The Trade and Cooperation Agreement and its impact on IP, Pharma and Medical Devices

The final Brexit agreement, the Trade and Cooperation Agreement (the “TCA”) was agreed between the UK and the EU on 24 December 2020. Within this agreement are provisions that set out the standards expected to be recognised (mutually) between the EU and the UK in relation to intellectual property (including SPCs and trade secrets). There are some provisions concerning pharmaceutical regulation and product standards, but overall there is a lack of mutual recognition, with the consequence that, for both pharmaceuticals and medical devices, there are now effectively two separate regimes for the EU and the UK.

Intellectual Property

The provisions on IP match or exceed those for IP set out in the various treaties to which the UK and EU have acceded (such as WIPO, WTO and TRIPS agreements).  These IP standards are to be maintained as a minimum. The cited objectives and scope in relation to intellectual property (see Title V) indicate the aims behind these provisions which are to:

(a) facilitate the production, provision and commercialisation of innovative and creative products and services between [the UK and the EU] by reducing distortions and impediments to such trade, thereby contributing to a more sustainable and inclusive economy; and

(b) ensure an adequate and effective level of protection and enforcement of intellectual property rights.

The provisions are intended to “complement and further specify the rights and obligations of each [of the UK and the EU] under the TRIPS Agreement and other international treaties in the field of intellectual property to which they are parties” and do not “preclude either [the UK or the EU] from introducing more extensive protection and enforcement of intellectual property rights than required under [this section of the TCA] provided that such protection and enforcement does not contravene [those provisions]”. However, there are aspects of current UK and EU IP law, such as the dilution provisions in trade mark law, to which the agreement does not refer, instead referring to the Paris Convention provisions on the protection of well known marks. Whether this will be a point of future divergence remains to be seen.

Both the UK and the EU also have the ability to develop their own exhaustion regimes. The provisions on geographical indications (“GIs”) indicate that a mutual future scheme has not be agreed although a review clause on GIs has, which provides that the UK and EU may (if both parties agree it is in their interests) use reasonable endeavours to agree rules for the protection and domestic enforcement of their GIs.

The UK Government’s Summary document that accompanies the TCA (see here) states that the agreement “includes mechanisms for cooperation and exchange of information on IP issues of mutual interest” and “retains regulatory flexibility for each [of the UK and the EU], enabling the UK to develop an IP system in line with [its] domestic priorities“, thus enabling the UK to diverge where it so requires.

We have already commented on the changes to the UK IP regime in the firm’s guide to Brexit here (see the IP section).

The Regulation of Medical Devices and Medicinal Products

Medical devices: The TCA has a chapter (4) (under Trade – Title I) on eliminating unnecessary technical barriers to trade which deals with conformity of standards. However, this only provides for an approach under which each party can agree that its standards bodies (including those relating to medical devices) will conform with international standards and will work together to influence those and to “foster bilateral cooperation with the standardising bodies of the other Party“.

For medical devices, it had been hoped that there would be at least mutual recognition of conformity assessment under which each of the EU and the UK would recognise the other’s certification bodies. However, as things stand, although Great Britain will continue to accept CE marked medical devices until 30 June 2023 those devices certified by the UK and marked as UKCA (standing for UK Conformity Assessed, as discussed in more detail in our post here), will not mutually recognised by the EU.

Medicinal Products: For medicinal products there is a dedicated annex in the TCA, Annex TBT-2 – Medicinal Products (the “Medicinal Products Annex”), which applies to all medicinal products listed in its Annex C, namely:

  • marketed medicinal products for human or veterinary use, including marketed biological and immunological products for human and veterinary use,
  • advanced therapy medicinal products,
  • active pharmaceutical ingredients for human or veterinary use,
  • investigational medicinal products,

with this list being subject to amended by the UK-EU Partnership Council (the main governing body for the agreement and supplementing agreements).

The aim of the Medicinal Product Annex is to “facilitate availability of medicines, promote public health and protect high levels of consumer and environmental protection in respect of medicinal products”.  To help achieve this aim, the Annex provides for:

  • the mutual recognition of Good Manufacturing Practice (“GMP”) inspections and certificates, meaning that manufacturing facilities do not need to undergo separate UK and EU inspections;
  • the individual inspection, on notice, by the EU or UK of each other’s facilities); and
  • for the suspension of the mutual recognition arrangements.

