EU SPC Reform - centralised examination procedure proposed

Proposed reforms put forward a centralised procedure for examining and granting EU SPCs. This would be a significant departure from the current system, where SPCs are examined and granted by separate national offices, potentially with differing outcomes.

Centralised examination offers potential benefits in reducing costs, increasing transparency and avoiding inconsistencies between Member States, but also poses new challenges. We take a deeper look at the proposed procedure and how it might work in practice.

When will the new procedures apply?

There is no target date yet for these proposals to come into effect and the European Commission work programme remains in the early stages (the current deadline for feedback is 18 September 2023). It will likely take time for the newly proposed Regulations to be debated, finalised and implemented. In any event, the initial drafts contain transitional provisions stating that the new rules will not apply to still pending SPC applications and the certificates granted thereon. So, in summary, much like the previous SPC waiver reforms, the date of inception is likely to be a hotly debated issue.

Will the centralised route be mandatory?

The centralised route would become mandatory for new SPC applications where:

(1) The basic patent is a European patent (including a unitary patent); and

(2) The marketing authorisation (MA) is centrally granted via the EMA.

There appears to be little room for choice, as there are co-acting and express provisions in the new SPC regulations that mean that when the above criteria are met, the authority to examine is granted to the EU IPO and stripped from Member States.

As discussed in our previous articles, the new proposals include the introduction of a new unitary SPC (uSPC), for which the basic patent must be a unitary patent and the MA must be centrally granted, meaning (unsurprisingly) uSPCs would also proceed through the centralised route at the EU IPO. The procedure for the centralised filing and examination of applications for uSPCs would be the same mutatis mutandis as the centralised procedure for national SPCs.

Applicants would be able to file a "combined application" for both a uSPC and national SPCs to additional Member States not covered by the unitary patent. However, a given product would not be protectable by both a national SPC and a uSPC in the same Member State. 

The centralised SPC route would not be available for SPCs based on national patents, or for products with MAs obtained via the decentralised and mutual recognition routes. In this case, SPC applications would still need to be filed at national patent offices.

The exclusion of MAs obtained via the decentralised and mutual recognition routes seems potentially controversial. The justification appears to be to reduce workload, which is perhaps understandable to a point, and could be re-evaluated in 5 years. But, in any case, most SPCs applications are based on centralised MAs.

The exclusion of national patents from the centralised system is potentially more significant, since this would essentially create a parallel application route at national offices for SPCs based on national patents. Especially in the early years of a new centralised system at the EU IPO, with any increased uncertainty therewith, it appears applicants could look to national patent applications in order to avoid the new centralised procedure (much in the same way that applicants are considering new filing strategies in light of the new Unified Patent Court). Given that SPCs are based on patents that were filed many years previously, applicants may therefore wish to review their patent filing strategies now, well in advance of the introduction of the new centralised SPC system.

Filing and publication

The deadline for filing a centralised SPC application would be the same as the existing national system, ie 6 months from marketing authorisation or 6 months from patent grant, whichever is later.

The centralised application could be filed in any official EU language and would need to contain a designation of the Member States in which certificate is sought, as well as details of the applicant, basic patent, marketing authorisation, and representative where present. Although the new rules do not explicitly refer to identifying the product, we would also expect this to be required since the identification of the product is to appear on the register (see below).

Following admissibility checks, the SPC application would be published on a new central electronic register, available in all languages of the Union and including details of the applicant, designated states, basic patent, an identification of the product, and marketing authorisation. The register would be kept up to date with information regarding the status of the application, a summary of the examination opinion, the duration of the certificate, details of any opposition or appeal, rejection or lapse in any member states, details and date of transfers, and whether annual fees have been paid.

The central register therefore appears to be a significant advantage of the new proposals in terms of improving transparency and availability of SPC information in Europe.

Examination

Substantive examination of a centralised SPC application would be entrusted to a panel of three examiners, including a member from the central examination authority and two qualified examiners experienced in SPC matters from different participating national patent offices of Member States. The panel would examine the application on substantive grounds (Art 3 of the SPC Regulation) for each of the designated Member States and issue an examination opinion to be communicated to the applicant.

If necessary to come to a decision, oral proceedings could be held, either at the instance of the examination authority or at the request of a party to proceedings. The oral proceedings at first instance before the examination authority would not be public. If a negative or partly negative opinion is issued, the applicant could file an appeal.

Once issued, the examination opinion would be translated into all official languages of all Member States and a summary published on the electronic register. This publication of the centralised examination opinion will be a significant procedural step for third parties to monitor, since a positive opinion would be binding on Member States and the publication would set a 2-month deadline for filing a centralised opposition (pre-grant). We will return to this in a future article, but this is a critical aspect of the proposals, particularly as pre-grant opposition would delay the grant of an application. This is in addition to the ability to file third party observations, which can be filed at any time by anyone (anonymously) - including even national examination authorities - to attempt to intervene in examination.

