A sweeping reform of the European Union’s legislation on supplementary protection certificates for medicinal products and plant protection products is currently underway, which features the introduction of a new centralized SPC examination procedure at the EUIPO as well as the creation of a new unitary SPC on the basis of the unitary patent, as previously reported on this blog.
While the initial legislative proposals tabled by the European Commission on April 27, 2023 have received largely positive feedback, a number of details have been harshly criticized by stakeholders and professional associations (see, e.g., the comments from the Chartered Institute of Patent Attorneys (CIPA), the European Patent Institute (epi), the Compagnie Nationale des Conseils en Propriété Industrielle (CNCPI), the Deutsche Vereinigung für gewerblichen Rechtsschutz und Urheberrecht (GRUR), and the German group of AIPPI).
The four draft regulations proposed by the European Commission are now scrutinized by the European Parliament’s Committee on Legal Affairs (JURI) and, in parallel, by the Council of the EU before a revised version of these regulations will eventually be adopted. This could happen as early as on February 26, 2024, which has been indicated as a tentative date for a possible decision in a plenary session of the European Parliament. With the current legislative period coming to an end, there will be considerable pressure to finalize and adopt the SPC reform before the next European elections which take place in June 2024.
Meanwhile, the JURI Committee has recently published a draft report on each of the four planned new SPC regulations:
- Draft report on the proposal for a regulation on the unitary SPC for medicinal products of October 13, 2023,
- Draft report on the proposal for a regulation on the SPC for medicinal products (recast) of October 13, 2023,
- Draft report on the proposal for a regulation on the unitary SPC for plant protection products of October 13, 2023, and
- Draft report on the proposal for a regulation on the SPC for plant protection products (recast) of October 13, 2023.
These draft reports set out a number of amendments to the initial proposals of the European Commission. Among others, the following modifications are envisaged:
- While the initially proposed regulations allow the grant of multiple SPCs for the same product only on condition that they are filed by different patent holders who are “not economically linked”, there is no definition of this new qualifier. The JURI Committee intends to introduce a definition of “economically linked” that hinges on direct or indirect control, namely: “‘economically linked’ means, in respect of different holders of two or more basic patents protecting the same product, that one holder, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another holder.” This definition would appear to exclude license agreements between independent entities, which is a welcome clarification.
- When filing an SPC application that relies on a marketing authorization held by a third party, the draft regulations require that an SPC “shall not be granted … without the consent of that third party”. In line with this, the JURI Committee intends to specify that the EUIPO shall not only examine the compliance of an SPC application with all the “Article 3 conditions” but also with the condition requiring the consent of a third-party marketing authorization holder. In addition, “the consent of the third party” is to be explicitly included in the list of documents to be submitted together with an SPC application. It still remains unclear, however, in what form a proof of such consent should be submitted and, e.g., whether a confirmation from the SPC applicant alone would be sufficient or whether a declaration from the third party is obligatory.
- The required consent of a third-party marketing authorization holder is to be listed among the grounds of invalidity but, rather bizarrely, only in the new regulation on unitary SPCs for plant protection products and not in any of the other three SPC regulations. It might be that this point has been overlooked in the draft reports on these other regulations.
- Insofar as examiners from national patent offices are involved in the examination and opposition panels at the EUIPO, their expertise and experience in SPC and patent matters as a relevant selection criterion will be much more strongly emphasized. Remarkably, the initially foreseen provision obliging the EUIPO to ensure “geographical balance amongst the participating [national patent] offices” is to be replaced by the imperative to ensure “relevant expertise and sufficient experience in the examination of patents and supplementary protection certificates”.
- In a similar vein, while the initial proposals from the European Commission provide that no more than one examiner (in a three-member panel) should come from a national patent office that has made use of the exemption to not examine the conditions of Article 3(c) and 3(d), the JURI Committee intends to tighten this requirement to completely exclude any examiners from national patent offices that do not examine the Article 3(c) and 3(d) conditions. This measure would certainly help improving the quality of the EUIPO’s decisions.
