I. The Call For Evidence
The call for evidence is a public consultation in which the Commission invites all interested parties to provide feedback and empirical evidence on the benefits, unintended effects, consistency and coherence of the different options of the intended legislation regarding Supplemental Protection Certificates (SPCs).
The problems the initiative aims to tackle are:
- Divergent outcomes of the grant procedures across EU countries
The SPC Regulations set out uniform eligibility criteria. However, it often happens that some Member States have granted SPCs but others have refused identical applications, or granted the SPCs with a different scope. This creates legal uncertainty and undue obstacles to the entry of competing generics.
- Lack of unitary SPC protection for the future unitary patent
Under current SPC legislation, future unitary patents could only be extended by national SPCs. This would make unitary protection unavailable over the whole protection period of medicinal products or PPPs.
- Suboptimal transparency of SPC-related information
The SPC Regulations set out rules for the publication of registration data. However, several problems with national discrepancies in the transparency of SPC-related information have emerged. Stakeholders confirm that this causes legal uncertainty, e.g. manufacturers of generics often face difficulties in assessing whether the product they aim to compete with is still protected by an SPC or not in various Member States.
- High cost and administrative burden for SPC users
Each national patent office examines SPC applications. It may then decide to grant an SPC for its territory in line with the requirements of the SPC Regulations. Over 20 000 SPCs have been granted since 1993. Multiple national SPCs (see section C below) result in high registration and maintenance costs for SPC users, as well as a heavy administrative burden, especially affecting innovative small and medium-sized enterprises (SMEs). SPCs are to be enforced before national courts.
Specific policy objectives are therefore identified as follows:
- Increase legal certainty about the procedure for granting SPCs;
- Provide unitary SPC protection in relation to unitary patents;
- Make SPC-related information more transparent (e.g. clearer, more easily accessible, more comprehensible and easier to understand);
- Reduce the cost and burden of obtaining and maintaining SPC protection in the EU.
To achieve these policy objectives, the Commission is considering the following options.
- a) Baseline scenario: no policy change. The SPC system would continue to operate on the basis of existing EU and national rules. Member States might continue in an uncoordinated manner to recalibrate their SPC practices, with different approaches persisting across the single market. The problems identified would persist, even if the Commission continues to promote better implementation of the SPC Regulations. Future unitary patents could only be extended by national SPCs.
- b)Non-legislative instruments: guidelines based on the best practices of national patent offices and the case law of the Court of Justice of the European Union (CJEU), aimed at further harmonising the current SPC system (this would help achieving objectives 1 and 3). However, this would not reduce the cost or burden of multiple parallel national procedures (objective 4), or provide unitary SPC protection in relation to unitary patent (objective 2).
- c) Legislative changes, possibly combined with non-legislative ones.
c.1) Creation of a centralised system for SPC protection in the EU, with a view to reducing the cost and burden (objective 4) and making the procedure for granting SPCs more predictable (objective 1). A centralised system would facilitate the setting up of standardised, common and publicly available digital databases (objective 3). This centralised system could consist of:
a unitary SPC (also helping to achieve objective 2), complementing the future unitary patent;
a unified procedure for granting (bundles of) national SPCs, without creating a unitary SPC;
a combination of the two.
The detailed features of a centralised SPC system will be assessed in an impact assessment (e.g. an examining and granting authority (a virtual authority comprising SPC experts from Members States, or an EU authority), language arrangements (English-only or multilingual), judicial review, etc).
c.2) Targeted amendments of the SPC Regulations on the basis of the best practices of national patent offices and CJEU case law aimed at further harmonising the current SPC system (objectives 1 and 3).
II. Preliminary Remarks
II.1 The Bundesverband Deutscher Patentanwälte
The Bundesverband Deutscher Patentanwälte e.V. (Federal Association of German Patent Attorneys; BDPA) has represented the freelance patent attorneys in Germany since 1974. After the Chamber of Patent Attorneys, it is the largest nationally organised association of the profession. The BDPA promotes the interests of its members internally and at the same time sees itself as an organ to the outside world. It is also the declared aim of the BDPA to present the profession of patent attorney to the public.