Further, the TCA also states that the EU and the UK should work together to implement agreed international guidelines and that any changes to either the UK or the EU’s regulation regime should be on 60 days’ notice and be subject to discussion by a Working Group on Medicinal Products, which will be established to enable mutual consultation. This Working Group on Medicinal Products will be under supervision of the Trade Specialised Committee on Technical Barriers to Trade, and will monitor and review implementation and ensure the proper functioning of the Medicinal Products Annex. It is noteworthy that the Medicinal Products Annex is specifically excluded from the TCA’s disputes mechanism, however, through its role in facilitating discussions and functioning as an appropriate forum for issues relating to Medicinal Products, it is hoped that it will be a sufficient mechanism to deal with any concerns.

When considering the confidentiality of information supporting applications for marketing authorisations (“MAs”), regulatory protection of pharmaceutical products, and Supplementary Protection Certificates (“SPC”) it is noteworthy that this is not included in the Medicinal Products Annex, but is included in the IP section (Title V) of the TCA.

  • In relation to regulatory data protection generally, the TCA requires that both the UK and the EU ensure that commercially confidential information submitted to obtain an MA is protected against disclosure to third parties, unless there is an overriding public interest or steps are taken to ensure the data is protected from unfair commercial use.
  • For the regulatory protections of data and market exclusivity, the TCA provides that, subject to any international agreement to which both the EU and the UK are party, and without prejudice to any additional periods of protection which either party may wish to provide for in its domestic law, these regulatory protections will be “for a limited period of time to be determined by domestic law”. This allows each of the UK and the EU to determine the length of such regulatory exclusivities under their own regulatory regimes.
  • For SPCs, the TCA records the agreement of both the UK and the EU to provide for further patent protection to compensate for the impact of regulatory administrative procedures but, again, the length of time is not stipulated.

The effect of these provisions is that they provide some comfort that these valuable forms of protection for medicinal products will be maintained by both the UK and the EU.

For detailed commentary on the new regulatory position for Pharma in the UK, and the impact on IP rights generally, see our series of posts on the HSF Intellectual Property Notes blog here.

Other provisions relevant to the pharmaceutical and medical device industry

The TCA also has provisions relating to the UK’s continued participation in EU programmes and on UK / EU cooperation on “serious cross-border threat[s] to health that are relevant for the pharmaceutical industry.

  • Subject to the UK making financial contributions, Part 5 of the TCA includes agreement on the UK’s continued participation in EU programmes, including the EU’s research and innovation funding programme, Horizon Europe.
  • UK / EU cooperation on serious cross-border threat[s] to health is covered by the TCA including agreement between the UK and the EU on emergency relief in relation to importation requirements, tax and road transport exemptions, and agreement to cooperate in relation to international health security systems.

Future developments

Although tariff free and quota-free trade has been agreed, there is little mutual recognition of regulatory provisions. This may not be the end of negotiations, with automatic reviews every 5 years written into the TCA and termination possible on 12 months’ notice.  See the HSF Brexit blog for further information, and our initial comments here.

Key contacts and authors

Jonathan Turnbull

Jonathan Turnbull
Partner, London
+44 20 7466 2174

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

George McCubbin

George McCubbin
Senior Associate, London
+44 20 7466 2764

Priyanka Madan

Priyanka Madan
Associate - London
+44 20 7466 2986

As the Bundestag passes the legislation to ratify the UPC Agreement, the UPC may finally open its doors in 2022

The Unified Patent Court (UPC) took another step closer to coming into being on November 26 with a Bundestag vote passing the legislation necessary for Germany to ratify the UPC Agreement and the Protocol on Provisional Application with (more than) the two thirds majority found to be required by the German Federal Constitutional Court in its decision rejecting the initial vote on these measures as unconstitutional for lack of sufficient majority (decision dated 13 February 2020, announced 20 March 2020).

German ratification – next steps and any further challenges?

Germany is the last required ratifier of the UPC Agreement (UPCA).  Ratification by at least 13 contracting states is required for the UPCA to enter into force, additionally this must include the “three States in which the highest number of European patents was in force in the year preceding the year in which the signature of the Agreement takes place”. With UK having withdrawn, those three countries are France, Germany and Italy. So far 15 contracting Member States have ratified, including France and Italy (see the ratification table here) so Germany’s ratification is the last piece of the jigsaw for the UPCA to come into force.

The legislation will now be submitted to the German upper house (Bundesrat) where approval is expected to take place on December 18. The next steps after that are a countersignature by the Federal Government (a formality) and the signature of the Federal President (so-called “Ausfertigung” or legalization). This is followed by the publication in the Federal Law Gazette, by which the law enters into force, allowing the Federal Government to deposit the ratification of the UPCA and sign the Protocol.

In the first German ratification attempt the Federal President did not sign because a constitutional challenge had been filed after the Bundesrat vote and the Constitutional Court asked the Federal President to delay his signature to await the outcome of the challenge, which in the end was successful based on the majority vote issue.

