The European Parliament has today approved proposals to reform EU Supplementary Protection Certificate (SPC) legislation, which introduce centralised examination and unitary SPCs.

These proposals are the European Commission’s original proposed reforms, with amendments from the European Parliament’s Committee on Legal Affairs intended to clarify certain aspects of the legislation. Further amendments proposed by members of the European Parliament (MEPs) to remove the highly controversial pre-grant opposition procedure for new SPC applications were not adopted.

These proposals will now be considered by the other EU legislative bodies, and may be revised further before being adopted.

Introduction

Last year, the European Commission proposed significant reforms to streamline the SPC regime in Europe for medicinal products and plant protection products. The main aim of the European Commission was to simplify certain aspects of the current SPC regime in which individual SPC applications are filed at each national patent office (NPO) where SPC protection is sought. This national filing regime can lead to inconsistent outcomes across Europe and creates an administrative burden for patentees.

The European Commission’s proposed reforms, which have now been adopted:

(a) Introduce centralised examination of SPCs; and
(b) Introduce a unitary SPC.

Under the reformed regime, the European Union Intellectual Property Office (EUIPO) examines SPC applications that rely upon a European Patent granted by the European Patent Office (EPO) and cover a medicinal product with a centralised marketing authorisation (granted via the European Medicines Agency). After substantive examination, the EUIPO issues an “examination opinion” on whether the SPC should be granted, which may be positive, negative, or partly so. Third parties may file observations on the validity of an SPC application after the application has been published, and may oppose a positive (or partly positive) examination opinion once published.

After a positive examination opinion, national SPCs are then formally granted by NPOs across Europe, or a single unitary SPC is granted if the patentee holds a unitary patent.

Today’s vote in the European Parliament

At first reading today, the European Parliament voted to approve the four new proposed SPC regulations proposed by the European Commission, with amendments proposed by the Committee on Legal Affairs (some of which are discussed below).

During the plenary debate, MEPs noted that the reforms will increase European harmonisation compared to the current fragmented regime. Several MEPs also highlighted that the reforms, including the centralised examination procedure and particularly the new unitary SPC, will reduce costs and excessive red tape for patentees.

Significant amendments rejected

The Parliament has rejected an amendment proposed by the European People’s Party (EPP) to delete provisions relating to the centralised pre-grant opposition procedure before the EUIPO. These provisions have attracted substantial criticism from patentees concerned that the pre-grant opposition system could be abused by third parties to cause significant delay to the examination process, e.g. to evade enforcement or to consume the practical SPC term. The Parliament’s retention of the pre-grant opposition procedure will be seen by many as a missed opportunity to reduce the uncertainty for patentees.

The EPP also proposed two further amendments to the unitary SPC regulations to delete provisions permitting declarations of invalidity to be granted by the EUIPO and provisions relating to counterclaims for invalidity. The aim of these amendments was to give the UPC sole competency to hear invalidity actions relating to unitary SPCs, to provide consistency and to avoid SPC holders being faced with invalidity challenges at both the EUIPO and UPC. These amendments were also rejected, another missed opportunity to increase legal certainty.

Other amendments considered

As mentioned above, the European Parliament adopted a suite of so-called “compromise amendments” to the proposals, previously approved by the Parliament’s Committee on Legal Affairs. Some of the key substantive changes, which have been introduced by these compromise amendments in today’s votes, are summarised below:

• Definition of the term ‘economically linked’ – The Commission’s original legislative proposal prohibited ‘economically linked’ parties from obtaining multiple SPCs for the same product. This term has now been defined such that two parties, or ‘holders’, are economically linked if, “in respect of different holders of two or more basic patents protecting the same product, that one holder, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another holder”. The definition brings some clarity but does not specify when in time the economic link is determined, so uncertainty remains regarding how future mergers will affect SPC validity.

• Product protected by the basic patent – New recitals aiming to codify CJEU case law on how to determine whether a product is protected by a basic patent have been amended to clarify that the drawings of the patent must be taken into account alongside the claims and description, and that the patent must be assessed on the basis of the skilled person’s common general knowledge, and the prior art, at the filing or priority date.

• SPCs for combinations and derivatives of protected products – Some new recitals have been amended to state that the product, or any derivative of that product, should not already have been the subject of a prior SPC (previously these recitals referred to ‘therapeutically equivalent’ derivatives). Unclear wording relating to combination SPCs has also been deleted from these recitals.

• Disclosure of public financial support in application – Applicants are required to supply “any information on all direct public financial support received for research related to the development of the product for which the SPC is requested” in their application, and this information will be made available on the public register. From an initial review, the consequences of not supplying this information are unclear, and we note that failing to provide this financial disclosure has not been added to the grounds for invalidity of an SPC.

• Experience of EUIPO examination panels – EUIPO SPC examination panels will include at least one member with at least 5 years’ experience examining patents and SPCs, to address stakeholders’ concerns that the EUIPO lacks expertise in SPC matters.

• Acceleration of examination process – Provisions have been introduced to accelerate examination in certain urgent situations (e.g. if expiry of the basic patent is imminent). In the expedited examination procedure, issuance of the first examination opinion is expedited from 6 months to 4 months after publication, and the window for third-parties to file observations on the examination opinion is reduced from 3 months to 6 weeks.

• Opposition oral proceedings – Opposition oral proceedings before the EUIPO will be public, in contrast to the Commission’s original proposal.

While these amendments aim to clarify certain aspects of the new proposals, key points of concern from stakeholders remain untouched by any proposed amendments to date, such as the lack of transitional provisions in the regulations, and uncertainty regarding how and when patentees should obtain consent for the grant of SPCs based on marketing authorisations held by third parties.

Next steps

Today’s initial approval of new SPC legislation is a major step forward, but we still cannot be certain on what the future of European SPCs will look like. The amended proposals, as approved by the European Parliament, will now be considered by the European Commission and Council of the EU (made up of ministers of national governments). These bodies could adopt their own amendments, including any amendments rejected by the Parliament, and so the ultimate legislative outcome remains uncertain. After negotiations between these institutions, we expect that finalised proposals will be voted on again later this year.