A gap could open up in IP rights relating to pharmaceutical products

The European Commission is seeking to make it easier to place generic drugs on the market on expiry of SPC protection. Eric Enderlin outlines the implications.

On 28 May 2018, the European Commission announced that it is proposing a “targeted adjustment” to the rules relating to intellectual property (IP) to “help Europe's pharmaceutical companies tap into fast-growing global markets and foster jobs, growth and investments in the EU”.

The Commission proposal seeks to amend Regulation 469/2009 as far as supplementary protection certificates (SPCs) for medicinal products are concerned. Once it has been adopted by the European Parliament and the Council, it will be directly applicable in all EU member states.

An SPC permits the duration of the market exclusivity conferred by a pharmaceutical patent to be extended to compensate for the time taken for the clinical tests and trials needed to obtain marketing authorisation (MA). The protection conferred by an SPC is limited to the proprietary medicinal product covered by the MA (Article 4 of Regulation (EC) No 1610/96 of the European Parliament and of the Council of 23 July 1996, and L611-3 of the French Intellectual Property Code or Article 4 of Council Regulation (EEC) No 1768/92 of 18 June 1992).

An SPC allows its holder to benefit from the same rights as those conferred by a patent, namely to prohibit the manufacture, offering for sale and placing on the market of the product which it covers (Council Regulation (EEC) No 1768/92 of 18 June 1992).

The Commission states, however, that this arrangement leads to economic losses associated with the relocation outside Europe of the manufacturing of drugs. In addition, it believes that SPCs complicate the job of manufacturers based in the EU which wish to establish themselves on the European market immediately after the expiry of the SPC, given that they cannot put in place production capacities prior to the expiry of the protection provided by the certificate.

To avoid these economic losses and make it easier to place generic drugs on the market as soon as an SPC expires, the Commission proposes that EU-based companies could in future manufacture the generic or biosimilar version of a drug before the expiry of the IP rights attached to the SPC, provided that this manufacture was undertaken exclusively for the purposes of export to third-country markets where the protection has expired or never existed. The Commission adds that this waiver will help Europe remain a pioneer in the research and development of pharmaceutical products.

A gap in protection

If this waiver is adopted, although it offers a certain economic benefit for manufacturers, it will open up a gap in the IP rights of companies which invest in research and development for new drugs.

In France, for example, the manufacture and possession of a product with a view to marketing it constitutes an act of infringement (Article L-613-3 of the French Intellectual Property Code). This waiver would mean that this would no longer be the case, and one of the sensitive questions which occurs to us is how the products manufactured for export will be able to be distinguished from those manufactured to be stored while the expiry of the SPC is awaited? This question will inevitably be asked in the event of litigation, including in relation to proof of the infringement.

The Commission’s plan does envisage a great deal of “transparency” in relation to this waiver, involving in particular a declaration to the competent authorities, public access to that declaration and the products concerned being marked “EU Export”. However, in the current form of the waiver proposal, this system is only a declaratory one.

Thus, it appears that the process by which a manufacturer obtains a manufacturing waiver authorisation for a medicinal product and also the oversight of the implementation of this waiver by IP rights holders will be highly complicated. It will certainly require a specific procedure to be put in place that takes account of everyone’s rights and obligations.

Novagraaf’s Chemistry and Life Sciences team comprises a number of renowned specialists in the field of industrial property relating to medicinal products and can assist you with any questions or activities with a view to defending your rights. 

Eric Enderlin is Director of the Chemistry and Life Sciences Department at Novagraaf in Paris