Supplementary Protection Certificates, European Patents, and Unitary Patents: How is it going to work after the entry into force of the UPC?

Written by Louise AMAR   // 22 January 2016   // Comments Off

UP Overview

Supplementary Protection Certificates ensure the recovery of high investments necessary over a long development period to bring a successful innovative product to the market. SPCs in particular are critical for the agrochemical, pharmaceutical and medical devices industries which rely heavily on industrial protection through patents and SPCs. Existing SPCs complement national or European patents to ensure an extra period – up to five years – of protection for patent holders, to offset the time required to obtain marketing authorisation for their patented products.

The entry into force of the UPC will however bring major changes to SPCs as well as European Patents.  This post therefore looks at the provisions in the UPCA and the Rules of Procedure which deal with SPCs; the impact of these provisions on SPCs, European Patents and Unitary Patents; the issues raised by these changes; and finally the project of a unitary SPC.

I. The provisions concerning the SPC in the Unified Patent Court Agreement (UPCA) and the Rules of Procedure: 

A.  The UPCA:

  • Article 2 (h)Supplementary protection certificate” means a supplementary protection certificate granted under Regulation (EC) No 469/20091 or under Regulation (EC) No 1610/962

 

  • Article 3This Agreement shall apply to (b) supplementary protection certificate issued for a product protected by a patent

 

  • Article 30  “A supplementary protection certificate shall confer the same rights as conferred by the patent and shall be subject to the same limitations and the same obligations

 

  • Article 32The Court shall have exclusive competence in respect of:(a) actions for actual or threatened infringements of patents and supplementary protection certificates and related defences, including counterclaims concerning licences; (b) actions for declarations of non-infringement of patents and supplementary protection certificates; (d) actions for revocation of patents and for declaration of invalidity of supplementary protection certificates; (e) counterclaims for revocation of patents and for declaration of invalidity of supplementary protection certificates”.

 

  • Article 83(1) During a transitional period of seven years after the date of entry into force of this Agreement, an action for infringement or for revocation of a European patent or an action for infringement or for declaration of invalidity of a supplementary protection certificate issued for a product protected by a European patent may still be brought before national courts or other competent national authorities. (2) An action pending before a national court at the end of the transitional period shall not be affected by the expiry of this period. (3) Unless an action has already been brought before the Court, a proprietor of or an applicant for a European patent granted or applied for prior to the end of the transitional period under paragraph 1 and, where applicable, paragraph 5, as well as a holder of a supplementary protection certificate issued for a product protected by a European patent, shall have the possibility to opt out from the exclusive competence of the Court. To this end they shall notify their opt-out to the Registry by the latest one month before expiry of the transitional period. The opt-out shall take effect upon its entry into the register. (4) Unless an action has already been brought before a national court, proprietors of or applicants for European patents or holders of supplementary protection certificates issued for a product protected by a European patent who made use of the opt-out in accordance with paragraph 3 shall be entitled to withdraw their opt-out at any moment. In this event they shall notify the Registry accordingly. The withdrawal of the opt-out shall take effect upon its entry into the register. (5) Five years after the entry into force of this Agreement, the Administrative Committee shall carry out a broad consultation with the users of the patent system and a survey on the number of European patents and supplementary protection certificates issued for products protected by European patents with respect to which actions for infringement or for revocation or declaration of invalidity are still brought before the national courts pursuant to paragraph 1, the reasons for this and the implications thereof. On the basis of this consultation and an opinion of the Court, the Administrative Committee may decide to prolong the transitional period by up to seven years.

 

B. The Rules of Procedure:

  • Rule 2:” 1. Subject to paragraph 2, in these Rules with the exception of Rule 5 the expression “patent” and “proprietor” shall whenever appropriate include, respectively, a supplementary protection certificate as defined in Article 2(h) of the Agreement and granted in respect of the patent and the holder of such certificate. 2. References in these Rules to the language in which the patent was granted shall mean that language and not the language in which a supplementary protection certificate in respect of the patent was granted.

