Following referral from the High Court of England and Wales, the Court of Justice of the European Union (the “CJEU”) refused to give a preliminary ruling on whether a patentee can obtain a Supplementary Protection Certificate (“SPC”) on the basis of a market authorisation (“MA”) held by a third party without that party’s consent. However, the CJEU did provide clarity on the matter of pre-emptive referrals made by the UK before its withdrawal from the EU.

Background: What is a third party SPC?

A patentee can extend exclusivity for a medicinal product for up to five years after the relevant patent expires by obtaining an SPC. The purpose of an SPC is to compensate a patentee for at least some of the time it takes to obtain regulatory approval (in the form of an MA) for a medicinal product. This regulatory requirement means that the patentee cannot exploit the patent for the full length of its term. An SPC essentially extends the life of a patent, but only in respect of a specific authorised medicinal product.

Article 3 of Regulation (EC) No 469/2009 (the “SPC Regulation”) states that an SPC can be granted if:

  1. the product is protected by a basic patent in force;
  2. a valid authorisation to place the product on the market as a medicinal product has been granted in accordance with Directive 2001/83/EC or Directive 2001/82/EC, as appropriate;
  3. the product has not already been the subject of a certificate; and
  4. the authorisation referred to in point (b) is the first authorisation to place the product on the market as a medicinal product.

Of course, pharmaceutical developers often have complex group structures, and the company that develops a product or obtains an MA will often be different to that which owns the relevant patent. It is therefore well understood and accepted that a patentee company may seek to obtain an SPC on the basis of an MA held by a different, but related company. The scope of the SPC regulation is less clear in relation to SPC applications made by the patentee who relies on an MA holder that is unrelated and with which it has no legal relationship. This is commonly referred to as a “third party SPC” or “SPC squatting”.

A consequence of SPC squatting is that the MA holder will become subject to the third party patentee’s SPC rights and will need to seek a licence to continue to work the patent and associated SPC.

The law remains unclear as to whether third party SPCs can be obtained without the MA holder’s consent and the recent case of C-239/19 Eli Lilly v Genentech, gave the CJEU an opportunity to clarify the position.

Eli Lilly v Genentech

Genentech Inc (“Genentech”) is the patent holder for EP1641822, IL17 A/F antibodies (the “basic patent”), though it currently has no authorised medicinal products of its own covered by the patent. Genentech made an SPC application and claimed to fulfil Article 3(b) by using an MA held by Eli Lilly and Company (“Lilly”). Lilly markets ixekizumab under brand name Taltz, which is an antibody that binds to the IL17A/F heterodimer. In support of its application for an SPC, Genentech contended that ixekizumab fell within the scope of protection of the basic patent.

Lilly brought proceedings before the High Court seeking a declaration that Genentech’s SPC, if granted, would be invalid, arguing first that the application does not comply with Article 3(a) as ixekizumab is not protected by the basic patent. Secondly, Lilly argued that Article 3(b) and (d) were not satisfied as there was no legal relationship in existence between Genentech and Lilly and the MA was being relied on without Lilly’s consent.

Lilly had also argued that the patent should be revoked alleging that all its claims are invalid on grounds of lack of novelty, obviousness and insufficiency. In February 2019, the High Court held that the claims of the patent were invalid.

Nevertheless, Lilly submitted that a reference to the CJEU was still necessary on the basis that:

  1. Genentech was likely to appeal the decision and with Brexit approaching, the UK Courts would not have jurisdiction to refer such questions, so should refer the question now;
  2. an EU-wide answer to the question was required as Genentech had filed parallel applications in other EU Member States for SPCs based on the basic patent and Lilly’s MA; and
  3. the third party SPC position had brought uncertainty to the pharmaceutical industry generally and should be resolved.

On acceptance of these arguments, the High Court referred the following question to the CJEU:

Does Regulation (EC) No 469/2009 preclude the grant of an SPC to the proprietor of a basic patent in respect of a product which is the subject of a marketing authorisation held by a third party without that party’s consent?

The referral judgment of the High Court can be found here.

Referral refused

The CJEU on 5 September 2019 refused the High Court’s request for a preliminary ruling on the matter, concluding that the reasons for requesting a preliminary ruling were not justifiable as the referral was unrelated to the main action and the problems used to justify the referral were currently hypothetical in nature.

First, the CJEU commented on the submission that Genentech was likely to appeal the decision and the UK Courts would not be able to refer such questions after Brexit. The CJEU found that this submission was based on “hypothetical premises” that Genentech would appeal and succeed, which did not justify a preliminary ruling. The CJEU further stated that the UK has merely notified the EU of its intention to leave the EU but has not yet actually withdrawn. Thus, with EU law in full effect, the UK is still able to refer questions to the CJEU until withdrawal has taken place. The present circumstances did not mean that the High Court was able to pre-emptively request reference from the CJEU.

Secondly, in relation to Lilly’s submission that it required an EU-wide answer, the CJEU stated that the mere fact that disputes in other Member States may arise did not support the conclusion that a preliminary judgment is needed.

The CJEU refusal can be found here.

The CJEU decision provides clarity in relation to pre-emptive requests for preliminary rulings in sight of Brexit, and the need for the referral to be related to the main action at hand. However, whether an SPC can be granted based on a third-party MA, without that third party’s consent, is yet to be clarified.

It is expected that the CJEU has simply deferred ruling on this point. Perhaps Lilly’s parallel applications filed in other Member States will give rise to a new referral. If not, it would appear likely that another SPC applicant or MA holder will wish for this point to be clarified in the future.