Reasons for the EU Regulations

Supplementary protection certificates (SPCs) are an IP right which effectively extend the term of patent protection for medicinal or plant protection products by up to five years, in order to offset the reduced effective duration of patent protection caused by the lengthy processes for obtaining regulatory marketing approval.

Currently there is no centralised process for SPC applications in the EU - instead SPCs have to be applied for through national patent offices throughout the EU. This makes the application process for EU-wide SPC coverage costly and inefficient, results in inconsistent decisions and makes it difficult for third parties to have clarity as to the scope of protection held by patentees (as searches of the national patent offices are necessary to determine whether there are relevant SPCs in each jurisdiction). The first set of proposals seek to address this by implementing a centralised procedure for the grant of national SPCs and a single SPC database.

The second set of proposals seek to implement a Unitary SPC to complement the Unitary Patent (technically the European patent with unitary effect), which will come into effect from 1 June 2023 alongside the new Unified Patents Court (UPC). The Unitary Patent (UP) is a single patent covering all of the EU member states that have chosen to participate in the UP and UPC system — currently Belgium, Bulgaria, Denmark, Estonia, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Austria, Portugal, Slovenia, Finland, Sweden. (See here for more information on the UP/UPC.)

The Regulation setting up the UP does not include provision for a Unitary SPC, meaning that if a patentee wishes to obtain an SPC in all of the UP jurisdictions it would have to apply to the 17 national patent offices for an SPC relating to that particular UP in line with the current fragmented system for SPC applications. This is inconsistent with the rationale behind creation of the UP and the proposals seek to redress that by introducing a Unitary SPC that can be applied for through the centralised application system that is to be created. The availability of a unitary SPC is also expected to incentivise innovators to use the UP system.

Overview of the proposals

• The proposals are set out in four Regulations - two that introduce the centralised procedure for granting national SPCs by recasting and repealing the existing EU regulations on SPCs for medicinal products and plant protection products; and two new Regulations that create a new unitary SPC for each of medicinal products and plant protection products.
• The changes to the existing SPC regulations are not intended to modify the conditions for obtaining SPCs or their legal effect, but simply to introduce new procedural provisions regarding the centralised application and examination process. New recitals have been included in the recast regulations to reflect the current status of case law from the Court of Justice of the EU but no substantive changes have been made.
• For medicinal products, the centralised process will only be available for products with a centralised marketing authorisation (and not for those with a national MA, including one obtained through the decentralised or mutual recognition procedure). For centrally authorised products covered by a European patent (either as the traditional 'bundle' of national rights or as a Unitary Patent), an SPC must be applied for centrally - though it doesn’t have to designate all the EP jurisdictions (i.e. it will be possible in such circumstances to apply, for example, for a German but not a French SPC for a particular EP and product, but that application will have to made centrally rather than through the German patent office). It will still be possible to apply to the national patent offices for SPCs where relying on national patents or if there is not a centralised marketing authorisation. .
• For plant protection products, as there are no centralised authorisations, national marketing authorisations will be allowed to serve as the basis for a centralised application. To account for differing MA grant dates in different jurisdictions, it will be possible to apply for an SPC covering a country where an MA has been applied for but not granted at the date of filing the application; however if the MA has not been granted before the end of the examination process the examination proceedings would be suspended for that country until the authorisation has been granted. Again the national route would continue to be available.
• In both cases only European patents (either as the traditional 'bundle' of national rights or as a Unitary Patent) will be able to form the basis for SPCs applied for under the centralised procedure, to avoid the complexity of having to consider national patents which may not have the same claims. There will not, however, be a requirement for the claims of the basic patent to be identical for all member states designated in a centralised application.
• Under the proposed centralised procedure, the SPC application could be filed in any official EU language and then a central examination authority will carry out the examination of the application. As with the SEP Regulation proposals, the Commission has proposed that the EUIPO would be the appropriate body for this role.
• The central examination authority will be required to maintain an electronic register of SPC applications and a database containing all the particulars provided by applicants or any other third party observations provided pursuant to the Regulations.
• The substantive examination will be carried out by a panel consisting of one member from the EUIPO and two examiners from different national patent offices with experience in SPC matters. If the panel provides a positive opinion on grant the national patent office of each designated member state will grant a national SPC.
• Third parties will be able to submit observations during examination on the validity of the application, and will be able to challenge a positive opinion through an opposition which must be filed within two months from publication of the examination opinion. Decisions of the central examining authority will be appealable to the Boards of Appeal of the EUIPO and then to the General Court and potentially ultimately the Court of Justice subject to the rules of procedure.
• Once the SPC has been granted at a national level litigation proceedings would need to be brought before the national courts or the UPC (depending on which has jurisdiction over the basic patent).
• Under the proposed unitary SPC Regulations, the unitary SPC will be granted based on a Unitary Patent as the basic patent and will be subject to the same conditions for obtaining an SPC and with the same centralised application process as for the existing SPC regulations as proposed to be recast. It will also be possible to file a combined application requesting a unitary SPC for the applicable member states and also designating non-UP member states for which a national SPC would need to be granted. It will not, however, be possible to obtain a unitary SPC and a national SPC covering the same jurisdiction. Renewal and related fees for a unitary SPC will be payable to the central examining authority.

Commentary

The SPC reforms are the least controversial of the three sets of proposals released as part of the EU's patent package. The proposals seek to simplify and harmonise the current framework around SPCs, making it easier for right-holders to obtain broad SPC protection and at the same time increasing transparency so that it is easier for third parties to understand the scope of the patentee's rights, and they address the omission of a Unitary SPC from the Unitary Patent system. Accordingly the proposals have broadly been welcomed by stakeholders and are likely to have a relatively straightforward passage through the legislative process.

However, while for the most part the changes proposed are administrative, the: (i) formal process for third parties to submit observations during examination and; (ii) new opposition procedure whereby a positive grant opinion could be challenged through the central examination authority within a 2 month period after issue and with rights of appeal up through the EUIPO Boards of Appeal and potentially on to the Court of Justice, represent a potentially significant change in practice. Currently, most national offices do not have a formal process for third party observations during examination, though they might informally take account of such observations if filed, and, once granted, the validity of SPCs has to be challenged through the individual national courts. These aspects of the proposals - in particular the opposition - could therefore provide a significant new opportunity for, and so the threat of, central and early challenge to SPCs.