Changes to the supplementary protection certificate system

On 15 September 2023, CIPA submitted comments prepared by the Life Sciences Committee in response to the European Commission’s proposed changes to the supplementary protection certificate (‘SPC’) system – i.e., proposals COM(2023) 221, COM(2023) 222, COM(2023) 223 and COM(2023) 231.

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Substantive amendments to the law

 All of the proposed regulations (the recast (non-unitary) SPC regulations and the unitary SPC regulations) include a statement indicating that ‘This reform does not intend to modify, nor further clarify in view of the relevant case law of the Court of Justice, the substantive features currently laid down in [Regulation (EC) No 469/2009 or Regulation (EC) No 1610/96] for the existing national SPC regimes or the new centralised procedure’.

However, that statement appears to be wrong for two reasons. First, change of words means change of meaning. Second, significant changes are proposed to the substantive features of SPC law.

As to the first point, a notable example of a change of wording is proposed article 1, where the wording of previous article 2 is changed substantially.

As to the second point, notable examples include, in the proposal for a recast regulation for SPCs for medicinal products, amendment of:

• article 3, by addition of article 3(3); and
• article 6, by addition of article 6(2).

Both of these amendments introduce new limitations on the availability of SPC protection. However, in stark contrast to the proposed insertion of article 3(2), neither of these amendments is occasioned by the proposed introduction of a unitary SPC.

In addition to the above, a substantive amendment to the law governing SPCs arises due to the fact that none of the recitals or Articles of the proposals reflect the principles set out in recital 14 of Regulation 1610/96.

Each of the above-mentioned, substantive amendments is discussed in detail below, as are problems arising from the absence of reasons for those amendments and transitional provisions governing their applicability. In essence, we believe that:

• each of the proposed amendments will give rise to arguments that the changes of wording lead to changes in the law and generate legal uncertainty, and hence prompt litigation that would and should otherwise have been unnecessary, with attendant expense and delay;
• the absence of reasons for the amendments contravenes article 296 TFEU; and
• the absence of transitional provisions contravenes the principle of legal certainty (as embodied by the principles of non-retroactivity and protection of legitimate expectations).

Discussion of specific, proposed amendments

Article 2

With regard to the proposed changes to the wording of article 2 of the medicinal products regulation, we believe that it is only necessary to update the reference to the legislation governing the authorisation of veterinary medicinal products. Any further changes to the wording of article 2 seem unnecessary. That is, contrary to comments in section 5 of COM(2023) 231, they are not ‘minor technical adaptations that bring the recast regulation up to current drafting standards’, nor are they required to ‘ensure better alignment’ between the proposals for medicinal and plant protection products.

Such unnecessary, further changes to the wording of article 2 will also generate uncertainty. This is because those changes will:

• call into question whether the different wording conveys a different meaning;
• cast doubt on the value of cases decided under the prior wording of article 2, such as C-195/09 and C-427/09; and
• lead to disputes over the meaning of the new wording, and to new referrals to the Court of Justice.

The further changes will therefore not only generate legal uncertainty but also litigation (with all of its attendant expense and delays) that could be avoided by retaining, to the extent possible, the current wording of article 2. To put it another way, and as acknowledged in section 5 of COM(2023) 231, such further changes ‘might trigger new fluctuations and uncertainty as regards the proper interpretation of the amended rules’. In this respect, we submit that there can be no merit in making amendments that are not strictly necessary and that would have the effect of reopening matters that have already been resolved.

Article 3(3)

The addition of article 3(3) is a dramatic change that is highly likely to generate uncertainty. This is on the grounds that it:

• does not represent settled (i.e. fully harmonised) practice or case law; and
• uses a term (‘not economically linked’) that is unclear and has no generally accepted

The proposals do not provide any framework for assessing the meaning of ‘economically linked’, raising questions as to whether economic links pertain to company structure or also encompass other arrangements, such as licensee / licensor relationships.

Moreover, there is no guidance on the point in time at which two applicants must not be ‘economically linked’. This raises many further questions, including:

• the relevance of prior economic links (i.e. links that are no longer in place at the time the determination under article 3(3) is made); and
• whether the subsequent (i.e. post-grant) establishment of an economic link might invalidate one or both of two SPCs for the same product.

