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

Tuesday 26 May 2020

Hold the Front Page: Royalty involved in SPC decision!

The CMS patent litigation team in London have provided a review of the Royalty Pharma decision (C650/17). Many thanks to Gareth Morgan, Natalie Coan and Hannah Rigby for their thoughts.  

On 30 April 2020, the CJEU ruled on the interpretation of Article 3(a) of the SPC Regulation in an action between the Royalty Pharma Collection Trust and the German Patent and Trademark Office (C-650/17) (“Royalty”).  

In its ruling, the CJEU in Royalty held that a product developed after the filing date of a patent following an independent inventive step but falling under the functional definition of said patent was not considered ‘protected’ under Article 3(a) of the SPC Regulation. The case brings greater clarity after an uncertain line of case law following Medeva (C-322/10) in relation to what is ‘specified in the wording of the claim’. The CJEU in the Royalty ruling confirmed the test endorsed by the CJEU in  Gilead (C-121/17) by following the two pronged test but most notably added clarification by confirming that the term “core inventive advance” was not relevant to the interpretation of Article 3(a). Until now the CJEU had failed to offer a clear test for applying Article 3(a) but this decision has the effect of finally placing the interpretation of Article 3(a) on more stable ground.

Article 3(a) of the SPC Regulation requires that a product be protected by a basic patent in force before an SPC may be granted in respect of it. Medeva introduced the concept of ‘specified in the wording of the claim’, although it was unclear what that really meant. A further layer of confusion appeared in the CJEU’s decision in Actavis (C-443/12) which stated that the product had to constitute “the core inventive advance of that patent”. That case related to Article 3(c) but the CJEU referred to the same test in Actavis (C-577/13) which related to Article 3(a). It was then unclear when exactly the core inventive advancement of the patent should be taken into consideration and whether it had replaced the Medeva test.

Arnold J sought some clarity on this point in his referral to the CJEU in Gilead. In his referral, Arnold J suggested that ‘protected by the patent’ should mean that the product must ‘embody the core inventive advance’ of the patent, replacing ‘specified in the wording of the claim’. The CJEU did not explicitly reject this proposal but confirmed that each active ingredient should (1) necessarily fall under the invention covered by the patent; and (2) be specifically identifiable in light of the information disclosed by that patent. Arnold J took this to mean that the patent’s technical contribution was relevant to the assessment. The UK Court of Appeal subsequently overturned Arnold J’s interpretation, replacing this with a simpler test of whether all components of the “product” were necessarily required by the language of the claim.

The confusion caused by pre-Gilead case law has however remained, leading to a number of referrals, including that of the German Federal Court in Royalty.

Royalty Pharma had applied for an SPC protecting sitagliptin on the basis of its patent claiming use of dipeptidylpeptidase IV inhibitors to lower blood glucose levels. Sitagliptin was developed after the filing date of the relevant patent. It is however a dipeptidylpeptidase IV inhibitor and was therefore covered by the functional definition in the patent’s claims.

The German Federal Court requested guidance as to whether a product is protected under Article 3(a) where:
1.       The product is not expressly referred to in the patent’s claims;
2.       The product is not considered the specific embodiment of the patent;
3.       The product was developed after the filing date of the patent; and
4.       The product was covered by a functional definition in the patent’s claims.

The CJEU held that Article 3(a):

is to be interpreted as meaning that a product is protected by a basic patent in force within the meaning of this provision if it corresponds to a general functional definition used in one of the claims of the basic patent and necessarily relates to the invention protected by this patent, but without being individualized as a specific embodiment from the teaching of the patent, provided that it can be specifically identified, in light of all the information disclosed by said patent, by a person skilled in the art, on the basis of their general knowledge in the field, considered on the filing or priority date of the basic patent and the state of the art on that same date.”

This ruling follows the ruling in Gilead.

The CJEU’s clarification seems to have confirmed that the test for Article 3(a), in effect, equates to a question whether there has been an enabling disclosure of the product. The CJEU held that:

“Article 3(a) must be interpreted as meaning that a product is not protected by a basic patent in force within the meaning of that provision where, although that falling under the functional definition given in the claims of this patent, it was developed after the filing date of the application for the basic patent, at the end of an autonomous inventive step.”

The CJEU has therefore confirmed that the patentee of the basic patent must demonstrate that the skilled person could produce the product which is the subject of the SPC using only the common general knowledge and prior art, with no inventive activity.

The Royalty ruling confirms, and clarifies, the Gilead decision. It represents another nail in the ‘core inventive advance test’ coffin with respect of Article 3(a), and further demarcates the appropriate test for Article 3(a).  Notwithstanding the clarity offered on Article 3(a) new questions arise in respect of the compatibility of this ruling with the earlier Actavis case law on Articles 3(a) and 3(c), and also the extent to which any later independent inventive activity creates a new “product” for the purposes of SPC eligibility.