A niche blog dedicated to the issues that arise when supplementary protection certificates (SPCs) extend patents beyond their normal life -- and to the respective positions of patent owners, investors, competitors and consumers. The blog also addresses wider issues that may be of interest or use to those involved in the extension of patent rights. You can email The SPC Blog here

Wednesday, 29 April 2009

CMA waiver based on "even SPC won't be enough" argument is rejected

Last Friday the Court of Justice of the European Communities made an Order in Case T‑52/09 R, Nycomed Danmark ApS v European Medicines Agency (EMEA), this being (i) an application for suspension of the operation of the EMEA’s decision of 28 November 2008 rejecting the application for a product-specific waiver concerning an ultrasound echocardiographic imaging agent for diagnostic purposes (perflubutane) and (ii) for the grant of interim measures. One of the arguments raised by Nycomed to try to get its waiver was that, if the marketing authorisation were delayed, it could not recoup its investment because of the limited patent life, even though the patent term could be "extended" by an SPC. Although this was no more than a side argument in Nycomed's effort to get a Community Marketing Authorisation (CMA), it did touch on the issue of patent term extension and therefore merits a brief mention here. Nycomed argued as follows:
"44 ... that delay also means that it will lose part of the effective protection period of the patents granted in respect of Imagify. The 20-year protection period for Imagify commenced on 27 February 1997 with the filing of the first patent application and will therefore lapse on 27 February 2017. The applicant cannot derive the benefits accruing from that protection before obtaining the CMA. The patent protection period may of course be extended beyond the 20-year period through the grant of a supplementary protection certificate, but the effective period resulting from the refusal to grant the waiver sought will still be shorter than that which the applicant would have obtained had the waiver been granted.

45 ... any delay in the launching of a patent-protected product will have considerable
impact on that product’s life-cycle turnover. Later market entry for the product will delay sales, and the potential turnover should not be calculated from the first year, when sales are modest, but rather in the year before loss of exclusivity, when product sales are peaking. In addition, a change in the order of entry of Imagify into the market in relation to other products will have a significant impact on the applicant’s market position if it reaches the market as manufacturer of the second ultrasound perfusion defect imaging product instead of the first, as is currently envisaged.

46 With respect to the irreparable nature of the alleged damage, the applicant acknowledges that Article 72(2) of Regulation No 726/2004 lays down a system of non-contractual liability for the EMEA, similar to that provided for by Articles 235 EC and 288 EC for the Community institutions. It submits, however, that it is not possible to compensate economically for the loss in turnover and profits and the
shortening of the protection period for its patent through the award of damages.
Entitlement to damages for loss suffered is subject to a set of conditions relating to the unlawfulness of the conduct alleged against the Community institution, the presence of damage and the existence of a causal link between the conduct and the damage complained of".
The Court was unimpressed. In the absence of "serious and irreparable" damage no interim measure might be ordered. What it says is worthy of note, though, if only because of its position regarding the nature of any damage suffered by a rights holder in relation to the loss of a portion of protection of its patent rights:
"63 ... the applicant argues that the damage suffered if the interim measures sought are not granted will be caused by the delay in introducing Imagify onto the market and by the loss of a corresponding portion of the protection period of its patents. It emphasises the significant impact of that delay on its position in the market for cardiac diagnostic products and the need for it to introduce Imagify onto that market as the first ultrasound imaging product in order to prevent another pharmaceutical company from gaining an edge and obtaining a CMA for a competing product, thereby acquiring a market share that it would not be able to acquire with Imagify present on the market.

64 However, the damage caused by such a delay in placing the product in question on the market, far from being able to be considered certain or, at the very least, sufficiently probable, is purely hypothetical in nature in that it presupposes the occurrence of future, uncertain events ... There is no certainty whatsoever that that product will be introduced onto the market, as it depends on the Commission’s granting a CMA, for which the applicant has expressly stated it ‘will be applying’ ... after successfully completing the validation procedure pending before the EMEA. In respect of that future authorisation procedure before the Commission, the applicant has not asserted, and even less established, that it would lead to the granting of the CMA, in the sense that the granting of that authorisation would be merely a formality.


67 With respect to the nature of the alleged harm, the applicant states that, during the period in which the placing on the market of Imagify is delayed, it will risk a loss in turnover and profits on sales of Imagify as well as a shortening of the effective protection period of the patents granted for the product, as any delay in launching a patent-protected product has a considerable impact on the turnover achieved for that product.

68 The applicant is thus alleging damage which must be regarded as being purely financial, in that it consists in loss of the income likely to result from future sales of a patent-protected product".

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