Therefore, in common with amendments to the wording of article 2, the introduction of article 3(3) will inevitably generate not only legal uncertainty but also time-consuming and expensive litigation over the meaning of the new provision again with inevitable, and inevitably expensive and time consuming, references to the Court of Justice.

Article 6(2)

The limitation on the availability of SPC protection in proposed article 6(2) does not represent settled (i.e. fully harmonised) practice or case law. Indeed, whether the MA holder needs to provide their consent to the grant of an SPC was a question referred to the CJEU in C-239/19. That referral was rejected as inadmissible because, in relation to the referring case, the question was hypothetical. Nevertheless, the fact that a national court felt the need to make the referral on the issue of ‘third party SPCs’ provides undeniable proof that there is currently no settled / harmonised interpretation of the law on this issue. The MA holder will inevitably want to prevent the grant of an SPC in some cases and will refuse consent.

Moreover, the proposals do not provide sufficient detail for how the requirement of new article 6(2) should be met and assessed. For example, it is unclear:

• the mechanism(s) by which the MA holder may grant consent;
• the stage at which the SPC applicant must have received the consent of the MA holder;
• whether (and, if so, how) the SPC applicant must prove that they have received the consent of the MA holder; and
• whether the MA holder may withdraw consent previously given (and, if so, what consequences this will have for the SPC applicant).

In the light of the above, the introduction of proposed article 6(2) will generate significant legal uncertainty, as well as time-consuming and expensive litigation in connection with multiple different aspects of the new provision.

Recital 14 of Regulation 1610/96

Recital 14 of Regulation 1610/96, which also applies to the legislation governing SPCs for medicinal products (see Recital 17 of Regulation 1610/96), reads as follows.

‘Whereas the issue of a certificate for a product consisting of an active substance does not prejudice the issue of other certificates for derivatives (salts and esters) of the substance, provided that the derivatives are the subject of patents specifically covering them’.

The principles set out in this recital are nowhere to be found in any of the proposed (recast) regulations. To the contrary, the proposal for a recast regulation for SPCs for plant protection products (COM(2023) 223) includes the following as (new) Recital 12:

‘To avoid overprotection, it should be provided that no more than one certificate, whether national or unitary, may protect the same product in a Member State. Therefore it should be required that the product, or any derivative such as salts, esters, ethers, isomers, mixtures of isomers, or complexes, equivalent to the product from a phytosanitary perspective, should not have already been the subject of a prior certificate, either alone or in combination with one or more additional active ingredients, whether for the same application or for a different one’ (emphasis added).

This represents a substantive change to the availability of SPC protection, and finds no basis in current practice or case law.

Also, a lack of clarity arises in view of the fact that Recital 12 uses confusing terminology (‘either alone or in combination with one or more additional active ingredients’) to refer to the subject matter of a prior certificate.

The subject matter of any certificate is a product, which is defined as ‘the active ingredient or combination of active ingredients of a medicinal product’ (see, for example, proposed article 1(2)). It therefore makes no sense to refer to ‘one or more additional active ingredients’ if those additional ingredients do not form part of the definition of the product (of a prior certificate).

In particular, such unclear wording casts doubt upon whether, for example, grant of an SPC for product A is precluded:

• only where there is a prior certificate for the same product (i.e. for A); or
• also where there is a prior certificate for a different product that includes A as one component of a combination of actives (e.g. A+B).

Therefore, Recital 12 of COM(2023) 223 (and corresponding recitals of COM(2023) 221, COM(2023) 222 and COM(2023) 231) would not only make a substantive change to the availability of SPC protection but would also make it unclear under which circumstances, if any, a later SPC for a ‘related’ product can be granted. For this reason, the introduction of proposed Recital 12 will generate significant legal uncertainty, as well as time-consuming and expensive litigation (including litigation involving referrals to CJEU).

Contravention of article 296 TFEU

The second paragraph of article 296 TFEU stipulates that:

‘Legal acts shall state the reasons on which they are based and shall refer to any proposals, initiatives, recommendations, requests or opinions required by the Treaties’ (emphasis added).

