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As we reported on in 2022, the UKIPO has been working with stakeholders to assist in the challenges faced by industry with respect to standards essential patents (SEPs). This work has resulted in the recent launch of the UKIPO’s “SEPs Resource Hub”.

As many readers will be aware, patents which protect a technology which are deemed essential to implementing a technical standard are known as SEPs. Such technical standards set out how devices interact with each other, such as cellular communication devices which operate in accordance with wireless communication standards (e.g. 3GPP). Use of these standards enable devices to seamlessly communicate with one another, wherever they are located in the world, as long as they are using (and hence implement) the same technical standards.

The SEPs Resource Hub (Hub) seeks to provide a one-stop repository of guidance and signposting for UK businesses as they interact with technical standards and standard setting organisations, enter negotiations in respect of SEPs, as well as matters relating to dispute resolution in the context of SEPs. Having such a Hub will assist businesses to better understand and traverse the often-complex world of SEPs.

The Hub also provides a very useful summary of UK SEPs Case Law, a glossary of SEP related terms, and international SEPs-specific resources. The IPO have noted that the Hub will continue to be updated and evolve over time.

Since March, the rate at which European patents granted by the European Patent Office (EPO)  are converted to Unitary Patents  has risen from 18% to 24.3%, an increase of 35%. The figures provided by the EPO, indicate that this increase has occurred across all technologies, but the rate of increase has been far more significant in some technology areas than others, indicating that reluctance to use the Unitary patent system in such areas is declining.

The graph above illustrates the current rates of use of the Unitary patent in different technology areas. The different colours in the graph correspond to the EPO’s broad technology areas: Electricity (Dark Blue), Chemistry and Life Sciences (Grey), Instruments (Orange), Mechanical Engineering (Yellow) and Other Fields (Light Blue).

Compared with 4 months ago, the overall ordering of adoption of the Unitary patents in different technical fields is little changed. However, the proportion of patents being granted which have been converted to Unitary Patents has increased considerably.

Civil engineering and Furniture remain the areas of technology where Unitary patents are most popular. The increase in take-up in these fields from 40% to 51.4% in the case of Civil Engineering and from 30% to 38.8% amounts to increases of about 30% in both fields, only slightly behind the average 35% increase of take up Unitary Patents across the board.

More dramatic increases in uptake have occurred in other technical areas, in particular Semiconductors where the rate of uptake has nearly doubled from 7.3% in March to 14.4% in July.

Uptake has increased by 50% in Polymers (previously 9.2%, now 14.2%), Audio Visual (previously 9.2%, now 14%), and Computers (previously 9.8%, now 15.7%) where uptake was previously relatively low, as well as areas where uptake was already previously higher such as Thermal Processes (previously 24.5%, now 36.6%) and Medical Technology (previously 24.4%, now 37.5%).

A notable outlier in this more general increase in enthusiasm for the use of the Unitary patent is IT Methods, which remains the area of technology in which the uptake for Unitary patents remains the lowest at 7.3%. Although this is an increase on the 6.4% uptake rate previously reported in March, this change only amounts to an increase of 14%, less than half of the average of 35% across all technologies.

The significant increases in the use of the Unitary patent in the last few months indicates that many more companies are now choosing to convert at least some of their European patents into Unitary patents.  This will ultimately lead to an increase in the numbers of patents which are subject to the jurisdiction of the Unified Patent Court as Unitary patents are always subject to the jurisdiction of the Court and cannot be opted-out from the jurisdiction.

However, it is also clear that in the majority of technical fields, at least for the time being, most patents will remain European patents.

On 19 July 2024, the Court of Appeal under Lord Justice Birss handed down its judgement on the case of Comptroller – General of Patents, Designs and Trade Marks v Emotional Perception AI Limited [2024] EWCA Civ 825. The Court of Appeal judgement overturns the first instance decision of the High Court and upholds the decision of the UKIPO Hearing Officer.

The judgement held that:

The full Court of Appeal decision can be found here.

In response to the issuance of the decision, the UKIPO has suspended its guidance on the examination of patent applications relating to artificial intelligence.  It remains to be seen whether the UKIPO’s practice will now revert to that before the first instance decision was issued last November, whereby ANNs are treated no differently to any other form of computer implemented invention.

The EPO Board of Appeal in decision T 0439/22 of 24 June 2024 referred new questions to the Enlarged Board of Appeal on whether and to what extent the description and drawings can be taken into account when interpreting claims for the purposes of assessing patentability. The referral G 1/24 (“Heated Aerosol”) seeks to resolve a long-standing conflict between Articles 69(1) and 84 EPC relating to how claims are to be interpreted before the EPO.