A “Foundation for a Free Information Infrastructure” (FFII) has following the Bundestag vote started a crowd-funding campaign for a new constitutional challenge. However, unless the FFII or others started preparation a while ago it seems highly unlikely that such a challenge could be filed before the law enters into force. Further, it seems unlikely that the Constitutional Court will once again ask the Federal President to delay his signature.

In addition, even though the Constitutional Court referred in its decision to a number of issues as relevant but either not substantiated enough in the constitutional challenge or not necessary to decide due to the successful majority challenge, it appears unlikely that any further challenge would succeed.

Once the German ratification is deposited, the UPC will commence on the 1st day of the fourth month after the month of the deposit of instrument of ratification. Germany is expected to delay the deposit of its ratification of the UPCA until the UPC has become fully operational during a period of provisional application as explained further below.

The UPC “Provisional Application” phase

The Protocol on Provisional Application (PPA) provides for a provisional application of the UPCA before the UPCA actually enters into force. As well as ratifying the UPCA, participating states need to sign the PPA, so that the provisional application stage can start.

By signing the PPA, the signatory states agree to apply the institutional, organisational and financial sections of the UPCA provisionally. Once the Protocol enters into force, the UPC organisation (as such) will be created and acquire legal personality. The Administrative Committee, the Budget Committee and the Advisory Committee will be established at the start of provisional application stage and will then take over the responsibility of the preparations from the UPC Preparatory Committee.

The provisional application stage allows the final preparations to be made for the commencement of the UPC in the certain knowledge that it will actually commence. This allows the employment of judges for example, and the finalisation of court preparations. The UPC rules of procedure also need to be finalised during this period.

There is no prescribed time-frame for the provisional application period, however, it is currently expected that it may take approximately 12 months.

In order for the PPA to enter into force, in addition to Germany, two other UPCA contracting Member States still need to sign the Protocol. It is currently envisaged that this could happen by February 2021.

Thus, assuming that the provisional application starts in February 2021 and that Germany deposits the ratification of the UPCA by February 2022, thereby triggering the prescribed period running up to the commencement of the UPC, the UPC could then open its doors on June 1, 2022.

Support for the UPC from the Commission and the EPO

The day before the Budnestag vote, the Commission released its EU IP action plan: Making the most of the EU’s innovative potential – An intellectual property action plan to support the EU’s recovery and resilience (25 November 2020) – see our blog post here. The Commission considers the unitary patent (UP) and the UPC as key to ensure that innovators have access to “fast, effective and affordable protection tools“. The Commission states that once the ratification process is completed, the Commission will work with the EPO and Member States to make the UPC/unitary patent system operational across the contracting EU Member States and will encourage the Member States that have not done so to join the system (Spain, Poland and Croatia).

The EPO President António Campinos responded to the Bundestag vote saying that, the so-called “the Unitary Patent package” (ie the UPC/unitary patent system) “will make Europe even more attractive for innovation and investors – and help with economic recovery in light of the COVID-19 crisis.” He declared that the EPO stands ready to register the first UPs, once the UPCA comes into force. The UPC is the only court in which UPs can be litigated. Campinos expects the UPC to start its work in 2022.

For more on the UPC and unitary patent system see our dedicated hub here.

Authors 

Sophie Rich

Sophie Rich
Partner, Global Head of IP, London
+44 20 7466 2294

Ina vom Feld

Ina vom Feld
Partner, IP, Dusseldorf
+49 211 975 59091

Sebastian Moore

Sebastian Moore
Partner, IP, Milan and London
+39 02 3602 1398

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

Approach to assessing entitlement to priority unchanged – TBA in the CRISPR case confirms

On 6 November 2020, the Technical Board of Appeal (TBA) issued a written decision in case T 844/18, which concerned whether or not the Broad Institute’s patent (EP 2 771 468) relating to CRISPR gene editing technology could validly claim priority from several US provisional applications. In summary, the TBA confirmed that the applicable rules governing the entitlement to priority remain unchanged. As a result, the priority had not been validly claimed and the patent in question was revoked for lack of novelty due to intervening prior art. The outcome does not come as a surprise, since the TBA made known its decision following the oral hearing which took place in January 2020 (see our summary in the Patent & Pharma update from February 2020).

Under Article 87(1) EPC, any person who has duly filed an application for a patent or their successor in title shall enjoy a right of priority during a period of twelve months from the date of filing of the first application (emphasis added). Article 87(1) EPC corresponds to Article 4A of the Paris Convention for the Protection of Industrial Property.