The CJEU has interpreted this provision as representing an essential procedural requirement. For example, in point 40 of C‑611/17 (Italy v Council), the CJEU held that:

‘In the first place, according to the Court’s settled case-law, the statement of reasons required by the second paragraph of article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution that adopted that measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the Union judicature to exercise its power of review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons for a measure meets the requirements of the second paragraph of article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgment of 17 March 2011, AJD Tuna, C‑221/09, EU:C:2011:153, paragraph 58 and the case-law cited)’.

Despite this requirement, however, the proposals do not indicate any reasons for the above- described amendments to the substantive law governing SPCs, let alone reasoning that is ‘clear and unequivocal’. Instead, the proposals:

• (incorrectly) proclaim the absence of any intention to modify, or further clarify, the substantive features of current SPC law; and
• include new recitals (such as Recital 12 of COM(2023) 231) that merely reiterate, without explanation, the wording of new limitations on the availability of SPC

Unless this matter is addressed prior to adoption of any Regulations based upon the Commission’s proposals, the failure to provide reasons for the amendments will contravene article 296 TFEU. In this respect, if the Commission wishes to make substantive amendments to the law, including by introducing new limitations on the availability of SPC protection (such as those of proposed article 3(3) and article 6(2)), clear reasons for such substantive amendments should be provided. Indeed, according to established CJEU case law, such reasons are essential for both:

• debate and scrutiny of the Commission’s proposals; and
• subsequent (teleological) interpretation of the new or amended

Contravention of the principle of legal certainty

The principle of legal certainty requires ‘Community rules binding on individuals to be clear and precise so that they may know without ambiguity what their rights and obligations are and are in a position to take steps accordingly’ (see, for example: T‑380/06, paragraph 81; and C- 169/80, paragraph 17).

As a general rule, the principle of legal certainty precludes a Community measure from having retroactive effect (i.e. from taking effect prior to its publication). This principle of non- retroactivity can exceptionally be overridden, but only where ‘the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected’ (see, for example: T‑380/06, paragraph 82; C-260/91, paragraph 9; and C-368/89, paragraph 17).

The proposals do not include:

• any transitional provisions that would exclude the possibility of retroactive application of new (or amended) provisions to existing certificates and applications therefor; or
• any justification for permitting the new or amended provisions to take retroactive

In view of (a) above, the proposals, if adopted in their current form, would contravene the principle of non-retroactivity. Also, it is clear from (b) above that the principle of legitimate expectations would be contravened. This is because the absence of acknowledgement of, or justification for, retroactive effect means that no attempt has been made to identify ‘those concerned’, let alone to ensure that their legitimate expectations are respected.

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‘Unitary’ SPCs for PPPs

General approach

We have previously explained that, in our view, a SPC right that is truly unitary in nature would need to be based upon:

• a unitary basic patent; and
• a unitary marketing

Indeed, we note that the Commission’s proposals for unitary SPCs for medicinal products adopt this view (i.e. do not permit national MAs to form the basis of a unitary SPC).

However, the Commission’s proposals for unitary SPCs for plant protection products (PPPs) are based upon a contradictory approach, in which national MAs are permitted to form the basis of a unitary SPC.

The different (less favourable) treatment afforded to ‘unitary’ SPCs for medicinal products is impossible to justify.

We believe that it would be more consistent to either:

• require all unitary SPCs (i.e. SPCs for medicinal products and SPCs for PPP) to be based upon a unitary MA; or
• allow all unitary SPCs to be based upon a national

In any event, potential problems that may arise from allowing a unitary SPC to be based on a national MA are set out below.

Problems in case of invalidity of a ‘unitary’ SPC for a PPP

The proposal for a unitary SPC for PPPs is problematic, in that it does not provide for a ‘safety net’ in the situation where, after filing the unitary SPC application, it is discovered that, at the date of filing, the conditions of article 3 had only been satisfied in some but not all of the ‘unitary’ states.

