The SPC Regulation (469/2009/EC) has given rise to many preliminary references to the Court of Justice of the EU in Luxembourg over its correct interpretation. Indeed, the English Courts have expressed frustration over the opaque drafting of the legislation and dubbed it “not fit for purpose”. Despite the high number of rulings, many issues remain unclear.

The recent decision of Pharmaq v Intervet involved yet another preliminary reference over the correct interpretation of the SPC Regulation, this time from the Norwegian Courts. Unusually, this was dealt with by the EFTA Court, rather than the CJEU (because Norway, whilst an EEA contracting state, is not a member state of the EU). The EFTA Court gave some useful guidance on the scope of an SPC for biologics, and further guidance on validity.

Background – A fishy business…

Intervet International BV (part of MS Animal Health) developed a veterinary vaccine called Norvax against viral pancreatic disease in salmonid fish, based on an inactive form of the F93-125 strain of Salmonid Pancreatic Disease Virus (“PD”). The strain F93-125 belongs to the PD subtype SAV1, found mainly in Ireland and Scotland. PD affects farmed fish, and is a serious health problem for that industry.

Intervet obtained a patent in Norway with broad claims, covering the F93-125 strain of PD (as deposited under the Budapest Treaty at a recognised biological material depository) and closely related strains which share “similar genotypic and/or phenotypic characteristics” and react serologically with F93-125.

Between 2003 and 2011, Intervet sold its vaccine in Norway under a Norwegian “special approval exemption” and supplied the vaccine in Ireland under a similar scheme. In 2005, Intervet was also granted a “provisional marketing authorisation” in the UK. Total sales between 2003 and 2011 in these three jurisdictions amounted to well over €73 million.

In August 2011, Intervet obtained a full marketing authorisation in Norway for “Inactivated Salmon Pancreatic Disease Virus Strain F93-125”.

In anticipation of the expiry in 2015 of the basic patent in Norway, Intervet then applied for an SPC in Norway on the basis of this Norwegian marketing authorisation. The SPC was granted by the Norwegian Patent Office in the same broad terms as the basic patent. For the purposes of calculation of the term of the SPC (under Article 13 of the SPC Regulation), the UK provisional marketing authorisation in 2005 was treated as the first marketing authorisation in the EU, giving an expiry date for the Norwegian SPC of 2020.

Pharmaq also developed a vaccine against viral pancreatic disease in salmonid fish. However, the Pharmaq vaccine was based on a virus strain isolated from PD-infected salmon in Norwegian waters (rather than the strain from Irish waters used by Intervet). This was SAV-3 (the third out of the six strains of salmonid alpha virus (SAV-1 to SAV-6).

In previous proceedings for patent infringement, the Norwegian courts had ruled that the Pharmaq product fell within the scope of the Intervet patent and granted an injunction for the life of the patent.

In the present proceedings, Pharmaq sought a declaration from the Oslo court that the SPC is invalid and/or does not cover its product.

As regards validity, Pharmaq argued that Article 2 of the SPC Regulation provides that an SPC is only available for a product which is subject to an administrative authorisation procedure under Directive 81/851/EC (the veterinary medical product directive) prior to being placed on the market. Since Norvax had been on the market in Ireland and Norway since 2003 without a marketing authorisation, it followed that it could not be the subject of an SPC. Pharmaq contended that this was consistent with the purpose of the SPC Regulation, as the patent holder had not suffered any loss of exclusivity due to regulatory delays. Intervet countered that the commercial exploitation of the medicinal product starts only with a marketing authorisation, which is an unconditional right to place a medicinal product on the market immediately.

As regards infringement, Pharmaq argued that Article 4 of the SPC Regulation provides that the protection conferred by an SPC shall extend only to the product covered by the marketing authorisation. To the extent that the Norwegian SPC purported to extend to the full breadth of the basic patent, it must be invalid. To the extent that it was limited specifically to Norvax, its protection would be narrower than the basic patent and the Pharmaq product would fall outside the scope of protection.

Norway is a contracting party of the European Economic Area (“EEA”). The EEA Agreement provides that much EU legislation in the area of the internal market, including the SPC Regulation, shall be binding upon the EEA contracting parties and be part of their internal legal order. However, since Norway is not a member state of the EU, the CJEU does not have jurisdiction over preliminary references from the Norwegian Courts relating to the correct interpretation of such EU legislation in the EEA context. Instead, such preliminary references have to be directed to the EFTA Court, which is a separate court (also based in Luxembourg) which provides non-binding rulings to the courts of the EEA member states (Norway, Iceland and Liechtenstein) on the interpretation of the EEA Agreement and other legislative acts in the EEA context.

