How does the current SPC system work and why does the EU wish to change it?

Although the legal basis for SPCs is EU regulations, there is no current EU-wide SPC filing system. All SPCs must be filed separately at the national patent office of each country where SPC protection is required. The EU considers that the current SPC system is costly and creates legal uncertainty for applicants, and that the progress of SPCs is difficult for third parties to monitor compared with basic European and national patents.

What changes are the EU proposing?

The EU is proposing to introduce a centralised system of filing and examination of SPC applications. The use of this system will be mandatory where (as for most medicines) the basic patent relied upon is a European patent and the marketing authorisation is a centralised one issued by the European Medicines Agency (EMA). As detailed below, the centralised examination procedure will result in a binding examination opinion and subsequent “bundle” of SPCs then granted by national patent offices.

Alongside this, the EU plans to introduce a unitary SPC, which will be based on a unitary patent and a centralised EMA marketing authorisation, and valid in the EU countries participating in the Unified Patent Court (UPC) system. It will be possible to file a single, combined SPC application requesting grant of a unitary SPC together with a “bundle” of national SPCs for those countries outside the UPC system. This will also undergo the centralised examination procedure.

How is the EU proposing to do this?

In order to bring the proposed changes into effect, the EU has proposed four new regulations, two each for medicines and plant protection products. For each type of product, the proposed legislation will amend the existing SPC Regulation to allow for centralised examination, and a new SPC Regulation will be brought in alongside it to allow for unitary SPCs.

Who will administer the centralised filing and examination procedure?

Under the current proposals, the European Union Intellectual Property Office (EUIPO) will administer the new centralised filing and examination system. The EUIPO currently handles only EU trade marks and EU registered designs, and has no experience in patent or SPC matters. In an attempt to allay concerns regarding this lack of experience, the EU is proposing that SPC applications will be examined by a panel of three examiners, one from the EUIPO and two specialist SPC examiners from the national patent offices.

The panel will issue a positive or negative examination opinion. This opinion will be binding on national patent offices: they must grant or reject the SPC based on it. There are only limited exceptions, for example, when the basic patent is no longer in force in that country.

Will there be any changes to substantive SPC law?

No changes are proposed to the present four criteria for grant of an SPC as reflected in Article 3 of the medicines and plant protection SPC Regulations. However, some of the existing case law on SPCs of the Court of Justice of the European Union (CJEU) is reflected in the recitals of the proposed legislation. Under EU practice, recitals can be used to interpret the intention and purpose behind the law.

Two important substantive changes are being proposed:

1. The existing practice which allows two SPCs to be granted for the same product to different patent holders will continue, but only if those patent holders are not economically linked. However, it is not yet clear how linked they must they be for this provision to apply. Subsidiaries of the same overall parent company would likely fall under this provision, but an otherwise unattached licensor and licensee may not.
2. As with the current system, the SPC will still be granted to the holder of the basic patent. However, if the product is the subject of a marketing authorisation held by a third party, an SPC will not be granted without the consent of that third party. The practice of patent holders filing SPCs without the marketing authorisation holder’s consent has been a controversial one, and it appears the EU wishes to prevent it in the future.

How can third parties object to SPC applications under the new system?

Under the current proposals, there will be two means for third parties to object to SPC applications:

1. Third party observations will be allowed within three months of the SPC application being published. As with the current European patent system, filing observations will not make the observer a party to the proceedings.
2. Pre-grant oppositions may be filed within two months of the examination opinion. The grounds for opposition may only be the four criteria under Article 3. The proposed pre-grant opposition system has raised concerns that third parties will file oppositions and delay the opposition procedure to prevent SPCs being granted before the basic patent expires, enabling them to get products on the market while the SPC is still pending.

Who will be able to represent SPC applicants under the new system?

National patent attorneys, European patent attorneys, and lawyers authorised to practice before member state courts and established in the EU will all be able to represent SPC applicants. With offices in both the UK and Germany, D Young & Co will be able to act for applicants in this regard, even if the EUIPO becomes the filing office for centralised SPCs.

Will paediatric extensions of SPCs still be possible under the new system?

Medicines which have undergone paediatric studies in compliance with a paediatric investigation plan (PIP) are currently entitled to a further six-month extension of the SPC, regardless of the outcome of the paediatric studies.

This will continue under the new system, will provisions that largely parallel those proposed for SPCs. In particular, it is proposed that paediatric extensions applications must also be filed at the EUIPO if the EMA was the regulatory route for agreeing the PIP and confirming that the studies have been carried out in compliance with it.

When are the changes likely to come into force?

The EU Parliament approved the four draft Regulations in February 2024. Under the EU’s normal legislative procedure, the draft legislation has now reverted to the EU Council and Commission for their review.

Although it is difficult to predict exactly when the legislation will come into force, it is possible that it will do so late 2025 or 2026. We will keep you informed of developments as to its progress.