In this scenario, it would seem that failing to satisfy the conditions of article 3 in all ‘unitary’ states would lead to rejection of the unitary SPC application. Alternatively, if the grounds for invalidity are only uncovered after grant, it could lead to invalidity and revocation of the unitary SPC in respect of all unitary states.

By way of contrast, pursuing protection via national SPCs in the ‘unitary’ states would lead to rejection or invalidation only in those states where the conditions of article 3 are not satisfied (as opposed to in all ‘unitary’ states).

The absence of a ‘safety net’ (e.g. conversion to a bundle of national SPC applications) therefore makes the option of a ‘unitary’ SPC for PPPs unattractive vs. the national route. In this respect, we suggest amending article 25 of COM(2023) 221 to permit, when article 3 is satisfied in some but not all of the ‘unitary’ states, conversion of:

• a unitary SPC to a bundle of national SPCs (in the states where article 3 is satisfied); and
• an application for a unitary SPC to a centralised application for national

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Pre-grant oppositions

Although the EUIPO is used to a procedure of pre-grant oppositions, this is in the context of trade marks and registered designs, which are not appropriate comparators to SPCs. Pre- grant oppositions are not, and have never been, a generally accepted feature of SPC law. Indeed, for the reasons outlined below, we believe that they are not appropriate for SPCs.

Pre-grant oppositions will delay the grant of SPCs. A significant number of SPC applications are filed close to the expiry date of the patent upon which they are based. This means that delays to the grant of an SPC can lead to a situation where:

• the basic patent has expired, and hence cannot be enforced in respect of post-expiry acts of infringement; but
• because it has not yet been granted, the SPC application also cannot be enforced in respect of those infringing acts.

Moreover, pre-grant oppositions would be vulnerable to misuse, for example as a tactic to enable (generic) product launch in the period between expiry of the basic patent and resolution of the (potentially meritless) pre-grant opposition.

The introduction of a pre-grant opposition procedure will inevitably give rise to a risk of opponents seeking to continue an opposition until beyond the projected expiry date of the SPC, thereby defeating the object of the extended protection to be given by the certificate. Indeed, certain aspects of the Commission’s proposals make this risk particularly acute. This is in view of inevitable delays that those aspects will introduce between the date that a positive examination opinion is issued and the date that said opinion is transmitted to the competent national authority of each designated Member State.

For example, in the case where an opposition is filed, transmission of a positive examination opinion to the national offices will be delayed by the time taken for:

• the examination opinion to be published;
• the (two-month) opposition period to have elapsed; and
• the EUIPO to examine, and then issue a decision upon, the

Moreover, further, potentially very lengthy delays are possible in view of the time that it could take for a party to the opposition to exhaust all possible avenues of appeal, namely:

• a first appeal to a Board of Appeal at the EUIPO; and
• a further appeal to the General

For cases closed by judgment, the General Court’s own statistics for 2022[1] indicate that the average duration of proceedings before that court is 20.4 months. Whilst the average duration is lower (13.4 months) for intellectual property cases, the complexity of the relevant CJEU case law makes it unlikely that this lower average will be achieved in proceedings concerning SPC validity.

Taking all of the above delays into account, a party intent upon exhausting all possible avenues of appeal against a decision to reject a pre-grant opposition will be able to delay the grant of national SPCs by a minimum of about 2½ years. Moreover, in cases where the General Court decides to make a preliminary reference to the CJEU, this delay could be increased to a minimum of over four years (based upon the average of about 20 months that the CJEU has taken to dispose of recent referrals relating to SPCs[2]).

In other words, for cases where the SPC application is filed close to the expiry date of the basic patent, the time taken to dispose of even a meritless pre-grant opposition could consume the majority (or even all) of the term of protection afforded to the SPC.

If there are serious grounds to question compliance with the provisions of article 3, third parties have the option of filing pre-grant observations. Also, if any opposition procedure is warranted, we believe it should follow the general principles adopted by the European Patent Office, i.e. post-grant oppositions and a route of appeal.

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Examination authority

If it is intended to create a centralised / unitary examination authority for SPCs, we believe that this should be the EPO, and not the EUIPO.

Firstly, delegating authority to the EPO would be consistent with the delegation to the EPO of the authority to examine requests for unitary effect.

