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

CJEU refuses UK High Court’s request for preliminary ruling on SPC applications based on third-party MAs, on account of referred question being “hypothetical” (C-239/19 Eli Lilly v Genentech)

On 5 September 2019, the Ninth Chamber of the CJEU refused a request for referral in relation to the interpretation of Article 3(b) of Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products (‘SPC Regulation‘).

Business impact

In its order, the CJEU held that this request for a preliminary ruling was manifestly inadmissible a under Article 52(3) of the Rules of Procedure of the Court of Justice, as the question referred was hypothetical for the purposes of the dispute in the main proceedings.

The referral request was made by High Court of Justice (England and Wales) in proceedings [2019] EWHC 388 (Pat) between Eli Lilly and Genentech. The referral was concerned with whether the SPC regulation should preclude SPC applications based on third-party marketing authorisations (‘MAs‘), which is where a patent holder seeks to obtain an SPC for a product without the consent of the unrelated third party that has developed that product and obtained the necessary a MA for it.

This issue is not a new one, and was previously referred to in Eli Lilly v HGS (C-493/12). Although it was not being pursued as a standalone ground, the CJEU decision observed in this case that if an SPC were granted to the patent holder, even though he was not the holder of the MA granted for the medicinal product developed from the specifications of the patent, and had therefore not made any investment in research relating to that aspect of his original invention, that would undermine the objective of the SPC Regulation. In a similar vein, in Gilead v Teva (C-121/17; a case that did not concern grant of SPCs based on third-party MAs) the CJEU held in paragraph 50 of its decision that when applying Article 3(a) of the SPC Regulation no account should be taken of research which took place after the filing date or priority date of the basic patent, as this would enable the SPC holder to unduly to enjoy protection for those unknown results.

The refusal of the reference means that disappointingly, the rather important question of SPC applications based on third-party MAs remains unanswered. Nevertheless, it is likely that there will be a further reference on this issue in the future, perhaps from one of the other national courts where the dispute between Eli Lilly and Genentech remains live, or from the Court of Appeal in the UK (should this happen before Brexit).

Background

The referral request was made by the UK High Court in proceedings which related to Genentech’s patent EP (UK) 1 641 822, entitled ‘IL 17A/F heterologous peptides and therapeutic uses thereof’ (the ‘Basic Patent’) and Eli Lilly’s MA for their product ‘ixekizumab’ marketed under the brand name ‘Taltz’.

Genentech contended that the formulation for ixekizumab fell within the scope of the Basic Patent, and applied for an SPC on the basis of the Basic Patent and Eli Lilly’s MA for ixekizumab.

Eli Lilly in turn contended that two grounds precluded the grant of the SPC: 1) the SPC application at issue did not comply with Article 3(a) of the SPC regulation, since the formulation for ixekizumab was not protected by the Basic Patent; and 2) the application did not comply with either Article 2 or Article 3(b) and (d) of the SPC Regulation, because the MA for ixekizumab is not a relevant MA, since it is owned by a third party and was relied upon without that party’s consent.

By the time the referring decision as handed down, the Basic Patent had already been held to be invalid in parallel proceedings. Nevertheless, Mr Justice Arnold considered it necessary to make a referral to the CJEU on whether the SPC Regulation should preclude SPC applications based on third-party MAs. Various factors played a role in making the referral:

  1. Even though the Basic Patent had been held to be invalid in parallel proceedings, it may be maintained on appeal;
  2. Because of Brexit, it is highly probable that the Court of Appeal will cease to have jurisdiction to refer a question for a preliminary ruling to the Court of Justice, so it was considered necessary that the High Court refer such a question now;
  3. As of the date of the reference decision, Eli Lilly and Genentech were in dispute on this issue not only in the United Kingdom but also in other Member States;
  4. This issue had arisen in other previous cases.

Keeping the above in mind, Mr Justice Arnold referred the following question to the CJEU:

Does [the SPC Regulation] preclude the grant of an SPC to the proprietor of a basic patent in respect of a product which is the subject of a marketing authorisation held by a third party without that party’s consent? 

Analysis

The CJEU’s order clarifies that the role of the CJEU is to aid with interpretation of such EU law as is necessary for national courts to give judgment in cases upon which they are called to adjudicate. A reference for a preliminary ruling made by a national court is to be rejected where it is obvious that the interpretation of EU law that is sought is unrelated to the actual facts of the main action or its object, or where the problem is hypothetical.