The disputed issue, as summarised by the TBA, was as follows: “A and B are applicants for the priority application. A alone is the applicant of the subsequent application. Is this priority claim valid even without any assignment of priority right from B to A? The appellants say that the answer is ‘yes’ and the respondents that the answer is ‘no’.” The TBA sided with the respondents and in doing so decided the following points:

  • EPO are empowered and obliged to assess the validity of a priority right claim;
  • “Any person” under Article 87(1) EPC refers to all persons listed as applicants for the priority application, such that all persons listed as applicants for the priority application, or their successors in title, must be listed as applicants for the subsequent application (reaffirming the so-called “all applicants” approach); and
  • It is the Paris Convention and not national law which determines who “any person” is.

The TBA reiterated that Article 87(1) EPC has been consistently interpreted by the EPO since the inception of the European patent system and the practice is based on a reasonable interpretation of the legal provisions in question. The TBA also emphasised that the bar for overturning a long-established case law and practice should be a high one because of the disruptive effects a change may have.

A policy reason put forward in support of the appellant’s position was that a mistake in the formality of correctly naming the applicants should not lead to the revocation of the patent (echoing the remarks of Birss J in Accord Healthcare v Research Corporation Technologies [2017] EWHC 2711 (Ch)). The TBA responded that the present case is an example of a deliberate choice of the appellants rather than a mistaken omission and, also, that a formal requirement cannot be merely disregarded or ignored even if the consequence of its non-compliance can be a revocation of a patent. The TBA also noted the different context in which the remarks were made in the English High Court case (which dealt with a distinction between legal and equitable title).

The consequences of non-compliance with rules pertaining to claiming priority are significant and may result in invalidating an otherwise valid patent. With that in mind, considerable thought should be given to naming applicants on the priority application and the effect of any subsequent assignments of priority rights during the priority year to minimise future challenges to priority entitlement.

Monika Klajn

Monika Klajn
Senior Associate, London
+44 20 7466 7604

Alex Freelove

Alex Freelove
Senior Associate, London
+44 20 7466 7452

Jonathan Turnbull

Jonathan Turnbull
Partner, London
+44 20 7466 2174

Consultation on MHRA draft guidance on the licensing of biosimilar products post transition – open until 15 November 2020

From the end of the Brexit transition period (1 January 2020), the licensing of biological products (including biosimilars, advanced therapy medicinal products), and how the status of plasma master files and vaccine antigen master files, will be provided for by the Human Medicines Regulations 2012, as amended by the Human Medicines (Amendment etc.) (EU Exit) Regulations 2019.

In September 2020, the UK government provided guidance in relation to biological products: Guidance on licensing biosimilars, ATMPs and PMFs from 1 January 2021. However, in relation to biosimilar products specifically, further guidance was considered likely to be necessary and the form and detail of this has been put out to consultation in relation to the licensing of biosimilar products post-transition – see the consultation document here: MHRA draft guidance on the licensing of biosimilar products.

The draft guidance under consultation largely adopts the existing principles in the various Committee of Medicinal Products for Human Use (CHMP) guidelines concerning biosimilars, but incorporates some amendments, namely relating to:

  • Reference products
    Applications for biosimilar products made after 1 January 2021 must be made with reference to a product that has been authorised in the UK for at least 8 years, and includes products authorised in the UK and by conversion from EU marketing authorisations. It is also possible to use a non-UK reference product, including products that had an EU marketing authorisation at the end of the transition period but did not convert to a UK marketing authorisation. Non-UK reference products can be used where evidence is provided that the non-UK reference product is representative of the UK reference product with suitable analytical bridging data. Data and market exclusivity period entitlements for reference products approved before the date of EU exit will continue to apply in the UK.
  • Lack of requirement for in vivo studies in animals
    The draft guidance states that in vivo studies from animals are not required to be submitted “as these are not relevant for showing comparability between a biosimilar candidate and its [reference product]”. Such in vivo studies would include pharmacodynamics studies, kinetic studies and toxicity studies (unless, for the latter, results have been generated in compliance with Good Laboratory Practice). The guidance further states where there are differences between a biosimilar candidate and the reference product that may have a clinical impact, it should be considered whether the product be developed as a new biological product, rather than a biosimilar. Specifically, data from in vivo studies in animals would not be able to address any such differences and therefore should not be submitted for this purpose.
  • Change in the requirement for a comparative efficacy trial in most cases
    For applications from 1 January 2021, the draft guidance states that a comparative efficacy trial will not be required in most cases. Applicants should include “a well-argued justification for the absence of an efficacy trial” in the submitted application. The guidance indicates that the efficacy of the reference product used for the biosimilar candidate can usually be derived from its mechanism of action. Therefore, applicants should provide information regarding the binding properties and functional characteristics of the biosimilar candidate as compared to the reference product, and accounting for an differences. The draft guidance anticipates that there will be some cases where a comparative efficacy trial will be required, such as where the mechanism of action of the reference product is not known.

