It’s showtime again for the SPC community — but don’t expect big surprises:
The CJEU handed down its judgment in the matter Teva et al. ./. Gilead (C-121/17) earlier today, concerning an SPC for the combination of tenofovir disoproxil (TD) and emtricitabine, i.e. Gilead’s Truvada®.
Be remembered that Arnold J had referred the same question from the Actavis ./. Sanofi (C-443/12) case again, i.e.:
What are the criteria for deciding whether ‘the product is protected by a basic patent in force’ in Article 3(a) of the SPC Regulation?
Now, in case of a combination product, the CJEU’s answer is as follows (emphasis added):
Article 3(a) of Regulation No 469/2009 must be interpreted as meaning that a product composed of several active ingredients with a combined effect is ‘protected by a basic patent in force’ within the meaning of that provision where, even if the combination of active ingredients of which that product is composed is not expressly mentioned in the claims of the basic patent, those claims relate necessarily and specifically to that combination. For that purpose, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent:
the combination of those active ingredients must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by that patent; and
each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent.
It will now be on the referring court to decide how this will play out in the matter at hand. However, there is a quite clear message from the CJEU in ¶56:
Consequently, it does not seem possible that a person skilled in the art, on the basis of the prior art at the filing date or priority date of that patent, would be able to understand how emtricitabine, in combination with TD, necessarily falls under the invention covered by that patent.
It was beyond dispute between the parties that the subject-matter of the SPC (tenofovir disoproxilfumarat + emtricitabin) is covered by the basic patent EP’894. The so-called ‘infringement test’ that had been applied in Switzerland since the Supreme Court’s decision BGE 124 III 375 – Fosinopril in 1998 was thus met. However, the CJEU explicitly disapproved the ‘infringement test’ with its decision CJEU C-322/10 – Medeva of 2011, and the plaintiff argued that the ‘infringement test’ should no longer be applied in Switzerland, either.
The FPC had held that it is not appropriate to change the practice. On the contrary, the Supreme Court did now exactly that.
In first place, the Supreme Court reviewed the practice of the CJEU which initially left it to the national courts to decide on what it meant to be protected by a basic patent. Essentially two lines of jurisprudence developed thereafter, i.e. the disclosure theory (‘Offenbarungstheorie’) and the infringement test (‘Verletzungstest’). Only later, the CJEU disapproved the ‘infringement test’; CJEU C-322/10 – Medeva.
The Supreme Court noted that the Swiss SPC legislation had been enacted with the explicit aim to make it materially the same as in the European Union. The ‘infringement test’ cannot achieve this aim anymore, and it thus cannot be maintained; ¶2.2.5-2.2.6:
Die Auslegung […] weicht konzeptionell ab von der Auslegung durch den EuGH. […] Das vom schweizerischen Gesetzgeber angestrebte Zeil, das Schutzniveau für das Institut der ergänzenden Schutzzertifikate mit demjenigen im benachbarten Ausland in Einklang zu bringen, wird damit verfehlt. […] An BGE 124 III 375 kann nicht festgehalten werden.
Supreme Court dismisses appeal against judgment of 3 Oct 2017 in the matter of Mepha Pharma AG v Gilead Sciences, Inc., re Supplementary Protection Certificate (SPC); but in the future, Switzerland will apply the ECJ’s “Medeva” case law to SPC’s, https://t.co/tdY0t602LG
Noteworthy, the Supreme Court also briefly touched the IPI’s prior initiative to amend its SPC granting practice in light of the CJEU’s Medeva case law, and the positive feedback that had been received from (at least some of) the interested circles. The Supreme Court notes that this was a strong indication that the Swiss practice should indeed be changed, and the IPI’s initiative thus paid off. Still, it was good that the IPI’s initiative had been put on hold in view of the present proceedings. In my humble opinion, any change of practice while BGE 124 III 375 – Fosinopril was still formally applicable would have been premature. Just imagine the consequences if the granting practice had been changed and the Supreme Court later did not abstain from the ‘infringement test'(!), for any reason whatsoever. Dreadful.
Now, what is the test instead? Practitioners are familiar with the subtle twists in the various decisions of the CJEU. This is not further clarified in the present decision. Unsurprisingly, the Swiss Supreme Court essentially only summarizes the criteria of these decisions, ¶2.2.6:
Bezeichnet ein Grundpatent nur einen von zwei Wirkstoffen, kann ein Erzeugnis […] nicht als ergänzendes Schutzzertifikat beanspruch werden, wenn es aus zwei Wirkstoffen zusammengesetzt ist. Art. 140b PatG ist vielmehr […] so auszulegen, dass die Wirkstoffe des Erzeugnisses im Grundpatent beansprucht werden müssen, indem sie in den Patentansprüchen benannt werden, oder indem sich die Patentansprüche – im Lichte der Beschreibung ([…]) ausgelegt – zumindest stillschweigend, aber notwendigerweise auf diese Wirkstoffe beziehen, und zwar in spezifischer Art und Weise.
