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Supplementary Protection Certificate (SPC) Manufacturing Waiver – Article 5 goes epic


1st Jul 2019

On 1st July 2019, Article 5 of Regulation (EC) No. 469/2009 was propelled from a 32-word bit part to a 989-word lead role in the SPC Regulation but will these changes make a difference and, after a decade of Article 3 getting all the attention, is #Article 5 set to be trending around the patent courts of Europe in the 2020s?

The story so far …

Under the original SPC regulation it was not possible to manufacture, stockpile or export an active pharmaceutical ingredient (API) or finished dosage form (FDF) that fell within the scope of a SPC. This was a problem for generic & biosimilar manufacturers because:

  1. it was not possible to manufacture in the EU for countries where the basic patent had already expired and/or no extension was available (and there are lots of them); and
  2. they could not manufacture in the EU in preparation for a “day-1” launch upon SPC expiry which often resulted in the need for expensive tech-transfers to non-EU countries and complex supply chain strategies to ensure day-1 entry.

The SPC waiver should address both of these points but it comes at a price and the question for generic & biosimilar manufacturers is whether this price is worth paying or whether this change to the law is too little, too late.

Taking effect

Firstly, it should be noted that although the waiver came into effect on 1st July it will not apply to certificates that have taken effect before 1st July. This means that, at least theoretically, there could be products that will enjoy full protection until 30th December 2024 (5 years of SPC from 30th June 2019 + 6 months paediatric extension). In addition, for certificates that have been applied for before 1st July, but take effect on or after that date, the waiver will only come into force from 2nd July 2022. As a result, the waiver will only have immediate effect for SPCs applied for after 1st July.

That is a lot of big products that EU based manufacturers could be missing out on so will they “hang on” for the next few years until the waiver seriously kicks in or will they continue to shift their manufacturing out of Europe (with the risk that they may never come back)?

On the other side of the coin, will SPC holders even bother enforcing their SPCs against a company that chooses to manufacture “at risk” in the EU within this transition period when they know the EU courts will already be shifting to a waiver focussed mind-set and there is no apparent commercial damage to the SPC holder if they let this happen?

Knowledge is power

The second point, I believe, is more critical to whether generic & biosimilar companies will choose to take advantage of the new waiver. Under Art 5(2)(b)&(c), (5) & (9), generic & biosimilar manufactures (and their contractual partners in the process) will be required to provide information about their manufacturing plans to not only the authorities where the respective SPC is in force but also the holder of the SPC. On the face of it, the information provided is not too alarming – name and address of the maker; Member States in which the making (and other acts) takes place and whether the making is for the purpose of export or storage – but this is information which, prior to the waiver, never had to be provided to the SPC holder.

When this information starts landing on the desks of in-house patent departments around the world will it simply be a trigger to blow the dust off all of those process and intermediate patents (which are not subject to the SPC waiver) safe in the knowledge that even if there is no evidence that these patents are infringed, there is also no longer any doubt where they should be enforced?

If Art 5(2)(4) is to be taken literally – something which is far from guaranteed where the SPC Regulation is concerned – this should not happen because Art 5(2)(4) requires that the information provided to the SPC holder “shall be used exclusively for the purposes of verifying whether the requirements of this Regulation have been met”.

So, if we start seeing a rise in the number of secondary patents being enforced, in exactly the right Member State, after receipt of the manufacturing information, this would seem to be a reasonable indicator that the information was not used “exclusively” to check compliance with the Regulation. I can see this becoming a hotly disputed topic over the next decade.

Why six months?

Finally, the amended Regulation makes a distinction between the timing of manufacture for export and the timing of manufacturing for a day-1 launch. Manufacture for export to third countries – referred to in the preamble as “countries outside the Union” – can take place at any point during the term of the SPC, but manufacture for day-1 launches in Member States can take place “not earlier than six months before expiry of the certificate”.

The only consequence I can see from this distinction is that any product with a lead time of more than six months will not be able to take advantage of the SPC waiver and hit a day-1 launch in the EU. This may already capture a number of difficult to make generic and biosimilar products and would appear to disadvantage any vertically integrated EU based manufactures who would need more time to make the API and the FDF compared to a company that imports the API from outside of the EU. I cannot believe the intention was to exclude products with a long lead time and yet this apparently arbitrary period of six months may end up being a serious headache for EU based manufacturers working on difficult to make products.

That’s a wrap

So that’s a few highlights from the newly introduced SPC manufacturing waiver that serve as a teaser trailer to some of the things to look out for when this amendment truly kicks-in in 2022 and although Article 3 is unlikely to reach the dizzying popularity of Article 5, I certainly expect it to be coming soon … to a court near you.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose for advice before taking any action in reliance on it.

Author
Robin Ellis
Partner
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Would you like to know more? You can talk to Robin Ellis who will be able to help. Call + 49 (0) 89 206054 267

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