The draft guidance further addresses:

  • excipient(s) in the proposed biosimilar product: the use of different excipients to those used in the reference product is not encouraged. Where there are differences, the safety of the different excipient should be addressed in the application.
  • indications claimed by a biosimilar product: the draft guidance states that once a biosimilar candidate has been shown to be highly similar to the reference product in terms of analytical characteristics and functional properties related to the mechanism of action, the indications granted to the reference product can be claimed by the biosimilar candidate. The draft guidance further makes clear that, save for some specific examples of dosage differences or other scientific reasons, the Summary of Product Characteristics (SmPC) for the biosimilar must be the same as the reference product.
  • interchangeability of the proposed biosimilar product, once authorised, with the reference product: the guidance highlights that once authorised, the biosimilar will be considered interchangeable with the reference product. However, it notes that although switching patients (either between the reference product and the biosimilar, or between biosimilars) has become clinical practice, as biosimilars must be prescribed by brand name, the decision on whether there is switching rests with the prescriber in consultation with the patient. Substitution of the prescribed product with another without consulting the prescriber is not permitted.

The consultation closes on 15 November 2020. Submissions can be made directly to the MHRA.

 

Jonathan Turnbull

Jonathan Turnbull
Partner, London
+44 20 7466 2174

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

Julie Chiu

Julie Chiu
Senior Associate (Australia), London
+44 20 7466 2658

 

Glaxo’s purple inhalers fail to get trade mark protection

Like Cadbury before them, Glaxo’s hard-fought attempts to register a trade mark for a shade of purple have been rejected. In this case, Glaxo had sought to register the colour of its seretide inhalers and asthma treatments as a trade mark, by providing the description “Purple – Pantone: 2787C” and this sign:

The General Court of the European Union upheld earlier decisions by the European Union Intellectual Property Office and its Board of Appeal, commenting that it was not in the public interest for colours to be monopolised in this context, and found that the mark applied for lacked “inherent distinctive character” and that the evidence of acquired distinctiveness provided by Glaxo (in opinion surveys and comments of doctors and pharmacists on social media and website, as well as sales figures) was not sufficient to demonstrate that it had acquired distinctive character through use (Case T‑187/19). Continue reading

The Unified Patent Court – on the move again?

Yesterday (10 September 2020) the UPC Preparatory Committee met (albeit virtually) for the first time since March 2017.  On the agenda were the issues triggered by the formal withdrawal of the UK from the UPC system and the events in Germany in relation to challenges to Germany’s participation.

The note of the meeting on the Committee’s website (here) states that the Committee took note of the “good progress” being made in Germany with regard to the legislation needed for the German ratification of the Unified Patent Court Agreement and the Protocol on Provisional Application.

The Committee also took note of the call from European Industry for a swift entry into operation of the Unitary Patent System.

“Against this backdrop issues concerning the effects of the UK withdrawal were discussed as well as appropriate ways forward. Good progress was made and the Committee is confident that pragmatic and legally sound solutions will be found that will enable the unitary patent system to be functional in a near future“.

The Italian Ministry of Foreign Affairs reported that the replacement of London as the life sciences seat of the central division was considered at yesterday’s meeting and a recommendation adopted that Munich and Paris divide the workload that would have gone to London as a temporary arrangement, so that the determination of this seat’s final location would not delay the start of the UPC system. The report also states that the procedure to amend the agreement to change the location of the London seat can now be commenced.

Once Germany has ratified the UPC Agreement, the hope is that the UPC could be formally established (and the unitary patent system also come into effect) in 2021. The start of the UPC would allow the EPO to start to grant unitary patents (European patents with unitary effect) which can only be enforced via the UPC.

Italy has formally submitted its proposal for Milan to host the life sciences seat of the central division court of the UPC on a permanent basis.  The Italian Minister of Foreign Affairs (Di Maio) was satisfied with the outcome of the meeting and Italy’s proposal was well received.

See also this post by Sebastian Moore, one of our European patent specialists, with more information and comment about the benefits of Milan hosting the life sciences seat of the UPC central division.