In considering whether the clarification or interpretation of EU law sought in the referral is necessary, the CJEU held that it is not sufficient to say that there may be an appeal down the line which may render the hypothetical scenario true. Neither is it of relevance that the same issue exists in proceedings in other jurisdictions, or may have been raised in previous proceedings – the existence of disputes in other Member States of the European Union or of previous disputes does not support the conclusion that the interpretation of EU law that is sought is necessary for the resolution of the dispute which the referring court is called upon to resolve.

The CJEU also clarified that the referring court could not pre-emptively request a reference pending Brexit, on the basis that the appeal court might subsequently lose its jurisdiction to refer the same question because of withdrawal from the European Union pursuant to Article 50 of the TFEU, and while EU law continues in full force in the UK.

Conclusion

Although the refusal of the CJEU to decide on the referral is disappointing, it is hoped that the question of SPC applications based on third-party MAs will not remained unanswered much longer, and that there will be a decision that clarifies this issue in the foreseeable future. Meanwhile, the CJEU’s order sheds light on some important issues like the CJEU’s approach to references in light of Brexit, which will no doubt inform litigation strategy in the coming months.

Sebastian Moore

Sebastian Moore
Partner
+44 20 7466 2801

Martina Maffei

Martina Maffei
Associate
+39 02 0068 1353

Priyanka Madan

Priyanka Madan
Associate
+44 20 7466 2986

 

Preparations for the UPC continue despite an “unpredictable environment”

The UPC Preparatory Committee has issued a “Status of the Unified Patent Court Project” statement and review of 2018, confirming that there are now 16 states which have ratified the UPC, and that German ratification is still awaited (dependent on the outcome of the complaint pending before the Constitutional Court in Germany) before the project can move into provisional application phase. This latter phase is allows the courts to be prepared and judges to be appointed.

 

Despite the current, somewhat unpredictable environment, the technical and operational preparations are continuing allowing for the project to move at pace in the event of a positive outcome from the German Constitutional Court“.

The press release says nothing more than was already known, but it does confirm that the status of the project is constantly being reviewed, stating that the Chairman of the UPC Preparatory Committee “continues to meet with the Executive Group and the operational team on a monthly basis” and noting that those that have applied for judicial positions in the Unified Patent Court are being contacted separately.

Author

Rachel Montagnon

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

Advocate General proposes literal interpretation of Article 3(d) SPC Regulation in Abraxis (C-443/17)

The Advocate General of the CJEU proposed a narrow interpretation of Article    3(d) in the Opinion given yesterday in Abraxis Bioscience LLC v Comptroller General of Patents 13 December 2018, one that would marginalise the effect of the CJEU’s decision in Neurim (C-130/11). If followed by the CJEU, this position would be met with disappointment by the pharmaceutical industry, which continues to make significant investments in researching and developing formulations that improve efficacy and new uses of known products.

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Draft Withdrawal Agreement Approved by UK Cabinet – IP and Marketing Authorisation Provisions Summarised

As was widely reported yesterday evening, the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (the Draft Withdrawal Agreement (14 November 2018)), detailing the arrangements for the UK to leave the EU has now been agreed by the UK Cabinet. The draft is as agreed between the UK and the EU’s negotiators. As stated in HSF’s Brexit Withdrawal Agreement webinar invitation here, a special European Council, anticipated to be held on 25 November 2018, will be asked to approve the Draft Withdrawal Agreement and the full text of the political declaration. The deal will also have to pass through the European Parliament. However, the main challenge to a deal being ratified is the requirement for approval by the UK Parliament. The first vote by the UK Parliament is expected within two weeks of the European Council.

We set out below a summary of the Draft Withdrawal Agreement’s provisions on intellectual property. The situation is not much changed from the previous draft issued in March 2018 although the provision for geographical indications has now been agreed: EU-wide rights will be replaced or recognised in the UK and provision has been made for pending applications, including for supplementary protection certificates (SPCs). The sharing of information for assessment of marketing authorisations between the MHRA and the EMA and vice versa is also provided for.

