Merck ruling and non-positive term: new article

“European court ruling on SPCs brings relief to industry” is the title of an article by Mike Snodin (Potter Clarkson) that has been published in the January 2012 edition of Scrip Regulatory Affairs: it discusses the Court of Justice's ruling in Case C-125/10 (Merck; sitagliptin). Referring back to an earlier article, co-authored with John Miles, which introduced the concept of zero or negative term SPCs, Mike notes that the Court of Justice has effectively adopted Model A of that article in preference to Model C. In this respect, according to Mike’s new article:

“The innovative pharmaceutical industry will welcome the acceptance of SPCs having non-positive terms, as this increases the number of patents upon which useful (extended) SPC protection can be based. It also irons out a potential peculiarity (a perverse incentive to delay authorisation of new products in order to obtain longer post-marketing exclusivity) that would have existed if the court had reached a contrary decision. 

An unusual aspect of the decision is that the court adopted different approaches for ruling upon the two questions that it addressed. That is, for approving the validity of SPCs with non-positive term, the decision looks to the combined objectives of the SPC Regulation and the Paediatric Regulation. On the other hand, for ruling out the use of SPCs to obtain post-marketing exclusivity greater than 15 years and six months (ie for deciding to adopt Model A in preference to Model C from the above-mentioned 2007 RAJ Pharma article), the decision looks only to a provision of the SPC Regulation. 

The adoption of Model A in preference to Model C may have disappointed some in the innovative industry, as it means that conducting (often mandatory) clinical trials in the paediatric population will not always lead to a “reward” of an extended post-marketing monopoly period. This is because those patent holders obtaining authorisation of products four years six months or less after patent filing will not be able to obtain grant of extended SPCs with a positive term (though it appears that they may not be prevented from obtaining extended SPCs with zero or negative term). 

Nevertheless, it is possible to view the decision to limit combined patent and SPC protection to a maximum of 15 years and six months as being consistent with the intention of the Paediatric Regulation, even if the manner in which that intention is put into effect (by way of unextended SPCs with non-positive term) was never contemplated by the legislators.”

Mike’s article then discusses the possibility of (negative term) SPCs expiring before the patent upon which they are based, concluding that any concerns on this point are likely to be short-lived, as:

“Firstly, more and more newly authorised medicinal products will have been subject to the provisions of Article 7 of the Paediatric Regulation. Those provisions are such that, in the absence of a relevant waiver, data from paediatric trials must be submitted at the same time as data from clinical trials involving adults. For such new products, it is therefore likely that applications for extension of SPC term will be submitted at the same time as applications for unextended SPCs. 

Secondly, from 26 January 2012, the deadline for applying for an extension of SPC term will be brought forward 18 months (to two years before SPC expiry). This should provide national patent offices ample time to grant extensions of term before expiry of even a negative term SPC.
Taken together, these two factors should ultimately eliminate any chances of (unextended) SPCs reaching expiry before the patents upon which they are based.”

You can read Mike's article in full here.