But the Supreme Court did not just change the practice. It did so with a smooth ‘Swiss touch’: Already granted SPCs shall not be affected by the change of practice. The Supreme Court held that, as a rule, formally final administrative decisions cannot be reconsidered or reversed on the basis of a change in case law. In the Supreme Court’s view, the public interest in equal treatment hardly exists in the context of an SPC, contrary to e.g. in social insurance issues. Apart from the fact that the number of SPCs — irrespective of their economic importance — is rather small, the purpose of granting them is precisely to grant privileges to their owners. If a change of the case law now restricts the conditions for granting SPCs in certain cases, the interests of the other market participants are given a higher weighting and the interests — including public interests in health care — are weighed up differently. However, this change in valuation and consideration of the interests involved does not justify the withdrawal of acquired legal positions, in the Supreme Court’s view; see ¶3.6. No national court in the European Union took this approach when the ‘infringement test’ had been abandoned, to the best of my knowledge.
Now, what is next? Respondent’s counsel already noted on Kluwer Patent Blog that it remains unclear how pending SPC applications shall be dealt with, but they suggested that the infringement test should also apply in these cases. I feel this could well be handled differently. No subjective right has yet been granted in these cases, and I cannot readily see an overriding interest of the applicants to still get SPCs granted contrary to the changed practice. To strike a balance, one might as well just give applicants a chance to amend their pending applications in view of the changed practice instead.
It was beyond dispute between the parties that the subject-matter of the SPC (Tenofovir Disoproxilfumarat + Emtricitabin) is protected by the basic patent EP’894. The so-called ‘infringement test’ that has been applied in Switzerland since the Supreme Court’s decision BGE 124 III 375 – Fosinopril in 1998 was thus met.
On the contrary, the CJEU disapproved the ‘infringement test’ with its decision CJEU C-322/10 – Medeva of 2011, and plaintiff argued that the ‘infringement test’ should no longer be applied in Switzerland either.
The FPC held that it is not appropriate to change the practice, and affirmed the ‘infringement test’ – at least for the time being.
The FPC’s reasons are as follows:
The law is clear
It is (only) required by the law that the product is protected by a patent; Art. 140b(1) lit. a PatA. The Supreme Court had held in the Fosinopril decision that it is not necessary that the product be explicitly named and described in the patent (‘ausdrücklich genannt und beschrieben’). Rather, it is decisive whether the product is covered by the scope of the basic patent. Well, that’s the ‘infringement test’.
The FPC notes in passing that the Introduction of further criteria might require a change to the law.
Die Einführung zusätzlicher, über den […] Schutz durch das Basispatent hinausgehende Anforderungen an das Basispatent für die Erteilung von Schutzzertifikaten würden wohl eine entsprechende Regelung durch den Gesetzgeber voraussetzen.
The rationale of Medeva is not applicable for Switzerland
The CJEU aimed to harmonize the SPC practice in the EU in order to preclude ‘obstacles to the free movement of medical prodcuts with the EU that would affect the establishment and functioning of the internal market’; see ¶24 of Medeva.
Switzerland is not part of that internal market, in particular not for medical products with state-regulated prices. Further, the FPC notes that the EU has harmonised the grant of market authorizations by the European Medicines Agency; Regulation (EC) No 726/2004. On the contrary, Switzerland has its own market approval procedure via Swissmedic; Therapeutic Products Act, TPA. The FPC concludes that even if one were to change the Swiss pratice in accordance with Medeva, this would not result in harmonised protection by SPCs with the EU.
Voluntary alignment with Medeva would not improve legal certainty and consistency
The FPC analysed the CJEU’s series of decisions dealing with SPCs, i.e.
The FPC held that the CJEU had been asked to answer essentially the very same question again and again, i.e. what exactly the criteria are to decide whether or not a product is ‘protected’ by the basic patent.
In the FPC’s view, Medeva raised more questions than it answered, and this uncertainty has not yet been resolved by the CJEU’s subsequent decisions. Defendant referred to the different wording used by the CJEU as ‘salad’. The FPC notes that this might well be an oversimplification. But still, the FPC identifies a terminological muddle, or at least a substantial unclarity.
Wenn die Beklagte die Formulierungen des EuGH als ‘Salat’ bezeichnet […], greift das wohl auch zu kurz, aber ein gewisses ‘terminologisches Durcheinander’, wie die Beklagte das auch nennt, oder zumindest eine erhebliche Unklarheit, scheint durchaus vorzuliegen.
The FPC further noted that yet another referral to the CJEU has been made by Arnold J in the co-pending case in the U.K.; see  EWHC 13 (Pat). Undoubtedly, Arnold J has immense knowledge and experience in SPC matters. The FPC took the fact that Arnold J again seeks advice from the CJEU on the question
What are the criteria for deciding whether ‘the product is protected by a basic patent in force’ in Article 3(a) of the SPC Regulation?
as a further indication of the substantial uncertainty even in the EU. In the court’s view, an attempt to harmonise the Swiss practice in alignment with Medeva would not improve legal certainty and consistency.
Application of the Medeva principles in the case at hand would not give a clear result
Finally, the FPC holds that it was unclear whether or not the unspecific reference to ‘optionally other therapeutic ingredients’ in claim 27 of the basic patent would be sufficient to meet the CJEU’s criteria, i.e. ‘specified in the wording of the claim’.