The Draft Withdrawal Agreement provides for an implementation/transition period from the date the UK leaves the EU (29 March 2019) to end of 31 December 2020. If the Draft Withdrawal Agreement is agreed, this transition period will mean that effectively the UK will continue to be treated as part of the EU from a legislative point of view. As the Commission’s press release puts it,”During this period, the entire Union acquis will continue to apply to and in the UK as if it were a Member State”. IP registrations and enforcement will carry on as normal during this period. Until the end of the transition period you will still be able to acquire/register and maintain EU-wide IP rights that will have effect in the UK. See the detail in our summary section below.  However, “as of the withdrawal date (i.e. including during the transition period), the UK, having left the EU, will no longer be part of EU decision-making. It will no longer be represented in the EU institutions, agencies and bodies, and persons appointed, nominated, or representing the UK, and persons elected in the UK, will no longer take part in the EU institutions, agencies, and bodies“.

The accompanying political agreement document “Outline of the political declaration setting out the framework for the future relationship between the European Union and the United Kingdom” (currently a summary version, with a fuller version to follow) looks to the future relationship between the UK and the EU post-transition. There is mention of IP in the section on Economic Partnership, but all that is said is: “Protection and enforcement of intellectual property rights beyond multilateral treaties to stimulate innovation, creativity and economic activity”.  Under ‘Basis for cooperation’, the political agreement states that “Terms for the United Kingdom’s participation in Union programmes, subject to the conditions set out in the corresponding Union instruments, such as in science and innovation, culture and education, development, defence capabilities, civil protection and space”. There is also mention of “Cooperation in matters of health security”.  For more on the impact of no deal on the pharma industry see our post on the UK Government’s “no deal technical notices” published on 23 August 2018.

Summary of the Draft Withdrawal Agreement’s provision for IP and marketing authorisations:

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Brexit “no deal” technical notices published on Patents, Trade marks, Designs, Copyright, GIs, and Exhaustion of rights

The latest tranche of “no deal” technical notices was released yesterday afternoon by the UK Government. Amongst them are several notices that highlight the Brexit issues faced by intellectual property right owners and, in some cases, confirm the Government’s approach to resolving them. The Government also released this news story today which comments on the guidance given in the technical notices and comments on the Government’s longer term aims for IP protection.

Key announcements, in the context of no deal, are:

  • Provision of a new right to replace unregistered Community design rights, to be known as “the supplementary unregistered design right“.
  • Existing EUTMs and Community registered designs will be replaced with new, equivalent rights in the UK at the end of the implementation/transition period, “with minimal administrative burden“.
  • The SPC, compulsory licensing, pharmaceutical product testing exception and patenting of biotechnological inventions regimes will remain unchanged at least initially.
  • If the UPC comes into force the UK will replace unitary patent rights with equivalent rights if the UK needs to withdraw from the new system, although the UK “will explore whether it is possible to remain within it“. The Government’s news story states that “The UK intends to stay in the Unified Patent Court and unitary patent system after we leave the EU.”
  • UK originating sui generis database rights will no longer be enforceable in the EEA; “UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases
  • The UK will set up its own GI schemewhich will be WTO TRIPS compliant“. The new rights “will broadly mirror the EU regime and be no more burdensome to producers“.  Since the UK would no longer be required to recognise EU GI status, EU producers would be able to apply for UK GI status. Those wishing to protect UK GIs in the EU will need to submit applications on a third country basis.
  • The UK will continue to accept the exhaustion of IP rights in products put on the market in the EEA by, or with the consent of, the rights holder. However, the EU will likely not consider that goods placed on the UK market are exhausted in the EEA, and thus permission may need to be sought from the rights holder to transfer goods to the EEA that have legitimately been put on the market in the UK. The Government news story says that “The UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders and we are ready to discuss issues the EU wishes to raise in the negotiations on our future relationship, including exhaustion of IP rights”.

Links to the notices:

  1. Patents
  2. Trade marks and designs
  3. Copyright
  4. Geographical Indications
  5. Exhaustion of IP rights

More detail on each of these is provided below. For those with an interest in Life Sciences please also see our blog post on the notices related to that sector that were released last month.

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CJEU SETS OUT TEST ON THE INTERPRETATION OF ARTICLE 3(a) SPC REGULATION

The Court of Justice of the European Union (CJEU) has today delivered its decision on the interpretation of Article 3(a) SPC Regulation in Case C-121/17 Teva v Gilead.

