Brexit spurs SPC litigation doubt for pharma companies
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Brexit spurs SPC litigation doubt for pharma companies

Pharma businesses say they are uncertain of whether decisions around Article 3a of the EU’s SPC Regulation would be followed in the UK for very long after Brexit – and that divergence might further complicate their litigation strategies

With the UK’s departure from the EU edging closer, pharmaceutical companies are becoming more concerned with what the country’s supplementary protection certificate framework could look like after Brexit and how it would affect cross-jurisdiction litigation strategies.

Three sources at innovator drug firms tell Patent Strategy that while the UK is planning to import EU case law after it has left the bloc, they are unsure of whether the country might eventually change its approach to the SPC Regulation if or when the nation is not subject to European court decisions.

They point out that the UK could choose to follow the rulings of the Court of Justice of the European Union (CJEU) after Brexit or diverge from European law and make its own decisions, particularly around Article 3a of the SPC Regulation, which requires an invention to have been covered by a basic patent in force.

A decision to diverge could make UK SPC law friendlier and easier to understand for patent owners, but could also disrupt already shaky European harmonisation on these matters and ultimately make litigation on the continent more complicated.

“Perhaps the UK will decide that the European court has gone down a rabbit hole, and will develop a clearer solution to the Article 3a saga,” says the head of IP at a European drug company.

He adds that he is paying particular attention to how the CJEU will rule in Sandoz v Searle, a UK Article3a matter referred to the CJEU for a preliminary judgment, because the timing of the decision could prove problematic.

It would be anyone’s guess, he says, whether the CJEU’s decision would be implemented in the UK after Brexit.

But another head of IP at a global pharma firm says it is unlikely that the UK courts would ignore the CJEU on a reference made before Brexit, and points out that the divergence in the law would not happen for some time, if at all.

“One would place a lot of weight on the CJEU’s interpretations of the regulation for current SPCs,” he says. “I expect the UK courts will still take due notice and interpret the CJEU’s ruling in the way it always has done.

“There will be the opportunity to deviate from the CJEU in the future but I suspect the UK courts will still want to try and give a degree of weight to CJEU interpretations on the European SPC Regulation until the nation rewrites the law on its own – if that ever happens.”

One source agrees that a change in the law would rest on potential changes to a UK-implemented SPC Regulation, but adds that the country might well decide to take a more relaxed approach to SPC law down the line because of the prominence of the pharmaceutical sector there.

She adds that there is always the possibility that SPC laws will be made more stringent in the UK to enable faster generic drug market entry and buttress cost savings for the National Health Service.

Patent attorneys have long wrestled with interpretations of the SPC Regulation’s Article 3 – and particularly Article 3a. Sources point out that litigators have combed the legislation for loopholes since the Medeva case in 2011. The CJEU has two Article 3a-related references pending: Sandoz v Searle and a German case involving Sitagliptin which asks whether a product is protected by a patent in force only if it belongs to the protected subject matter defined in the original patent claim.

Article 3a anarchy

In-house counsel say that the uncertainty that Brexit could present to the wider European SPC framework is just the latest in a series of events across the continent that have made Article 3a litigation difficult to plan.

The Swiss pharma head of IP predicts: “The next two decisions that come down from the CJEU will be cryptic. But every time a decision comes down you are left a little bit clearer in how they are thinking.”

The other head of IP adds that businesses become a bit more advanced on whatever situation they are looking at with each new judgment that is handed down.

“But I can’t think that these next two decisions will provide absolute clarity,” he says.

Sources point out that a good example of the confusion surrounding Article 3a is when the French and Swedish courts issued opposite rulings on the commercialisation of Sandoz’s Darunavir between February and March 2019.

The Paris High Court decided that the previous rulings by the CJEU did not apply to Markush formulas and issued an injunction against Sandoz. But the Swedish courts decided that the SPC would probably be found invalid and thus denied a request for a preliminary injunction.

With different jurisdictions interpreting the same case in different ways, it comes to IP attorneys to invent an original strategy to litigate SPC cases, say in-house counsel.

“There is definitely wiggle room to argue the Article 3a point if you are a generic company that an SPC shouldn’t be available to the patent holder if a patent doesn’t specifically describe the regulator-approved product,” says the Swiss head of IP.

One explanation given by in-house counsel for the confusion is that CJEU judges are not necessarily experts in IP. “They use language that does not fit with general patent litigation language, which is why the judges and everyone else scratches their heads and wonders what their decisions actually mean,” says the global head of IP.

Both the European Commission and the CJEU have grown tired about the lack of clarity. Sources say the best-case scenario would be to scrap the SPC Regulation completely and redraft it from scratch.

According to another in-house source: “The magic ruling would have been at the outset to say that if the basic patent would be infringed by the product, the product is protected by the patent. They were afraid of giving a too broad interpretation of a patent.”

The basic confusion seems to be around the wording of Article 3a that states that a product is protected by a basic patent in force. While seemingly straightforward, the simple wording of the regulation has resulted in lots of confusion.

Whether the CJEU issues a crystal clear ruling or not, Brexit is still coming. In-house counsel suggest that the SPC Regulation’s wording will continue to provide enough ambiguity for their teams to litigate creatively around the fringes of the regulation.  

How in-house teams decide to litigate UK cases in the future, however, will depend on how UK courts align themselves in a post-Brexit world. 

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