The SPC reform which is currently undergoing the legislative procedure in the European Union has taken a further decisive step forward, as the European Parliament’s Committee on Legal Affairs (JURI Committee) has approved an amended version of the draft text of the four new EU regulations on SPCs for medicinal and plant protection products as well as corresponding unitary SPCs.
Following the publication of the initial legislative proposals for these four new regulations by the European Commission on April 27, 2023 (as previously reported on this blog), the JURI Committee issued draft reports proposing a number of amendments on October 13, 2023 (as previously reported) and subsequently collected further amendments suggested by Committee members until November 2023.
Based on the numerous amendments proposed for each of the four draft regulations (more than 200 amendments in the case of the regulation on unitary SPCs for medicinal products), a set of compromise amendments was tabled on January 19, 2024 and subjected to a vote in the JURI Committee on January 24, 2024. All compromise amendments to all four draft SPC regulations were unanimously accepted (see here for video footage of the voting on the four new SPC regulations in the JURI Committee session, the supporting documents, the results of the voting, and the European Parliament’s corresponding press release).
The amendments to the four draft SPC regulations as now approved by the European Parliament’s JURI Committee can be found here:
- Draft regulation on SPCs for medicinal products (recast): Approved amendments to the Commission’s initial proposal
- Draft regulation on unitary SPCs for medicinal products: Approved amendments to the Commission’s initial proposal
- Draft regulation on SPCs for plant protection products (recast): Approved amendments to the Commission’s initial proposal
- Draft regulation on unitary SPCs for plant protection products: Approved amendments to the Commission’s initial proposal
Among the various amendments made by the JURI Committee, the following points are particularly noteworthy:
- A definition of the term “economically linked” has been introduced, providing that “‘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 is relevant to the provision in Article 3 which allows 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”. As a consequence of this new definition, independent companies having concluded a license agreement should normally not be regarded as “economically linked” and should thus be able to each obtain one SPC for the same product on the basis of their respective patents, which is a sensible clarification.
- In cases where the SPC applicant relies on a marketing authorization (MA) held by a third party, the draft legislation requires that an SPC shall not be granted without the consent of the third-party MA holder. The amendments endorsed by the JURI Committee clarify that “the consent of the third party” shall be submitted together with any new SPC application. In which form this will have to be done, however, still remains unclear.
- The provisions on the examination procedure for centralized SPC applications and unitary SPCs have been amended to specify that the European Union Intellectual Property Office (EUIPO) must assess compliance of SPC applications with the new condition in Article 3 requiring that different patent holders must be “not economically linked” in order to be able to each obtain one SPC for the same product, as well as the requirement in new Article 6(2) calling for the consent of a third-party MA holder. In line with this, the grounds for the invalidation/revocation of an SPC have been expanded to cover all the conditions set out in Article 3 and Article 6(2), including the “not economically linked” condition as well as the consent of a third-party MA holder.
- In SPC examination proceedings, the EUIPO will be supposed to issue an examination opinion within 6 months after the publication of the corresponding SPC application in normal cases. Where reasons for urgency can be asserted, such as the imminent expiry of the basic patent, an expedited examination can be requested by the SPC applicant, in which case the EUIPO shall issue an examination opinion within 4 months.
- In examination and opposition proceedings before the EUIPO as well as in appeal proceedings before the Boards of Appeal of the EUIPO, the corresponding oral proceedings shall, as a norm, be held in public (whereas oral proceedings before the examination and opposition panels were originally intended to be not public). The amended draft regulations further set out that “full transparency shall be ensured” throughout opposition proceedings “which shall be open, whenever possible, to public participation”.
- It has been clarified that EUIPO 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. Where several oppositions have been filed, they shall be dealt with jointly, and the EUIPO shall issue a single decision on all oppositions.