The CJEU has said that in the case of an SPC for a combination product, Article 3(a) will be satisfied if, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent:

  • the combination of active ingredients necessarily, in the light of the description and drawings of that patent, falls under the invention covered by that patent, and
  • each of those active ingredients is specifically identifiable, in the light of all the information disclosed by that patent.

The CJEU has made it clear that these are matters for national courts to decide.

Business Impact

This is a very important decision for all stakeholders in the pharmaceutical industry. It relates to the ability of patentees to obtain SPCs, a sui generis right, which effectively extends the duration of patent protection for products (i.e. active ingredients or combinations of active ingredients) of medicinal products covered by marketing authorisations (MAs).

It is the first time that the Grand Chamber of the CJEU (sitting as 15 judges) has provided guidance for national courts to interpret Article 3(a) of the SPC Regulation, although other Chambers of the CJEU have also tackled this issue in the past. Continue reading

Changes to the SPC regime? The EU Commission proposal

The European Commission issued a proposal on 28 May 2018 to change the rules around Supplementary Protection Certificates (Regulation (EC) 469/2009), which if approved will substantially impact patent rights in the pharmaceutical sector.

Before being launched on a European market, a product must first undergo lengthy testing and clinical trials on efficacy and safety before being granted marketing authorisation by the competent authorities. For patented innovator products, which require substantial investment in terms of research & development, the process effectively shortens the duration of a patent’s protection to the extent it no longer reflects or justifies the heavy R&D investment required.  This is where an SPC comes into play. An SPC extends patent protection for medicinal products by recouping the time needed from the date of the marketing authorisation application to the actual MA grant. SPCs take effect immediately after the patent expires and can last for up to five years, so are an important incentive for research and development in the pharmaceutical sector.

According to the Commission, although SPCs encourage investment in innovation and safeguard intellectual property rights, the current regime creates a significant disadvantage for EU-based manufactures of generics and biosimilars. This is because EU-based generics and biosimilars manufacturers are prohibited from manufacturing and stockpiling their products for the duration of the relevant SPC, even for exportation to non-EU countries where SPC protection does not exist or has expired. The end result is that the EU-based manufacturers use operations based in countries where there is no SPC protection, such as China, India and Brazil, or where SPC protection is less stringent or shorter.

SPC export manufacturing waiver

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UK Government agrees elements of the European Commission’s proposals for post-Brexit protection of EU-wide IP rights in the UK in the latest draft of the Withdrawal Agreement

In the latest draft of the Withdrawal Agreement (19 March 2018) the UK Government and European Commission negotiators appear to have agreed text providing for the replacement of EU-wide IP rights having effect in the UK with equivalent UK rights at the end of the transition period post-Brexit (until 31 December 2020). Further, during the transition period, EU-wide rights will still apply to the UK due to the effect of Article 122 which provides that EU law will be applicable to the UK during the transition period and that it will produce the same legal effects in respect of and in the UK as those which is produces within the EU and its Member States and shall be interpreted and applied in accordance with the same methods and general principles, and that during the transition period, any reference to Member States in EU law shall be understood as including the UK.

Other IP related measures include provision for dealing with: exhaustion of rights, pending applications, international registrations designating the EU and the effect of invalidity proceedings that are “on foot” at the end of the transition period, (see Articles 50-57).  Certain provisions (highlighted in green) are now listed as agreed between negotiators, whilst others are still just proposals from the Commission (those un-highlighted) including those on GIs, SPCs and who pays the administration costs involved.

There are still unresolved issues for those who hold IP rights in the EU and those who license (in or out) EU-wide IP rights or have agreements linked to the “EU” as territory, which we discuss below.

Despite the areas of current agreement, there remains the possibility of a “no deal” scenario in relation to the whole agreement, in which case none of the areas agreed would stand (although the UK Government could make separate arrangements to create equivalent rights at the moment of Brexit). Anything agreed between the Commission and the UK under the Withdrawal Agreement needs European Council approval and then European Parliament approval. Thus, although a good start has been made on agreeing the post-Brexit fate of EU-wide IP rights currently having effect in the UK, the final arrangements are still far from certain. Indeed, if the Withdrawal Agreement is not accepted then there will be no transition period at all and a “hard” Brexit will come into effect on 30 March 2019, with all that implies for IP rights (see our comments from January 2017 here).

In summary, the proposals in the revised Withdrawal Agreement, and problems associated with them, are:

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