Grant

After completion of examination, and after the time limits for any appeal and opposition have expired (or where applicable a final decision issued), the examination opinion would be transmitted to the relevant national offices, who would be instructed to grant or refuse the SPCs. Thus, while examination would be conducted by the centralised authority, the actual grant of SPCs would be done by the respective national offices of the designated Member States, based on a positive opinion from the central examination authority.

The opinion of the central examination authority would be binding on the national offices of the designated Member States, who would be responsible for granting the SPC in accordance with their national rules (eg publication, registration in relevant databases and the payment of renewal fees).

Only in very specific circumstances could a national office refuse an SPC after a positive examination opinion is transmitted, ie where material circumstances in that Member State have changed since the filing of the centralised application, such as the basic patent no longer being in force, or the marketing authorisation being withdrawn.

It is possible that the conditions for grant may be fulfilled in one or more designated Member States but not others, such as where the basic European patent has different claims which do not cover the product. In this case, the central office may issue a positive opinion for those designated Members States in which the conditions for obtaining a certificate are fulfilled, and a negative opinion for those in which the conditions are not fulfilled.

The binding nature of the centralised examination opinion is intended to improve consistency across Member States, which is a major change to the current fragmented system that can lead to differing outcomes in SPC applications across Europe. Inconsistency between Member States is the single reason most often cited by national courts causing preliminary references to the Court of Justice of the European Union (CJEU) on SPC matters. Although the new system will provide a more direct route to the CJEU via appeal, this will probably be rare. The new proposals may therefore reduce the number of references to the CJEU by eliminating the potential for inconsistency between Member States. National SPC applications based on national patents and/or decentralised or mutual recognition MAs would still exist, which could leave open the possibility for inconsistency between national offices and the EU IPO, but this would also likely be rare (unless there is a significant change in patent filing strategies towards more national filings).

Costs

The centralised SPC application would require an application fee paid to the central examination authority. Renewal fees would remain payable to national offices, with a portion transferred to the central examination authority to help cover operational costs.

One of the proposed advantages of the centralised system is a reduction in overall filing costs, intended to bring the EU closer to its main trading partners. According to reports by the European Commission, obtaining 5-year SPC protection across the EU27 costs € 192,000 (not including lawyer fees), compared to roughly €3,000 in the US and €4,200 in Japan. By simplifying the European SPC procedure, the new system aims to reduce this cost. According to estimates by the European Commission, the new centralised European procedure could lead to a saving of around €137,000 per applicant to receive EU27 wide five year long SPC protection (Source: A Single Market for Patents: new EU rules on Supplementary Protection Certificates, European Commission, April 2023).

The bulk of savings appear to come from the reduced renewal fee for a unitary SPC, compared to paying renewal fees in 17 Member States. In addition, the centralised examination procedure would allow a single representative to be instructed to file and prosecute a single SPC application, compared to using multiple firms across Europe.

Representation

A professional representative would be required for natural or legal persons having neither their domicile nor their principal place of business or a real and effective industrial or commercial establishment in the European Economic Area.

Representatives would need to be either i) practitioners established in the EU and entitled to act as a professional representative in patent matters before a national patent office or the European Patent Office, or ii) lawyers authorised to practise before the courts or tribunals of a Member State. For European patent attorneys established solely outside the Union, this could present a difficulty (similar to that for UK trademark attorneys before the EUIPO).

Guidelines for examination

Producing guidelines was one of the options discarded in favour of the more extensive reform proposals now on the table. However, the proposals nonetheless urge the EU IPO to develop guidelines that reflect its practice, as practical use both to officials involved, applicants and professional advisers, with the need for examples called out. Again, this is a familiar practice by the EPO and the guidance may be developed and updated in order to improve consistency. There is also a mention of these being of potential use to national offices, no doubt in the hope that central guidelines may help influence practice of applications falling outside the mandate of the centralised procedure. This may be particularly pertinent with respect to the numerous additional recitals to the proposed regulations, which may foreshadow aspects of the office's guidelines on how the new wording is interpreted.

Conclusion

In many ways, the new SPC proposals look to operate similar to the EPO, with centralised filing and examination leading to a binding decision, which is then implemented at the national level (akin to national validation of EP patents). This offers opportunities to reduce costs, increase transparency with a central register and avoid inconsistencies between national offices. However, much in the same way that applicants are wrestling with the new Unified Patent Court (and in many cases opting out), the risk of centralised opposition may give applicants pause. One has to wonder how patent filing strategies may evolve in light of the new SPC proposals and if there could be an increase in national patent filings (rather than at the EPO) in cases where a single examination opinion from the EU IPO, followed by centralised opposition, is considered too great a risk.