At the EPO, the extent of protection conferred by a patent is governed by Article 69(1) EPC and the requirements for the form and content of patent claims are governed by Article 84 EPC. Article 69(1) EPC states that “The extent of the protection conferred by a European patent or a European patent application shall be determined by the claims. Nevertheless, the description and drawings shall be used to interpret the claims”. The use of the description and drawings to help understand and construe the true meaning and scope of a patent claim is a fundamental principle of claim interpretation applied in infringement proceedings in the national courts throughout Europe (and most if not all other patent jurisdictions) and underpins the “purposive construction” approach applied by the UK courts. At the same time, according to Article 84 EPC the subject matter of the invention for which protection is sought is defined by the claims (and only the claims). The question thus arises whether the claims should be interpreted in the light of the description and drawings as provided for in the second sentence of Article 69(1) EPC merely in order to determine the extent of protection, e.g. for infringement proceedings in the national courts, or whether it is also possible to do so in order to establish whether the requirements of patentability and clarity have been satisfied. EPO case law is divided on this fundamental point, and the referral G 1/24 (“Heated Aerosol”) seeks to clarify the situation.

The EPO’s current practice

In contrast to practice at the UKIPO where claims can be interpreted in light of the description and drawings when assessing patentability and clarity, EPO examining and opposition divisions have long followed the practice set out in the EPO Guidelines for Examination (see GL F-IV 4.1-4.2) whereby the claims of a European patent application must be clear in themselves without reference to description and drawings, because it is only the claims of the European patent, not the description, which are published in all the official languages of the EPO. As such, under current EPO practice before the examining and opposition divisions, the claims are generally read in isolation, giving the words the meaning and scope which they normally have in the relevant art, and only in particular cases where the description gives the words in a claim a special meaning by explicit definition or otherwise, or where the claim wording is particularly ambiguous, will the EPO look to the description to interpret the claims. In this regard, the patent document may be ‘its own dictionary’. However, during prosecution, the EPO will in any case typically require the claim to be amended such that its meaning is clear from the wording of the claim alone.

This practice is supported by a long line of case law in which the EPO Boards of Appeal generally rely on Article 84 EPC as the legal basis for focusing on the claim wording alone to ensure future legal certainty, and often express the view that Article 69(1) EPC concerns only the extent of protection, which in turn is relevant only for the purposes of Article 123(3) EPC and national court infringement proceedings (see e.g. T 1279/04 and T 169/20). On the other hand, there is also another line of case law where the Boards of Appeal have endorsed the opposite view, based on the second sentence of Article 69(1) EPC, that the claims should be interpreted in light of the description and drawings to identify their subject-matter for the purposes of assessing patentability (see e.g., T 1473/19, T 450/20, T 1494/21 and T 367/20). Further, even in the body of case law that generally supports the “claims only” approach, there are decisions which hold that the description, including any definitions therein, should be ignored if the claims are clear on their own merits (see e.g. T 197/10, T 1266/19), and others that go as far as to suggest the claims should always be interpreted on their own merits without consulting the description (see, e.g. T 675/22, T 1924/20). There is thus a clear divergence in the case law on how claims should be interpreted in proceedings before the EPO.

The referral

In the referred case T 0439/22, claim 1 included the term “gathered sheet”, which if given its usual meaning in the art confers novelty to claim 1 in light of prior art which disclosed a spirally wound sheet, whereas if read in a broader but still technically meaningful manner in view of the description, the Board held that claim 1 lacks novelty. Specifically, the description included a broad definition stating that “the term ‘gathered’ denotes that the sheet of tobacco material is convoluted, folded, or otherwise compressed or constricted substantially transversely to the cylindrical axis of the rod“, wherein the Board held that the dictionary definition of at least the term “convoluted” includes “coiled”, such that claim 1, when interpreted in light of the definition set out in the description, encompasses the spirally wound arrangement of the prior art. Thus, the question arose of how to interpret the term and whether the description should be used to interpret what is otherwise considered to be a clear claim.

The exact referral questions in G 1/24 (“Heated Aerosol”) are:

1. Is Article 69 (1), second sentence EPC and Article 1 of the Protocol on the Interpretation of Article 69 EPC to be applied on the interpretation of patent claims when assessing the patentability of an invention under Articles 52 to 57 EPC?

2. May the description and figures be consulted when interpreting the claims to assess patentability and, if so, may this be done generally or only if the person skilled in the art finds a claim to be unclear or ambiguous when read in isolation?

3. May a definition or similar information on a term used in the claims which is explicitly given in the description be disregarded when interpreting the claims to assess patentability and, if so, under what conditions?