 

  • Rule 5: “Rule 5 – Lodging of an Application to opt out and withdrawal of an opt-out 1. The proprietor of a European patent (including a European patent that has expired) or the applicant for a published application for a European patent (hereinafter in this Rule 5 an “application”) who wishes to opt out that patent or application from the exclusive competence of the Court in accordance with Article 83(3) of the Agreement shall lodge an Application (hereinafter in this Rule 5 an “Application to opt out”) with the Registry. (a) Where the patent or application is owned by two or more proprietors or applicants, all proprietors or applicants shall lodge the Application to opt out. Where the person lodging an Application to opt out is not recorded as the proprietor or applicant in the registers referred to in Rule 8.5(a) and (b), respectively, the person shall lodge a declaration pursuant to paragraph 3(e). (b) The Application to opt out shall be made in respect of all of the Contracting Member States for which the European patent has been granted or which have been designated in the application. 2. An Application to opt out or an Application to withdraw an opt-out pursuant to paragraph 8 (hereinafter in this Rule 5 an “Application to withdraw”) shall extend to any supplementary protection certificate based on the European patent. (a) Where any such supplementary protection certificate has been granted at the date of lodging the Application to opt out or the Application to withdraw, the holder of the supplementary protection certificate shall, if different from the proprietor of the patent, lodge the Application to opt out or the Application to withdraw together with the proprietor. (b) Where any such supplementary protection certificate is granted subsequent to lodging the Application to opt out, the opt-out shall take effect automatically on grant of said supplementary protection certificate. (c) Paragraphs 7 and 9 shall apply mutatis mutandis. For the purposes of paragraphs 7 and 9, reference to actions (i) in respect of a European patent shall apply to all supplementary protection certificates based on that European patent, and (ii) in respect of a supplementary protection certificate shall apply to the European patent on which such supplementary protection certificate is based and (iii) in respect of a supplementary protection certificate shall apply to all other supplementary protection certificates based on the same European patent. (d) For the avoidance of doubt, it is not possible to opt out supplementary protection certificates, whether granted by the authorities of a Contracting Member State or otherwise, based on a European patent with unitary effect. 3. The Application to opt out shall contain: – 22 – (a) the name of the proprietor or applicant for the European patent or application and of the holder of any supplementary protection certificate based on the European patent in question, and all relevant postal and, where applicable, electronic addresses; (b) where such proprietor, applicant or holder have appointed a representative, the name and postal address and electronic address for service of the representative; (c) details of the patent and/or application including the number; (d) details of any supplementary protection certificate granted based on the patent concerned, including the number; and (e) for the purposes of paragraph 1(a), a Declaration of proprietorship that the person lodging the Application to opt out is the proprietor or applicant pursuant to Rule 8.5 and entitled to lodge the Application to opt out. 4. Rule 8 shall not apply to Applications to opt out and to Applications to withdraw made pursuant to this Rule 5. Where a representative is appointed, such a representative may include professional representatives and legal practitioners as defined in Article 134 EPC in addition to those referred to in Article 48 of the Agreement. 5. The applicant for an opt-out shall pay the fixed fee in accordance with Part 6. The Application to opt out shall not be entered in the register until the fixed fee has been paid. One fixed fee shall be payable in respect of each European patent or application for which an Application to opt out has been filed, including any supplementary protection certificate based on said patent or application. 6. Subject to paragraph 5 the Registrar shall as soon as practicable enter the Application to opt out in the register. Subject to paragraph 7, the opt-out which meets the requirements laid down in this Rule shall be regarded as effective from the date of entry in the register. If the requirements are missing or incorrectly recorded, a correction may be lodged with the Registry. The date of entry of the correction shall be noted in the register. The opt-out shall be effective from the date of correction. 7. In the event that an action has been commenced before the Court in respect of a patent and/or an application contained in an Application to opt out prior to the date of entry of the Application to opt out in the register or prior to the date of correction pursuant to paragraph 6, the Application to opt out shall be ineffective in respect of the patent and/or application in question, irrespective of whether the action is pending or has been concluded. 8. A proprietor of a patent or an application the subject of an opt-out pursuant to this Rule may lodge an Application to withdraw in respect of the patent or application, but not in respect of different Contracting Member States for which the European patent has been granted or which have been designated in the application. The Application to withdraw shall contain the particulars in accordance with paragraph 3 and shall be accompanied by the fixed fee in accordance with Part 6; paragraph 5 shall apply mutatis mutandis. Subject to the receipt of the fixed fee the Registrar shall as soon as practicable enter the Application to withdraw in the register and the withdrawal shall be regarded as effective from the date of entry in the register. Paragraphs 1(a) and 6 shall apply mutatis mutandis. 9. In the event that an action has been commenced before a court of a Contracting Member State in a matter over which the Court also has jurisdiction pursuant to Article 32 of the Agreement in respect of a patent or application contained in an Application to withdraw, prior – 23 – to the entry of the Application to withdraw in the register or any time before the date pursuant to paragraph 6, the Application to withdraw shall be ineffective in respect of the patent or application in question, irrespective of whether the action is pending or has been concluded. 10. Where an application for a European patent subject to an opt-out pursuant to this Rule proceeds to grant as a European patent with unitary effect, the proprietor shall notify the Registry. The opt-out shall be deemed to have been withdrawn in respect of the Contracting Member States covered by the European patent with unitary effect at the date of the registration of the unitary effect and the Registrar shall as soon as practicable enter the withdrawal in the register in respect of such Contracting Member States. No fee shall be payable pursuant to paragraph 8. 11. A patent or application the subject of an Application to withdraw which has been entered on the register may not thereafter be the subject of a further Application to opt out. 12. The Registrar shall as soon as practicable notify the European Patent Office and the national patent office of any Contracting Member States concerned of the entries in the register pursuant to paragraphs 6 and 8. 13. Applications accepted by the Registry before the entry into force of the Agreement shall be treated as entered on the register on the date of entry into force of the Agreement. Relation with Agreement: Article 83(3) and (4)