A patent attorney has a degree in a technical or scientific field followed by legal training. He sees himself as a lawyer for intellectual property. His work relates not only to patents in the strict sense, but to all kinds of industrial property rights, from utility models and plant variety protection to design and trademark law.
With the professional know-how of its committees, the Bundesverband Deutscher Patentanwälte can also make its contribution to legal and economic policy processes. The BDPA takes a stand on political issues, EU law and national and international legislative procedures, and on socially relevant developments in general.
As a professional association, the Bundesverband Deutscher Patentanwälte represents the interests of its members in particular. The BDPA networks colleagues, offers training seminars and regular meetings. Because only those who are networked can also benefit from the experience of others.
II.2 Purpose of Supplementary Protection Certificates
Supplementary Protection Certificates (SPCs) were created by the European Commission with the aim to improve the protection of innovation in the pharmaceutical sector with the aim to improve the protection of innovation in the pharmaceutical sector[1] and – later – also for plant protection products[2].
The EU health policy seeks to create the conditions which permit the European pharmaceutical industry to guarantee therapeutic, scientific, economic and social progress linked with the discovery and use of medicinal products[3]. Patents were seen as representing the best tool for protecting innovation in this respect. However, regarding pharmaceutical products lengthy marketing authorization processes were seen as leading to a loss of a very substantial part of the period of exclusivity granted by the patent. The regulations were created under the assumption that this would make pharmaceutical research unprofitable, and one of the goals of the regulations was a relocation of research centres to jurisdictions that offered greater protection. The same applies to plant protection products which are also subject to extensive regulatory approval procedures prior to commercialization.
The purpose of the SPC legislation was to create patent-like sui generis rights compensating patent holders for the time loss experienced in the identified two sensitive technological fields where new products are subject to extensive regulatory procedures prior to commercialisation. By establishing common standards in this regard, the European Union legislature sought to prevent the emergence of diverging national legislation, so as to safeguard the integrity of the internal market. At the relevant time other jurisdictions, such as the US and Japan, had already enacted legislation providing for an extension of the patent term, inter alia, in the pharmaceutical field.
The relevant EU legislation is Regulation (EC) No 469/2009 and Regulation (EC) No 1610/96 on SPC covering medicinal products and plant protection products respectively.
II.3 Marketing Authorizations
Article 2 Reg. 469/2009 provides that an SPC can only be issued for products that are subject, prior to being placed on the market as medicinal product, to an administrative procedure as laid down in Dir. 2001/83 regarding medicinal products for human use or Dir. 2001/82/EC regarding medicinal products for veterinary use. Art. 2 Reg. 1610/96 provides a similar rule for plant protection products with reference to administrative authorisation procedure as laid down in Art. 4 Dir. 91/414/EEC. Under Union and national legislation marketing authorizations (MAs) for medicinal products can be obtained via four different routes:
- Centralised procedure (CP) as set out in Reg. 726/2004;
- Mutual recognition procedure (MRP) as set out in Arts. 28 et seqq. Dir. 2001/83 and Arts. 31 et seqq. Dir. 2001/82;
- Decentralised procedure (DCP) as set out in Arts. 28 et seqq. Dir. 2001/83 and Arts. 31 et seqq. Dir. 2001/82;
- Purely national procedures subject to the domestic provisions implementing Dir. 2001/83 and Dir. 2001/82.
The centralised procedure leads to the grant of an MA that is valid for all EU Member States (European Union marketing authorisation), whereas within the MRP, DCP and purely national procedures national permissions are granted. The MRP and the DCP allow a national MA to be obtained in more than one Member State. The scope of the different procedures is not co-extensive: for some medicinal products only a centralised procedure is available; for others only MRP, DCP or national procedures are possible, while for others still, both Union and national authorisations are possible.
