Poll: SPC system wanted by most generics
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Poll: SPC system wanted by most generics

In part two of Patent Strategy’s survey, almost all in-house respondents backed a European SPC system, but were less unified on the SPC Regulation’s reliability for new technologies or third-party MAs



In a surprising revelation to some innovator companies, almost all generics drug makers support the existence of a European SPC system, according to a Patent Strategy poll of 30 in-house counsel at pharmaceutical companies.


In the survey, which was taken by 20 originator (67%) and 10 generics (33%) drug manufacturers, only 3% of respondents (one lawyer from a generics company) said they did not back the supplementary protection certificate (SPC) framework, which was introduced in Europe in 1992.


Unsurprisingly, all originator respondents also said they thought there should be a European SPC system.

Speaking to Patent Strategy about these results, several innovator in-house counsel say this outcome is surprising when the absence of an SPC system would presumably benefit generics by enabling them to manufacture otherwise-protected pharmaceuticals sooner.

They add that, as such, they would have expected the results to match more closely with how respondents identified their company’s primary function. 

Respondents were first asked whether their company was more of a generics or an originator manufacturer. This was to take into consideration that most large drugs companies will probably have some interest in both sides of the pharmaceutical industry.

“If you keep generics respondents in mind, this result on the popularity of the SPC system is pretty astonishing,” says Axel Braun, European patent attorney at Roche in Switzerland. “Why would they need the SPC Manufacturing Waiver if they supported an SPC system?”

The IP director at a UK-based innovator company agrees that the generics response is a surprise, and notes that the result is probably indicative of these companies’ moves into the innovator space. Teva, for example, has traditionally focused on generics manufacturing but now has a significant R&D business too.

The head of patent affairs at generics firm in Germany says generics’ enthusiasm for the SPC system is due to its role in encouraging European innovation.

“If you look at it from far away, the SPC system does benefit generics by giving a reward to innovators to compensate them for the R&D they put into creating new and better medicines,” he says. “If innovators stop making new medicines because they do not have an adequate incentive, there will be no new generic drugs.”

Lars Kellberg, corporate vice president of patents at Novo Nordisk in Copenhagen, agrees that the production of high-quality generics medicines is probably the main driver behind generic drug companies’ support for SPCs.

“To make cheap and high-quality drugs, you need part of the drug industry to deal with regulatory hurdles and development times that can take more than 12 years. It is still the case, after all, that most projects we start fail and never get to market, and those losses require a specific business model.”

He adds that generics acknowledge that this model forms part of the pharmaceutical ecosystem, where innovators must be incentivised to take on these costs so that they produce good drugs, which can be copied by generics later down the line.

MA madness?

Survey respondents were not quite as united on some of the ways SPCs can be used. When we asked whether patentees should be able to obtain SPCs on third-party marketing authorisations (MAs), most (60%) said ‘no’ – but almost a third (30%) were in favour of the idea.


It is hotly debated whether a patentee can rely on a third party MA when applying for an SPC, which is sometimes called 'SPC squatting', in circumstances where the Article 3 conditions are silent about the identity of the MA holder.

England and Wales High Court judge Richard Arnold, who is set to sit at the Court of Appeal, referred a question on this matter to the Court of Justice of the EU (CJEU) in March.

When we break this data down into innovator and generics respondents, the latter are unsurprisingly more against SPCs on third-party MAs than the former. Four fifths of generics respondents said SPCs should not be granted for third-party MAs, but only half of innovators said the same by comparison.

The innovator IP director points out that this disparity between generics and innovators has probably occurred because most originators acknowledge that there are scenarios where obtaining an SPC for a third-party MA might be acceptable.

You may have a situation, for example, where a patent is owned by a university and licensed to a pharmaceutical company rather than sold. Under such circumstances, it could be reasonable for said company to file for an SPC, despite a different name being on the patent and MA, if the company can show that it owns the rights to said patent.

The director adds, however, that SPCs on third-party MAs should not be granted in situations completely divorced from the patent where a company relies on another’s MA to extend its patent.

“One of the fundamental functions of an SPC is to award pharma innovators for the expense and effort of getting regulatory approval. Allowing companies to get an SPC when they have contributed nothing in terms of R&D undermines its point.”

Kellberg at Novo Nordisk adds: “I do not think it was lawmakers’ intention to allow someone to extend a patent when that patent does not protect their own investment but someone else’s. That makes no sense.”

