Amendments to the UK Patents Act 1977 will provide innovators with much needed certainty on the application of the “experimental purposes” exemption to clinical/field trials and health technology assessments
An innovative pharmaceutical company may legitimately need to use a product or process patented by a third party for clinical or field trials or for the purposes of health technology assessments (HTAs). In the UK, HTAs are required before the National Institute for Health and Clinical Excellence will recommend a medicinal product for use by the National Health Service. Products and processes patented by third parties may also be used by innovative companies when developing combination therapies.
Within Europe, there exists a defence to patent infringement commonly referred to as the “Bolar” exemption, which applies to acts legitimately undertaken for the regulatory approval of medicinal products. However, there is a significant divergence of approaches between individual Member States as to the extent and scope of the Bolar exemption. In the UK, the current law exempts from patent infringement certain acts undertaken for the regulatory approval of generic medicinal products. However, this exemption does not cover acts undertaken for the regulatory approval of new medicinal products, making the UK one of only 8 EU Member States in which trial activities for new medicinal products may infringe a patent. Although a separate “experimental purposes” exemption exists under the UK law, it has been narrowly interpreted leading to uncertainty for innovators about its application to trials and related activities. The result is that the UK’s current approach to exemptions for trials and related activities is relatively narrow, unlike a number of other European Member States.
Following a number of consultations the UK government proposes to change the law to ensure that it is clear to innovative pharmaceutical companies that anything done for the purposes of a medicinal product assessment, meaning activities for specific purposes (including authorisations and recommendations as to use in any country) will fall within the scope of the “experimental purposes” exemption. It is expected that these changes will reduce the cost of undertaking trials in the UK (for example by eliminating the cost of freedom-to-operate investigations which will reportedly1 save companies between £3,000 to £135,000 per trial) and will make the UK a more attractive place for companies to undertake research and development.
The current position
The UK Patents Act 1977 (the Act) provides for two different exemptions relevant to trials and experimental activities. Under sections 60(5)(b) and 60(5)(i) of the Act, an act will not infringe a patent if:
“S. 60(5)(b) it is done for experimental purposes relating to the subject-matter of the invention;
[This is commonly referred to as the UK’s “experimental purpose” exemption.]
S. 60(5)(i) it consists of:
“(i) an act done in conducting a study, test or trial which is necessary for and is conducted with a view to the application of paragraphs 1 to 5 of article 13 of Directive 2001/82/EC or paragraphs 1 to 4 of article 10 of Directive 2001/83/EC [the abridged authorisation route for generics]; or
(ii) any other act which is required for the purpose of the application of those paragraphs.”
[This is commonly referred to as the UK’s “Bolar” exemption.]
Until now, the UK courts have taken a narrow view as to what constitutes an act done for experimental purposes under section 60(5)(b) of the Act. In Monsanta v Stauffer2 the Court of Appeal held that:
- Trials carried out to discover something unknown, to test a hypothesis, or to find out whether something will work in specific conditions can be regarded as an experiment; but
- Trials carried out to demonstrate to a third party that a product works or to amass information to satisfy a third party that it works as claimed, are not regarded as acts done for experimental purposes and are therefore not exempt acts.
The case law did not directly address the status under the experimental use exemption of bioequivalence and stability tests undertaken for the purpose of securing an abridged authorisation for a generic drug. This uncertainty was addressed by the introduction in 2005 of section 60(5)(i) of the Act, the UK’s “Bolar” exemption, which specifically refers to the abridged authorisation route for generic drugs. This provision fully implements EU Directives 2004/27/EC and 2004/28/EC3 (Future Medicines Legislation) that was intended to provide equivalent legislation to the Hatch-Waxman Act4 in the US.
The US case law has subsequently evolved to now exempt from patent infringement all uses of inventions reasonably related to the development and submission of information to the Food and Drug Administration or other regulatory agencies5. In contrast, the UK has adopted a narrow approach to implementation by closely following the wording of the relevant Directives. Some other EU Member States, however, took a much broader approach to the Directives. For example, in Germany all studies and trials and the consequential practical requirements which are necessary to obtain a marketing authorisation for an innovative or generic drug in any Member State or any third country are exempted6.
Due to the narrow interpretion of the UK’s Bolar exemption it has still been necessary for innovators to attempt to rely upon section 60(5)(b) of the Act (the UK’s “experimental purpose” exemption) in relation to UK clinical and field trials for new drugs. Whilst such trials have been the main source of relevant case law, it has remained difficult to determine whether certain trials and related activities fall within the scope of the “experimental purpose” exemption. However, following a number of consultations, draft legislation to amend the Act has recently been published which is intended to provide certainty to UK law.
Draft amendments to the Patents Act 1977
A draft Legislative Reform Order7 (the Order) has been laid before the UK parliament. The Order will amend section 60 of the Act and is stated to come into force on 1 October 2014. Rather than expand the “Bolar” exemption under section 60(5)(i) of the Act, the proposals involve expanding the “experimental purpose” exemption under section 60(5)(b) of the Act (i.e. the experimental purpose exemption). The following new sections will be inserted in section 60 of the Act:
(6D) For the purposes of subsection (5)(b), anything done in or for the purposes of a medicinal product assessment which would otherwise constitute an infringement of a patent for an invention is to be regarded as done for experimental purposes relating to the subject-matter of the invention.