Authors

Sebastian Moore

Sebastian Moore
Partner, Milan & London
+39 02 3602 1398; +44 20 7466 2331

Rachel Montagnon

Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

Patent and Pharma Update, August 2020

Key recent developments in the United Kingdom and Europe relating to patents and the pharmaceutical sector

In this edition we cover landmark judgments from the UK and German Supreme Courts, on sufficiency in the UK and FRAND obligations in Germany. We also cover a significant decision of the CJEU in relation to SPCs in the Santen case, as well as a decision concerning the provision of sample medicine to pharmacists and the Advocate General’s Opinion regarding an appeal from a fine imposed for anticompetitive agreements and we report on an important decision of the European Patent Office regarding the patentability of plant and animal products. This edition also includes our analysis of a number of noteworthy UK High Court and Court of Appeal decisions on issues including injunctions, attempted strike-out of an infringement claim and the law on obviousness. Finally, we report on UK’s formal withdrawal from the Unified Patent Court Agreement.

Continue reading

CJEU rules that providing free samples of non-prescription drugs to pharmacists is permitted

CJEU rules that providing free samples of non-prescription drugs to pharmacists is permitted

On 11 June, the Court of Justice of the European Union (“CJEU“) ruled on the question of whether free samples to pharmacists of medicines may be supplied by pharmaceutical companies to pharmacists. The German Federal Supreme Court (Bundesgerichtshof) had referred questions regarding the German provisions which do not provide for supply to pharmacists. According to the judgement, free samples of non-prescription drugs may be supplied to pharmacists whereas prescription drugs may only be supplied to persons entitled to prescribe them.

Background

The legal dispute which led to the decision of the CJEU was an unfair competition lawsuit between two pharmaceutical companies selling non-prescription pain gel. One of the companies had supplied free samples to pharmacists “for demonstration purposes”. The other company considered this to be in violation of the German Medicines Act (“AMG“), resulting in a breach of competition law (“unfair advantage via legal violation”, “Vorsprung durch Rechtsbruch”). The action was successful in first instance and appeal. The courts concluded that Section 47 Para 3 of the AMG exhaustively listed the persons to whom free drug samples could be provided, namely specific groups, all of whom were entitled to prescribe prescription drugs. Pharmacists were not included in the list, so the courts considered the supply to them to be illegal.

Referral to the CJEU by the German Federal Supreme Court

The Federal Supreme Court had doubts whether the German provision was in line with the Community code relating to medicinal products for human use (Directive 2001/83/EC, in the following “Community Code”). The respective provision regarding the supply of free samples is Article 96 Para 1 which addresses solely the supply to prescribing persons and provides for certain conditions for such supply. However, recital 46 of the Community Code excludes the provision of free samples only to the general public and recital 51 states that “It should be possible within certain restrictive conditions to provide samples of medicinal products free of charge to persons qualified to prescribe or supply them so that they can familiarize themselves with new products and acquire experience in dealing with them.”

Based on this the Federal Supreme Court referred to the CJEU firstly the question whether Article 96 para 1 of the Community Code really exhaustively limited the provision of free samples to persons entitled to prescribe, so that any provision of free drug samples to pharmacists was illegal or whether the provision of samples labelled “for demonstration purposes” to pharmacists so that they can familiarize themselves with the product was permitted. Further, and (only) in case the CJEU found the latter to be true, the Federal Supreme Court referred a second question, namely whether a reading of the German provision which excluded the giving of samples to pharmacists was still in line with the Community Code based Article 96 para 2 which gives member states the possibility to provide for further restrictions over para 1.

Ruling of the CJEU

The CJEU concluded based on the interplay of the provisions of the Community Code that the rules of Article 96 of the Community Code related only to prescription drugs, and were exhaustive, so that the supply of prescription drugs to pharmacists is not allowed in any case. In this regard the CJEU argued that the Community Code differentiates throughout between prescription and non-prescription drugs with prescription drugs being those which due to the dangers associated with their use need to be under the control of physicians whereas this is not the case for non-prescription drugs (Articles 71 and 72 of the Community Code). Having that differentiation in mind the CJEU sees Article 96 as tailored towards the dangers of prescription drugs which requires the supply to be limited to persons entitled to prescribe.

The CJEU on the other hand reasoned that it does not follow from Article 96 of the Community Code that the provision of samples of non-prescription drugs to pharmacists is excluded. In this regard the CJEU referred specifically to the above-mentioned recitals 46 and 51. The CJEU stated that the Community Code allows the supply of free samples to pharmacists within the framework of national law under limited conditions and under safeguarding of the goals pursued by the Community Code.

The CJEU, therefore, rules (note the official English translation of the judgment is not yet available):

“Art. 96 of the Directive 2001/83/EC (…) is to be interpreted in such a way that it does not allow pharmaceutical companies to supply free samples of prescription drugs to pharmacists. On the other hand, the provision does not hinder the supply of free samples of non-prescription drugs to pharmacists.”