- It has been clarified that decisions on oppositions shall include a “detailed reasoning”, and that oppositions can also be filed against positive examination opinions relating to applications for paediatric extensions. Moreover, where several oppositions have been filed, they shall be dealt with jointly, and the EUIPO shall issue a single decision on all these oppositions.
- New grounds for the invalidity of an SPC are to be introduced, including the withdrawal of the marketing authorization underlying an SPC. In the case of unitary SPCs for medicinal products, additional new grounds for invalidity include the withdrawal from the market of a medicinal product, a suspension of marketing, and the failure to place the medicinal product on the market in all EU member states covered by the unitary SPC (unless the SPC holder waives its rights for markets where the medicinal product has not been launched). These new invalidity grounds seem highly problematic for several reasons. In addition, there is reason for concern that these new grounds for invalidity could make unitary SPCs less attractive than bundles of national SPCs.
- Various provisions are to be amended to specify that all submissions to the EUIPO must be made electronically. Thus, SPC applications as well as third-party observations, oppositions, invalidation actions (where applicable), and appeals shall be filed at the EUIPO in electronic form only.
It remains to be seen to what extent these modifications will be finally endorsed by the European Parliament’s JURI Committee and also what amendments are envisaged by the Council of the EU. In particular, it may be expected that the highly controversial pre-grant opposition system and possibly also the handling of invalidation actions against unitary SPCs by the EUIPO could still be put into question. Within the Council, the Working Group on Intellectual Property (Patents) is already working on the four draft SPC regulations, but its deliberations are not publicly accessible at this stage. Yet, it seems safe to assume that further changes to the draft SPC legislation will be coming down the road.
UPDATE:
The German Federal Council (Bundesrat) has meanwhile filed observations on the planned SPC reform (received by the European Parliament on November 9, 2023), in which several points are criticized, including the introduction of a pre-grant opposition procedure. The Federal Council’s comments on this latter point read as follows (in English translation):
The proposed regulation provides for the possibility for third parties to submit objections to the EU Intellectual Property Office prior to the granting of certificates and thereby lodge an opposition against intended decisions. The Federal Council fears that this possibility could be abused to a considerable extent.
In the opinion of the Federal Council, this possibility could result in a certificate possibly not being granted before the underlying basic patent expires. The rights holder would lose their intellectual property, at least temporarily, without being able to sue for infringement or obtain a preliminary injunction against potential infringers. As the duration of the opposition proceedings is also not limited in time and as several appeal instances may follow, there is a real risk that the rights holder will suffer considerable damage.
The Federal Council therefore considers it much more sensible to follow the examples of the USA and Japan. It is perfectly sufficient if the validity of a certificate can be contested after it has been granted.
The submissions from the German Federal Council can be found here:
- https://connectfolx.europarl.europa.eu/connefof/app/exp/COM(2023)0222 (PDF version)
- https://connectfolx.europarl.europa.eu/connefof/app/exp/COM(2023)0231 (PDF version)
Oswin Ridderbusch and Alexa von Uexküll are the editors of the handbook European SPCs Unravelled: A Practitioner’s Guide to Supplementary Protection Certificates in Europe (Second Edition), which was published by Wolters Kluwer in 2021.
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I am still wondering whether the whole upheaval created by the involvement of the EUIPO, even with the help of examiners from national offices, is really worth it. On the other hand, one could see the efforts in matters of SPC by the EU have the aim of getting back some competence which had been given to the UPC.
However, the idea of a European SPC going through the EUIPO has at least the advantage that SPCs and their validity will not be decided by a body not controlled by the EU and the CJEU as it is the case for European patents with unitary effect and not opted out EP, i.e. the UPC.
The UPC is also meant to decide upon the validity of SPC based on European patents, cf. Art 31(1) UPCA. What will happen in case of diverging case law between the CJEU and the UPC in SPC matters? The same potential problem already exists when it comes to the validity of granted EP and possible divergences between the case law of the boards of appeal of the EPO and that of the UPC.
