UK court shuts door on ‘second medical use’ SPCs

The unanimous ruling of three UK judges means case law developed by the EU’s highest court on ‘second medical use’ products’ eligibility for SPCs continues to apply in the UK post-Brexit. Patent law experts Charlotte Weekes and Alasdhair McDonald of Pinsent Masons said it is one of a number of recent decisions which clarify the scope of SPC protection.

The court’s ruling also provided broader guidance on when it might be appropriate for the courts in the UK to depart from case law established by the EU courts and retained in UK law at the point of Brexit.

The Court of Appeal maintained the status quo while considering, and rejecting, an appeal brought by Merck Serono over its attempt to obtain a UK SPC for cladribine.

Cladribine is an active ingredient that was originally used in medicinal products for treating a form of leukaemia – 1995 was when the first product for that purpose obtained marketing authorisation. A second medical use for cladribine was subsequently found, however, for treating multiple sclerosis and in 2017 a product called Mavenclad was granted marketing authorisation for that purpose.

Under EU and UK law, pharmaceutical companies can obtain SPCs to effectively extend the period for which they can exercise monopoly rights over the sale of medicinal products they have invested a lot of time and money into developing. Patent protection lasts 20 years but it takes pharmaceutical companies several years to develop new medicines, carry out mandatory clinical trials and gain marketing authorisation. This means that the period of patent protection available to pharmaceutical manufacturers during which they can commercialise their products is typically much shorter than that which applies in other, less regulated, sectors. The SPC framework was developed to account and compensate for that.

However, strict eligibility criteria apply, as set out in the EU SPC Regulation, which applies to UK SPC applications filed before 31 December 2020, and which applies in this case where the SPC application was filed in 2018. The EU SPC Regulation was imported into UK law largely unchanged and applies to SPC applications made on or after 1 January 2021.

Under Article 3 of the EU SPC Regulation, SPCs can only be granted if, in the UK or EU country in which the application is submitted, the product is “protected by a basic patent in force”; a marketing authorisation has been issued to place that product on the market as a medicinal product; the product has not already been the subject of an SPC; and the marketing authorisation relied on is the first to place the product on the market as a medicinal product.

The dispute that arose over Merck’s application concerned how the requirement in Article 3(d) of the SPC Regulation that the marketing authorisation relied be the first to place the product on the market as a medicinal product should be interpreted in the context of second medical use products.

This is a question that the Court of Justice of the EU (CJEU) previously answered. In 2020, the CJEU ruled that SPCs are not available to cover existing authorised pharmaceutical products for which new medical uses are found. This so-called ‘Santen’ ruling clarified previous uncertainty which had arisen from a 2012 judgment of the court, known as the Neurim case, where it said pharmaceutical companies were not precluded from obtaining an SPC for a 'different application' of the same product for which a marketing authorisation had already been granted "provided that the application is within the limits of the protection conferred by the basic patent relied upon for the purposes of the application for the supplementary protection certificate". 

Merck’s application for a UK SPC for cladribine based on the marketing authorisation for Mavenclad was rejected by a hearing officer at the UK’s Intellectual Property Office (IPO) on the basis of the CJEU’s ruling in the Santen case. That decision was then upheld when challenged by Merck at the High Court. In its appeal before the Court of Appeal, Merck argued that the Santen case law was not good law and that the UK should depart from it – specifically, that the CJEU had misinterpreted the EU’s SPC Regulation and its purpose when closing off the scope for second medical use products to obtain SPCs. It argued that the Court of Appeal should restore the Neurim case law that preceded Santen, in the UK.

However, the Court of Appeal held that not only was it not open to it to depart from the Santen precedent in this case – since the court had applied Santen in an earlier ruling last year in a case involving Newron Pharmaceuticals – but that it also considered Merck’s criticisms of the CJEU case law to be unjustified.

In respect of whether the court could depart from Santen, the Court of Appeal analysed the law regarding departing from retained EU case law, holding that the Court of Appeal is bound by that case law if there is post-transition UK case law which modifies or applies the retained EU case law and which is binding on the relevant court. This, it determined, had happened in the Newron case – even though its application of Santen in the Newron ruling concerned one of the other SPC eligibility criteria than is relevant to Merck’s application.

