A niche blog dedicated to the issues that arise when supplementary protection certificates (SPCs) extend patents beyond their normal life -- and to the respective positions of patent owners, investors, competitors and consumers. The blog also addresses wider issues that may be of interest or use to those involved in the extension of patent rights. You can email The SPC Blog here

Tuesday 24 February 2015

Dutch Council of State upholds Syngenta's "wrong date" appeal

Writing on behalf of himself and his Netherlands CMS colleagues Edmon Oude Elferink, Conny Delissen and Willem Hoorneman, Rogier de Vrey brings news of a recent judgment delivered by the Dutch Council of State on 18 February 2015 in what he describes as a very interesting SPC case [so far as this blogger is concerned, all SPC cases are interesting, and he can even find room in his heart for those decisions on the Special Mechanism ...]. The Council of State is the highest general administrative court in the Netherlands, so its pronouncements deserve our attention. Writes Rogier
This case basically concerns the issue whether it is possible to rectify – in this case extend – the term of protection of an SPC, after it has been granted, if the term of protection of the certificate is incorrectly calculated.

In this case, the Netherlands Patent Office ("NPO") granted Syngenta an SPC on 9 December 2005 on the basis of a ('mono') Polish MA. It is now undisputed, after the University of Queensland judgment of the Court of Justice of the European Union (C-630/10), that the SPC was granted on the basis of the wrong MA. The NPO should have used the Finnish "combi-MA" for the calculation of the term of the SPC. As a result, the certificate was valid until 24 March 2014 while, had the Finnish "combi-MA" been used, the term of the certificate would have extended for more than 1½ years. 
On 3 September 2013, about eight years after the grant of the certificate, Syngenta asked the NPO to rectify the duration of the certificate. At the time of this request, the certificate was still in force. This request was denied by the NPO. The NPO also dismissed the notice of objection lodged by Syngenta to the NPO. The Court of The Hague subsequently dismissed the appeal brought by Syngenta against this decision of the NPO. Syngenta appealed this decision with the Administrative Jurisdiction Division of the Council of State, requesting the president to grant an interim injunction. This request for an interim injunction was rejected as well.

Council of State
In the proceedings on the matters before the Council of State, NPO asserted that there is no obligation to reconsider its decision to grant the certificate in 2005. Syngenta could have filed a notice of objection (after 9 December 2005) within the statutory period of 6 weeks, which it had not done. Article 17(2) of Regulation 1610/96 (the Regulation) does not, according to the NPO, lead to another result, as this clause allegedly only refers to the possibility of lodging an objection in accordance with national rules of procedure (the 6 weeks term). There were no new facts or changed circumstances that would require reconsideration of the original decision under administrative law (art. 4:6 of the Dutch Administrative Act). Finally, NPO asserted that rectifying the duration of the certificate could affect the interests of third parties.

Syngenta argued – in brief - that the interpretation of NPO of Article 17(2) of the Regulation does not comply with the mandatory and supranational nature of Regulation 1610/96, the general aim and purpose of this Regulation and the principle of Loyalty in EU Law (Article 4 (3) TEU). The correction mechanism introduced in Article 17(2) would be meaningless if invoking this Article would be subject to a national appeal period of 6 weeks. Article 17(2) was inserted (at a later stage) in the Regulation as an option for appeal, separate from the option provided by Article 17(1). Moreover, Article 17(2) should be interpreted broadly. The fact that in this case the incorrect calculation of the duration of the certificate is not the result of an error in the entry in the application of the date of the first MA, but the result of the use of an incorrect MA, can not preclude application of Article 17 (2).

The Council of State (on the merits) was convinced by the arguments of Syngenta and upheld the appeal lodged by Syngenta. The Council of State ruled that the duration of the certificate granted to Syngenta will be extended in the sense that the expiry date of the certificate will be set at 18 December 2015 and ordered NPO to compensate Syngenta for the costs of the proceedings.

In particular, this broad interpretation of Article 17(2) and the ability to basically at anytime request rectification under Article 17(2), is groundbreaking and has a potential impact on the position of SPC owners. To our knowledge, the judgment is the first of its kind in the European Union. We are very pleased with the spectacular result.
Rogier has helpfully furnished The SPC Blog with an English translation of this decision, which you can read here or download here

Friday 20 February 2015

CJEU rules in Merck/Sigma Special Mechanism dispute

Last week the Court of Justice of the European Union (CJEU) gave its ruling in Case C‑539/13, Merck Canada Inc., Merck Sharp & Dohme Ltd v Sigma Pharmaceuticals plc, this being a request for a preliminary ruling from the Court of Appeal (England and Wales).

