Negative Term SPCs - A Positive Outcome
The CJEU has recently issued a decision allowing SPCs to be granted with negative terms. Whilst this might initially seem surprising it is actually an encouraging outcome for innovator pharmaceutical companies.
This is because, although the duration of the SPC is negative, it may provide an overall extension of a patent term by allowing a paediatric extension (that is a reward for carrying out a paediatric investigation) to be added to the SPC. This extension to the SPC, which is available as a result of carrying out the paediatric investigation, can provide an extremely valuable period of patent protection: the end of the SPC term is frequently the time when the product reaches peak sales.
As a result, obtaining an SPC, even one which has a negative or zero term, could be very valuable.
Merck Sharp & Dohme Corp. (Merck) is the owner of a European patent covering dipeptidylpeptidase inhibitors for the treatment or prevention of diabetes. The patent had a filing date of 5 July 2002. Merck applied for an SPC covering the specific product that had obtained a marketing authorization, sitagliptin phosphate monohydrate (Januvia®). The marketing authorization was issued on 21 March 2007.
As a result of the marketing authorization being granted relatively quickly, less than five years had elapsed from the date of filing of the patent to the date of the first marketing authorization (compared with 12 to 14 years for most pharmaceuticals).
In effect, this early grant of the marketing authorization meant that if an SPC were to be granted, it would have a negative term. The calculation below shows how this is worked out:
According to Article 13 of Regulation 469/2009 (the codified SPC regulation), the duration of an SPC is:
a period equal to the period which elapsed between the date on which the application for a basic patent was lodged and the date of the first authorisation to place the product on the market in the Community, reduced by a period of five years.
- Difference between 5 July 2002 (date of ‘lodging’) & 21 March 2007 (first MA) = 4 years, 8 months, 16 days.
- 4 years, 8 months & 16 days (4 years & 259 days) – 5 years = (-)106 days
- A negative SPC duration of (-)106 days (3 months, 14 days).
Merck submitted that they should be granted an SPC, even if the term would be negative, because without one they could not proceed to obtain a six month extension of the SPC term for carrying out a paediatric investigation. If such a six month extension could be obtained, it would in this case extend overall protection beyond the normal basic patent term.
In view of the differing decisions taken by various national authorities throughout Europe on this issue (some allowed the negative SPC, some refused it, some allowed it but rounded it up to zero), the German Patent and Trademark Office (DPMA) made a referral to the CJEU. The DPMA questioned whether, in light of the possibility to obtain a six month extension to the SPC following a paediatric investigation, negative term SPCs should be allowed. Accordingly, the following question was referred to the CJEU:
Can an [SPC] for medicinal products be granted if the period of time between the filing of the application for the basic patent and the date of the first [marketing authorisation] in the Community is shorter than five years?
The CJEU considered that an SPC can be granted even if the resulting term of the SPC is negative (or zero). Their reasoning was based on the fact that without the availability of such negative SPCs, the objective of compensating for the effort made to evaluate the paediatric effects of the medicinal product at issue would be compromised.
It was also clarified that the six month extension that is available following a paediatric investigation should be applied to the end of the negative SPC term, not to the expiry of the patent term. Thus, the negative term SPC is not rounded up to zero. In the Merck case, the application of the paediatric extension results in an overall extension of 77 days (2 months and 16 days).
- Negative term or zero term SPCs may be granted;
- Negative or zero term SPCs may be beneficial where the period between the filing date and the date of the first marketing authorisation is between four and a half and five years;
- A six-month paediatric extension may be added to the end of the negative SPC term, not to the expiry date of the patent.