Comments

The case for referral put forward by the referring Board in T 0439/22 is compelling and shines the spotlight on an large body of conflicting EPO case law on claim interpretation. Indeed, from an outside observer’s point of view, it may seem surprising that after 50 years the EPO is apparently still wrestling with how to handle such fundamental issues of claim interpretation. The Enlarged Board of Appeal (EBA) will now have to decide whether and to what extent the referral questions are admissible. Meanwhile the EPO has issued a press release stating that practice at the EPO will continue as set out in the current guidelines while the referral is pending, highlighting the significance of the case.

Claim interpretation is clearly a point of law of fundamental importance and, based on the divergent case law on the matter, an EBA decision on the matter would be welcome to ensure uniform application of the law. However, it remains to be seen whether the facts of the case are deemed to warrant the specific referral questions – indeed, the EBA have a habit of dodging or narrowing tricky questions such as these (e.g. as they did in G 1/19). As an example in this regard, it might be queried whether answers to all of the referred questions are really required by the referring Board to reach a decision on the specifics of the case, or whether instead if an answer to question 3 (relating to the extent to which a patent can be its own dictionary) would suffice. The issue of whether the description affects the interpretation of what is otherwise considered to be a clear claim is also relevant to the EPO’s (often criticized) current strict guidelines to adapting the description to the granted claims, which also concerns Articles 84 and 69(1) EPC, and for which a referral to the EBA is hotly anticipated from the ongoing appeal case T 56/21.

Mathys & Squire Partners Laura Clews and Chris Hamer were recently interviewed by Protein Production Technology International (PPTI) and provided commentary on various issues relating to intellectual property (IP) and trends in the alternative proteins industry.

In the article, Partners Laura Clews and Chris Hamer outline recent innovations in the protein field, what can be protected, what the market share looks like in the industry, and why it is important to protect your IP.

Click here to read the feature and here to listen to the interview.

Get in touch with our dedicated food and beverage patent and trade mark attorneys here.

Commentary by Partner Andrew White has been featured in Law 360, Solicitors Journal, The Patent Lawyer and The Global Legal Post, discussing how an increase in defence spending is thought to be driving a rise in the number of national security patent filings.

Read the extended press release below.

The number of secret ‘National Security’ patents filed in the UK – those deemed by the government to be critical to defence of the country – has increased 36% from 45 in 2021 to 61 in 2022 *, shows research from Mathys and Squire, the leading intellectual property law firm.

The latest figure represents the highest number of National Security patents filed since 2018. The rise is partly driven by an increase in defence spending especially in technology heavy areas such as drones and cyber-defence. Another major factor in the increase may also be the government’s increasing sensitivity around the publication of military-grade technology.

National Security patents cannot be disclosed publicly as the Government believes that it would impact the security of the country if details were available to hostile groups.

The Impact of the war in Ukraine

The increase in the filings of National Security patents could be due to the development of military technology following Russia’s invasion of Ukraine. 80% of national security patents filed in 2022 were filed by defence companies.

Andrew White, Partner at Mathys and Squire, says: “These patents show how the UK is investing heavily in developing cutting-edge security and defence technology.”

“For national security reasons the Government actively monitors patents related to the defence industry and in some cases restricts the publication of those patents.”

“The UK and other western governments are increasingly concerned about the technical detail of sensitive technology being seen by countries that are not considered friendly. Increased geopolitical tensions and the war in Ukraine has brought that risk to the top of the agenda.”

Out of the 61 National Security patents filed in 2022, filers of UK origin account for 51, representing 84% of all of these patents.

The number of these patents that relate to UK inventions has increased in the last three years, demonstrating the increasing importance of British manufacturers in developing new defence and security innovations. UK inventors accounted for 76% of patents in 2020, which then increased further to 80% in 2021.

Examples of patent applications that can be covered by the national security patents rules include:

*The most recent data available from the Intellectual Property Office (IPO)

Introduction

In April 2023 the EU published draft legislation which, if enacted, would represent a major shift in the regulatory and IP framework for pharmaceutical products in Europe.[1] As well as establishing a unitary SPC (to complement the recently-introduced unitary patent), the proposed legislation alters the regulatory exclusivity periods available for innovative products, and changes the Bolar exemptions. Overall, the proposed legislation strongly favours the generics industry and undercut the rewards available to pharmaceutical  innovators.

Recently, the EU Parliament has approved some significant changes to the provisions which deal with regulatory exclusivities and the Bolar exemption.[2] [3] These changes reduce the negative impact of the legislation on the period of exclusivity, and they reduce the burden on innovators to obtain regulatory exclusivity. The changes do, however, significantly extend the scope of the safe harbour available to generics manufacturers under the Bolar exemption. It also raises a serious question of whether the proposed Bolar provisions are compliant with the EU’s obligations under TRIPS.