The UPC is subject to European Union law (Arts. 20 and 24.(1)(a) UPCA) and has an obligation to refer questions to the CJEU on the interpretation of EU law (Art. 21 UPCA). This would include SPC law.
I therefore find it hard to follow your assertion that the UPC is not “controlled by the EU and the CJEU” to this extent, or that the UPC could diverge from the CJEU in SPC matters.
Could you please explain?
@ anonymous attorney,
There is a difference between the fact that Union law, including Regulation (EU) No 1257/2012 and Regulation (EU) No 1260/2012 ( 1 ) is a source of law for the UPCA and the fact that the UPC is controlled by the EU. The Court shall apply Union law in its entirety and shall respect its primacy, but there is no obligation whatsoever vis-à-vis the CJEU, besides “following” preliminary rulings.
The CJEU is not controlling the UPC as much it is not controlling the EPO and its boards of appeal as there are no organic links between the various judicial bodies. The EU is neither contracting state of the EPC nor of the UPCA and those two instances are thus fully independent of the CJEU.
The UPC has just accepted to “follow” preliminary rulings of the CJEU when interpreting SPC requirements, but again, this does not mean that it is subjected to the direct control of the CJEU. When one sees how national courts interpret the preliminary rulings of the CJEU, it is difficult to speak about control of the national jurisdictions by the CJEU. Why should it be different with the UPC?
@Thinking of it:
I am sorry, but your reply makes absolutely no sense. Articles 20 and 21 UPCA say:
Article 20: The Court shall apply Union law in its entirety and shall respect
its primacy.
Article 21: As a court common to the Contracting Member States and as part of their judicial system, the Court shall cooperate with the Court of Justice of the European Union to ensure the correct application and uniform interpretation of Union law, as any national court, in accordance with Article 267 TFEU in particular. Decisions of the Court of Justice of the European Union shall be binding on the Court.
Your position that the Court has “no obligation whatsoever vis-à-vis the CJEU, besides “following” preliminary rulings” is plainly at odds with these provisions of the UPCA.
The UPC is just as much subject to the CJEU as national courts of EU member states are. Your argument simply does not make any sense.
The UPCA further provides, in Article 22, for the UPCA member states to be liable for damages reesulting from infringement of EU law.
What am I missing here? Is your position really that NEITHER national courts NOR the UPC should have any say whatsoever in patent litigation, be it for unitary patents or for traditional EP “bundle” patents, because of insufficient “control” by the CJEU?
I am as aware as yourself of the various links established in the UPCA with Union Law.
I never said that “NEITHER national courts NOR the UPC should have any say whatsoever in patent litigation be it for unitary patents or for traditional EP “bundle” patents”. You must have manifestly misunderstood something.
What I have said is that the CJEU can inform national courts or in the future the UPC of its interpretation of EU law. This does however not withhold national courts and in the future the UPC to have their own interpretation of the interpretation of Union by the CJEU. Otherwise we would not be in presence of multiple prejudicial questions from national courts dealing with SPCs.
The CJEU does not have a final say in patent matters like in trademark matters. In this respect, the CJEU does neither control national courts nor in the future the UPC, when it comes to substantive patent law as defined in the EPC.
@Thinking of it: thank you for the clarification in your comment of 8/11/23 at 8:34 pm, but I am still struggling to understand your point.
Your original comment suggested that you saw a problem with SPCs being subject to the jurisdiction of the UPC, which is “a body not controlled by the EU and the CJEU”.
Your clarification now seems to suggest that the real problem, in your view, is that the CJEU does not have the final say in patent or SPC matters. This means that the same problem – the problem of possible divergent interpretations of CJEU case law – may arise at the UPC and also in national courts.
When you talk of a lack of “control” I assume that you mean that there is no mechanism for the CJEU to ensure that courts do not issue divergent opinions – other than by those courts recognising the divergence and asking the CJEU for its view once again.