De facto, most marketing authorizations for medicinal products nowadays are obtained via the centralized procedure. An MA granted within the centralised procedure is valid throughout the EU and as such can be relied upon by pharmaceutical companies to market the relevant medicinal product in all EU Member States.
Similar to medicinal products, plant protection products (PPPs) may only be placed on the market in the EU subject to an MA based on an in-depth ex ante assessment carried out by certain administrative state authorities. The MA procedure for PPPs is regulated in Reg. 1107/2009, 193 which has repealed Dir. 79/117/EEC and Dir. 91/414/EEC.
With the entry into force of Reg. 1107/2009 on 14 June 2011, applications for MAs for PPPs are to be assessed within a so-called zonal authorisation procedure. To this end, the EU Member States were divided into three zones. Unlike for medicinal products, the applications cannot be assessed by a specific central European Agency with a central and unitary effect for the territory of the whole EU. Rather, MAs for PPPs are assessed and granted by individual EU Member States on behalf of other Member States in their zone and sometimes on behalf of all zones within a mutual recognition system.
II.4 Nature of Law underlying MAs and SPCs
Both processes of obtaining an MA and/or an SPC are based on EU Regulations.
The national courts are normally responsible for applying EU law when a case so requires. However, when an issue relating to the interpretation of the law is raised before a national court or tribunal, the court or tribunal may seek a preliminary ruling from the Court of Justice (CJEU). If it is a court of last instance, it is compulsory to refer the matter to the CJEU. The national court submits the question(s) about the interpretation or validity of a provision of EU law, generally in the form of a judicial decision, in accordance with the national procedural rules.
Regarding the nature of the acts underlying the marketing authorizations and the creation of SPCs, Reg. 726/2004, Reg. 1107/2009, Reg. 469/2009 and Reg. 1610/96, as well as Dir. 2001/83, Dir. 2001/82, Dir. 79/117/EEC and Dir. 91/414/EEC are an integral part of the Union legal order and their interpretations are subject to the judicial control of the CJEU.
The same applies for Reg. 1257/2012 and Reg. 1260/2012 regarding the creation of a unitary patent system. In contrast, the UPCA is a multilateral agreement concluded by the EU Member States (with the exception of Spain, Poland and Croatia) without the participation of the EU itself. Therefore, the treaty is not subject to the judicial control of the CJEU.
This is an important aspect for the later discussion of options regarding a unitary SPC.
III. Standpoints
A recent study has examined the functioning of the system of SPCs established in the EU by Regulation 1768/92/EEC on SPCs for medicinal products (now: Reg. 469/2009/EC) and Regulation 1610/96/EC on SPCs for plant protection products from a legal perspective[4] and puts the regulations into context with the remaining international and national body of law.
In accordance with a large majority of NPOs and stakeholders, the Study endorses the view that the unitary patent should be complemented by an SPC of equal dimensions. It is true that de lege lataSPCs – as national rights – can already be obtained on the basis of a unitary patent, and that such rights can be enforced extraterritorially in proceedings before the UPC. However, according to the stakeholders, the lack of a single granting procedure for SPCs would constitute a lacuna in the upcoming unitary patent system.
However, the unitary patent is a legal title that will provide uniform protection only across the participating countries. The participating countries do not include all members of the European Union.
Unitary SPC protection for the future unitary patent is in principle desirable, see also recommendation No. 27 of the Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, as it would lower the costs and administrative burden of SPC seekers. The Bundesverband Deutscher Patentanwälte (BDPA) concurs with the recommendation of establishing a system for granting unitary SPCs for the benefit of SPC seekers and to further safeguard the integrity of the common market.
