentee for the purpose of the procedure for grant of an SPC.

According to article 3 of the SPC Regulation, an SPC shall be granted if, in the Member State in which the application is submitted, and at the date of that application:

(a)the product is protected by a basic patent in force;

(b)a valid marketing authorisation has been granted;

(c) the product has not already been the subject of an SPC; and

(d)the authorisation referred to in (b) is the first authorisation to place the product on the market as a medicinal product.

SPCs are national rights. Applications for SPCs should be lodged with the competent industrial property office of the European Member State that granted the basic patent or on whose behalf it was granted, and in which the marketing authorisation referred to in article 3 (b) of the SPC Regulation was obtained, unless the Member State designates another authority for the purpose.

SPCs serve to compensate pharmaceutical companies for the exploitation time effectively lost due to the relatively long duration of the procedures in Europe for obtaining a marketing authorisation. It is therefore that, within the limits of the protection conferred by the basic patent, the protection conferred by an SPC shall extend only to the product covered by the marketing authorisation and for any use of the product as a medicinal product that has been authorised before the expiry of the certificate. It is therefore also the case that the SPC Regulation comprises a specific scheme for calculating the term of supplementary protection.

In this respect, reference is first of all made to Recital 8 of the SPC Regulation:

“Whereas the duration of the protection granted by the certificate should be such as to provide adequate effective protection; whereas, for this purpose, the holder of both a patent and a certificate should be able to enjoy an overall maximum of fifteen years of exclusively from the time the medicinal product in question first obtains authorisation to be placed on the market in the Community”

Further, article 13 of the SPC Regulation provides the following provisions regarding the term of the SPC:

1. The certificate 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 lodged and the date of the first authorization to place the product on the market in the Community reduced by a period of five years.

2. Notwithstanding paragraph 1, the duration of the certificate may not exceed five years from the date on which it takes effect.

With the entry into force of European Regulation 1901/2006, a third paragraph was added to article 13:

3. The periods laid down in paragraphs 1 and 2 shall be extended by six months in the case where Article 36 of Regulation (EC) No 1901/2006 applies. In that case, the duration of the period laid down in paragraph 1 of this Article may be extended only once.

It is this provision which is causing fresh discord across Europe. Where does it come from?

Paediatrics regulation

European Regulation 1901/2006 on medicinal products for paediatric use (Paediatrics Regulation) aims to ensure that the needs of children are met through innovation leading to authorisation of new medicines, rather than off-label use. As follows from the preamble, notably recital 4, its aims are particularly:

  • to facilitate the development and accessibility of medicinal products for use in the paediatric population;
  • to ensure that medicinal products used to treat the paediatric population are subject to research of high quality and appropriately authorised for used in the paediatric population; and
  • to improve the information available on the use of medicinal products in the various paediatric populations;


  • subjecting the paediatric population to unnecessary clinical trials; and
  • delaying the authorisation of medicinal products for age population.

For these purposes, the Paediatrics Regulation introduces additional requirements for marketing authorisations. Particularly, article 7 of the Paediatrics Regulation requires that the applicant shall submit the results of all studies performed and details of all information collected in compliance with a so-called paediatric investigation plan. The paediatric investigation plan (PIP) shall be drawn up by the applicant, and agreed upon by the Paediatric Committee (PDCO) of EMEA. It shall specify the timing and the measures proposed to assess the quality, safety and efficacy of the medicinal product in all subsets of the paediatric population that may be concerned. In addition, it shall describe any measures to adapt the formulation of the medicinal product so as to make its use more acceptable, easier, safer or more effective for different subsets of the paediatric population (article 15(2) Paediatrics Regulation).

This requirement applies to applications for marketing authorisation for a new medicine (those not yet authorised by 26 July 2008). Further, with effect from 26 January 2009, it also applies to applications for variations or extensions of an existing marketing authorisation concerning a new indication, pharmaceutical form or route of administration of medicines protected by an SPC or a patent eligible for an SPC.

Exemptions from this requirement are provided: the Regulation includes a system of ‘waivers’ for medicines unlikely to benefit children and ‘deferrals’ for maintaining safety and preventing delay in the authorisation of medicines for adults.