I can agree with you at least to the extent that the CJEU’s rulings on SPC matters do not always result in completely harmonious interpretation of the SPC Regulation by other courts. (Might this not suggest, however, that the problem lies at least in part with the CJEU’s own opinions, which are often difficult to understand? If this is the case then it is difficult to see how tinkering with allocation of responsibility at lower instances can fix a problem at the highest instance.)
Coming back to the original point, though, I am still failing to understand why handing SPC matters to the EUIPO instead of the UPC or national courts would improve matters in this respect. What guarantee is there that the EUIPO would always interpret CJEU rulings in the “correct” way, where national courts or the UPC fail to do so? Where, in this circumstance, is the necessary “control” that you seek?
it is about time that EUIPO starts serioulsy tackling issues like SPC, SEPs and compulsory licensing, this activity will just integrate the duties of the UPC, there will be no potential conflict here. And UPC and BoA will have necessarily to converge with time, similarly to BoA and EPO-first instance which are not always so aligned … We are talking here of four entities that have different tasks and complement each other, and need to find a common ground exactly as it needs to happen with the various judicial bodies in any Country or Organization
Sniffer, your optimism is likely misplaced.
The problem with SPC law is that it is fiendishly difficult to interpret. For example, the CJEU has struggled for decades to provide a clear interpretation of Article 3(a) but has manifestly failed … as the national courts still reach diverging interpretations of that provision. That is not to mention the volte face on Article 3(d) (Neurim / Santen) and the less prominent, but still long-standing, lack of a clear interpretation of Article 3(c).
Against this background, it is hard to see how throwing new (quasi-)judicial instances into the mix will help to reduce the number of diverging interpretations of the law. The national patent offices and courts will still remain competent for national SPCs. Then there is the UPC, which has recently gained competence for SPCs based upon not opted-out patents. The proposed reform therefore seems very unlikely to lead to harmonisation, given that it will add to the mix of (divergent) interpretations the views of EU IPO examining, opposition and appeal bodies, PLUS those of the General Court.
Just because different (quasi-)judicial bodies ought to converge on a common interpretation of the same provision does not mean that they WILL do so. I refer you to the divergent (national) interpretations of Article 63(1) EPC. Whilst a simple (and hence seemingly easy to interpret) provision that governs a fundamental matter, namely the term of a patent, different national courts and legislatures have adopted, and stubbornly adhered to, divergent interpretations of that provision … for over 50 years!
but this is exactly the point, going beyond the divergent national courts, now this is possible thanks to the UPC, I dont know how well it will work from the beginning but for sure better than before without it, so I dont understand this pessimism, it sounds to me like a prejudice that refuses to accept any positive side, is this perhaps a more general attitude of a certain workforce? If yes … not easy to work with it, or maybe I am referring to the wrong people
Sniffer, which line of case law do you see becoming “dominant”? That from the UPC or instead that from the EUIPO (or General Court)?
Do you really see the judges of the UPC, who of course are well versed in patent law, playing second fiddle to judgements from the General Court … which has never before been called upon to decide patent disputes, let alone tackle fiendishly complex SPC matters? Or do you think that the judges from the EU’s General Court will become subservient to a non-EU judicial body? And even if so, what will they do in cases relating to points of law upon which the UPC has not yet issued any decisions?
And then what about all of those national judges that have ample experience dealing with SPCs? Will they all become subservient to the UPC too? Or perhaps they will feel obliged to pay more attention to decisions of EU bodies (i.e. the EUIPO or the General Court)?
Aiming for harmonisation via the creation of supranational (quasi-)judicial bodies is one thing. Making it work in practice is another. My point was that the unholy mess of different national and supranational bodies seems highly unlikely to achieve the desired aim in an area as complex as SPCs. I can see how adding one supranational body (the UPC) having relevant expertise might do the job. I just don’t see how adding the EUIPO and the General Court will do anything other than make things far more complicated than they need to be.
@ law sniffer
The EUIPO, in spite of its name, has been set up for dealing with trademarks and not with patents and related issues like SPC, SEPs and compulsory licensing. It has presently no competence whatsoever in those matters. The competence has to come from outside, for instance by examiners from national offices. This is unnecessarily complicated and not necessarily a condition for success.