In respect of Merck’s critique of the CJEU’s decision in Santen – the company’s view is that it was regressive, overly literal, restrictive and conveying no practical benefit to the UK IPO or the public at large – the Court of Appeal disagreed. It held that the CJEU explicitly considered both the wording of the SPC Regulation and its objectives and that the SPC scheme was made more difficult to administer by the Neurim ruling, when it was meant to be simple.

In any event, the Court of Appeal was “far from convinced” this would be a proper case to depart from Santen, which it considered brought the scheme of the SPC Regulation “back into a measure of coherence, and substantially reduced the legal uncertainty caused by Neurim”.

The court’s judgment does not mean that the UK courts will never depart from the case law the CJEU established in its Santen ruling – the UK Supreme Court could, in theory, still issue a divergent ruling. However, the Court of Appeal judges did provide an insight into what they consider might be relevant to whether it would be appropriate for the UK courts to diverge from EU case law on SPCs or to other retained EU case law more generally.

Lord Justice Arnold said, for example, that as SPC law applicable in the UK post-Brexit has not relevantly been amended from the EU SPC Regulation that previously had direct effect in UK law, it follows that it is the will of the UK parliament that the legislation continue to be harmonised with that of the EU. The UK courts should continue to interpret the legislation in harmony with the CJEU unless convinced that the CJEU’s interpretation is wrong – as he was in the case of ICE v ICE in 2023, he said.

He also considered that there is no realistic prospect of the CJEU reversing its ruling in Santen and that Merck had neither cited any academic criticism of the Santen case law nor any decisions of any EU national courts supportive of its case.

Further points relating to the question about UK departure from Santen even if the Court of Appeal had considered it was not bound by its ruling in the Newron case, were set out by Lord Justice Lewison. He said, among other things, that the UK courts’ power to depart from a previous decision should not be invoked merely because the later court thinks that the earlier decision of that court was wrong, and that the power should be more sparingly used where the point in issue is the interpretation of a statutory provision, rather than the scope of a principle of the common law.

Consideration, he said, could also be given to whether the earlier decision has been criticised by academics, judges or practitioners; how that instrument has been interpreted in other jurisdictions – with a view to, where possible, maintaining international uniformity; whether there has been a relevant change in circumstances since the earlier decision, such as to public policy; and whether the earlier decision defeats the purpose of the provision in question or has given rise to incoherence in the law.

This decision maintains the status quo and confirms the UK’s alignment with the CJEU on this issue, providing some certainty for SPC applicants and third parties. However, Merck has yet to confirm whether it will seek permission to appeal to the Supreme Court, which may depart from the earlier case law.

Alasdhair McDonald of Pinsent Masons said: “The Neurim decision arose out of peculiar facts – the original authorisation for the drug in question, melatonin, was for use regulating breeding in sheep, and the second authorisation was for use treating insomnia in humans. However, the CJEU’s decision was not confined to the facts in that case and set out broad statements relating to the application of the SPC Regulation. The judgment caused considerable uncertainty in member states and was not applied uniformly. This uncertainty, and the potential for divergence between member states, was resolved clearly by the Santen decision.” 

“However, as the Santen decision deprives drug developers of SPC protection when they have invested in developing second medical uses for medicinal products, it may be argued that the Santen decision means the SPC Regulation does not fulfil its intended purpose. This was a key argument in Merck’s appeal. The Court was referred back to the statement of Lord Justice Jacob that led to the Neurim CJEU referral: ‘if Neurim are wrong, the Regulation will not have achieved its key objects for large areas of pharmaceutical research: it will not be fit for purpose’.  However, this commentary is over 10 years’ old, and the Court of Appeal was not directed to any judicial or academic criticism of the Santen decision itself,” he said.

Charlotte Weekes of Pinsent Masons said: “The result of the Court of Appeal’s decision in this case is to maintain a simplified and clear SPC regime which confines protection only to the first authorisation of a product, consistent with that in the EU. It is one of a number of recent decisions which clarify the scope of SPC protection available to patentees. In fact, coupled with the recent decision in the Clonmel case, it may be said that the scope of SPC protection is the clearest it has been in many years. It is very interesting too to read the comments of three eminent Lord Justices of the Court of Appeal on what it will take for them to diverge from CJEU case law and the fact that harmonised interpretation will be a factor unless convinced the CJEU is wrong.”