To remind readers of the background, in 2004 a number of new Member States (the 'accession states') joined the European Union. Some of those states had not historically permitted the patenting of pharmaceutical products. By 2004, such patents were permitted, but there remained a number of cases where patents or supplementary protection certificates had been granted in other Member States for pharmaceutical products at a time when no such protection had been available in one or more of the accession states. Accordingly, a special derogation from the normal free movement rules was negotiated as part of the accession arrangements.

This derogation, known as the 'Specific Mechanism', was appended to the Act of Accession. It permitted the owner of a pharma patent or SPC to prevent the parallel importation of the patented product from one of the accession states if, at the time of filing, such protection was unavailable in that accession state. It also anyone who intended to import such a product to demonstrate to the relevant national authority that he had given notice of that intention to the holder or beneficiary of the protection.

Merck Canada, which was incorporated in Canada, was the registered proprietor of apatent and SPC for montelukast sodium, an active ingredient in a product called 'Singulair'. The second claimant, Merck Sharp Dohme, was a UK company and its exclusive licensee. Merck filed for protection when montelukast sodium could not be patented in Poland.

Sigma, a parallel importer of pharma products into the United Kingdom. In June 2009 Pharma XL, an associated company of Sigma that was responsible for applying for parallel import authorisations for the Sigma group of companies, sent a letter to Merck Sharp Dohme which stated that it intended to import Singulair into the UK from Poland. This letter referred to the Specific Mechanism and asked whether there were any objections to importation. Merck Sharp Dohme did not respond. In September 2009 PXL applied to the Medicines and Health Regulatory Agency (MHRA) for parallel importation licences. This application required confirmation that either the Specific Mechanism did not apply or that one months’ prior notification had been given to the patent holder. Pharma XL indicated that one months’ notice had been given. In May 2010 the MHRA granted Pharma XL a licence in respect of the 5mg dose of Singulair. In June and July, Pharma XL wrote to Merck Sharp Dohme, saying it planned to import Singulair from Poland and enclosed copies of the intended representation of the repackaged products. Again Merck Sharp Dohme did not respond, so Sigma began to import 5mg Singulair. In September, Pharma XL was granted a second licence in respect of the 10mg dose. Pharma XL wrote two further notification letters to Merck Sharp Dohme in respect of the 10mg dosage, but again there was no response, so Sigma began to import the 10mg form of Singulair too.

In December, Merck Canada wrote to Pharma XL objecting to the importation of Singulair under the specific mechanism and asserting that its patent had been infringed. Sigma stopped its activity, but Merck Canada nonetheless sued for infringement of both the patent and the SPC.

Sigma's primary defence was that the Specific Mechanism merely conferred upon a patent holder the option of preventing imports: the derogating provisions were inapplicable unless and until the patent holder demonstrated his intention to exercise that option -- which did not happen till December 2010. In any event, having failed to respond to the letters from Pharma XL, Merck Canada was estopped from asserting its rights.

When the case came before the Patents County Court, Judge Birss QC (as he then was) rejected both these defences. In his view, the Specific Mechanism did not require the patent holder to demonstrate his intention to oppose importation before that activity was rendered an infringement -- and he declined to refer any issue concerning the proper interpretation of the Specific Mechanism to the CJEU. Also, he found on the facts that Merck Canada was not estopped from relying on its patent rights. He granted an injunction and ordered Sigma to deliver up its unsold stocks of Singular. Sigma appealed.

The Court of Appeal for England and Wales (Lord Justice Patten, Lady Justice Black and Lord Justice Kitchin) upheld the trial judge's decision relating to estoppel: this was because there was no suggestion that Merck Canada had been, or ought to have been, aware of Sigma's existing state of mind and, in particular, the misunderstanding which Sigma had already formed as to Merck Canada's attitude to the importation of patented pharmaceutical products from Poland. There was no pre-existing relationship, contractual or otherwise, that could have imposed a duty on Merck to respond to Pharma XL's letters and Merck Canada had not acted unconscionably in delaying its decision to bring proceedings within the legal time limit.

The Court of Appeal also agreed that Judge Birss QC was right to make the order for delivery up, on the basis that his finding of infringement had been correct. However, this action raised three groups of questions that concerned the proper interpretation of the specific mechanism. These had to be answered by the CJEU before the Court of Appeal could decide the appeal. As Lord Justice Kitchin, giving judgment for the Court, explained:
Under Article 267 of the TFEU this court may submit a request to the Court of Justice for a ruling on a question concerning the interpretation of a rule of EU law if it considers it necessary to do so in order to resolve a dispute before it. In my judgment this case raises three groups of questions concerning the proper interpretation of the Specific Mechanism which must be answered for this court to decide this appeal.