I am not sure that the UPC is really keen to see its competence in those matters reduced. Just look at declarations of the President of the UPC. If issues like SPC, SEPs and compulsory licensing are dealt with by the EUIPO, the last instance will be the CJEU. I cannot imagine that the CJEU will ever be inclined to follow decisions from other courts. It is rather the contrary, as through prejudicial questions, the CJEU gives the direction.
As far as case law is concerned, could you please give one reason why the UPC and BoA will necessarily have to converge with time? I see none, and there is not even an exchange foreseen between the two judicial bodies. The situation is different with the EFTA Court and the CJEU, where an official exchange mechanism has been set up, but this does also not mean that their case law will converge.
The boards of appeal of the EPO have kept their independence vis-à-vis national courts and vice-versa and this now for 40+ years running. Some national courts claim to follow the case law of the boards of appeal of the EPO, but when you look into more detail, it often boils down to a mere allegation.
If the BoA and EPO-first instance were completely aligned, there would be no need for BoA. Decisions of the BoA are only biding for first instance departments insofar as they are quoted in the Guidelines. The only decisions binding for first instance departments and for the boards are decisions of the EBA under Art 112.
I am not sure that the criticism mentioned can all be labelled as “harsh”, perhaps only that from CIPA (see https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13353-Medicinal-plant-protection-products-single-procedure-for-the-granting-of-SPCs/F3436224_en for a more complete version of that submission, ie one lacking printing errors).
Nevertheless, it remains to be seen whether anyone at the Commission or the Parliament has any inclination towards paying attention to even the most well-reasoned of criticisms.
For example, the JURI committee report only PARTIALLY addresses ONE of the many criticisms raised in CIPA’s submission. Whilst the JURI committee’s report might provide a framework for assessing the meaning of “economically linked”, it still does not address questions of timing, or the absence of any rationale or justification for adding new Article 3(3) in the first place. As to the other (serious) criticisms raised by CIPA, it seems that the JURI committee did not feel that those gave rise to the need for any amendments. I shall leave it to readers of this blog to decide for themselves whether this represents sound judgement on the JURI committee’s part.
Indeed, it is disappointing to see how little attention the JURI committee has paid to the sensible criticism voiced by CIPA and others. The risk for an abuse of the opposition regime to deliberately delay the grant of SPCs, for instance, seems to have been recognized. Yet, all that the JURI committee has proposed in order to mitigate this risk is a weak provision calling for an evaluation sometime in the future (Article 56 of the draft unitary SPC regulation, which provides for an evaluation by the European Commission every 5 years, is supplemented by this sentence: “Special emphasis shall be given to the effects of opposition under Article 15 and whether the possibility of opposition leads to significant delays in granting unitary certificates.”). One can only hope that at least the Council and the Commission will listen to reason.
@ Disillusioned SPC enthusiast
Could it not be that the Council, the Commission and the EU Parliament want to regain some control on the topic of SPCs?
This control had been given up, let’s say lightly, to the UPC when the UPCA was drafted and supported by all the lobbyists hoping to gain an advantage with the creation of the UPC.
It was the clear wish of all the staunch supporters of the UPC that the CJEU should not have a say in substantial patent matters. The only way not to alienate the UPC completely from the EU was, inter alia, to claim that the UPC accepts the supremacy of EU law and to provide the possibility to file requests for preliminary rulings to the CJEU.
Whether the CJEU will refrain to say anything about substantial patent matters remains to be seen. I take bets that the CJEU will do so.
You might actually be in for more disillusions. The legal basis of the UPC is anything but safe as, for example, the UK has “left” a treaty without any exit clause, this being combined with the way the Presidium of the UPC and the Administrative Committee of the UPCA have dealt with Art 7(2) UPCA and Annex II of the UPCA.
After all, the Vienna Convention on the Law of Treaties applies to the UPCA. The Preparatory Committee of the UPC had even announced once a Declaration according to Art 31 VCLT relating to the situation created by the Brexit. This declaration has never come.