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Of Molecules & Medicine: Further SPC News – Correct Fee Payments are Important

By Isobel Finnie, Partner

Readers of our blog and newsletters will already know that there are several requirements within the SPC Regulation[1] that are open to interpretation, and which have been interpreted in different ways by different patent offices throughout Europe. These issues of interpretation are usually focussed on the requirements Article 3 of the SPC Regulation, and the UK courts, amongst others have sought clarity from the CJEU. However, a recent SPC decision from the UK High Court (March 2020) relating to unintentional underpayment of SPC annual fees indicates that at least Articles 12, 13 and 14 of the SPC Regulation pose no such issues of interpretation for the UKIPO, even if the outcome appears harsh to the SPC holder.

A Supplementary Protection Certificate (SPC) is an IP right available in EEA countries including the UK, to extend the duration of protection for a patented medicinal product for up to five years. Article 13 of the SPC Regulation specifies how to determine the duration of an SPC. The purpose of an SPC is to compensate for the effective loss of patent term, due to the lengthy regulatory processes that a medicinal product must undergo before receiving a marketing authorisation allowing it to be sold. As a consequence, SPCs are very valuable.

An SPC comes into force on expiry of the patent. It is subject to a number of requirements including that having the SPC may be subject to the payment of annual fees (Article 12) and that an SPC shall lapse if the annual fees are not paid in time (Article 14). UK Rules (Schedule 4A as referred to in s. 128B UKPA, paragraph 5) require that all the renewal fees are paid in one lump sum in the three months just before the SPC is to take effect.

This Decision, [2020] EWHC 572 (Pat), is an appeal from a decision from the UKIPO concerning SPC/GB07/012 in the name of Genentech, Inc. (Genentech) which protects a product known as ranibizumab, sold under the brand name Lucentis® for the treatment of various eye diseases. Genetech’s SPC was based on EP0973804, which expired in April 2018, and provided another 3 years and 9 months of protection for that medicinal product with a duration potentially running to 23 January 2022. However, through what appears to have been an error, Master Data Center, Inc (Master Data), who were tasked with payments of renewal fees for Genentech, paid for only two years of the available SPC period.

Master Data and Genentech had presented a number of arguments which were all rejected by the UKIPO, and reconsidered and essentially rejected again by the High Court.

Master Data’s arguments were around whether there can only be one duration of an SPC and only one prescribed fee for that duration. Master Data argued that the duration of an SPC is set by Article 13 and UKIPO should not have allowed Genentech to shorten their SPC duration by paying less than the required amount of fees. The Court, however, distinguished between the duration of an SPC which is calculated according to Article 13 and which shall take effect after the basic patent expires, and an SPC’s expiry which is governed by Article 14. Article 14 states that an SPC shall lapse in certain circumstances including if the annual fees are not paid. The Court found that there is only one duration for an SPC calculated according to Article 13, but that it was open to an SPC applicant to shorten the SPC period by paying annual fees for less than the maximum duration – in this case only for a two year term.

It was also argued that the UKIPO should extend its discretion to allow correction of fees paid and accompanying form submitted by Master Data, or at least allow late payment of the fees, especially balanced against the significant detriment to Genentech of the loss of nearly two years of SPC protection. Whilst it appears to have been accepted that this situation arose as a genuine mistake, and accepted that any effect on third parties could be limited by advertising any correction and consequent longer SPC duration with opportunity for third parties to object, the UKIPO would not allow this. A key reason in the judge’s mind for not extending any discretion seems to be that this was the third time that Master Data had made such a mistake in payment of SPC fees. In the earlier instances, the UKIPO had notified Master Data such that they were able to correct it.

Genentech’s arguments also focussed on a potential paediatric extension. A paediatric extension of six months of extra SPC term can be awarded to an SPC holder in return for the additional experimentation needed to demonstrate that a medicinal product is also safe and effective for children. Since this testing is often done at a later stage, and possibly after the normal SPC has been granted (or even come into force), the application can be filed and fees paid for a paediatric extension can be dealt with later. Genentech did intend to apply for a paediatric extension. Therefore they argued that the underpaid SPC annual fees should be payable with the fees for the paediatric extension, or at least that the paediatric extension of six months should be allowed to be added to shortened SPC period. Neither of these arguments were allowed. The former was not allowed because it would have offered SPC holders applying for a paediatric extension, to have an additional opportunity not afforded to other SPC holders. The latter was not allowed because the paediatric extension can only come into force after the normal full duration of an SPC.

Since then it appears to have been Genentech’s intention to pay for the maximum possible duration for their SPC, and to have applied for a paediatric extension for a further six months of SPC protection. Furthermore, the accumulated renewal fees that were due to the UKIPO for this SPC came to only £3,000, this seems to have been a very costly error with a harsh outcome for the SPC holder.

[1] Regulation (EC) no 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products