Secondly, the basic patent for all centralised SPC applications must already be a European patent granted by the EPO, for which EPO examiners already have the appropriate technological understanding and expertise. For example, although not part of the requirements expressly outlined in the SPC Regulations, part of the ruling in CJEU decision C-650/17 refers to a requirement for an ‘independent inventive step’. Determining the presence or absence of an inventive step is a matter of European patent law, on which the EPO (and not the EUIPO) is already expert.

Thirdly, delegating authority to the EPO could enable decisions of the examining authority to be appealed to the UPC instead of the General Court.

The latter point is particularly important, as it would:

• prevent relevant judicial expertise being spread too thinly; and
• avoid generating another potentially conflicting line of case These two points are discussed in more detail below.

Judicial expertise

The UPC has been afforded exclusive jurisdiction for matters concerning SPCs based upon European patents (EPs). The UPC has multiple central, local and regional divisions, almost all of which need to be staffed with judges that have sufficient experience and expertise to handle disputes concerning the validity of SPCs.

Even considering only the court systems already established, there is a scarcity of individuals having sufficient experience and expertise to handle disputes concerning the validity of SPCs. Indeed, the Commission has recognised this by proposing to utilise SPC examiners from national offices to examine applications filed at the EUIPO. In view of the creation of (multiple divisions of) the UPC, the scarcity of individuals is particularly acute with respect to qualified judges in Europe.

In view of this scarcity, now appears to be the wrong time to effectively turn the EUIPO and, above it, the General Court into another new, judicial instance for hearing appeals on SPC matters. It would be more logical, practical and economical to put all such matters before the UPC and/or the national courts.

Conflicting lines of case law

If the decision is not taken to refer SPC cases to the UPC, under the Commission’s proposals, the following courts would all be tasked with issuing decisions upon the validity of SPCs.

1. The UPC, for granted SPCs based upon (unitary or not opted-out)
2. National courts, for SPCs and SPC applications based upon national patents and opted-out EPs.
3. The General Court, for appeals against decisions of the EUIPO (on applications for unitary SPCs or applications examined via the ‘centralised’ route).

Historically, there have been numerous references to the CJEU on matters concerning SPC law. Such references are only made in instances where there are diverging lines of case law. Based upon this historical evidence, it can be concluded that, where different courts are tasked with interpreting SPC law, divergent lines of case law will inevitably emerge.

The decisions of the General Court would represent a new (third) line of case law in respect of the same (or equivalent) provisions of SPC law. In the light of historical evidence, this would almost certainly lead to yet more divergent case law that would generate yet more legal uncertainty.

In the light of the above, our view is that the Commission should not create a new judicial instance having jurisdiction for hearing matters concerning SPC validity.

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Duration of unitary patents

The unitary (medicinal products and PPP) SPC proposals contain provisions that attempt to ‘clarify’ the duration of a unitary patent. That is, Articles 20(1) and 19(1), respectively, of the proposals for unitary SPCs for medicinal product and PPPs read as follows:

‘The unitary certificate shall take effect at the end of the lawful term of the basic patent, namely on the twentieth anniversary of the filing date of the application for that patent, for a period equal to the period which elapsed between the date on which the application for the basic patent was lodged and the date of the first authorisation to place the product on the market in the Union, reduced by a period of five years’ (emphasis added).

However, we question the legal basis and effect of this wording, as set out below. In particular, we question whether it is appropriate for the duration of a European patent having unitary effect to be determined by Regulations concerning SPCs. It does not seem appropriate that a fundamental issue such as the duration of any unitary patent (in any technical area) be dictated by Regulations on SPCs for medicinal product and PPPs.

Lack of antecedent (EU) legal basis

The duration of a European patent having unitary effect is determined by article 63(1) EPC. The EPC is not EU law. Indeed, there is currently no EU law that defines the duration of European patent having unitary effect.

Without any EU law defining the duration of a unitary patent, it is inappropriate to attempt to ‘clarify’ (in an EU law) that duration. This is because the attempted clarification lacks antecedent basis under EU law. Moreover, whilst the proposal may be intended to promote harmonisation, it conflicts with settled law in a number of member states, as discussed below.