The FPC holds that if harmonisation with the CJEU case-law should be made at all, it would be too early: In the court’s view, there is just not yet a comprehensible and practicable case-law to align with.
Sollte überhaupt eine Harmonisierung mit der EuGH-Rechtsprechung in Betracht gezogen werden, scheint deshalb auf jeden Fall der Zeitpunkt, die Schweizer Rechtsprechung anzupassen, verfrüht, solange seitens des EuGH nicht eine nachvollziehbare und eindeutig umsetzbare Rechtsprechung vorliegt. Ein Versuch der Übernahme der Rechtsprechung des EuGH im gegenwärtigen Zeitpunkt würde nur eine Erhöhung der Rechtsunsicherheit nach sich ziehen. […] Deshalb ist, jedenfalls solange keine etablierte und die Rechtssicherheit sowohl für die Antragsteller als auch für die Dritten erhöhende Rechtsprechung des EuGH vorliegt, eine Änderung der Schweizer Rechtsprechung in keiner Weise angezeigt. Die strengen Voraussetzungen für eine Praxisänderung [BGE 138 III 270 , r. 2.2.2] sind eindeutig nicht erfüllt.
Two further aspects of the decision relate to the costs:
First, the parties had agreed on the English language to be used by the parties; Art. 36(3) PatCA. The main hearing, however, was held in German on request of the defendant. This required translation at the main hearing, and the defendant has to bear the costs for the interpreter.
Second, the FPC did not order any reimbursement of expenses incurred by defendant’s patent attorney. Note that expenses for assisting patent attorneys are not reimbursed according to a tariff (unlike the compensation for legal representation); see Art. 3 lit. a and Art. 9(2) CostR-PatC.
The requested amount has to be specified and substantiated, preferably by means of a detailed debit note. This has not been done, and the FPC accordingly did not award reimbursement of such unspecified and unsubstantiated expenses for the assisting patent attorney.
It’s not the first time that the parties litigate about this SPC. Nullity proceedings are co-pending; see this Blog here and here. A major issue at stake now is the alleged infringement of the SPC. The FPC had granted ex parte interim injunctive relief; see this Blog here. Note, however, that the SPC concerns (emphasis added):
Plaintiff essentially argues that an SPC would always extend to all salts of (a component of) a product, irrespective of its wording. On the contrary, defendant argues that this is a misunderstanding of the ‘Farmitalia’ decision of the ECJ (C-392/97): In that case, the market authorisation related to a specific salt, but the ECJ had allowed the registration of an SPC also for salts and esters. It had been held in ¶27 that
[…] where an active ingredient in the form of a salt is referred to in the marketing authorisation concerned and is protected by a basic patent in force, the certificate is capable of covering the active ingredient as such and also its various derived forms such as salts and esters, as medicinal products, in so far as they are covered by the protection of the basic patent.
The ECJ’s judgment only concerned the requirements for grant of an SPC, but not the scope of protection. The FPC will now have to decide on the scope of an SPC directed to a combination product wherein a first component is identified as a specifically named salt (fumarate) which is not used in the attacked product (using a phosphate instead); and wherein the second component (emtricitabin) is not mentioned at all in the basic patent.
The President noted that no expert opinion of the judge-rapporteur will be established. The parties did not enter into settlement discussions.
Towards this end, the so-called ‘infringement test’ has been applied in Switzerland since the Supreme Court’s decision BGE 124 III 375 – Fosinopril in 1998. On the contrary, the CJEU explicitly disapproved the ‘infringement test’ with its decision CJEU C-322/10 – Medeva in 2011.
The pleadings initially focussed on two issues, ie the relevance of the reasons for harmonization given by the CJEU for Switzerland; and the differently phrased criteria used by the CJEU in its decisions post-Medeva. The court had explicitly invited the parties to extend their pleading to these two issues.
Plaintiff essentially argued that the ratio legis of the Swiss SPC regulation requires that the ‘infringement test’ be set aside, and that this change of practice shall be applicable with immediate effect for SPCs granted under the Fosinopril regime. It has been referred to various other European jurisdictions where this has been the outcome in parallel proceedings.
On the contrary, defendant argued with multiple lines of defense. First, when the legal situation of 2006 was applied, the case should be dismissed. Only if it was now decided in favour of a change of practice, it would still need to be decided whether or not this should have retroactive effect. If one were to accept a retroactive effect, the criteria established by the CJEU would need to assessed. The parties disagreed whether the CJEU has established a sufficiently consistent approach.
All in all, the hearing took very long. The plaintiff’s reply was finished after 2h at about 12am; defendant asked for a break of 2h to adapt his rejoinder which then took about 3h. It remains to be seen whether reply/rejoinder in a hearing in main proceedings is a model for success.
The parties did not enter into settlement discussions.
Reported by Martin WILMING
Case No. O2107_001 ¦ Main hearing of 21 August 2017
Thus, the latest judgements of the CJEU and the Swiss Supreme Court are not in line anymore. The key issue in this matter is whether the Swiss SPC granting practice is to be brought in line with the case law of the CJEU.