Brexit a factor in patents court reference to CJEU

Out-Law News | 05 Mar 2019 | 1:11 pm | 2 min. read

The UK's impending exit from the EU was a leading factor in a High Court judge's recent decision to seek immediate clarity from the EU's highest court on how to interpret EU intellectual property (IP) laws concerning supplementary protection certificates (SPCs).

On Friday last week, Mr Justice Arnold, considering a dispute between pharmaceuticals giant Genentech and rival medicines manufacturer Eli Lilly, confirmed that he would ask the Court of Justice of the EU (CJEU) to determine whether the SPC Regulation precludes an SPC being granted to the owner of a patent for a product that is the subject of a marketing authorisation held by another business without that marketing authorisation holder's consent, colloquially known as 'SPC squatting'.

Accepting concerns raised by lawyers for Eli Lilly, Mr Justice Arnold said "the current exceptional circumstances" made it necessary to make the reference to the CJEU now, rather than wait for the outcome of a potential appeal to be raised by Genentech.

The reference to the CJEU comes less than a month before the UK is scheduled to exit the EU. As it stands, courts in the UK will lose the ability to refer questions of EU law to the CJEU for interpretation after 29 March.

Mr Justice Arnold's reference came in one of two rulings he issued on Friday concerning Genentech and Eli Lilly's dispute.

Genentech owns a patent for a genetic compound which it has claimed has been infringed by Eli Lilly in its development of a formula to help treat psoriasis and psoriatic arthritis.

In the first of his rulings, however, Mr Justice Arnold found Genentech's patent invalid. The ruling has implications for the second dispute, which concerns Genentech's assertion that it can rely on the marketing authorisation Eli Lilly has been granted for its product to obtain an SPC of its own based on its patent rights.

SPCs serve to extend the life of a patent by up to a maximum of five years with respect to products which are authorised under the relevant regulatory framework in the field of medicinal and plant products. SPCs are provided for under EU regulations which are directly applicable across the whole of the EU, although they have to be applied for separately in each EU country.

The rationale for SPCs is to compensate patent holders for the period of patent protection during which they are prevented from commercialising their products owing to the lengthy approval process. Patent protection lasts 20 years but it often takes drugs companies around a decade to develop new medicines and gain marketing authorisation.

Under EU regulations, SPCs can only be granted if, in the EU country in which the application is submitted, the product is protected by a basic patent in force and a valid authorisation to place the product on the market as a medicinal product has been granted. The authorisation must also be the first of its kind and an SPC not already issued for the product.

According to Mr Justice Arnold, EU case law is "not clear" on whether Genentech can rely on Eli Lilly's marketing authorisation to support its own SPC application.

The judge said that while clarity on the matter would appear to be "academic", given his finding that Genentech's patent is invalid, he accepted that Genentech could raise an appeal against that ruling before the Court of Appeal and that that court may find itself unable to ask for the CJEU's guidance on the issue of the SPC application after Brexit. He therefore concluded that the reference to the CJEU should be made now.