Changes to the Proposed EU Pharmaceutical Legislation for Medicinal Products

Changes to Regulatory Protection Periods

The initial proposal for the new Directive would have reduced the duration of data exclusivity for innovative medicinal products from 8 years to 6 years, whilst retaining the additional 2 years of market protection as at present (to a total of 8 years of regulatory exclusivity, as compared to 10 years at present). However, to “encourage innovation” the initial proposal provided various options for extending the exclusivity period, with the longest of these being an extra +2 years of data exclusivity available to certain innovators if the medicinal product is launched in all 27 EU member states. This seemed like an onerous requirement to restore the level of regulatory exclusivity to that which is currently provided.

In the latest changes, the period of data exclusivity for innovative medicinal products is increased to 7.5 years from the date of grant of the MA, and there is no longer any exclusivity benefit from launching in all EU member states.[4], [5] There are also additional periods of data exclusivity available for:

  1. products which address an “unmet medical need” (+12 months, up from 6 months in the earlier proposal)[6],
  2. medicinal products containing a new active substance, where the clinical trials supporting the initial MA application use a relevant and evidence-based comparator (+6 months, the same as the earlier proposal),[7] and
  3. research collaboration with public entities such as university hospitals (+6 months, newly added as compared to the earlier proposal)[8].

The total period of regulatory data exclusivity may not exceed 8.5 years,[9] which means that not all of the above extensions may be applied simultaneously.

In addition to the extra data exclusivity which is available, the amended Directive allows an additional +1 year of market protection to be obtained (i.e., in addition to the 2 years which is already provided) where an additional therapeutic indication is authorised which provides a “significant clinical benefit” over existing therapies.[10] This extension may only be granted once.

Overall, the changes to the regulatory exclusivity periods in the proposed new Directive seem broadly in favour of pharmaceutical innovators – they largely restore the extent of regulatory protection and they remove what would have been very onerous requirements to obtain additional protection (for those entities who were eligible to apply for the longest extensions to the periods of data exclusivity). Seen in this light, the changes which have been approved by the EU Parliament may be seen as balancing what would otherwise have been a heavily generics-friendly shift in EU law.

It may be noted that the latest changes do not alter the situation as regards orphan medicinal products, which are handled under a proposed new medicinal products Regulation.[11] For orphan drugs, the standard period of market exclusivity is to be reduced from 10 years to 9 years, and the existing 2 years of additional exclusivity for completing pediatric studies is to be abolished. However, options for extending the period of exclusivity are available, where the product addresses a high unmet medical need (+1 year) and/or is launched in all 27 EU member states (+1 year). An additional +1 year is also available for each new MA obtained for a new orphan indication of the product (up to an extra +2 years). It remains to be seen whether any further changes are made to these proposals, e.g. whether the reward for launching in all EU states is removed (as it has been in the new Directive).

Changes to the Bolar Exemption

The Bolar exemption available under existing EU legislation provides a limited safe harbour against infringement of patent or SPC rights in connection with conducting “necessary studies and trials” for seeking authorisation of a generic medicinal product.[12] There are, however, significant differences in the implementation of the current Bolar exemption across Europe. The uncertainty caused by the different interpretations currently adopted by the national courts could be resolved through judicial harmonisation, e.g. through rulings by the UPC or the CJEU, rather than by further regulation. Nevertheless, the proposed new Directive, in its initial version, seeks to clarify and expand the scope of the exemption. Thus, the proposed Bolar exemption references “biosimilar, hybrid or bio-hybrid medicinal products” explicitly alongside “generic” products.[13] This appears to clarify that the exemption should not apply to innovative medicinal products. The initial proposal also provides security for Third Party entities that supply the MA applicant with a patented product for use in trials, or who carried out such trials on behalf of the MA applicant (at least within Europe).

In the latest amendments, the EU Parliament has approved some major changes to the proposed Bolar provisions which are weighted heavily in favour of the generics industry. In doing this, they have apparently rejected alternative amendments which would seek to address concerns from pharmaceutical innovators about the initial version of the new Directive. In an Opinion on the new Directive, published in November 2023, the EU Committee on Industry, Research and Energy sets out reasons why the new Bolar provisions as originally proposed could weaken IP protection across Europe and damage confidence in the European IP framework.[14] In particular, that Opinion recommends limiting the Bolar exemption to activities solely related to obtaining MAs.[15] It appears that those proposals were purposefully rejected in the version approved by the EU Parliament.

