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Out-Law Analysis 5 min. read

Broadening of safe harbours and patent exemptions for pharmaceuticals in Europe

Pharmaceutical companies should anticipate the broadening of the so-called 'Bolar' exemption in patent law.

Reform is likely in light of a recent study carried out by the Max Planck Institute for Innovation and Competition on behalf of the European Commission.

The Bolar exemption and its application in the EU

The Bolar exemption is a term that sprung from US case law. After generic manufacturer Bolar Pharmaceutical lost a 1984 case against patent holder Roche before the US Court of Appeals over its experimentation with an active ingredient patented by Roche, US law makers legislated to enable medicines manufacturers to use patented products when developing medicines for the purposes of obtaining regulatory approval from the US Food and Drugs Administration. The legislation is the Hatch-Waxman Act.

The Bolar exemption is reflected in EU law. Under the Human Medicines Directive and the Veterinary Medicines Directive, as amended in 2004, conducting the necessary studies and trials for the purpose of applying for marketing authorisations for new generic, hybrid or biosimilar medicines in the EU/EEA is not regarded as contrary to patent rights or to supplementary protection certificates (SPCs) for medicinal products.

However, EU countries have adopted different approaches when implementing the Bolar exemption. Some have applied the exemption with the minimum standard of the directive, while other member states have expanded the exemption to studies and trials that are useful, but not 'necessary', to obtain a marketing authorisation, and/or for studies and trials related to a marketing authorisation application in non-EU/EEA countries, and/or for studies and trials not pertaining to an abridged procedure, as is the case in France, Germany, Italy or, more recently, Ireland and the UK.

The fragmentation means clinical trials may or may not fall into the scope of the exemption depending on where they are carried out.

Fabre Jules Sept_2019

Jules Fabre


Reform of the Bolar exemption is being explored by the European Commission in the context of the pharmaceutical incentives review

Moreover, if and when the Agreement on a Unified Patent Court (UPCA) enters into force, the scope of the exemption will also depend on the nature of the relevant patent and whether the UPC has jurisdiction. This is because the UPCA contains a narrow Bolar exemption and refers to the provisions of the Human Medicines Directive and the Veterinary Medicines Directive. As a consequence, unitary patent and European patents litigated before the UPC would be subject to a narrow exemption.

There is also a lack of clarity over whether the Bolar exemption is applicable in the context of outsourcing. Specifically, some clinical studies and trials that are directly covered by the Bolar exemption rely on the supply of API from third parties. It is unclear whether the supply of API in this context is within the scope of the exemption, and therefore if the third-party supplier – that does not conduct the studies and trials itself – is covered.

The Supreme Court of Poland considered the issue in 2013 and decided that the third-party supplier could not rely on the Bolar exemption under Polish law in such a situation. In parallel proceedings in Germany the Düsseldorf District Court took the same view but the Düsseldorf Court of Appeal referred the question to the Court of Justice of the EU (CJEU). However, the case was subsequently settled and the CJEU did not issue a ruling on the matter.

The research exemption

In most EU countries, the Bolar exemption is complemented by a more general research exemption, which is often referred to as the experimental use exemption, which exempts from infringement certain research activities.

Unlike the Bolar exemption, the research exemption does not have a basis in EU law and its scope vary significantly from a country to another.

The SPC manufacturing waiver

In the field of SPCs, EU law makers recently introduced a new waiver which permits manufacturing of generic and biosimilar products as well as related activities in the EU that would otherwise require consent of an SPC holder where they are undertaken for the purpose of exporting the goods to territories outside of the EU.

The waiver, the eligibility for which is subject to a series of notification, due diligence and labelling requirements, also allows producers of generics or biosimilars to stockpile products in the EU during the last six months that the SPC is valid so as to be ready for release on the EU market upon the expiry of an SPC.

Contrary to the Bolar and research exemptions, the SPC manufacturing waiver covers activities that have a direct commercial purpose. It is aimed at boosting the competitiveness of Europe's pharmaceutical industry compared to countries or regions where pharmaceutical products enjoy a shorter effective patent protection period.

The exemption, however, only applies to SPCs, and manufacturing activities exempted under waiver may remain at risk in relation to secondary patents covering aspects of the product, such as a particular process or dosage.

Due to transitional rules for its application, the SPC manufacturing waiver is not expected to be effectively available until at least mid-2022.

Options for reform

Reform of the Bolar exemption is being explored by the European Commission in the context of the pharmaceutical incentives review.

In 2017, the European Commission published a roadmap of its initiative in relation to optimising the intellectual property legal framework on SPCs and patent research exemptions.

The introduction of the SPC manufacturing waiver was one of the options it listed for reform, as was the potential extension of the scope of the Bolar and research exemptions.

The Commission's stated objectives for reform include creating a level playing field for EU-based manufacturers of generic and biosimilar medicines by comparison with firms based in non-EU countries, increasing business predictability, legal certainty and potentially provide additional incentives for innovation, and maximising certainty and the benefits of the Bolar exemption. In this latter regard, it said this should include reducing fragmentation in relation to the application of the Bolar exemption in the EU single market.

Fabre Jules Sept_2019

Jules Fabre


The Max Planck Institute set out a series of recommendations in relation to the Bolar exemption. It called for full harmonisation of the exemption and endorsed the broadening of its scope

To help inform future policymaking, the Commission at the time commissioned a number of studies. This included a study on the legal aspects of SPCs in the EU by the Max Planck Institute for Innovation and Competition.

The Max Planck Institute study was informed, amongst other things, by interviews with representatives from national patent-granting authorities and a survey of industry and other stakeholders.

In its report the Max Planck Institute set out a series of recommendations in relation to the Bolar exemption. It called for full harmonisation of the exemption and endorsed the broadening of its scope.

Specific recommendations include the adoption, through a bundle of legislative measures, of a uniform exemption that applies to national patent and European patents with or without unitary effects. According to the Max Planck Institute, the exemption should be broader than the standard minimum currently set by EU law and should extend to:

  • activities aimed at generating data for marketing authorisations in relation to any medicinal products, including innovative drugs;
  • activities geared towards the acquisition of a marketing authorisation in a non-EU/EEA country;
  • activities directed to generating data for health technology assessments; and to
  • the supply of API by third parties if the activity of the supplied person is covered by the experimental use or Bolar exemption, subject to certain due diligence obligations.

While the European Commission has already implemented the recommendations of the Max Planck Institute in relation to the SPC manufacturing waiver, its intentions in relation to a possible reform of the Bolar exemption have not been made public yet. However, the report suggested that there are many within industry who favour greater harmonisation and a broadening of the Bolar exemption.

Jules Fabre is a patent law expert in the life sciences sector at Pinsent Masons, the law firm behind Out-Law. Fabre discussed research exemptions at the C5 pharma and biotech patent litigation conference in Amsterdam, held over 25-26 February 2020.

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