An industry exploration of the Article 3d wording

Counsel from Valneva, Confo Therapeutics and Lazewski Depo & Partners questioned the literal and teleological interpretations of Article 3d of the SPC Regulation at the Patent Term Extension conference in Munich
To the naked eye the wording of SPC Regulation’s Article 3d is quite simple. To receive a supplementary protection certificate (SPC), a product must have valid marketing authorization (MA) as either a plant or medicinal product. Article 3d says that an SPC can only be granted for the first MA the product receives.
Panellists from Confo Therapeutics, Valneva and Lazewski Depo & Partners explained at the Patent Term Extension conference in Munich last month, however, that interpreting these words is not so simple, and asked whether judges should look at a literal interpretation of Article 3d or take a teleological approach.
“The memorandum says the SPC is compensation for the time lost in development before a product gets to market,” says Adrian Spillman, head of corporate IP at Valneva in Austria. “So it seems to be something to do with the cost of development.”
“But the SPC is granted to the patentee. That raises the question of who should get the SPC; the patentee or the company who invested to bring it to market? Big pharma invests millions and had regulatory delays. Who do you reward?”
The speakers agreed the intent behind Article 3d was to prevent the continuation of multiple SPCs for a single product. The argument went that without the article, companies could tweak the product, get a new MA and then a new SPC.
But what happens when the same product has two completely different MAs requiring different clinical trials and high investment costs resulting in regulatory delays similar to that of a new product? A combination product can have more than one active ingredient, multiple MAs and more than one indication. 
Mareck Lazewaski, managing partner of LDS Lazewski Depo & Partners in Poland took a philosophical approach to Article 3d interpretation: “I was taught in law school that there is a single piece of legislation and that lawyers must understand the meaning behind the text. The teleological purpose of the different institutions is a very important aspect.
“The idea behind every IP right is going to be the relationship behind income and time. You need to recover what you invested in time and money.”
But looking at the intent of the regulation can also introduce problems. Second medical use patents require time and money to jump through regulatory hoops; though perhaps not as much as the primary indication.
“We have been discussing the interpretation for many years,” said Frank Landolt, chief IP counsel at Belgium based Confo Therapeutics. “A very restrictive approach is probably the easiest approach to handle, but we are trying to achieve a balanced approach.”
“From the point of view of the public, the goal is to have lots of drug options at an affordable price.”
He explained that many vaccines could be used in completely different fields, and SPC protection would be a necessary incentive to conduct the research needed to repurpose the products.
“I understand the frustration of the patent office, but if you can get an SPC and repurpose it, the prices might be a lot lower for the consumer,” he said

Evolution of words and medications

The field of medicine has changed a lot since SPCs were first introduced in Europe in the 1990s. When the SPC Regulation was written, most medical and plant products were much simpler. But biologic drugs have now come on the market, which evolve from the time the first patent is filed to the moment the drug finally receives the MA.
“We are dealing with the same issues now as we were 25 years ago,” says Landolt at Confo. “Things were definitely not as easy as we expected, especially when it came to the interface between regulatory law and patent law, and especially for biologics and biosimilars.”
“Another place for problems is going to be for the advanced therapy medical products. The SPC is one piece of paper and we don’t even know if we can go back to the patent,” he added.
Speakers agreed that the developing field of personalised medicines adds an extra layer of nuance to the SPC debate. Gene therapy involves tailoring medication to a specific patient. The techniques and procedures involved to develop innovative medications are thus more complicated than developing simple molecules that scientists can roll into a capsule and administer to the patient.
“The future of medicine is this personalised stuff. You are likely to have new administrative routes and regimes; that is the argument. But of course everybody is struggling to understand what part of that gets the SPC,” said Spillman at Valneva.
Lazewaski at LDS added that more clarity is needed in the interpretation of Article 3d, not just so future drugs can be developed, but so pharma companies can make adjustments to the business models they are using with drugs currently in development.
“I’m not going to sit here and defend drug prices, but if you look outside the SPC system you might feel these companies on the market got a big bonus with the SPC and now make more money. But that’s not really how it works.
“Companies are calculating the value of the product with the patent and the SPC, and if you don’t get the SPC the company loses money. So this is not some futuristic argument, it’s important for projects that are already running.” 
In the end, interpretation of the SPC regulation feels a lot like examining any other important document. Judges are asked whether the intent is more important than a literal meaning.
But clearly there needs to be some clarification soon if we want to keep incentivising businesses to pump investment into new and potentially life-saving treatments.

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