As amended, the proposed Bolar provision of the new Directive reads:[16]

“Patent rights, or supplementary protection certificates … shall not be regarded as infringed when necessary studies, trials and other activities are conducted for the purpose of:

  1. obtaining a marketing authorisation and subsequent variations;
  2. conducting a health technology assessment as defined in Regulation (EU) 2021/2282;
  3. obtaining pricing and reimbursement approval; and
  4. the subsequent practical requirements associated with such activities.

The activities conducted exclusively for the purposes set out in the first paragraph, shall cover as relevant the submission of the application for a marketing authorisation and the offer, manufacture, sale, supply, storage, import, use and purchase of patented medicinal products or processes, including by third party suppliers and service providers.

This exception shall not cover the placing on the market of the medicinal products resulting from such activities.”

References to biosimilar, hybrid and biohybrid products are removed from Article 85, thus potentially opening the exemption to innovative products which happen to fall within the scope of pending patents. This appears to be consistent with the amended Article 85 not mentioning a “reference medicinal product” which is a term used in the current legislation. This would also be consistent with an amendment made to one of the Recitals in the proposed new Directive which relates to the Bolar exemption, whereby the Recital no longer refers to “the market entry of generics and biosimilars” but instead to “the timely market entry of medicinal products, in particular the market entry of generics and biosimilars”.[17]

The proposed Bolar exemption does not adopt the amendment recommended by the EU Committee on Industry, Research and Energy, namely to state in the preamble that the product is used for the exclusive purpose of performing actions in pursuit of a MA. Whilst the second paragraph of the Bolar exemption characterizes what is covered by “activities conducted exclusively for the purposes set out in the first paragraph”, it is not apparent that this statement necessarily limits the scope of the exemption to activities carried out exclusively for the aforementioned purposes. It is unclear, therefore, which other commercial activities might fall under the Bolar exemption. Given the concerns raised by the EU Committee on Industry, Research and Energy, it is perplexing that the amended Directive does not state in its preamble that the exempted activities must be conducted exclusively for the purposes set out in points (i) to (iiia) of paragraph 1, or otherwise make this point explicit in paragraph 2.

The proposed wording does clearly permit commercial, or at least pre-commercial, activities relating to inter alia manufacture, storage and offer for sale of patented products in the context of authorization and pricing approval. The final paragraph of the Bolar provision clarifies that the exemption “shall not cover the placing on the market of the medicinal products resulting from such activities” but it neither expressly forbids a party from offering to sell medicinal products during the term of a patent or SPC nor expressly prevents a party placing medicinal products on the market after patent or SPC expiry where those products have been made, stored and/or offered for sale during the lawful term of the patent or SPC.

All of the above observations indicate that the scope of the Bolar exemption will be significantly wider under the new Directive.

Is the Bolar Exemption of the New Directive Compliant with TRIPS?

The apparent breadth of the proposed new Bolar exemption, in particular as regards commercial or pre-commercial activities, raises a serious question of whether the EU will comply with its legal obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”) if it enacts the new Directive.

Article 30 of the TRIPS Agreement provides signatories with limited powers to implement an exception to the exclusive rights conferred by a patent, where such an exception “do[es] not unreasonably conflict with a normal exploitation of the patent”. The lawful extent of such an exception was addressed by the WTO panel in Canada – Patent Protection of Pharmaceutical Products, a complaint brought by the European Communities and their member states against proposed legislation from the Canadian government.[18] In that case, the WTO panel systematically reviewed the wording of Article 30 and the intention of the legislature, and held that a Bolar exemption which exempted acts carried out solely for the purpose of seeking regulatory authorisation would be permitted[19], but that the exemption of commercial acts would run contrary to Article 30. In particular, the WTO panel expressly disapproved of the notion that Article 30 would permit the exemption of commercial acts carried out in anticipation of a large-scale pharmaceutical product launch immediately after patent expiry, e.g. an act such as stockpiling.[20] The WTO panel held that a gradual process of market entry after patent expiry is part of the normal patent framework under TRIPS, and that a Bolar exemption cannot be used to flood the market with generic product immediately after patent expiry.   