It is because of compliance with this requirement that article 36 Paediatrics Regulation provides for a six month SPC extension if indeed the applicant has submitted the results of all studies performed and details of all information collected in compliance with the agreed PIP. In light of this, the extension will also apply if the data does not support a paediatric indication. The extension is a reward for the effort, not for the result. (However, relevant information on use in paediatric populations should be included in the SmPC and leaflet.) Other conditions concern whether:

  • the medicine is authorised in all Member States;
  • the medicine is not designated as orphan drug; and
  • the applicant has not obtained a one-year extension of the period of marketing protection for a significant new (paediatric) indication.

Zero term SPCs

Although the underlying regulations serve to provide uniform European legislation, the introduction of the paediatric term extension has so far led to remarkably different results in the EU Member States.

What to do if, on the basis of the calculation scheme of article 13, paragraphs 1 and 2 of the SPC Regulation, the term of the SPC would be nil or negative? Would the responsible industrial property office then still have to grant an SPC, if with the paediatric extension of six months the ultimate term would become positive? And, what would be the basis on which the total term will have to be calculated? If calculation on the basis of article 13, paragraphs 1 and 2 of the SPC Regulation would result in a negative term, would the six months extension of paragraph 3 then have to be added to this negative term, ultimately resulting in an extension of less than six months, or does one then have to take a zero term as a starting point, as a consequence of which each paediatric SPC extension will have a fixed effective term of 6 months?

These questions have come up before various national industrial property offices in respect of Merck’s application for an SPC for a product with the generic name sitagliptin phosphate monohydrate (Januvia®). Calculated on the basis of article 13, paragraphs 1 and 2 SPC Regulation, the term of supplementary protection would be negative (minus 3 months and 14 days). However, with the six months paediatric extension, the ultimate term would turn positive.

On 28 February 2008, the Swedish Patent and Registration Office (PRV) refused Merck’s application for an SPC. The PRV held that the period of time that had elapsed between the application for the basic patent and the grant of the marketing authorisation is less than five years and that therefore, in the absence of a positive term calculated on basis of article 13, paragraphs 1 and 2 of the SPC Regulation, it cannot grant SPC protection.

Shortly after, on 14 April 2008, the UK Intellectual Property Office (UK IPO) came to a different conclusion.

It decided to grant Merck an SPC with a negative term.

In its decision, the UK IPO took account of views earlier expressed by the European Commission, and recorded in the ‘Record of the meeting of national experts held on 3 February 1995’ and in the ‘Record of the Second meeting of national Supplementary Protection Certificate (SPC) experts held on 9 October 2006 in Brussels’:

First expert meeting 1995: The commission representative pointed out that the duration of a certificate was calculated by reference to the principles set out in Article 13 of the Regulation. If under that Article, the duration of the certificate was zero, no certificate should be issued; the application could be considered as no longer serving a useful purpose (the view could be taken that that it did not constitute an application for an extension of basic patent under Article 13).

Second expert meeting 2006: A different issue, but in relation with the proposal of Paediatric Regulation, The COM also want to point out that the extension of the SPC should not apply in case where the SPC duration is "0". In order for an extension to be granted, the SPC is a sine qua non.

Whilst stating that these views should be given serious consideration, the UK IPO noted that given the timing of the first meeting, it would not have been possible at that time for the Commission to have taken into account the possibility of obtaining a paediatric extension in coming to the view that a zero-term SPC should not be granted because it would serve no purpose. The purpose is provided by the Paediatric Regulation in forming a basis for a paediatric extension. Recital 27 of the Paediatrics Regulation provides that “[..] an application for an extension of the duration of the certificate pursuant to this Regulation should only be admissible where a certificate is granted pursuant to Regulation (EEC) No 1768/92.” Further, as to the second meeting, the UK IPO particularly held that it cannot find basis for a positive term requirement in either the Paediatric or the SPC Regulation, nor anything that explicitly forbids the granting of an SPC with a zero or negative term.

Subsequently, the UK IPO considered that the only possible objection to granting an SPC would seem to be that it would be an absurdity to grant an IP right without a positive term. Assessing the interests of the applicant vis-àvis the interests of third parties, the UK IPO held that no harm would be done by granting such an SPC.

Finally, the UK IPO did not find a basis in the SPC or Paediatric Regulation for the rounding up of negative terms to zero for the purposes of calculating the period of the SPC.

