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22 November 2017
In eight landmark decisions, the Patent and Market Court of Appeal decided that the terms for already granted supplementary protection certificates (SPCs) should be recalculated in order to reflect the 2015 European Court of Justice (ECJ) decision in Seattle Genetics (C-471/14) regarding the method for calculating SPC terms under EU Regulation 469/2009.
Several pharmaceutical companies had applied for and been granted eight SPCs for different types of medicinal product. The SPC terms had been calculated by the Patent and Registration Office based on the day when the authorisation was first given. The pharmaceutical companies noted that the office's method of calculating SPC terms was not in line with EU law, as set forth under the regulation and clarified by the ECJ in Seattle Genetics.
In Seattle Genetics, the ECJ set forth that Article 13(1) concerning the calculation of SPC terms must be interpreted as meaning that the:
"date of the first authorisation to place the product on the market in the EU within the meaning of that provision is the date on which notification of the decision granting market authorisation was given to the addressee of the decision."
Consequently, there was approximately a three-day difference in the SPC terms granted in Sweden, as opposed to the SPC terms calculated by application of the method in Seattle Genetics (ie, the time from the day of the authorisation to the day of notification of the authorisation).
The pharmaceutical companies requested that the Patent and Registration Office reassess its original decisions. However, the office did not do so and the decisions were appealed to the Patent and Market Court and subsequently to the Court of Appeal.
The Court of Appeal noted that the office's original decision conflicted with the applicable method for determining SPC terms as set out by the ECJ in Seattle Genetics. The Court of Appeal further noted that it must be assessed whether the decision in Seattle Genetics should be applied to SPCs which had already come into effect. The court also noted that SPCs are regulated under EU law and that regulation regarding SPCs should therefore in principle be harmonised.
The court went on to assess whether EU law requires the retroactive application of the principles of Seattle Genetics to SPCs which have already been granted correctly under EU law. It concluded that applicable EU law does not set forth a requirement to retry SPC terms once they have been granted and further noted that there is no such requirement in ECJ case law.
The court assessed whether general EU principles require older decisions to be reassessed and brought into compliance with newer EU precedents. In principle, national procedural rules should not be allowed to hinder effective application of EU law within member states. Referring to Kapfere (C-234/04) and Asturcom (C-40/08), the court noted that the national courts are not obliged to apply national rules on legal force or effect in order to remedy decisions made under EU law that were correct at the time of their ruling.
The ECJ further found that when national regulation conflicts with EU law there is often conflict between the rule of law and the effective protection of fundamental EU rights. In practice, the retroactive effect of the precedent is therefore often limited to cases in which the final verdict has yet to be rendered.
The matter of reassessing final administrative decisions has been assessed in Kühne & Heitz (C‑453/00). The ECJ reasoned that the interest of rule of law may mean that administrative decisions should not be reassessed. EU law does not therefore require that administrative decisions which have gained legal force be reassessed. However, under certain circumstances, Kühne & Heitz sets out a requirement to reconsider a decision if national administrative and procedural rules allow for it and the decision has been appealed to the highest-instance court. The court noted that the decision had not been appealed to the highest-instance court and that the principles of Kühne & Heitz were not applicable. Nevertheless, the court found that the principles in Kühne & Heitz would allow for a reconsideration if it is granted under national law.
Under Swedish national law the principal rule is that a decision which is favourable for an individual or entity gains legal effect, while unfavourable decisions do not (and may thus be reconsidered). The court noted that a decision to approve an SPC is a favourable decision in itself. However, the request for reassessment in the cases before the Court of Appeal sought a more favourable decision. Consequently, the principle regarding favourable decisions did not hinder reassessment.
The Court of Appeal noted that reassessment of the cases could lead to negative consequences for third parties, especially generic manufacturers. This did not hinder the reassessment of the decision, but is a fact that may be taken into account when the case is reassessed on its merits.
The court reasoned that generic producers have legitimate interests, especially with regard to transparency, and that the significance of these interests increases as the exclusivity of the patent approaches expiration. However, the Court of Appeal resolved that the interests of the patent owner outweigh the interest of third parties until the day that the SPC comes into effect, while after this date the interest of the third party outweighs the interests of the patent owner. Consequently, the court ruled that the SPC terms may be reassessed up until the moment that the SPC comes into effect.
In contrast to the Patent and Registration Office and the Patent and Market Court, the Court of Appeal concluded that the principal rule that decisions of authorities which are favourable per se for the applicant will not have legal effect would not generally apply to cases such as the ones at hand, where an even more favourable decision could be the outcome of the reassessment. This allowed for the decisions to be reconsidered.
In the cases where extensions were denied, the Court of Appeal took into account that the SPCs had already entered into effect when the request for an extension was made, and that generic manufacturers may already have adapted to the original expiration date of the SPC. The court did not elaborate on what form of consideration may be expected to be taken by the generic manufacturers. It may be questioned to what extent a generic manufacturer has acted to prepare for the expiration of an SPC at the time it enters into force. This is especially debatable with regard to the fact that the extension of the term is only a few days.
Further, the position that extensions cannot be granted once the term of the SPC has started can be questioned, particularly in light of paediatric extensions to SPCs which can be applied for and granted after the start of an SPC term. This aspect was not discussed in the decision.
The two cases where extensions of SPC terms were not granted have been appealed to the Supreme Court. The Supreme Court has yet to decide if it will grant leave to appeal. The decision is expected by the end of November 2017.
For further information on this topic please contact Jonas Löfgren at Westerberg & Partners Advokatbyrå Ab by telephone (+46 8 527 70 800) or email (email@example.com). The Westerberg & Partners Advokatbyrå Ab website can be accessed at www.westerberg.com.
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