- The selection criteria for the appointment of examiners from national patent offices to be involved in SPC examination or opposition proceedings before the EUIPO have been focused on “relevant expertise” and “experience”. Moreover, no SPC examiners shall be appointed from national patent offices that do not examine the Article 3(c) and 3(d) conditions (in contrast to the initial legislative proposals which allowed one examiner from such national patent offices per panel). In addition, when setting up an examination or opposition panel, the EUIPO shall ensure “relevant expertise and sufficient experience in the examination of patents and supplementary protection certificates” and shall, in particular, ensure that at least one of the tree members of each panel “has a minimum of 5 years of experience in patent and supplementary protection certificate examination”. Conversely, the criterion of “geographical balance between the participating [national patent] offices”, which previously occupied the first place in the list of applicable criteria, has been downgraded to be considered only “where possible”. This new focus on expertise and experience in the examination of patents and SPCs together with the definition of corresponding tangible minimum requirements should be helpful to ensure a high quality of the future SPC examination proceedings before the EUIPO.
- A more stringent timeframe is now foreseen for appeal proceedings before the Boards of Appeal of the EUIPO. In particular, any written reply to the statement of grounds of appeal shall be submitted within 3 months from the filing of the statement of grounds. The competent Board of Appeal shall then fix a date for oral proceedings within 3 months from the filing of the reply to the statement of grounds of appeal or within 6 months from the filing of the statement of grounds, whichever is earlier, and shall issue a written decision within 3 months from the oral hearing.
- A number of further amendments aiming at improving the speed and transparency of SPC proceedings before the EUIPO have been introduced, as well as amendments making submissions by electronic means obligatory.
Notably, these amendments as now endorsed by the JURI Committee no longer include some of the previously proposed amendments that had been heavily criticized, such as the introduction of new grounds for the invalidation specifically of unitary SPCs, including 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.
Conversely, no significant amendments have been made to the pre-grant opposition system and to the handling of invalidation/revocation actions filed against unitary SPCs by the EUIPO.
In order to be passed into law, the new SPC regulations need to be adopted by the European Parliament and the Council of the EU, which serve as the EU’s co-legislators. As a next step, the draft regulations as amended by the JURI Committee will now be put to a first reading in the plenum of the European Parliament, which has been scheduled for February 26, 2024. Meanwhile, the Council of the EU is deliberating in parallel but has not yet made its position public.
In view of the reservations voiced by several member states, including Germany, on the planned introduction of a pre-grant opposition procedure and other specific aspects of the SPC reform, it remains to be seen what further amendments might still be made before the new SPC regulations are finally adopted. At the same time, with the current legislative period coming to an end (and the next European elections taking place in June 2024), there will be considerable pressure to quickly finalize and adopt the SPC reform. Therefore, and in view of the qualified majority voting in the Council of the EU, it would appear rather unlikely that any fundamental changes to the current versions of the draft SPC regulations will still follow.
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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In an earlier post, queried whether anyone at the Commission or the Parliament has any inclination towards paying attention to even the most well-reasoned of criticisms. Looking at the amendments approved by the JURI committee, I am inclined to conclude that the answer to that query is a clear “no”.
This cannot end well. The CJEU and the national courts were already struggling (badly!) to deal with the original SPC legislation, despite its relative clarity and simplicity. Now we have not only added the UPC to the mix, but we seem set to gain new wonders such as:
– multiple new, PARALLEL jurisdictions for SPCs (namely the EUIPO and its appeal boards plus the EU’s General Court);
– vastly increased complexity of the legislation (especially for PPP SPCs, the “unitary” version of which is so riddled with limits, exceptions and caveats that it will end up being unitary in name only); and
– major new headaches for interpreting the legislation (due to substantive changes being made without explanation).
If the Commission wanted to make SPC law even more complex and impenetrable, then they are certainly going the right way about it!
I have a different question: why on earth did the Commission needed to open discussions on SPCs?
The UPC is meant to deal with SPCs, so why another jurisdiction in charge of SPCs?
Could it be that the CJEU want to have the last say in IP matters and is starting with SPCs so that in the end it can actually decide on patent matters in general?
Could it also be that the CJEU does not trust the UPC?
The net effect is indeed that the situation will be more complicated and this will be to the disadvantage of the users of the patent system in Europe.
As far as I can tell, discussions were opened because there was a perceived need for a unitary SPC, as well as a way to make examination of national SPC applications more robust / predictable.
That explains most of the proposed amendments. However, it seems that the Commission and Parliament could not help tinkering with settled provisions / case law, for no reason other than that they can. And all whilst professing not to be making any substantive changes!