Inconsistency with Regulation no. 1182/71 (Euratom)

The wording of the above-mentioned, proposed Articles 20(1) and 19(1) implies that:

• the unitary certificate takes effect on the 20th anniversary of the (patent) filing date; and
• a unitary patent therefore expires the day before the 20^th

Article 63(1) EPC defines the term of a European patent as ‘20 years from the date of filing of the application’. If that duration is to be interpreted under, and applied to, EU law, then the principles of article 3(1) of Regulation no. 1182/71 must be considered.

Amongst other things, article 3(1) of Regulation no. 1182/71 states the following:

‘Where a period, expressed in days, weeks, months or years is to be calculated from the moment at which an event occurs or an action takes place, the day during which that event occurs or that action takes place shall not be considered as falling within the period in question’ (emphasis added).

If this principle is taken into consideration, then the period of ‘20 years from the date of filing of the application’ expires on the 20^th anniversary of the filing date. In other words, interpreting article 63(1) EPC according to fundamental principles under EU law leads to the conclusion that the duration specified in the proposed regulations is a day too short.

Problematic implications

We have previously pointed out that different UPCA Participating Member States interpret article 63(1) EPC differently under their national laws. For example, the term afforded to a European patent under German national law is a day longer than that afforded to the same patent under the national laws of France and Italy.

A unitary patent is still a European patent, albeit one that has been afforded unitary effect in respect of some (but not all) designated EPC states. Further, as pointed out above, the duration of all European patents (unitary or otherwise) is determined by article 63(1) EPC. Bearing this in mind, as well as the divergent, national interpretations of article 63(1) EPC, any attempt to ‘clarify’ the duration of a unitary patent will have problematic implications. These include the following.

• For both ‘unitary’ and ‘non-unitary’ patents a conflict of laws (EU vs. national) in at least some UPCA Participating Member States. Such a conflict would be difficult to resolve in view of the above-mentioned absence of antecedent legal basis under EU
• A request for unitary effect would always change (by one day) the duration of the European patent in respect of some UPCA Participating Member States. Such changes of duration, which would stem from a post-grant action that is entirely within the control of the patent proprietor, could be particularly problematic for third
• Difficulties in determining the last date upon which any SPC application can validly be The confusion caused by the above-mentioned conflict of laws would cast doubt upon the determination of the last day that, under EU law, a basic patent complies with article 3(a), in the sense that it is still ‘in force’.

In our view, these problems cannot be resolved without first harmonising all relevant national laws with regard to the interpretation of article 63(1) EPC. That would have to be done under the EPC and cannot be done by the Commission.

Effect on unitary patents for which no unitary SPC is requested

Finally, we point out that the proposed unitary SPC legislation could (unwittingly) have a legal effect on all unitary patents, whether or not they will be referenced in a unitary SPC application and regardless of their date of grant.

In the event that the Commission proceeds with the proposed wording to ‘clarify’ the duration of unitary patents without first harmonising national laws, we recommend expressly limiting this clarification to relate only to unitary patents that are the basis for unitary SPCs, such that all other unitary patents are unaffected. This would follow the principle of proportionality because the proposed legislation should relate only to unitary SPCs.

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Therapeutically equivalent products

 To avoid confusion, it should be clarified that the protection conferred by the certificate extends to the ‘therapeutically equivalent products’ mentioned in new Recital 13 of COM(2023) 231 and Recital 21 of COM(2023) 222) only to the extent that those products fall within the limits of the protection conferred by the basic patent.

In this respect, we suggest amending the above-mentioned Recitals by adding wording analogous to that of the second sentence of the Recitals discussing ‘therapeutically equivalent derivatives’, namely Recitals 11 and 19 of COM(2023) 231 and COM(2023) 222, respectively.

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[1] https://curia.europa.eu/jcms/jcms/Jo2_7041/en/

[2] Referrals received by the CJEU from 2017 onwards that were admissible and that led to the issuance of an opinion or a reasoned order (namely, C-121/17, C-443/17, C-527/17, C-650/17 and C-673/18).

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