In December 2013, the Upper District Court Düsseldorf in Germany referred a question of law to the Court of Justice of the European Union (CJEU) about the interpretation of the EU Directive 2001/83/EC (amended by Directive 2004/27/EC) related to medicinal products for human use. It deals with balancing the rights between an originator as a holder of a basic patent or SPC of a drug compound on the one hand, and the generics industry on the other hand seeking marketing authorization of the generic product of the same drug compound already during the lifetime of the patent/SPC in order to start commercial use thereof right after lapse of the patent/SPC protection.
It is undisputed in Europe that, based on Art. 10(6) of the mentioned EU Directive and its implementation into national laws throughout the EU, a generic company is allowed to perform marketing authorization studies during the lifetime of a patent/SPC covering the product. Such a marketing authorization privilege exempts from infringement. Yet, in today's practice in the pharmaceutical industry, it is commonplace that a generic company itself does not produce the active compound (API); the API is normally manufactured and delivered by a third party – the API supplier who does not himself actively take part in the marketing authorization procedure, but rather possesses a Drug Master File (DMF) relating to the manufacture of the active substance.
A corresponding situation did apply to the present case. The Defendant, an API supplier, has offered and delivered a certain amount (in separate portions up to a total of 30kg) of an active substance (solifenacin) to a generic company, and only the latter performed the necessary marketing authorization tests (bioequivalence studies).
The lower instance court regarded the API producer and supplier as not being covered by the marketing authorization privilege under such circumstances, and consequently found this third party to infringe the patent (distinct from its customer, the generic company performing the studies). In particular, the first instance court held that, for a third party to obtain a privileged status, it is required that it is their own personal intention to carry out trials or studies. It would not yet suffice that the third party is merely aware of its customer's intention to carry out corresponding acts. The third party needs to be in a position of a co-organizer of the trials. As noted above and as it was here, this is normally not the case.
Questions referred to the CJEU and the Upper District Court's Preliminary View
The Upper Düsseldorf Court has disagreed to the narrow interpretation of the marketing authorization privilege of the first instance and has referred the case to the CJEU. In the higher court's opinion, commercial third party acts of delivery are in principle also subject to the marketing authorization privilege. The questions referred to the CJEU shall now clarify the scope of the marketing authorization privilege throughout Europe. Main questions raised to the CJEU are:
Are acts of delivery also excluded from patent protection even if these are done purely for commercial reasons, yet given that the receiving generic company intends to use the product for studies/trials to obtain marketing authorization? If so, which requirements need to be met by the API producer (third party): Does the third party have to be aware of its customer's intended privileged use? Does it have to ascertain with the generic company that this is the case? Is it sufficient that the third party can rightly assume that this is the case when judging all of the circumstances? Is the third party obliged to take separate precautions to ensure that its customer actually uses the active substance for privileged trials only?
In its decision of December 2013, the Upper Düsseldorf Court has given its own guidance on some of the relevant prerequisites for the API supplier to fall under the privilege:
In addition, in the court's view the third party (API supplier) himself should take precautionary measures in order to avoid non-privileged use. In the case of merely offering a substance, in general it suffices to clearly indicate that the product will be delivered in quantities adequate for, and merely for the purpose of, marketing authorization studies. In case of delivery, the third party and the customer should regularly enter into an agreement of use that is subject to an adequate contractual penalty. In individual cases with particular circumstances, other measures might be required.
It remains to be seen whether the CJEU confirms this preliminary opinion of the court.
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As announced in our circular letter in October 2013, the Administrative Council of the European Patent Office (EPO) has made a decision about additional fees for divisional applications (second or any subsequent generation) and further increases of fees, as a part of the new Rules relating to fees. The decision has been made on December 13th 2013 and will become effective on April 1st 2014.
As already reported in October, an additional fee for European divisional applications will be charged in addition to the application fee. The amount of the additional fee depends on the generation relationship between divisional application and parent application.
The additional fee for divisional applications will be for the
For divisional applications of the first generation, no additional fee will be charged.
Due to the transitional provisions, the additional fee for divisional applications of the 2nd or any subsequent generation, which are filed on April 1st 2014 or later, will become obligatory.
Most of the fees of the EPO will be increased from April 1st 2014 as well, on average by approximately 4.5%. However, the fee for appeal will be increased even by 50% (now: EUR 1240, in future: EUR 1860).
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We will be happy to assist you with all questions or concerns regarding this topic.
Contact: Jürgen Feldmeier