From one perspective, the choice of the EUIPO makes sense, on the grounds that it is an EU institution that handles matters relating to IP. From a common sense perspective, however, that choice makes no sense at all.
For example, if responsibility for examining and granting unitary patents can be delegated (to the EPO), then why not also delegate responsibility for examining and granting unitary SPC?
Also, is it really sensible to creating multiple new, completely inexperienced decision-making instances for SPCs, when we already have enough confusing and conflicting case law stemming from the combination of national patent offices and courts and the CJEU (let alone the UPC, which is yet to get going on SPCs)?
Further, which individuals having sufficient knowledge and experience of SPC legislation and case law will staff the decision-making bodies? The UPC has depleted what was already a relatively small pool of suitable individuals in EU Member States.
Regardless, you are quite correct that the proposed revisions to the SPC legislation will create an immensely and unnecessarily complex situation.
I see a general “need” of unitary SPCs in view of the UP, and logically also the “need” in a separate jurisdiction dealing with “USPCs”. What I find somewhot disappointing about the recast SPC Regulations is that there are a number of CJEU decisions in particular about Art. 3 of the exising regulation that have not really provided clarity about the question: “When is a product considered protected by a basic patent?” The CJEU has run circles around this question and its decisions added layers and layers of “aspects” on that question, but the decisions of the CJEU were always very narrow on the cases, and cannot really be generalized in any conclusive way.
Here is my list of “requirements” that was “established” by the CJEU:
(a) the product (or combination) must be “specified [or identified] in the wording of the claims” (Medeva and progeny),
(b) whether a product is protected by an EP patent depends on the application of Article 69 EPC and the Protocol, not to rules relating to infringement (Eli Lilly);
(c) a structural formula is not necessary, a functional formula will suffice (Eli Lilly);
(d) for products that are not expressly specified or identified in the claims, to be protected the claims must “relate, implicitly but necessarily and specifically, to the active ingredient in question” (Eli Lilly);
(e) a skilled person in the art must, at the filing date or priority date of the basic patent, have been able to identify that the claims relate necessarily and specifically to the (combination) product (Teva),
(f) that the active ingredients must be specifically identifiable in the light of all information disclosed by that patent (Teva),
(g) in case of combination products the combination must fall under the invention covered by that patent (Teva), and
(h) a product is not protected by a basic patent in force […] if, although it is covered by the functional definition given in the claims of that patent, it was developed after the filing date of the application for the basic patent, following an independent inventive step (Royalty Pharma).
I had hoped that a revision of the SPC Regulations would look like, the CJEU being asked what they would need on the legislative level to clarify this point. Should it be an “added matter” point of view? Should it be an “infringement” point of view, or else? Dear judges of the CJEU, what do you miss from the Regulations to clearly say what is protected and what is not?
However, this is not what the legislator did. They preferred to refer to the “wobbling” CJEU decisions and present them as guidance (what they IMHO are not, they are mostly very case specific, which is the reason why there are still open questions that need to be decided on Art. 3 EC469/2009). But good to know that due to the “economically linked requirements” there will be even more in future.
That it would be better to have a unitary SPCs is not in dispute. If a unitary SPC is needed in view of the UP, then the need of a separate jurisdiction dealing with “USPCs” is not really apparent. This is the more so as the CJEU did not apparently give its best decisions in matters of SPC.
It is not that I am a great promoter of the UPC, but setting up a new instance just to deal with “USPCs” does not seem the best solution as matters are indeed becoming unnecessarily complex.
As the responsibility for examining and granting unitary patents has been delegated to the EPO, then why not also delegate responsibility for examining and granting unitary SPC to the EPO? At least the EPO knows, or should know, what patents it has granted and why and also what they entail.
An additional treaty on SPC could be set up with the possibility to grant SPC for all contracting states of the EPC, whereby some of them would have a unitary effect.
In order to avoid diverging decisions on validity between the UPC and the EPO, the opposition period at the EPO could be extended to the whole life of the patent. After all, the proprietor can amend its patent during the whole life of the latter.
This means that the EPC has to be amended, but could not those ideas be a good reason to at least call a conference of ministers of the Contracting States responsible for patent matters. Since the entry in force of the EPC 2000 in 20013 no such conference hs been called. One wonders why? At least two of those conferences should have been held by now.