 

 

II. So how is it going to work?

A.  SPCs granted on top of European Patents:

As with European Patents (EP) themselves, SPCs referencing the European Patent as the basic patent will, under Article 3 of the UPC agreement, be subject to the UPC’s exclusive jurisdiction. Under article 83 UPCA, it will however be possible during the transitional period (currently 7 renewable years) to opt out of the UPC’s exclusive jurisdiction European Patents and their corresponding SPC.

 During the transitional period:

(i) SPCs granted on top of European Patents which are opted-out: 

  • If an EP has been opted out, and an SPC granted subsequently, the SPC is automatically opted out, and this opt out lasts for the whole life of the SPC. 
  • If an SPC has been granted before an application to opt out an EP is filed, the proprietor(s) of both the EP and (if different) the SPC must register the opt out.  In order for an opt out to be valid, all relevant proprietors must, in fact, participate in the opting out process.  In the 18th Draft Rules of Procedure, Rule 8.4 has been amended, and the proprietor is now defined as “the person shown in the Register for unitary patent protection as the proprietor shall be treated as such”.
  • If the EP has expired, and only the SPC remains in force at the time of the opt-out, the SPC proprietors and the expired EP proprietors will both need to register the opt-out.

Consequences of the Opt-out: if an SPC and its underlying EP are opted out, only national litigation in relation to those rights will be possible.

(ii). SPCs granted on top of European Patents which are not opted-out:

Under Article 83(1), if the European patent has not been opted-out, the patent and its corresponding SPC will be prima facie under the exclusive jurisdiction of the UPC. However actions for infringement or revocation may still be brought before national courts.