It is precisely such acts which the new Directive appears to endorse. Looking first to the Recitals of the new Directive, whilst Recital 63 states that “[t]he exemption must be confined to conduct studies and trials and other activities needed for the regulatory approval process, health technology assessment and pricing reimbursement request” and that “there can be no commercial use of the resulting final medicinal products obtained for the purposes of the regulatory approval process”, the indication in Recital 64 that the Bolar exemption “will allow all necessary steps to support timely access to generic medicinal products, inter alia, to conduct studies to support pricing and reimbursement as well as the manufacture or purchase of patent protected active substances for the purpose of seeking marketing authorisations during that period” calls into question how the term “commercial use” is being used. Indeed, Recital 64 goes on to state that the Directive will contribute to “the timely market entry of medicinal products, in particular the market entry of generics and biosimilars on day one of loss of the patent or SPC protection”.[21] In order to enter the market on “day one”, a generic or biosimilar manufacturer must not only have completed all of the regulatory requirements, and sought agreement on pricing or completed offers for tender in at least some countries, but must also have manufactured and stockpiled the product ready to distribute and sell. These acts are clearly considered as being “commercial use” within the ruling of the WTO panel in Canada v EC.

Looking to the language of Article 85 of the new Directive, this may (as noted above) permit aspects of manufacture and storage of a medicinal product which is then placed on the market in large scale immediately on patent expiry. Such a situation is expressly identified in Canada v EC as failing to be compliant with Article 30 of the TRIPS Agreement. The new Directive goes further than this, however, and also permits tenders or offers for sale that may occur during the pricing and reimbursement approval process. Obtaining pricing and reimbursement approval at least represents an implicit offer to sell a medicinal product in many countries, and in some other countries it can involve an explicit offer to sell or even sale of the product. “Offering for sale” and “selling” are two fundamental patent rights protected under Article 28 of the TRIPS Agreement and the reasoning set out by the WTO panel in connection with stockpiling arguably applies equally to any commercial or pre-commercial offer for sale. As such, the exception under part (iii) of Article 85, and the recital of “offer” and “sale” in paragraph 2 of Article 85 (insofar as it relates to pricing and reimbursement approval), would also fail to be compliant with Article 30 of the TRIPS Agreement.

Summary

The initial version of the proposed new Directive significantly reduced the amount of data exclusivity available and set onerous requirements for innovators to extend the exclusivity period. In the latest changes, the EU Parliament has approved a version which relaxes those requirements and largely restores the amount of regulatory exclusivity which is available. In this respect, it dials back the heavily pro-generic stance which was apparent in the initial version.

The changes made to the proposed Bolar exemption, however, provide for a wider exclusion from infringement which appears to swing the pendulum back in favour of the generics industry. Not only are new products arguably within the scope of the safe harbour, but there is also a lack of clarity around which other activities, including commercial activities, would be permitted during the term of patent or SPC protection. In particular, the wording of the new Directive does not expressly forbid that products manufactured or stored under the Bolar exemption are placed on the market on “day one” after patent or SPC expiry. Furthermore, the extension of the safe harbour to activities conducted in the process of seeking pricing approval undercuts another commercial activity (offer for sale) which would otherwise be protected by a patent or SPC. Absent an EU-wide mechanism to adjudicate when any given medicinal product comes off-patent (i.e., a mechanism to help promptly and finally determine “day one” before it occurs – thereby providing well-needed certainty not only to the pharmaceutical industry, but also to patients, stakeholders and the public at large), the proposed pricing and reimbursement exemption may encourage generics manufacturers to offer a product for sale at an early stage when patent or SPC protection is still pending – this would be contrary to the interests of rights holders, of member states and of patients. The proposed Bolar exemption may thus be unworkable and fail to achieve its intended aims.

Finally, the extent to which the Bolar exemption has been widened merits an investigation of its compliance with Article 30 of the TRIPS Agreement. The jurisprudence which the EU itself (in an earlier guise) helped to develop sets limits on the extent to which Bolar exemptions may be defined; those limits are arguably exceeded by the new Directive as regards both the potential for stockpiling and the proposed pricing and reimbursement exemption.

If the Bolar exemption is considered as a ‘grand bargain’ between innovators and generics, under which generics can perform studies necessary for regulatory approval in advance of patent expiry, and in exchange for which innovators are provided additional term of exclusivity (e.g. by way of SPC protection), then the proposed new Directive rewrites that bargain in favour of an earlier market entry of generics without offering any compensation for innovators. This is particularly problematic in a regulatory environment where there is no clear determination of “day one” before it occurs. Overall, therefore, while the balance has shifted, the new legislation still looks to represent an erosion of the protections currently afforded to the innovator pharmaceutical industry and it raises serious questions of non-compliance with the EU’s international legal obligations.

Click here to download a PDF version of the article.

[1] The main changes are summarized by Creemer et al., Pharm Pat Anal (2023) 12(6):249-252

[2] The initially proposed Directive is COM(2023)192, “Proposal for a Directive of the European Parliament and of the Council on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC”, published 26 April 2023.

[3] The adopted text of the amendments to the Directive has reference T9-0220/2024 and is dated 10 April 2024.

[4] Article 81(1) of the new Directive as amended (Amendment 199 of T9-0220/2024).

