Supplementary Protection Certificates offer additional value, but they also bring challenges, as Dr Christian Köster explains.
Pharmaceutical and plant protection products face time consuming application procedures to secure approval from the authorizing body before commercialization. This lengthy process often delays introduction of the product into a potentially mature market. These industries historically looked to compensate for this late introduction into the market by ensuring that their innovation could remain protected even after the end of the term of the standard patent protection.
Various jurisdictions have implemented means to provide for such additional IP protection. The European Union uses Supplementary Protection Certificates (SPCs). SPCs are considered a right sui generis, but in essence they prolong the protection of an already existing basic patent. Supplementary protection of up to five years may be conferred by SPCs for pharmaceuticals[i] and plant protection products[ii]. In addition, and provided that certain requirements for pediatric studies are met, pharmaceuticals may enjoy up to another six months of prolonged patent protection[iii].
Valuable IP assets
Discovering a new medicinal product, such as a drug, and ultimately bringing it to market, is a very selective and time consuming exercise. According to reports from the pharmaceutical industry[iv], out of 5000 to 10,000 new substances only about 9 reach a stage where they are tested on humans, and only 1 finally makes it to commercialization. Sales and distribution starts, on average, 13.5 years after the first discovery of a new drug. Taking these figures into account, development costs are significant and typically amount to $1 to $1.6 billion US dollars.
It is of course necessary to recover these costs and generate revenue throughout the sales cycle. The time between the start of sales and the loss of exclusivity conferred by patent protection for the drug is economically the most attractive period.
Extending the exclusivity imparted by standard patent rights by virtue of SPCs has an immediate positive effect on the sales revenues and hence, the drug developer’s business. The SPC protection is not limited to drugs containing the active ingredient explicitly protected by the certificate. For example, where the SPC protects A, the competitor trying to sell the combination A+B is an infringer[v]. Depending on the overall circumstances of the case, the SPC might in fact be of higher value than its underlying basic patent. A valid SPC can be something close to heaven. First, however, the stairway has many steps.
Mind the step(s)!
The first step in obtaining the SPC is one for the bench chemist: a new medicinal product, like a drug, must come into existence. A business decision as to whether to file a patent at this point is considered. Prior to filing, the application needs to be drafted, keeping in mind issues that arise during the application procedure. For example, fallback positions must be included in case amendments become necessary later due to anticipating prior art. From a European perspective, the fallback positions should be well-tailored. The reason is that amended subject-matter must be directly and unambiguously derivable from the originally filed application. This “gold” standard[vi] cannot always be easily complied with.
Other relevant aspects are possible exclusions from patentability and ways to circumvent them. In Article 1(c) of the relevant EU regulation1, it is clarified that a basic patent for an SPC can be one which protects a use of the relevant product. The use of a substance for treating a particular illness per se was not patentable under the former European Patent Convention (EPC). However, it has been learned that under the current EPC, the existing knowledge to use a medicament to treat an illness does not bar the patentability of the same medicament for use in a different treatment by therapy of the same illness[vii]. Also, there is no need any more to circumvent any exclusion from patentability by means of a Swiss-type claim format[viii].
Another step comes from EU case law. Last year, the Court of Justice of the European Union (CJEU) rendered five important decisions[ix]. The decisions make it clear that a new medicinal product must be defined in the specification in a detailed manner. Namely, the decisions outline that a basic requirement for obtaining an SPC is that the active ingredients of the drug must be specified in the wording of the claims of the basic patent.
A referral on this issue has been made in which the CJEU is asked for further clarification of the mentioned requirement[x]. It is uncertain whether the referral will clarify, unambiguously, the circumstances under which the active ingredient in question is sufficiently specified in the wording of the claims. The recommended step, based on the uncertain outcome, is to diligently approach your drafting.
The practice of obtaining and enforcing SPCs is a niche field. However, the business value of an SPC can be significant. The law in this area continues to develop. At the very least, diligent drafting of basic applications is key to success.
[i] Regulation (EC) No 469/2009 (superseding Council Regulation (EEC) 1768/92)
[ii] Regulation (EC) No 1610/1996
[iii] Regulation (EC) No 1901/2006
[iv] See e.g. the vfa brochure “Forschung für das Leben – Entwicklungsprojekte für innovative Arzneimittel“, June 2011, from which all figures reported herein are taken
[v] CJEU case C-574/11 (Novartis)
[vi] G 2/10 (Disclaimer), OJ EPO 2012, 376, point 4.6 of the Reasons
[vii] G 2/08 (Dosage regime), OJ EPO 2010, 456, Headnote, Question 1
[viii] Id., Headnote, Question 3
[ix] CJEU cases C-322/10 (Medeva), C-422/10 (Georgetown), C-518/10 (Yeda), C-630/10 (Queensland), and C‑6/11 (Daiichi Sankyo)
[x] UK High Court of Justice,  EWHC 2545 (Pat)
Dr. Christian KÖSTER, LL.M.
German and European Patent Attorney, Dennemeyer & Associates (Munich)
With a PhD in Chemistry, a Master of Laws, and vast experience in patent prosecution, Dr. Köster is specialized in chemistry and pharmaceutics. He assists clients during the lifecycle of IP rights in contentious and non-contentious matters, including SPCs, FTO analyses and litigation procedures. Dennemeyer & Associates is an international IP law firm headquartered in Luxembourg, with SPC specialists in several jurisdictions, including Germany and Luxembourg.