The first concerns the conditions which must be satisfied before a patent holder may bring infringement proceedings under the Specific Mechanism and, in particular, whether the derogation confers upon the patent holder an option of preventing imports falling in its scope; and whether the derogation is inapplicable unless and until the patent holder demonstrates his intention to exercise that option.

The second concerns the identity of the person who must give the notice under the second paragraph of the Specific Mechanism and, in particular, whether a notification is compliant if it is given by an applicant for regulatory approval in the Member State into which the products are to be imported; and whether it makes any difference if the notification is given and the application for regulatory approval is made by one legal entity within a group of companies which form a single economic unit, and the acts of importation are to be carried out by another legal entity within that group under licence from the first legal entity.

The third concerns the identity of the person to whom the notice must be given under the second paragraph of the Specific Mechanism and, in particular, whether, in a case where a group of companies form a single economic unit comprising a number of legal entities, it is sufficient if the notification is addressed to a legal entity which is the operating subsidiary and marketing authorisation holder in the Member State of importation rather than the entity within the group which has legal ownership of or an exclusive licence under the patent. A subsidiary question also arises as to whether a notification which is otherwise compliant is rendered non-compliant if it is addressed to the "the Manager, Regulatory Affairs".

I recognise that this court is not obliged to make a reference but I believe it is appropriate to do so for the following reasons. First, these questions are not acte clair. Second, the Specific Mechanism has not yet been considered by the Court of Justice and, although its Iberian predecessor was considered by the Court in Case C-191/90 Generics and Harris Pharmaceuticals, there is uncertainty as to how the decision of the Court in that case should be understood. Finally, the parties helpfully provided to us after the hearing an agreed table which shows that the Specific Mechanism will continue to be relevant until 2019. In all these circumstances I believe it to be desirable that the questions raised in this case are answered authoritatively as soon as possible.

I would therefore make a reference to the Court of Justice for a preliminary ruling on each of the three groups of questions posed at [97], [98] and [99] above. They are currently formulated in general terms on the basis of questions originally proposed by Sigma. We have not had the benefit of any comments from Merck. Accordingly, I would invite the parties to consider them further in the light of this judgment and to propose draft questions and a draft reference for our consideration.
The questions referred to the CJEU thus read as follows:
1 May the holder, or his beneficiary, of a patent or supplementary protection certificate rely upon his rights under the first paragraph of the Specific Mechanism only if he has first demonstrated his intention to do so? 2 If the answer to Question 1 is yes:
(a) How must that intention be demonstrated? 
(b) Is the holder, or his beneficiary, precluded from relying upon his rights with respect to any import or marketing of the pharmaceutical product in a Member State that occurred prior to the demonstration of his intention to rely upon those rights?
3 Who must give the prior notification to the holder or beneficiary of a patent or supplementary protection certificate under the second paragraph of the Specific Mechanism? In particular:
(a) Must the prior notification be given by the person intending to import or market the pharmaceutical product? or 
(b) Where. as permitted by the national regulatory system, an application for regulatory approval is made by someone other than the intended importer, can prior notification given by the applicant for regulatory approval be effective if that person does not itself intend to import or market the pharmaceutical product but where the intended importation and marketing will be carried out under the applicant's regulatory approval?; and
(i) Does it make any difference if the prior notification identifies the person that will import or market the pharmaceutical product? 
(ii) Does it make any difference if the prior notification is given and the application for regulatory approval is made by one legal person within a group of companies which form a single economic unit, and the acts of importation and marketing are to be carried out by another legal person within that group under licence from the first legal person, but where the prior notification does not identify the legal person that will import or market the pharmaceutical product?
4 To whom must prior notification be given under the second paragraph of the Specific Mechanism? In particular:
(a) Is the beneficiary of a patent or supplementary protection certificate limited to persons who have a legal right under national law to bring proceedings to enforce that patent or supplementary protection certification? or 
(b) In a case where a group of companies forms a single economic unit comprising a number of legal entities, is it sufficient if the notification is addressed to a legal entity which is the operating subsidiary and marketing authorisation holder in the Member State of importation rather than the entity within the group that has a legal right under national law to bring proceedings to enforce that patent or supplementary protection certificate, on the basis either that such legal entity may be characterised as a beneficiary of the patent or SPC, or that it is to be expected that such notification in the ordinary course of events will to come to the attention of the persons who make decisions on behalf of the patent or SPC holder?
If the answer to Question 4(b) is yes, 
(c) is a notification which is otherwise compliant rendered non-compliant if it is addressed to the "the Manager, Regulatory Affairs" of a company when that company is not the entity within the group that has a legal right under national law to bring proceedings to enforce that patent or supplementary protection certificate but is the operating subsidiary or marketing authorisation holder in the Member State of importation and when that Regulatory Affairs department in practice regularly receives notifications from parallel importers regarding the Specific Mechanism and other matters?
The CJEU has now answered these questions as follows:
1. The second paragraph of the Specific Mechanism  ... must be interpreted as not requiring the holder, or beneficiary, of a patent or supplementary protection certificate to give notification of his intention to oppose a proposed importation before invoking his rights under the first paragraph of that mechanism. However, if such a holder or beneficiary does not indicate such an intention during the one-month waiting period laid down in the second paragraph of the mechanism, the person proposing to import the pharmaceutical product in question may legitimately apply to the competent authorities for authorisation to import the product and, where appropriate, import and market it. The Specific Mechanism thus denies that holder or his beneficiary the possibility of relying on his rights under the first paragraph of the mechanism with regard to any importation and marketing of the pharmaceutical product carried out before such an intention was indicated.