[5] Articles 81(2)(a) and 82 of the new Directive are deleted (Amendments 200 and 207 of T9-0220/2024).

[6] Article 81(2)(b) of the new Directive as amended (Amendment 201 of T9-0220/2024).

[7] Article 81(2)(c) of the new Directive (not amended).

[8] Article 81(2)(ca) of the new Directive (newly added by Amendment 202 of T9-0220/2024).

[9] Article 81(3)(a) of the new Directive (newly added in Amendment 206 of T9-0220/2024).

[10] Article 80(2)(a) of the new Directive (newly added in Amendment 196 of T9-0220/2024). Note that the initial version of the new Directive provided a +1 year extension to the period of data exclusivity in these same circumstances (former Article 81(2)(d) of the new Directive, as deleted by Amendment 203 of T9-0220/2024).

[11] COM(2023)193, dated 26 April 2023. See especially Articles 71 and 72.

[12] Article 10(6) of Directive 2001/83/EC (in its current form).

[13] Article 85(a)(i) of the new Directive (newly added in Amendment 211 of T9-0220/2024).

[14] 2023/0132(COD): “DRAFT OPINION of the Committee on Industry, Research and Energy for the Committee on the Environment, Public Health and Food Safety on the proposal for a directive of the European Parliament and of the Council  on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC (COM(2023)0192 – C9-0143/2023 – 2023/0132(COD))”.

[15] 2023/0132(COD) at Amendments 13 and 14, and their corresponding “Justifications”.

[16] Article 85 of the new Directive, as amended by Amendments 209-215 of T9-0220/2024.

[17] Recital 64 of the new Directive (Amendment 47 of T9-0220/2024, emphasis added).

[18] See the decision of the panel in WT/DS114/R, 17 March 2000 (“Canada v EC”).

[19] See Canada v EC, sections 7.45-7.50.

[20] See Canada v EC, sections 7.35-7.36.

[21] Recital 64 of the new Directive (Amendment 47 of T9-0220/2024 with emphasis added), noting that the definition of “day one of loss of patent or SPC protection” is undefined in the new Directive.

Mathys & Squire attorneys: David Hobson, Martin MacLean and Nicholas Fox have filed a Petition for Review on behalf of Ipsen Bioinnovation asking the European Patent Office’s (EPO) Enlarged Board of Appeal to set aside a decision which resulted in the revocation of Ipsen Bioinnovation’s patent EP 2677029.

A Petition for Review is an exceptional remedy which enables a party to overturn a decision of an EPO Board of Appeal. The success rate for Petitions for Review is notoriously low, with fewer than 5% being successful. This is because Petitions for Review can only be based on very specific grounds and there is an obligation on parties to bring issues to a Board’s attention at a hearing. Failing to do so renders a Petition for Review inadmissible unless the circumstances are such that an objection could not have been raised during the appeal proceedings.

Unusually, valid grounds for a Petition for Review appear to have been made out in the present case.

Background to the case

EP 2677029 was opposed as allegedly being invalid on the grounds of added matter, lack of sufficiency and lack of inventive step. At first instance, the added matter objection was rejected. However, the allegation of lack of sufficiency was upheld. No ruling was made on inventive step.

Ipsen Bioinnovation appealed.

When responding to the Grounds of Appeal, in addition to asking the Board of Appeal to uphold the Opposition Division’s finding of lack of sufficiency, the respondent also asked the Board to overturn the Opposition Division’s decision that the claims of Ipsen Bioinnovation’s Main Request did not add matter. This argument gained traction with the Board of Appeal, and in a Preliminary Opinion, issued by the Board a few weeks before a hearing was scheduled, the Board indicated that they were of a preliminary view that three of the dependent claims in the Main Request contained added matter.

Mathys & Squire responded by filing arguments to the contrary and in addition, submitted two additional auxiliary requests into the proceedings which deleted these dependent claims, noting that such claims could not have been filed with the original appeal because the Opposition Division had previously found in Ipsen Bioinnovation’s favour.  Mathys & Squire further noted that the deletion dealt fully with the added matter objections, did not raise any new issues, and did not in any way shift the focus of the appeal which, from the beginning of the case, had been the issue of sufficiency.

Fundamental violation of the right to be heard

At Oral Proceedings, after initially rejecting an added matter attack against claims 1 and 3 of the Main Request, the Board ruled that dependent claims 2 and 4 of the Request added matter. The Board then proceeded to refuse to admit the requests deleting these claims into the proceedings and revoked the patent. No explanation for the refusal to admit the auxiliary requests which deleted the dependent claims alleged to add matter was given at the oral hearing itself.

