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SPCs: Paris court confirms its interpretation of CJEU ‘Royalty Pharma’ test

Out-Law News | 04 Nov 2021 | 2:08 pm | 6 min. read

The Paris Court of Appeal has rejected a patent holder’s interpretation of EU case law that concerns criteria for obtaining supplementary protection certificates (SPCs) for innovations in medicine.

In doing so, it has confirmed the position it took earlier this year in relation to SPC applications for products that are not expressly disclosed in the patent that serves as a basis for the SPC.

In a series of five judgments handed down on 15 October 2021, the Paris Court of Appeal upheld earlier decisions by the French National Institute for Industrial Property (INPI) that rejected Royalty Pharma’s French SPC applications for anti-diabetic drugs sitagliptin, alogliptin, linagliptin, saxagliptin and vildagliptine.

SPCs serve to extend the life of a pharmaceutical patent by up to a maximum of five years. SPCs attach to specific products – medicinal or plant products – that have been authorised for use by regulators and aim at compensating innovators for the delay in effective marketing of medicines due to the time necessary to obtain a marketing authorisation.

Under the EU SPC Regulation, 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 market authorisation has been issued to place that product on the market as a medicinal product, so long as that authorisation is the first of its kind and an SPC has not already been issued for the product.

In its arguments before the Paris court, Royalty Pharma reflected on the requirement that each product must be specifically identifiable by the skilled person to be considered ‘protected’ by the underlying patent

In recent years, courts around Europe have elaborated on the legislative criteria for obtaining SPCs in more detail and have referred several questions to the EU’s highest court, the Court of Justice of the EU (CJEU), in order to interpret the SPC Regulation. In relation to the requirement that the product is "protected by a basic patent in force", under Article 3(a) of the SPC Regulation, the latest ruling of the CJEU was made last year, in a case that involved Royalty Pharma and its application for a German SPC on the product sitagliptin. The case law established by the CJEU then was at the heart of the discussion in the latest cases considered by the Paris Court of Appeal, as it related to French SPC applications by Royalty Pharma based on the same basic patent and, in one case, for the same product.

In its judgment last year, the CJEU assessed what criteria need to be satisfied for a product to be considered as 'protected' by a basic patent when the product is not expressly disclosed in the basic patent but is covered by a functional, rather than structural, definition in the basic patent. The CJEU built on existing case law in this area which had been developed in previous cases and more recently in the case of Teva v Gilead, in which Pinsent Masons, the law firm behind Out-Law, acted for Teva.

In that case, the CJEU established a two-limb test for defining what must be protected by the basic patent in order to obtain an SPC in relation to combination products. It said that the combination of the active ingredients of a product must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by that patent, and that each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent.

The assessment of whether that criteria is met must be carried out through the eyes of a "person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent". The combination of active ingredients does not need to be expressly mentioned in the claims of the basic patent if those claims relate necessarily and specifically to that combination, the CJEU held.

In the Royalty Pharma case, the CJEU confirmed that the two-limb test also applies to single products covered by a functional definition in the underlying patent.

The SPC at issue in this case was for the product sitagliptin. However, the patent that served as a basis for the SPC application did not disclose sitagliptin and its structure but claimed, in functional terms, the inhibition of certain enzymes in the human body in order to lower blood sugar concentration and treat diabetes.

The CJEU said that a product corresponding to a general functional definition used in the basic patent and which necessarily falls under the invention covered by that patent but is not otherwise indicated in individualised form as a specific embodiment, must be specifically identifiable by a skilled person to be considered to be 'protected' by that basic patent.

Adding to the Teva v Gilead test, the CJEU also said that a product that was developed after the filing of the basic patent following "an independent inventive step" cannot be considered as protected by the basic patent even if it falls under a functional definition in the patent claims. However, the CJEU did not give guidance on what should be considered an "independent" inventive step, a concept that previously did not exist in patent and SPC law.

The question whether the product was specifically identifiable by the skilled person must be based exclusively on information in the patent and the prior art

Each of the SPC applications made by Royalty Pharma in France were based on the same European patent which had been discussed before the CJEU, which contained the same functional definition but did not disclose the specific structure of any of the five products at issue.

In its arguments before the Paris court, Royalty Pharma reflected on the requirement that each product must be specifically identifiable by the skilled person to be considered ‘protected’ by the underlying patent. It said the EU case law on that point should be interpreted as meaning that the skilled person, to whom the product would be presented at the priority date, must be able to identify that the product is covered by the basic patent, and does not require the skilled person to be able to infer the structural composition of the product from the patent as filed.

However, the Paris Court of Appeal held that the test requires only that the state of the art at the priority date is considered, without prior knowledge of the product, and so the question whether the product was specifically identifiable by the skilled person must be based exclusively on information in the patent and the prior art.

Royalty Pharma also argued that, in developing the concept of ‘independent inventive step’, the CJEU had acknowledged that “ground-breaking patents” which open a new therapeutic field can serve as a basis for obtaining an SPC for products developed after the filing of the patent but based on its teachings, by contrast with products that have been developed truly independently from the teachings of such patents. The Paris Court of Appeal disagreed. It said the CJEU did not distinguish between ground-breaking patents and other patents. It considered it relevant that subsequent patents to the one Royalty Pharma relied on, which made claims relating to the structure of the inhibitor products and were filed several years after the basic patent, following additional research, had shown that the products were developed following an ‘independent inventive step’.

Royalty Pharma also argued that refusing to grant SPCs on pioneering inventions, such as the one covered by its basic patent, was contrary to the objectives of the SPC Regulation and creates an unlawful discrimination between primary research and research made at a later development stage. Again, however, the Paris Court of Appeal disagreed with the company’s characterisation of matters.

The court said that the objective of the SPC Regulation is to compensate innovators for the delay in the market caused by the requirement of obtaining a marketing authorisation and distinguished that scenario from the circumstances Royalty Pharma found itself in in this case – the court considered that Royalty Pharma did not suffer from such delay given that it had been able to grant licenses under its basic patent for others to develop specific products for which marketing authorisations have been granted.

The rulings by the Paris Court of Appeal are the latest to consider the CJEU case law relevant to Article 3(a) of the SPC Regulation, having issued rulings earlier this year on the issue, with an identical position and outcome.

Following Brexit, UK law has been amended to incorporate the same criteria required by the EU SPC Regulation for applications for SPCs in the UK made after 1 January 2021. UK courts are required to interpret retained EU law in accordance with past CJEU case law, unless and until either the Court of Appeal or Supreme Court departs from such decisions.