The Study Ref. Ares (2018)2748080 gives recommendation for the implementation of a future centralized system to address the problems the initiative aims to tackle[5]. Amongst others the Study recommends establishing a system for granting unitary SPCs. The study identifies three options for establishing such a system:
“For this purpose, it is necessary that a decision is taken on the institutional design of such a system. There are basically three options: First, a system of mutual recognition of SPCs granted by one national office could be established; second, an EU authority, whether existing, to be created, or “virtual” in the sense that experts from the national offices cooperate on a common digital platform, can be charged with the task of granting unitary SPCs; third, that task could be allocated to the EPO. We do not consider the first option to be an appropriate solution, as it does not lead to a genuinely unitary right. Thus, the choice must be made between an EU authority and the EPO.”[6].
While the study does not consider the first option to be an appropriate solution, as it does not lead to a genuinely unitary right, and prefers the third option, the BDPA favours the second option for several reasons set out below, as it seems to be the most appropriate solution to tackle the problems identified by the initiative.
The study also does not address the question whether a unitary SPC protection shall be valid throughout the entire European Union or only across participating countries, as is the case with unitary patents.
III.1. Mutual recognition of SPCs
The relevant EU legislation is Regulation (EC) No 469/2009 and Regulation (EC) No 1610/96 on SPC covering medicinal products and plant protection products, respectively.
During the years of existence of the regulations, the CJEU has developed the legislation in a number of decisions, especially regarding applying Articles 3 (Conditions for obtaining a certificate) and 4 (Subject-matter of protection) of the respective regulations with the effect that grant procedures of SPCs are better harmonized throughout the EU member states than grant procedures of patents are sometimes.
The study states that the qualitative interviews and the survey, as well as the analysis of the NPOs’ decisions and the data provided in Chapter 7, have confirmed the existence of discrepancies in the practice of the NPOs regarding the granting and refusal of SPCs. This is true inter alia for the severity, scope and length of examination, as well as for the understanding of CJEU case law[7]. However, it is also noted that the national authorities cannot deviate from the SPC Regulations themselves, and improvement is seen in future implementation of soft law to establish truly uniform practices and procedures[8].
The BDPA therefore does not fully share the concerns set out in the study Ref. Ares (2018)2748080. The BDPB does not expected that a unitary SPC in a centralised system for SPC protection in the EUwill have the effect of an increase in legal certainty about the procedure for granting SPCs, at least regarding substantial provisions for the grant of SPCs.
However, the BDPA believes that a system of mutual recognition of SPCs granted by one NPO will, once established, inevitably lead to a significant decrease of cases that are examined by the different NPOs in the member states. As a result, the experience of the NPOs as well as that of the national courts entrusted with reviewing the decisions of the NPOs, will decline over the years. This will ultimately pave the way for discrepancies in the practice of the NPOs regarding the granting and refusal of SPCs. Therefore, the BDPA is of the opinion that a system of mutual recognition of SPCs is not an appropriate way for establishing a unitary SPC.
III.2. Grant of SPCs by the EPO
Furthermore, allocating the grant of unitary SPCs with the EPO is not an option commensurate with European law in the opinion of the BVPA. In this regard the BVPA disagrees with the study Ref. Ares (2018)2748080.
The European Patent Convention (EPC) constitutes a special agreement within the meaning of the Paris Convention for the Protection of Industrial Property. The EPO examines patent applications on the premises of the material law agreed upon by the EPC Contracting States and on behalf of these contracting states. The future Unitary Patent will be a “European patent with unitary effect” which means a European patent granted by the EPO to which, after grant, unitary effect is attributed for the territory of the EU member states participating in the Unitary Patent scheme. The EPO will register the unitary effect, set up and administer a new Register for Unitary Patent Protection and collect renewal fees for Unitary Patents, which are all acts of purely formal nature.
The EPO is not an authority of the European Union, and is not subject of European law, in contradiction to the bodies of the EU member states. As such, decisions by the EPO are not subject to revision by EU authorities, as for example the CJEU. Any decisions taken by the EPO regarding the examination of SPC’s, as e.g. regarding applying Articles 3 (Conditions for obtaining a certificate) and 4 (Subject-matter of protection) of the respective regulations can – in principle – not be reviewed by the CJEU.