Future fitness

Respondents were much more divided over whether the EU’s SPC Regulation is fit for purpose for new and upcoming therapeutic treatments, such as CART-T or other forms of personalised medicines or CRISPR-Cas9-based therapies. 

Speakers at the Pharmaceutical Patent Term Extensions conference in Munich last June pointed out that personalised medicines field adds an extra layer of nuance to the SPC debate because gene therapy involves tailoring medication to a specific patient.

The techniques and procedures required to develop innovative medications are thus more complicated than developing simple molecules, and IP counsel are uncertain about whether they can get SPCs for different parts of those processes based on the current regulation.

The vote in Patent Strategy’s survey on this matter, however, was more or less split into thirds – although ‘no’ was the most popular answer to this question by a thin margin of four percentage points.


The senior IP litigation manager at an innovator firm points out that the SPC Regulation was drafted long before therapies such as personalised medicines became feasible. As such, there will inevitably be scepticism in the industry, particularly from those who have had a hard time applying the regulation’s provisions to biologics.

But he adds that the regulation is probably broad enough to apply to new products without too much difficulty. “There may be some special cases that will need to be decided in litigation, of course, but generally it is not a huge problem,” he says.

He also points out that SPCs might not end up being that important in the personalised medicine or CRISPR therapeutics markets in any case. Patents and SPCs, after all, play a key role for products that are easily replicated and sold by generics companies. They play a different role in areas such as vaccines where there are few, if any, generics competitors – and it remains to be seen whether generics will want or be able to enter these new markets.

Frank Landolt, chief IP counsel at Confo Therapeutics in Belgium, also suggests that this split in the vote may have occurred because the regulation’s reliability when it comes to these medicines comes down to how patent offices will implement it.

“It’s a matter of how it will work in practice,” he says. “If they implement it properly, it will work; if not, it will lead to more confusion and uncertainty.”

Regulation change wanted

Of course, whether the SPC Regulation needs clarifying or changing for new and upcoming treatments is a question for the not-too-distant future. Whether the regulation needs clarification now for existing drugs is a much more pressing question – and it seems that more drug makers think it does.

When asked what might be the best way to make the provisions of the SPC Regulation clearer, only 17% of respondents said no clarification was needed; the remaining 83% thought it needed at least some clarification.


This result is not surprising when we consider respondents’ biggest challenges in practice when it comes to the regulation. When we asked survey takers what their biggest challenge was, 10 out of the 25 respondents who indicated that the regulation needed some clarification (40%) said ‘navigating the sometimes contradictory rulings of the CJEU’.

Nine more of these respondents’ biggest challenges (36%) were also related to clarification, including: the granting of third-party SPCs; whether it is possible to obtain an SPC for a new clinical use; and predicting the scope of SPCs.

Seven out of all 30 respondents, however, including three of the five survey takers who thought the regulation needed no clarification, indicated that their biggest challenges were administrative or budgetary. One answered ‘the cost of unnecessary litigation’ but all the others indicated that the lack of harmonisation across Europe when it came to SPC prosecution was their key challenge.

But while most respondents agreed that clarification was needed, they diverged significantly on how that clarification should be achieved. More than a third (37%) said some form of revision was needed (either just to Article 3a or to the entire regulation), while almost another third (30%) thought the matter was best left with the CJEU to develop clearer case law.

Most respondents (67%), therefore, want to see clarification enshrined into law rather than in the form of guidance from the European executive.

For some in-house lawyers who spoke to Patent Strategy about these results, revisiting the legislation itself is too risky and might open up a can of worms more gruesome than the one some practitioners say we already have.

The associate director of IP at a European innovator business says a change to the regulation could open it up to another 15 years of interpretation, which is unnecessary when it works for most therapeutic products. Legislative change could also open up the SPC term to revision since it was only set at five years as a matter of policy.

For others, such as the innovator IP director, case law clarification at the CJEU is not a sensible option unless IP-expert judges are put on SPC cases to help harmonise case law. He points out that it is likely that few people chose ‘guidance’ as their answer because it would not be binding on the courts and could easily be overruled.

Landolt at Confo Therapeutics says that if he had the choice, he would have chosen ‘all of the above’ for this question. “These are questions that patent offices, courts and practitioners have been struggling with for more than 25 years. We need a way forward, from the CJEU, from the Commission, or from an updated or new Regulation”.

Patent Strategy’s survey has shown that while everyone supports the existence of an SPC system in Europe, most want to see it clarified in some way so they know how it can be used now and in the future.

Next week, Patent Strategy will published part three of its SPC survey on unitary patents.

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