 

 After the transitional period:

(i) At the end of the transitional regime, the UPC will be the sole court to be competent in case of litigation concerning:

  • All European Patents not opted-out
  • All SPCs granted on top of European Patents not opted-out

(ii) National Jurisdictions will be competent in case of litigation concerning:

  • All European Patents opted-out
  • All SPCs granted on top of European Patents opted-out

 

B. SPCs granted on top of European Patent with unitary effect (or Unitary Patent):

European patents with unitary effect will not have the possibility to be opted-out. They will be under the exclusive jurisdiction of the UPC during and after the transitional period. This will therefore also be true for their corresponding SPCs.

However, despite being based on Unitary Patents, valid in 25 Member states, SPCs will not have the same territorial scope as Unitary Patents. Instead, the same system which exists at present for SPCs based on national or European Patents will apply, and individual national applications will have to be made.
III. Uncertainties: 

 There are quite a few grey areas concerning the interaction between the Unitary Patent, national patents and SPCs, notably:

  • For European Patents (opted-out or not), it is uncertain whether the corresponding SPCs, which are national titles, can benefit from Art. 34 UPCA, which states that the decisions of the Court shall cover the territory of those contracting Member States for which the European patent has effect, and be applied by the patentee in all 25 Member States.

The European Commission, despite declaring that the articulacy between the unitary patent and the current EU rules on SPCs is a “key challenge to get the end game right ” in its “Staff working document” on a “Single market strategy for Europe”, identifies further issues:

  • The Commission first fears that if SPC users wish to benefit from the unitary patent this “will require multiple administrative procedures in multiple jurisdictions, limiting the full benefits of a unitary system.
  • The Commission also highlights the problem of  the”patent research exemption” and “Bolar exemption” which are applied by Member States differently. This exemption could lead with the entry into force of the Unitary Patent and UPC to forum shopping. In fact “on the one hand, some Member States do not allow the supply of active pharmaceutical ingredients (APIs) to EU-based generic manufacturers for the purpose of seeking marketing authorisation. On the other hand, in a number of Member States, it is not certain whether testing in the EU by originators and biosimilars can benefit from these exemptions for the purpose of seeking marketing authorisation in the EU and in non-EU countries, or for meeting emerging regulatory requirements such as those related to health technology assessment“.

The European Commission thus announced to be working on a project of Unitary SPC, and on the coherence between the upcoming unitary patent and current EU rules on SPC -in the absent of a unitary SPC title.

 

 

IV. Towards a Unitary SPC? 

The European Commission considers that applying the unitary patent system to SPCs would help optimising the legal framework for industry sectors whose products are subject to regulated market authorisations, and which currently “presents several features not fit for purpose in today’s global economy and in the light of new regulatory requirements“.  The European Commission therefore calls for a Unitary SPC to  “enhance the value, transparency and legal certainty of the protection of medicines and plant protection products; and provide a one stop shop for the granting of SPCs in Europe, and give enhanced certainty to European health authorities, to patients and to generic companies on the status of a regulated product’s IP protection.

The European Commission’s project is supported notably by the European Crop Protection Association (ECPA), European Federation of Pharmaceutical Industries and Associations (EFPIA) and the International Federation of Animal Health (IFAH). These three organisations published in 2015 a letter in support of a Unitary SPC being granted on the basis of European Patent with unitary effect which they see as “a logical continuation of the Member States’ decision and agreement to create a European Patent with unitary effect“. In this letter the ECPA, EFPIA and the IFAH point out that it will be necessary to designate a body responsible for granting the Unitary SPC for the 25 Member States participating to the enhanced cooperation mechanism.

The Unitary SPC might however be a project for which a political compromise is quickly reached, following the positive valuation for the UPC of a gain of 0.25 % GDP in EU -“which represents the possible net productivity impact resulting from the reduction of validation and maintenance fees in the Member States for patents granted by the European Patent Office”- and a reduction of up to 80% in the cost in administrative costs.


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Draft Rules of Procedure

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