EU SPC Reform – what’s going on?

The European Commission has published significant and far reaching proposals to reform the law governing the prosecution, grant and litigation of supplementary protection certificate (SPCs) in Europe, including new routes for centralised grant as well as unitary SPCs.

The significance of EU SPC reform

SPCs are an important R&D incentive that offer a form of patent term extension to compensate products that are delayed to market due to compliance with EU regulations.

We will focus on SPCs for medicinal products for human use, which often take the limelight and endure more significant litigation (compared e.g. to SPCs for veterinary or plant protection products).

By their nature, SPCs kick in once a medicinal product has been on the market for a long time. Indeed, SPC expiry may mark the target for generic or biosimilar launch. Accordingly, erosion of SPC scope, or indeed SPC revocation, is important regarding generic/biosimilar competition.

While based on patents – which fall under the governance of national courts/laws and the EPO/EPC – SPCs are governed by directly applicable EU Regulations, under the purview of the CJEU and, accordingly, subject to review and reform via the European Commission.

But the power of these reforms may surpass the borders of the EU, as other European/EPC countries – e.g. Switzerland and the UK – will be watching carefully given their influence on SPCs. This particularly applies to the UK whose current law, post-Brexit, is essentially a cut and paste of the current EU SPC Regulations.

The key reform proposals

More than a decade ago, SPC reform was posed within a batch of Commission proposals. Those proposals were incubated via extensive legal and economic review and hatched a significant development: a new SPC Regulation implementing waivers permitting manufacture for export/stockpiling during SPC term.

The latest reforms, hatched from another extensive legal review (by a common author of the first), pose many changes to the law via two regulations (for medicinal products): one new and one significantly revised; which bear two key reforms:

• 1) A new centralised examination procedure for SPCs (that remain national rights); and
• 2) A new unitary SPC right (uSPC), to attach to the now available EP with unitary effect (or unitary patent / UP).

The uSPC is an acceleration (at last) to try to catch up with the new (albeit long time coming) reforms around the UP and the Unified Patent Court (UPC), which started on 1 June 2023.

The need for a clear and carefully thought through uSPC has been a key issue with respect to the uptake of UPs in the pharma sector. Any perceived risk could result in fewer pharma UPs (or certainly fewer (or no) uSPCs); not unlike the trend seem in high volume of UPC opt-outs filed by pharma patentees.

While the UP and/or uSPC are optional, the centralised procedure will be of equal interest, especially as in the majority of SPC applications, it will be mandatory.

And the scope of the reform clearly surpasses the main 2 issues, with further amendments spanning the current laws, both codifying existing caselaw and clarifying certain issues. Pharma companies will be looking carefully at the details to ascertain whether the reforms have preserved or propose changes for the better or worse.

The timing of these reforms

As noted already, these reforms are not a surprise. There was call for evidence in Q1/Q2 2022 and Roberto Romandini’s legal review was published in August 2022.

The proposals and new regulations were published in April 2023, with the deadline for feedback ever extending (currently in August 2023) while the documentation is translated into all EU languages.

When they do come into force, the new regulations propose one year to get the new bodies and procedures up and running (with re-evaluation every 5 years).

In the meantime, there is no clear or concrete timeframe and there is clearly going to be numerous detailed submissions from interested parties in the pharma industry in such a significant and heavily debated field.

Breaking down the reforms

Pending the outcome of the consultation, we are going to break down the key issues into a series of articles, which we can return to later in 2023 to see what has stuck, twisted or fallen away as the reforms progress. We will also monitor whether any UK reforms arise.

And if you are interested in these reforms, you are probably as interested in the extensive parallel reforms proposed concerning pharma regulation, including data exclusivities and how experiments / clinical trials might be exempt from patent infringement. Please see here.