On 1 July 2008, the German Patent and Trade Mark Office (DPMA) refused Merck’s application for the SPC. The DPMA held that an SPC with a negative term cannot be granted since no effective positive duration can be determined for the applied SPC. It stated that it is the spirit and purpose of an SPC to compensate for the loss of exclusive use caused by the extensive marketing authorisation procedures by means of additional protection. The patentee should have at least 15 years effective protection. If the time between the application of the basic patent and the first marketing authorisation in the EEA is longer than 5 years, then the lost exploitation time should be granted to him as a surplus to the patent’s term in order to achieve the 15 years of effective exclusive use (Recital 8 SPC Regulation). This is what the SPC serves to offer. However, if the patentee obtains the first authorisation within the term of 5 years, then he can effectively exploit the monopoly deriving from his patent for a period longer than 15 years. As this was the case for Merck, the DMPA concluded that an SPC is not necessary, nor wanted.

In addition, the DMPA referred to the fact that article 7, paragraphs 4 and 5 of the SPC Regulation set deadlines for the filing of an application for extension of the term of an already granted SPC, which are calculated on basis of the expiry date of the SPC. According to the DPMA, in respect of SPCs not having a positive term, these provisions would not be applicable since no duration can be determined. Consequently, the DPMA decided that the later term extension in order to obtain an SPC with a positive duration is not in accordance with the SPC Regulation. Notably, the DPMA has expressly pointed out in its considerations that the decision of the UK IPO has had no influence on its decision.

Most recently, on 22 January 2009, the Dutch Patent Office (DPO) rendered another decision in this string of cases. It decided in favour of granting the SPC to Merck.

The DPO held that from a formal perspective there are no restrictions that would stand in the way of granting a zero-term SPC. According to the wording of the SPC regulation and the explanatory memorandum, the requirements for grant of an SPC are listed exhaustively in article 3 of the Regulation. If these requirements are met, in principle, an SPC should be granted.

The DPO also referred to the views of the European Commission expressed in 1995 and in 2006, discussed above. According to the DPO, however, there is now a useful purpose for a zero-term SPC: to serve as the basis for paediatric term extension provided for by the Paediatric Regulation and the new paragraph 3 of article 13 of the SPC Regulation.

Furthermore, the DPO dealt with the question of whether the grant of a zero-term certificate would be in conflict with the purpose of the Paediatric Regulation. The DPO held that it would not. From the European Commission’s Extended Impact Assessment of 29 September 2004 regarding its proposal for the Paediatric Regulation, the DPO derived that it is clear that the term extension was meant not only as a reward for carrying out mandatory paediatric studies for new marketing authorisations but also as an incentive for companies with existing marketing authorisations to perform such studies. It is stated in this document that companies will want to develop new formulations, dosage forms and indications for their existing products, and for that purpose conduct paediatric studies in order to access the six-month SPC extension. Not granting a zeroterm SPC would, according to the DPO, mean that in this case no such incentive exists. This is not considered in line with the purpose of the Paediatric Regulation, which is to improve the information available on the use of medicinal products in the paediatric population.

In addition, the DPO held that refusal of zero-term SPCs could also induce parties to delay the grant of a marketing authorisation in order to qualify for an SPC with a positive term, which is not desirable from a public health perspective and opposed by Recital 4 of the SPC Regulation.

Finally, the DPO has expressly stated that it has not been influenced by the various, dissenting, decisions from industrial property offices in other Member States.

There is information that Merck’s SPC for sitagliptin phosphate monohydrate has also been granted in Greece and refused in Portugal, although this has not yet been confirmed.

Clearly, the European legislator has not intended this mix of conflicting decisions when it adopted the underlying regulations, which particularly serve to provide a uniform system. It cannot be in the interest of applicants and third parties either. Higher instance decisions will ultimately provide the required guidance.

In the meantime, during the Third meeting of national Supplementary Protection Certificate(SPC) experts held on 26 September 2008 at EMEA (Record, page 14/18), the European Commission has expressed “that no paediatric extension should be granted for zero or negative term SPCs”, and – notably - that “[t]herefore, the Commission may not support any teleological approach aiming to justify the grant of paediatric extension when there was no SPC granted with a positive term.”