This is also confirmed by the Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, Recommendation No. 28:
“[…] one important aspect to consider is that if an EU authority is put in charge, appeals must be directed to the General Court, whereas in the case of the EPO being mandated, it would be possible to direct appeals to the UPC, thus consolidating jurisdiction for the grant of (unitary) SPCs as well as for infringement and validity in the same forum.”
To this end, the Study proposes that the European Union enters into a contract with the European Patent Office, and that appeals are to be directed to the UPC. This, however, would re-direct final revision of Reg. 726/2004, Reg. 1107/2009, Reg. 469/2009 and Reg. 1610/96, as well as Dir. 2001/83, Dir. 2001/82, Dir. 79/117/EEC and Dir. 91/414/EEC, which are an integral part of the Union legal order, from the CJEU to the UPC.
It is expected that this is not only incompatible with EU law, but that it would also lead to a decrease in legal certainty regarding interpretation of these regulations and directives.
In the opinion of the BVPA, the option of allocating the task to the EPO and allowing a revision by the UPC would be contra-productive, let alone the fact that – at least in the first instance at the EPO – cases regarding SPC based in EU law can be represented and decided by citizens of EPC member states which are not EU member states. In addition the EPO has no practice regarding the grant of SPCs and the interpretation of the corresponding EU law and the case law of the ECJ.
Representation of SPC seekers and decision regarding SPCs should remain in the hands and under final control of the legislative bodies within the European Union at all instances.
The MPI study suggests that entrusting the EPO with the task of granting unitary SPCs might require more complex legislation, which would include the obligation of Member States to conclude an agreement with the EPO within the meaning of Art. 63(4) EPC, and which would also secure, through an act of EU legislation, the jurisdiction of the UPC[9]. However, concluding such agreement may not even be commensurate with the EPC, as the study acknowledges. Rather the “tasks associated with implementation of relevant provisions” within the meaning of Article 63(4) EPC seems to include the conducting of a registry, as is the case with unitary patent protection. It was not intended to entrust the European Patent Office with the examination of the premises for granting SPCs knowing that it would not be possible for the European Patent Office to build up the required expertise in an appropriate time frame.
In light of the foregoing, the BDPA believes that entrusting the EPO with examination and grant of SPCs is not a practicable solution and not compliant with primary EU law.
III.3. Grant of SPCs by an EU authority or multinational authority to be created
The BVPA believes that mandating an EU institution has several advantages. Most significantly, entrusting or establishing such an authority is readily possible in view of the applicable primary EU law. Although, the existing EU institutions presently do not have any expertise for examining and granting SPCs, this problem may be solved by establishing a “virtual” institution which can (and indeed should) rely on experts from the NPOs. In this way, a virtual authority would have the required expertise for examining and granting SPCs immediately upon its creation. In the study Ref. Ares (2018)2748080, the majority of the consulted stakeholders confirmed that they would prefer a virtual office or virtual Unitary SPC Division for examining SPCs and granting certificates.
The BVPA is of the opinion that the European Patent Office, as a first instance institution for examining SPCs, will not be able to build up the necessary expertise within an appropriate time period.
Furthermore, the study confirms that an EU granting authority with subsequent appeal to the GCEU presents the lowest legal hurdles – what is needed here are rather small amendments of existing regulations (or the enactment of a separate regulation)[10].
The only potential drawback of this option appears to reside in the fact that appeals against decisions of the new EU authority must be directed to the General Court rather than the UPC. The majority of the stakeholders consulted favoured a system in which the UPC hears appeals lodged against decisions rejecting the SPC application. The Study therefore concluded that the UPC, which will decide on matters of infringement and validity in the future, is considered as the court best placed to decide on the grant or refusal of unitary SPCs.
