Part 1: Supplementary Protection Certificates – harmonisation  

Following the European elections earlier this month, innovator’s eyes are on the new Parliament to see how the proposed reforms to the Supplementary Protection Certificate regime are finalised following consideration by the European Commission and the Council of the EU. This is the first in a series of articles discussing the evolving landscape of patent term extensions. Here we focus on the proposed new centralised examination procedure which aims to improve consistency in order to harmonise the Supplementary Protection Certificate regime. 

In the world of innovation, securing adequate intellectual property protection which will enable an appropriate reward for the investment underlying invention is crucial to success.  The patent system is directed to doing just that, providing a 20-year monopoly for inventions deemed worthy of protection. Two decades of patent protection may seem like a just reward, but that is not the case in all areas of innovation – for some, the time available for enjoying exclusivity on the market may be eroded by other factors.  In the field of pharmaceuticals and plant protection products, a company cannot exploit their invention until they have obtained a marketing authorisation, and jumping through the necessary regulatory hurdles to do so takes many years. Consequently, the 20-year period of monopoly protection afforded by a patent may be insufficient to adequately reward the investment put into research and development. 

This is where Supplementary Protection Certificates (“SPCs”) come into play.  SPCs are essential ‘follow on’ rights (effectively patent term extensions), available where a pharmaceutical or plant protection product is protected by a patent and has a marketing authorisation.  SPCs extend the monopoly by up to five years.  They offer a valuable lifeline to patentees, often during the most valuable part of the lifecycle of a medicinal or plant protection product, going some way to mitigate the market entry lag due to regulatory requirements.  Like patents, SPCs are national rights, granted and enforced on a country-by-country basis (although they are also now part of the Unitary Patent (“UP”) system, see below).  Post-Brexit, the UK has adopted the same provisions as those in the EU Regulations governing SPCs (EU Regulations 469/2009 and 1610/96) into its legal framework, with the UK Intellectual Property Office continuing to grant UK SPCs where there is a relevant patent in force in the UK and a related UK marketing authorisation. 

In 2020, the EU carried out an ex-post evaluation of the SPC Regulations.  The evaluation assessed whether the main objectives of the SPC Regulations were achieved by considering the effectiveness, relevance and added value of EU intervention. As part of this, the EU pinpointed the fragmentation of the SPC regime as detrimental to its efficacy. The national filing regime, in which individual SPC applications have to be filed at each national patent office, can be an administrative headache for patentees, costly, and can lead to inconsistent outcomes across Europe.   

Consequently, the EU set out proposals last year aimed at harmonisation. The proposed SPC reforms aim to increase procedural certainty by centralising SPC examination in order to facilitate consistency.  The proposals include a new centralised examination procedure for:-

• all national SPCs within the EU for medicinal/plant protection products with a centralised marketing authorisation (from the European Medicines Agency) which are protected by a European Patent (“EP”); and 
• all Unitary SPCs for medicinal/plant protection products with a centralised marketing authorisation which are protected by a UP.

These proposals are set out in four regulations, one for national SPCs and one for Unitary SPCs and, in each case, one for medicinal products and one for plant protection products. 

Under the new procedure, national (within the EU) and Unitary SPC applications will be examined by the EU Intellectual Property Office (“EUIPO”), with the EUIPO SPC examination panels including at least one member with at least 5 years’ experience of patent and SPC examination.  Oral proceedings may be held.  The EUIPO will issue an “examination opinion” on whether the SPC should be granted.

If the examination opinion is positive, SPCs will then formally be granted by national patent offices across Europe (in the case of an EP), or a single unitary SPC will be granted (in the case of a UP).  A national patent office can only refuse an SPC after a positive examination opinion in very limited circumstances, such as withdrawal of the marketing authorisation or the patent no longer being in force. 

The centralised examination procedure will not be available (and therefore applications will need to be filed at national patent offices) for SPCs in the EU where:

• the product is protected by a national patent; and/or 
• the marketing authorisation has been obtained via the decentralised or mutual recognition route. 

As part of the reforms, another notable innovation by the Commission is the introduction of a “pre-grant opposition” procedure, where a centralised opposition can be filed within 2 months of publication of the examination opinion (this is in addition to third-party observations, which can be submitted during examination).  Decisions on oppositions are to include detailed reasoning.  This new procedure has been met with resistance due to concerns that it could be used to delay the grant of SPCs, thereby eroding the term of the SPC and potentially enabling third parties to evade enforcement for longer.  However, amendments proposed by members of the European Parliament to remove the procedure were not adopted by the European Parliament.   

With the new Unified Patent Court now fully operational, this new opposition procedure will afford those wishing to challenge an EU SPC two bites of the cherry, with the opportunity to argue for invalidity before both the EUIPO and the Unified Patent Court.  Whether this will influence future patent filing strategies remains to be seen, but it is conceivable that some players will consider the risks of an opinion from the EUIPO followed by a centralised opposition too great, and consider reverting to national patent filings, at least in key markets and/or for ‘crown jewel’ patents. 

The reforms also aim to provide greater clarity in relation to thorny issues that have plagued the SPC regime for many years, due to conflicting decisions in different jurisdictions. One such issue is the meaning of “product protected by a basic patent” where a seemingly simple definition has been the subject of many referrals to the Court of Justice of the EU (“CJEU”). The reforms aim to codify the CJEU case law on this issue.

The proposals for the reforms were approved by the European Parliament on 28 February 2024, with the finalised proposals currently pending consideration by the European Commission and the Council of the EU.  And, although the Members of the European Parliament approved the new regime, given the European elections earlier this month, the final shape of the legislation will have to be followed up by the new Parliament and the proposals may be revised further before being adopted. 

The evolving SPC landscape reflects a broader narrative of balancing innovation with protection. Once implemented, the reforms will result in the coexistence of the EU SPC centralised procedure with a purely national procedure (for example, for SPCs in countries outside of the EU, including those in the UK, as well as for EU SPCs excluded from the centralised procedure because they are based on a national patent and/or a non-centralised marking authorisation). The quest for a streamlined and more effective SPC system continues, with the hope that it will foster an environment where innovation thrives and is justly rewarded. Following its departure from the EU, the UK continues to watch from the sidelines as the EU moves towards a harmonised regime. 

Part 2 of this series will discuss another key area of SPC reform – the proposed implementation of waivers permitting manufacture for export/stockpiling during the SPC term.