It should be noted that the Attorney General’s opinion did not make this differentiation between prescription and non-prescription drugs and considered that pharmacists were completely excluded from receiving free samples. It follows from the CJEU decision that the previous interpretation of Section 47 AMG by the German courts as limiting also the supply of non-prescription drugs to persons entitled to prescribe prescription drugs was not in line with the EU Community Code. The question remains what the conditions shall be for the supply of non-prescription drugs to pharmacists, e.g. whether (with the exception of the limitation to prescribing persons) the conditions as set out in Article 96 of the Community Code shall apply mutatis mutandis, e.g. including a requirement of a prior written request from the pharmacist.

Authors

Ina vom Feld

Ina vom Feld
Parner, Disputes, Dusseldorf
+49 211 975 59091

Behyad Hozuri

Behyad Hozuri
Junior Associate (Germany), Disputes, Dusseldorf
49 211 975 59097

UK Supreme Court in Regeneron v Kymab: technical contribution critical to determining sufficiency

The Supreme Court has handed down today its judgment in Regeneron Pharmaceuticals Inc v Kymab Ltd [2020] UKSC 27, allowing Kymab’s appeal and holding Regeneron’s patents invalid for insufficiency by a majority of 4:1.

The judgment emphasises the fundamental principle of the patent bargain, which envisages that the patentee makes full disclosure of the invention in return for a time-limited monopoly. Sufficiency is, amongst other tools like novelty, inventive step and industrial application, one of the ways to ensure such patent bargain is struck in the right place, such that the protection afforded by the claim is commensurate with the technical contribution to the art made by the disclosure of the invention in the patent. Whilst the Lords and Lady of the Supreme Court were of the view that their judgment does not change the existing, fundamental legal principles of sufficiency contained in the well-established authorities in the UK and of the Technical Board of Appeal of the European Patent Office, this case illustrates the importance of, and difficulty in, identifying a patent’s technical contribution and the significant consequences which follow. Continue reading

Unsuccessful strike out of a quia timet infringement counterclaim

Teva UK Ltd v Chiesi Farmaceutici SpA [2020] EWHC 1311 (Pat), 2 June 2020

Summary

After having been pressed by the defendant pharmaceutical company, Chiesi Farmaceutici SpA (“Chiesi”), to disclose a product description in a patent revocation action brought by Teva UK Ltd (“Teva”), Teva applied to strike out Chiesi’s counterclaim for quia timet infringement. Teva argued that the legal test for such a claim had not been met and, in the alternative, that the disclosure of the product description required for the infringement claim would violate competition law. Mr Justice Birss refused to strike out the counterclaim for infringement on the basis that it has a real prospect of success at trial and that the disclosure sought by Chiesi does not amount to collusion contrary to Art 101 TFEU.

Background

In October 2019, Teva brought an action to revoke three of Chiesi’s patents which, along with others, cover one of Chiesi’s products known as FOSTAIR in the UK, used in inhalers to treat asthmatics. The patents are due to expire in 2027/28, but the data exclusivity for FOSTAIR expired in 2012 such that generic companies were free to apply for marketing authorisations for that product. In response to Teva’s revocation action, Chiesi filed a defence and counterclaimed for infringement on a quia timet basis, seeking disclosure of a product description in the usual way. The trial for both the validity and infringement claims is currently listed for October 2020.

Legal test for a strike out claim and quia timet injunction

Birss J reiterated that the legal test for infringement on a quia timet basis is whether “viewed in all the relevant circumstances, there was a sufficiently strong probability that an injunction would be required to prevent the harm to the claimant to justify bringing the proceedings” (MSD v Teva [2013] EWHC 1958 (Pat)). He rejected Teva’s submissions that sought to qualify this test and also the submission that, as a matter of legal principle, it was a prerequisite for quia timet claims in pharmaceutical patent case for there to be a pleaded, relevant marketing authorisation. In rejecting the latter submission, he considered and distinguished his earlier decision in Actavis v ICOS [2016] EWHC 1955 (Pat) on which Teva relied. In Actavis v ICOS, Birss J held when granting a final injunction at trial that the inference supporting quia timet infringement does not derive solely or even predominantly from the fact they have sought to clear the way by applying to revoke patents, but that it derived from the relevant marketing authorisation. Addressing Teva’s submission, Birss J cautioned that this decision and his reliance on the existence of a relevant marketing authorisation must not be taken out of context. In Actavis v ICOS, he was considering the grant of a final injunction at trial whereas in this case he was being asked to strike out a claim for infringement on a quia timet basis at an interim stage.

