SPCs: Updates and Forecast

1. SPCs: Updates and Forecast Steven Baldwin Allen & Overy LLP Philipp Widera, LL.M.Simmons & Simmons LLP

2. Recent developments in Germany • Further SPCs in case of further active ingredients? • SPCs in case of a covalent connection • Limitation of protection

3. Further SPCs in case of further active ingredients? CJEU, 12 December 2013 (C-443/12; Actavis v. Sanofi), andCJEU, 12 December 2013 (C-484/12; Georgetown v. OCN) In principle: one SPC for one (basic) patent (Art. 3c) (P) what if one patent protects more than one product acc. to Art. 3a?(the active ingredient or combination of active ingredients of a medicinal product)1) If a patent protects several independent products, it is possible to have further SPCs based on one patent. 2) If an SPC has already been granted for a product, no further SPCs for a combination of this product with a different unprotected (but mentioned in the description) product. In essence: It depends on the scope of the first SPC whether or not additional SPCs will be granted.

4. SPCs in case of a covalent connection CJEU, 15 January 2015 (C-631/13; Arne Forsgren v. ÖPA), andGerman Federal Patent Court, 8 December 2015 (14 W (pat) 45/12 - Aminosilane) A product according to Art. 3a needs to have its own pharmacological, immunological or metabolic effect which must have been part of the first marketing authorization. Hence, any components not having such an effect are not considered products. Innocuous whether the active ingredient is only part of the pharmaceutical product in the form of a chemical combination as long as the additional components do not show those effects even if the active ingredient is connected to the component by a covalent connection. Insufficient if the additional component only enhances the effect of the actual active ingredient.

5. Limitation of protection Higher Regional Court of Dusseldorf, 06 August 2015 (2 U 21/15; Ezetimib) Generally, the scope of protection of the SPC is identical to the basic patent. Art. 4 limits the scope of protection twofold: 1) protection conferred by the SPC extends only to the product covered by the MA; 2) protection only for the pharmaceutically authorized use. Irrelevant whether or not the generic drug has additional features. If the claims of the basic patent are broader, the broader term used in the basic patent is to be replaced by the “product” of the SPC.

6. The most important recent UK cases Actavis Group PTC EHF v Sanofi [2012] EWHC 2545 (Pat); C-443/12 CJEU decision: 12 December 2013 Eli Lilly v Human Genome Sciences, C-493/12; [2014] EWHC 2404 (Pat) CJEU decision: 12 December 2013 UK decision: 18 July 2014 Actavis v Boehringer Ingelheim [2013] EWHC 2927 (Pat); C-577/13 CJEU decision: 12 March 2015 *

7. What is the Art 3(a) test? • Some CJEU bench consistency: each of Judges Caoimh, Toader and Fernlund sat on the CJEU bench for the three cases mentioned on the previous slide. • Did that lead to a consistent test for when a “product” will be “protected by a basic patent” for the purposes of Art 3(a)? NO! And the UK provides a good example of the remaining uncertainty. Actavis v Sanofi: to satisfy Art 3(a) the product must be “protected as such”. What does “protected as such” mean? Is it the “core inventive advance” test proposed by Arnold J in his referring decision, which the CJEU seemed to adopt in this case? * *

8. What is the Art 3(a) test? Continued Eli Lilly v HGS [2014] EWHC 2404 (Pat): The CJEU decision came back to Warren J in the UK High Court on the interpretation of Article 3(a). • The real question is “what is the patent really about?” • Warren J stated his view of the test in numerous ways: • “If the product falls within the claims, it will be protected within art.3(a)” (subject to the “comprises” proviso). • “…the question is simply whether the product falls within the scope of the claims” taking Art 125 Patents Act 1977 and Art 69 EPC into account. • “If the active ingredient in question is covered by the claims, the active ingredient is, subject to the [“comprises”] proviso…, protected for the purposes of art.3(a)”. • Functionally and structurally defined claims are to be treated equally and the comment made by the CJEU that the claims must “relate, implicitly but necessarily and specifically” to the active ingredient, adds nothing over the Medeva (C-322/10) “specified/identified” test. • NOT an infringement test, though the result will be the same in many cases. • How can this be consistent with a “core inventive advance” test or sole subject matter test (see next slide)? Positive decision for claims defining a class e.g. markush claims. * *