When the Board’s written decision was issued, it became apparent that the Board had departed from previous EPO case law which would have admitted the requests deleting the relevant dependent claims into the proceedings.

Starting with the decision in T1480/16, many Boards[1] have ruled that deleting dependent claims (particularly when such a deletion does not result in a shift of the focus of a case) is merely a restriction of the scope of an appeal and as such does not constitute an amendment of an appellant’s case. Under such an interpretation of the law, such a request can be made at any time during appeal proceedings and a Board does not have a discretion to refuse the request merely because it is submitted after parties have been summoned to Oral Proceedings.

A second line of case law has taken a different view, holding that the deletion of dependent claims does constitute an amendment of a party’s case. This means that a party has to establish “exceptional circumstances” that justify the admission of a request. However, invariably this has been held to satisfy the “exceptional circumstances” test for admission whenever a request has related solely to the deletion of dependent claims which:

In the present written decision, it became apparent that the Board had declined to follow either of these approaches and instead had decided to refuse to admit the amendments on the ground that they did not address the Board’s concerns relating to sufficiency of disclosure; a ground that had never been discussed at the Oral Proceedings.

Basing a decision on a ground on which a party has not had the opportunity to present comments is a clear breach of a party’s right to be heard under Article 113 EPC and constitutes grounds for a Petition for Review. Further, as there was no prior indication that the Board would depart from the previous case law and that the Board required arguments on sufficiency to be presented, it was not possible to bring this breach to the attention of the Board at the hearing itself.

David Hobson, commented: “Our client Ipsen clearly suffered an injustice here. I recall my surprise at the hearing that our claim requests were not admitted given that: (i) they unquestionably addressed the added matter issue; and (ii) our position was supported by well-established EPO case law. It was only upon receipt of the decision that the underlying reasoning of the Board of Appeal became clear. I could not have guessed at the time that Ipsen’s right to be heard had been violated and that a consideration of sufficiency was central to the Board of Appeal’s refusal to admit the claim requests. We are hopeful that the Petition for Review will put right this wrong.”

Martin MacLean commented: “The post-grant proceedings in relation to this patent have been as unconventional as I have experienced in 25 years of practicing as a European Patent Attorney. The whole purpose of Oral Proceedings is to give patentees the opportunity to be heard prior to a Board of Appeal ruling on the validity of a patent. When issuing their decision to revoke this patent, the Board must have been aware that questions of sufficiency had not been discussed. The Board’s decision to revoke this patent is therefore clearly unsafe and should be overturned.”

The case is proceeding as case number R14/24.

[1]  For example in: T914/18, T995/18, T1857/19, T884/18, T565/16, T981/17, T1792/19 and T2201/19.

[2] See for example T853/17, T306/18, T682/16, T1224/15, T853/17, T306/18, T884/18, T494/18 and T2920/18.

Mathys & Squire is pleased to be ranked as a leading European patent law firm by the Financial Times (FT) in their 2024 report.

Mathys & Squire has also been highlighted in five specialised areas of industry expertise: ‘Biotechnology, Food & Healthcare‘, ‘Chemistry & Pharmacy‘, ‘Electrical Engineering & Physics’, ‘IT & Software‘, and ‘Mechanical Engineering.’

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Mathys & Squire is thrilled to be ranked in the 2024 edition of IAM Patent 1000: The World’s Leading Patent Professionals . IAM is known for being the definitive resource outlining word-class private practice patent expertise, and conducts extensive qualitative research to identify leading firms and individuals based on their abilities, market presence, and the complexity of their work. Only those with exceptional skills and deep insights into patent matters are featured in the directory.

In addition to our firm ranking, a record number of Mathys & Squire attorneys have been recognised as ‘Recommended Individuals’. Partners Paul Cozens, Stephen Garner, Anna Gregson, Chris Hamer, Dani Kramer, Alan MacDougall, Martin MacLean, James Pitchford, Juliet Redhouse, Michael Stott, Craig Titmus, Andrew White and Consultant Partner Jane Clark have all maintained their rankings. We are also pleased to see Partners Philippa Griffin and Nicholas Fox ranked for the first time.

Mathys & Squire has been recognised as a ” real industry leader that provides a very high level of service and support. It has a real breadth and depth of technical understanding paired with European legal expertise and experience dealing with legal systems elsewhere.” Our team have also been praised for their ability to “collaborate and communicate effectively with clients and each other to efficiently manage global portfolios, coordinate patent strategies, advise on FTO matters and represent patrons in proceedings at the EPO. They keep up to date with commercial developments to provide proactive and cost-effective advice, and always make themselves available to answer questions, providing clear and concise summaries.”