The judgment

As regards scope of protection, the Norwegian Court asked the EFTA Court to rule on whether the SPC will protect not only the specific strain of virus included in Norvax, but also other strains of virus covered by Intervet’s basic patent. In this regard, the Norwegian Court asked whether it is relevant that:

  • such other strains have an “equivalent therapeutic effect”; or
  • a medicinal product based on such other strain is the subject of a separate marketing authorisation based on safety and efficacy data (rather than the comparability data required by the biosimilar regulatory pathway under Article 13(4) of Directive 2001/82).

The EFTA Court advised that, in the context of a vaccine, an SPC can extend to cover a strain of virus covered by the basic patent but not mentioned in the marketing authorisation, but only if that strain:

  • constitutes the “same active ingredient as the approved medicinal product”; and
  • has “therapeutic effects that fall within the same therapeutic indication for which a marketing authorisation was granted”.

The Court clarified that it is not relevant whether a medicinal product based on such other strain would require a separate marketing authorisation.

It was in dispute whether the SAV-1 and SAV-3 strains of the SPD virus are two forms of the same active ingredients, or two separate ingredients. It was also in dispute whether the two products constitute a “therapeutic equivalent”.

The EFTA Court characterised these issues as matters of fact, and remitted them to the national court for determination.

The Norwegian court also referred a number of questions related to the validity of the SPC, in particular:

  • whether the “special approval exemption” under which Norvax had been supplied in Norway since 2003 constituted an administrative authorisation pursuant to Directive 85/821 for the purpose of Articles 2, 3(b) and 3(d) of the SPC Regulation;
  • If not, does this mean in the context of Article 2 that Norvax had been “placed on the market as a medicinal product in the EEA” before it had been granted a marketing authorisation (in which case the SPC would be invalid under Article 2)?;
  • If so, does this mean in the context of Article 3b and 3d that the full marketing authorisation on which it had been granted was not the first administrative authorisation in Norway (in which case the SPC would be invalid under Article 3(d)?

The EFTA Court drew a distinction between a provisional permission to supply a medicinal product under the first paragraph of Article 8 of Directive 2001/82 and administrative authorisations granted under Title III of Directive 2001/82 (including authorisations granted in exceptional circumstances under Article 26(3)).

Article 8 permits EEA states to provisionally allow the supply of unlicensed immunological medicinal products in the event of serious epizootic diseases in the absence of a suitable authorised medicinal product). Safety and efficacy studies are not required. The EFTA Court said that this type of provisional permission does not constitute an administrative authorisation procedure for the purposes of Articles 2, 3(b) and 3(d) and does not generally entail “placing on the market” for the purposes of Article 2 as it does not entitle the producer to market, but merely to supply it. Conversely, exceptional authorisations under Article 26(3) do amount to relevant administrative authorisation procedures.

The EFTA Court left the national court to determine, as a question of fact, whether the Norwegian special approval exemptions amounted to an Article 8 permission or an Article 26(3) exceptional authorisation. We understand that this issue went to trial at the end of April 2015, with a decision expected shortly.

Eversheds’ comment

This decision is important because practice regarding how a “product” should be defined in an SPC application, and the resulting scope of the SPC application, is not yet settled. Indeed, SPC applications are routinely drafted with a product definition wider than the specific medicinal product authorised by the basic marketing authorisation. Any suggestion that these SPCs are invalid in their entirety would be a major concern. The discussion of these issues in the judgement is therefore helpful.

The Court’s observation that the scope of an SPC cannot be confined narrowly to the specific strain contained in the authorised product because this would allow products which are “therapeutically equivalent” to enter the market is helpful to biologics innovators facing the entry of biosimilars. It provides some support for the position that an SPC for a reference product should always cover a biosimilar. However, the Court’s decision does not go this far.

Moreover, by referring to “therapeutic effects that fall within the same therapeutic indication for which a marketing authorisation was granted”, the EFTA Court seems to have introduced a new requirement for determining the scope of protection of an SPC under Article 4. This wording is not found in the SPC Regulation itself, but seems to be a reference to the Forsgren decision of the CJEU (in which it is used in a completely different context). The meaning of the wording is unclear, even in the specific context of the vaccines products which were before the Court in this case.

Quite how the Court’s ruling will apply to other types of biologic medicinal product is still more unclear. The importance of biologics is undeniable. Of the eight top-sell drug products in 2014, seven were biologics: Humira (adalimumba), Sovaldi (sofosbuvir), Remicade (infliximab), Enbrel (entanercept), Lantus (insulin glargine), Rituxan (rituximba) and Avastin (bevacizumab). Patent protetion for all seven is due to expire over the next 5 years. It is inevitable, given the potential impact on the market of biosimilar and biobetter products, and in the absence of any legislative proposals to amend the SPC Regulation, that further references to either the CJEU or EFTA Court will be made for further guidance on how the SPC Regulation applies to biologic products.