9. What is the Art 3(a) test? Continued Actavis v Boehringer Ingelheim C-577/13 • Decided after Warren J’s decision in Lilly v HGS. • Art 3(a): “…in order for a basic patent to protect ‘as such’ an active ingredient within the meaning of Articles 1(c) and 3(a) of Regulation No 469/2009, that active ingredient must constitute the [sole] subject-matter of the invention covered by that patent.” • Similar to the “core inventive advance” concept. How can you get multiple SPCs based on the same basic patent if each product would have to be the sole subject matter of the invention? • How can it be consistent with Lilly v HGS? Why would any single antibody (e.g. tabalumab) be seen as the “sole subject matter of the invention” as against any others contained within the class set out in the claims? In Lilly, the parties were agreed that the marketed antibody was not expressly named in the claims or “otherwise specified in the description or specification”. • Where does the decision leave other class-based claims e.g. markush claims? * *

10. SPCs under the UPC System Strategy report by the EC of 28 October 2015 High uncertainties over how the UPC works together esp. with national SPCs. SPCs are critical for pharmaceutical companies. EC wants to “recalibrate” certain aspects of patent and SPC protection, in particular: 1) manufacturing waiver; 2) update of the scope of the Roche-Bolar-clause. “It will consult, consider and propose further measures, as appropriate, to improve the patent system in Europe, notably for pharmaceutical and other industries whose products are subject to MAs.” * *

11. What are the industries’ desires? Joint Position Paper by ECPA, EFPIA and IFAH Push for a Unitary SPC. Improvement of the UPC system as “their” industries heavily rely on SPCs. Not costly if the granting body was “virtual” composed of SPC experts from national offices. In the interim? Support of national SPCs being granted by national patent offices on the basis of EPs with unitary effect. Do the pharmaceutical companies “really” want an unitary SPC? * *

12. SPCs under the UPC System • Is the current position counter-intuitive? SPCs based on unitary patents, which cannot be opted-out, but which will be national only rights. Opt-out • Opt-out for life: SPCs being litigated into the 2040s/50s? • Transitional period for SPCs based on EPs (Art 83): • Right owners can opt-out their EP from the exclusive jurisdiction of the UPC which will extend to the parasitic SPC (Rule 5.2). • Opt-out the EP before obtaining any SPCs to avoid having to make joint ownership applications for opt-out purposes: if the EP is already opted-out, the SPC will follow (this is not the case if the SPC is granted before an opt-out is made) (Rule 5.2). • If not opted-out, right holders and validity attackers will be able to choose between bringing proceedings nationally or in the UPC (Art 83(1)). • Needs careful thought: can a competitor force the forum? Are UPC (r5.2(c), r5.7, Art 83(3) – no opt out) or national court (r5.2(c), r5.9, Art 83(4) – no opt-back in) proceedings ongoing? • Can SPCs based on not opted-out EPs benefit from Art. 34 (territorial scope of protection)? Technically, SPCs are national rights having only national effect. * *

13. SPCs under the UPC System Consistency? • Will centralised decisions avoid the problem of diverging decisions between national patent offices and courts based on the same patent and MA (e.g. as regards Art 3(a))? (The CJEU has shown that centralisation does not always lead to clear/consistent decisions). Where does Art. 34 leave you in terms of enforcement? • Will a central unitary SPC help e.g. see Seattle Genetics v OP C-471/14 – will all national offices amend SPC durations to reflect the fact that, following this case, the term of the SPC should be calculated based on the date of notification of the MA in the EU’s official journal? Might seem minor but the money stake is often big. * *

14. Any Questions? Steven Baldwin Londonsteven.baldwin@allenovery.com Philipp Widera, LL.M. Düsseldorfphilipp.widera@simmons-simmons.com *