The BVPA agrees to majority of the shareholders and the study and is of the opinion that the involvement of the UPC as an appeal instance regarding the decisions of the favoured EU authority could be established in accordance with EU law when unitary SPC is a legal title that will provide uniform protection only across the participating countries, as is the case with the unitary patent. There is no apparent reason to assume that the UPC will be unable to adopt a practice that is consistent with the rulings of the CJEU in validity, as the UPC according to Article 21 of the UPC agreement, the UPC shall cooperate with the CJEU to ensure the correct application and uniform interpretation of Union law, as any national court, in accordance with Article 267 TFEU in particular.
Furthermore, also Article 63(3) states that the term of 20 years could be extended to European patents granted jointly for a group of Contracting States – for example those participating in the UPC -if the subject-matter of the European patent is a product or a process for manufacturing a product or a use of a product which has to undergo an administrative authorisation procedure required by law before it can be put on the market in that State, respectively that same Group of contracting States.Thus, even according to the EPC – which prescribes the patent term – considers the patent term extension only possible for the group of participating members of the UPC.
It follows that „virtual“ EU authority charged with the task of granting unitary SPCs and, wherein the central division of the UPC acts as the authority for appeals against decisions of the EU authority, seems to be the most appropriate option to tackle the identified problem of divergent outcomes of the grant procedures across EU countries.
Alternatively to a true EU authority the unitary SPCs could be granted by a multinational “virtual” authority of the member states participating in the unitary patent system. In this authority the examiners of the NPOs would work together to grant the unitary SPC. This model combines the current expertise of the national examiners and has the advantage that appeals could be directed to the central division of the UPC avoiding any possible conflict with the Treaty of the Treaty on the Functioning of the European Union (Art. 256 in conjunction with Art. 263 TFEU).
As the granting of SPCs is solely based on EU law and the extensive case law of the ECJ we propose to restrict representation before this “virtual” authority (either as EU or multinational authority) as well as the UPC dealing with appeals to attorneys and patent attorney resident within the EU or the participating member states.
III.4 Suboptimal transparency of SPC-related information
The currently Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, see Recommendations No. 24 and 25. As stated therein suboptimal transparency can be dealt with by implementing a provision that mandates the publication of SPC applications by a uniform deadline and/or the establishment of a common register for national marketing authorisations.
In particular the second task could be delegated to the EPO when unitary SPCs are at issue. The EPO would act purely as a registry authority, as is the case for unitary patents.
III.5 High cost and administrative burden for SPC users
This issue has already been addressed in Section II.1 to II.3.
IV. Summary
The Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080 suggested that a unitary SPC system may be achieved by (i) a system of mutual recognition of SPCs (i) entrusting a new or existing EU authority with SPC grant, or (iii) entrusting the EPO with SPC grant. The BVDP comes to the conclusion that only the first and second options are compliant with existing primary EU law. Within the two remaining options, mandating a virtual EU institution with SPC grant appears to be the best option for achieving the objectives at hand. In an alternative favourable option the unitary SPCs could be granted by a virtual multinational institution of the member states participating in the unitary patent system. Both favourable options should build up on the existing competencies of the national examiners and appeals should be directed to the central division of the UPC.
[1] European Commission, Explanatory Memorandum to the Proposal for a Council Regulation (EEC), of 11
April 1990, concerning the creation of a supplementary protection certificate for medicinal products
(COM(90) 101 final – SYN255), Paragraph 1
[2] Regulation (EC) No. 1610/96 of the European Parliament and of the Council.
[3] European Commission, Explanatory Memorandum to the Proposal for a Council Regulation (EEC), of 11
April 1990, concerning the creation of a supplementary protection certificate for medicinal products
(COM(90) 101 final – SYN255), Paragraph 1
[4] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018.
[5] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, pages 655 ff., Recommendation Nos. 24, 25, 26, 27, 28.
[6] [6] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, pages 657
[7] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018; Chapters 20.4 and 24.3.8
[8] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018; Chapters 20.3.1.2 and 20.3.1.3
[9] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, page 574
[10] Study of the Legal Aspects of Supplementary Protection Certificates in the EU (Final Report), Ref. Ares (2018)2748080, of 28 May 2018, page 574