(6E) In subsection (6D), “medicinal product assessment” means any testing, course of testing or other activity undertaken with a view to providing data for any of the following purposes—
(a) obtaining or varying an authorisation to sell or supply, or offer to sell or supply, a medicinal product (whether in the United Kingdom or elsewhere);
(b) complying with any regulatory requirement imposed (whether in the United Kingdom or elsewhere) in relation to such an authorisation;
(c) enabling a government or public authority (whether in the United Kingdom or elsewhere), or a person (whether in the United Kingdom or elsewhere) with functions of—
(i) providing health care on behalf of such a government or public authority, or
(ii) providing advice to, or on behalf of, such a government or public authority about the provision of health care,
to carry out an assessment of suitability of a medicinal product for human use for the purpose of determining whether to use it, or recommend its use, in the provision of health care.
The government’s draft impact assessment8, which assesses the costs, benefits and impact of the relevant policy explains that the previous wording of the Act (implementing a narrower interpretation of the Future Medicines Legislation) has meant that the UK law puts the pharmaceutical industry at greater risk of patent infringement when running clinical trials, field trials and health technology assessments. The government considers that this is a problem because there is a cost to industry in assessing this risk and it makes the UK a less attractive place to do this work. The government expects that changing the law to provide greater certainty will reduce these costs and bring economic benefits to the UK by making it a more attractive place to carry out trials and related activities.
Formal consultation and government response
On 24 October 2012 the UK Intellectual Property Office (IPO) launched the preceding formal consultation on proposed changes to legislation relating to patent infringement in clinical trials and field trials9. The stated aim of the proposal was to eliminate legal uncertainty and to reduce the financial burden on those conducting clinical or field trials which is caused by the current narrow experimental use and regulatory review exemptions, the latter of which only applied in the UK to generic drugs.
It was proposed that section 60(5) of the Act be amended to provide an exemption to patent infringement for clinical or field activities involving innovative drugs. The three options that the IPO sought responses on were to exempt:
- all activities required to secure regulatory approval to market innovative drugs in all countries;
- all activities required to secure regulatory approval to market innovative drugs in the EU and EEA only; or
- all activities required to secure regulatory approval to market innovative drugs and also activities necessary for health technology assessment e.g. to support assessments by the National Institute for Health and Clinical Excellence.
The Government response10 to the consultation accepted that the legislation should be changed to include an exemption from infringement, for activities involved in preparing or running clinical or field trials involving innovative drugs for the purpose of:
- gaining regulatory approval in any country, a change supported by most respondents; and
- activities involved in health technology assessment e.g. data to support assessment by the National Institute for Health and Clinical Excellence, a change supported by a significant majority of respondents.
Previous informal consultations
Following the recommendations of the Gowers Review of Intellectual Property11, in 2008 the IPO undertook its first informal consultation12 on the experimental purpose exemption. There was general agreement amongst respondents13 that the experimental purpose exemption needed to be clarified and many suggested that the exemption should be extended to cover all types of clinical trials. Although the “Bolar” exemption was formally excluded from the scope of the consultation, respondents suggested that this could be nevertheless achieved by effectively including an expanded extension of the “Bolar” exemption into the definition of experimental purpose.
Having noted the respondents’ concerns, and following the UK Government’s commitment14 to the success of the life sciences industry, the IPO undertook a second informal consultation15 in 2011 to investigate the impact of the Act on the conduct of clinical and field trials. According to the IPO’s summary of responses16:
- There was evidence that the Act puts parties at risk of infringement when conducting trials involving innovative drugs, with the circumstances where organisations were most at risk including comparative trials and trials of new combination products; and
- Some of this risk arose because of uncertainty about which activities fall within the scope of the exemptions where some activities are undertaken to satisfy regulatory review but others are conducted to collect data for marketing or public health procurement purposes.
Accordingly, from as early as 2011 there has been little call by respondents to maintain the status quo and the majority of respondents supported changes to the legislation, preferably drafted to have the same scope as the German law (see above). It was noted that most respondents to this second informal consultation did not support legislative changes to exempt from infringement any acts relating to public health procurement.
Future landscape and the Unified Patent Court
The proposed amendments to the UK Patents Act and the overall broadening of the Bolar exemption will certainly come as welcome news to innovator companies. The potential challenge going forward for companies is the scope of “anything done in or for the purposes” for … “any testing, course of testing or other activity” during the earlier stages of the product’s life (eg during pre-clinical phases). The UKIPO provides “soft” guidance as to what it considers is covered by the Bolar exemption under the current un-amended provisions and it will be interesting to see if this guidance is updated once the proposed changes come into force.
It is not yet known whether other European Member States which have a similarly narrow implementation of the Bolar Exemption will follow suit. What is clear, however, is that a large number of key industry players would welcome a broader implementation of the “Bolar” exemption across Europe generally.
With the imminent arrival of the Unified Patent Court (UPC) and the UPC-related legislation, plainly this is something which will need to be given careful consideration by the UPC’s Preparatory Committee. The scope for the exemption under the UPC Agreement is similar to the current UK position. However, now that the UK proposes to amend its Patents Act to broaden the effect of the relevant directive, bringing its position similar to that of Germany, it may be that the directive which provides for the abridged authorisation route should be further amended to make clear how the directive should be applied within the UPC regime. It is expected that there will be further developments on this matter later this year.