2. The second paragraph of the Specific Mechanism must be interpreted as meaning that the notification must be given to the holder, or beneficiary, of the patent or the supplementary protection certificate, the latter term designating any person enjoying the rights conferred by law on the holder of the patent or the supplementary protection certificate.

3. The second paragraph of the Specific Mechanism is to be interpreted as not requiring the person intending to import or market the pharmaceutical product in question to give notification himself, provided that it is possible from the notification to identify that person clearly.

Tuesday 10 February 2015

Merck's Gardasil extension request in Israel

Our friend and reader Michael Factor has just drawn my attention to a piece which he has posted on his IP Factor weblog, "A Request for a Patent Term Extension for IL 117459 “DNA ENCODING HUMAN PAPILLOMAVIRUS TYPE 18″ to Merck".  It's all about Gardasil, which has a lovely website of its own just here.

You can check Michael's post out for yourself here.

Monday 9 February 2015

Pharmaq v Intervet in the EFTA Court: an early comment

The SPC Blog is delighted to report that it has just received another note from Mike Snodin (Park Grove IP).  This time round, Mike has drawn our attention to commentary that he has produced on Pharmaq v Intervet (Case E-16/14, on which this blog announced the Judge-Rapporteur's report a week ago) that is being heard by the EFTA Court.  A copy of Mike’s commentary can be found here.

While recognising that the opinion that the EFTA Court has been asked to provide will not be binding (especially in respect of EU member states), Mike points out that the questions posed in Pharmaq v Intervet

*       are potentially of huge importance to those seeking (or holding) supplementary protection for biological active ingredients in European Union (EU) or EFTA Member States (Iceland, Norway, Liechtenstein and Switzerland); and
*       have elicited observations from parties that include the European Commission and the Government of the United Kingdom.

In connection with the questions that relate to the breadth of protection provided by an SPC to a biological product, Mike draws attention to the fact that the European Commission has proposed answers that may have profound (and, in part, undesirable) implications.  For example, those proposed answers could lead to both harsh results for innovators and/or prolonged uncertainty for producers of “copycat” (biosimilar and “me too”) biological products.  Mike therefore suggests that parties having a stake in either innovative or “copycat” biological products may wish to develop, and advocate to national governments and the European Commission, alternative solutions to the problem of SPC scope for biological products that lead to

*       a fairer result for innovators; and
*       more (and earlier) certainty on freedom to operate.

Monday 2 February 2015

Pharmaq v Intervet: EFTA Rapporteur gives his view

From our good friend and patent attorney John Miles comes news that the EFTA Court has now published online its Report for the Hearing in Case E-16/14 Pharmaq AS v Intervet International BV. The 39-page Report, prepared by Judge-Rapporteur Páll Hreinsson, can be accessed here.

The original request for an advisory opinion, made by the Oslo District Court, was reported on The SPC Blog here.

There is still no indication as to when the EFTA Court, which aligns its decisions with those of the Court of Justice of the European Union (CJEU) even when the CJEU issues a ruling that is contrary to EFTA Court jurisprudence, is likely to give its decision.

This blog hopes to be able to prepare a short note on this Report in due course.