In considering the correct approach, Birss J held that a lack of evidence at the start of the action to justify a final injunction is not determinative of the relevant question at a strike out hearing, where the relevant legal question is whether there is a real prospect of success of establishing a threat or intention to infringe at trial, i.e. whether such evidence may exist by then. In the absence of other regulatory hurdles that would preclude a marketing authorisation during the remaining life of the patent, it is not a complete answer at an interim stage that the alleged infringer has not obtained a marketing authorisation, although the weight given to this fact will change if the question is assessed again at trial. Birss J took further support for his conclusion from Arnold J (as he then was) allowing a quia timet infringement claim by amendment in Generics v Sandoz [2017] EWHC 2276 (Pat).

Birss J also held that the approach of the English Courts to patent litigation was a relevant consideration. Here, he highlighted the well established principle that an alleged infringer ought to “clear the way” by revoking the relevant patent and/or seeking a declaration of non-infringement (“DNI”). Actions to clear the way usually result in the alleged infringer seeking to both revoke the patent and obtain a DNI, such that issues of both infringement and validity are determined together. In such actions, the fundamental question can be answered: are the alleged infringer’s proposed acts lawful or not in view of the patentee’s rights. If the alleged infringer chooses not to seek a DNI, then the patentee may wish to counterclaim for infringement so that this fundamental question can be answered.

In light of these considerations, a simple, rebuttable inference can be drawn from the fact that the party seeking the revocation of the patent intends to infringe by launching a product before expiry of the patent.  As Teva had commenced revocation proceedings, Birss J drew this inference, which, as set out above, is not displaced simply by the absence of a pleaded, relevant marketing authorisation. Birss J drew further support for this inference from the fact that, as pleaded by Chiesi, Teva had failed in correspondence to state that it did not have an intention to launch, despite having been given an opportunity to do so. Teva’s offer of two weeks’ notice of launch was also insufficient to rebut this inference, as it would not allow infringement to be decided in advance of such a launch. In light of this, Birss J was satisfied that Chiesi’s pleaded claim for quia timet infringement had a real prospect at trial and therefore refused to strike out this claim.

Abuse of process

Teva pleaded an alternative free standing “abuse of process” argument to strike out the claim, contending that the Chiesi’s true motive in pleading the infringement counterclaim was a collateral one, namely to obtain Teva’s launch plans through disclosure. Having summarised the earlier law, Birss J relied on JSC BTA Bank v Ablyazov (No. 6) [2011] 1 W.L.R. 2996 as establishing that even if a claimant has two purposes for commencing proceedings, one legitimate and the other sufficiently collateral as to be illegitimate, the commencement of proceedings will not be an abuse. Birss J starkly noted that even assuming disclosure was one of Chiesi’s motives, it is obvious that there is another purpose in bringing the infringement claim, namely to sue Teva for infringement and obtain appropriate remedies such as an injunction if the claim is made out. Furthermore, he noted the claim was being brought by Teva in the first place, and thus held that the infringement claim is not an abuse of process.

Competition law

Teva put forward another alternative argument, submitting that the parties are “competitors” and that there is a very real risk that the provision of the information requested by Chiesi mentioned above would be found to infringe Art 101(1) TFEU. Birss J agreed that the parties were competitors and summarised infringement of Art. 101(1) as requiring a collusion between undertakings.

Birss J highlighted that the point of the patent system is to stimulate innovation, which itself is pro-competitive. Resolving disputes between rivals about patent validity and infringement are part of that system and therefore this sort of litigation, conducted properly and not as part of a sham, is inherently pro-competitive, irrespective of the result. A court determination that a patent is valid and infringed should not be seen as a “negative” result even if it means that consumers will pay higher prices for the patented goods, because such determinations are a necessary means of ensuring that patent-holders receive the proper rewards for their innovations.

Although Birss J agreed that the provision of information between undertakings can itself amount to the requisite form of collusion required, Art. 101 will only be engaged if this provision amounts to practical cooperation between the parties being substituted for the risks of competition. Balancing the factors above, the judge concluded that exchange pursuant to disclosure obligations and case management orders which are made in properly constituted patent litigation does not meet the minimum threshold to amount to a form of collusion prohibited by Art. 101 TFEU, and, accordingly, he dismissed the competition law argument.

Stay of proceedings

Finally, Teva argued that, if the claim was not struck out, it should be stayed because it was prepared to offer 14 days’ notice of launch. Birss J was not convinced by the argument and stated that it offered no substitute for resolving issues of infringement on their merits at trial, remarking that Chiesi asking Teva for two months’ notice seemed to have been a fair attempt at a compromise.

Jonathan Turnbull

Jonathan Turnbull
Partner
+44 20 7466 2174

Monika Klajn

Monika Klajn
Associate, London
+44 20 7466 7604

Charlie Madill

Charlie Madill
Trainee, London
+44 20 7466 3585