IP Expert Talk: Supplementary Protection Certificates in the system of the Unified Patent Court

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Visit our dedicatd UPC page. Study on the legal aspects of Supplementary Protection Certificates in the EU](https://www.ip.mpg.de/en/research/research-news/study-on-supplementary-protection-certificates.html) Call for statements regarding initiative by the European Commission

Finally, the Unified Patent Court (the UPC) could open its doors in April 2023. This new system will not only affect patents but will also have an immediate impact on Supplementary Protection Certificates (SPCs in short). The UPC will provide a new central forum for enforcing and challenging SPCs from day one, while broader changes to the SPC system may also be on the horizon.

But, Axel, let’s start with some background information on SPCs.

Sure. An SPC is a discrete protective right which prolongs the term of protection conferred by an underlying patent – called “basic” patent – for a specific pharmaceutical or plant protection product. This is to compensate for the fact that such products require a marketing authorization prior to their marketing. Obtaining a marketing authorization is often a lengthy process which reduces the time a patentee can actually profit from the exclusivity conferred by their patent.

Currently, an SPC application is filed nationally with the national patent offices, irrespective of whether the basic patent on which the SPC is based is a national or a European patent. The rejection of an application for the grant of an SPC can be appealed to national courts and litigation for enforcement as well as on the validity of a granted SPC is also conducted before the competent national courts.

Now, this will change to some extent under the new UPC system.

Right. As soon as the UPC opens its doors, it will generally have exclusive competence for decisions regarding the infringement and validity of SPCs based on a European basic patent. However, as the term “generally” already implies, there is an exception to every rule: During the transitional period national courts and the UPC are competent to hear and decide cases concerning infringement and validity in parallel, or to put it a little more precisely, national courts may be invoked instead of the UPC.

The examination of applications for SPCs and their grant, however, will (initially) still solely be within the jurisdiction of the national bodies – even after the start of the UPC system.

That means, we will deal with a divided system in which the national patent offices are in charge of granting SPCs, while legal disputes regarding granted SPCs, that is infringement and validity proceedings, are also conducted before the UPC.

That’s true. But as you already mentioned the transitional period, I may add that during this time there is still the possibility to entirely exclude SPCs based on European (basic) patents from the jurisdiction of the UPC by opting out the European (basic) patent. In this case, practice will remain unchanged with national courts dealing with matters of infringement and validity of the SPC.

If you opt out of the UPC system, there is, however, no possibility of opting out a European basic patent and the SPC/SPCs based thereon of the UPC system independently of each other. Rather, all SPCs share the fate of the basic patent on which they are based. This applies to all combinations of different granting phases: If an opt-out was declared for the basic patent before SPCs were granted, the opt-out automatically extends to the SPCs once they are granted. If an SPC is already granted, the opt-out for the basic patent also extends to the SPC granted. Lastly, an opt-out can also be declared for European patents that have already expired in order to exclude the SPC from the competence of the UPC.

Now I could imagine that, since SPCs are usually very valuable for the patent or SPC owner, numerous basic patents will probably be opted out of the exclusive competence of the UPC in order to exclude the risk of central revocation of the basic patent. Therefore, it will possibly take some time until the first decisions of the UPC in legal disputes regarding the infringement or validity of SPCs will be rendered. What do you think, Axel?

Yes, that’s to be expected. However, it should also be borne in mind that owners of patents and SPCs will have the possibility of influencing and shaping the development of the UPC case law – especially at the beginning of the new court system. Thus, a strong SPC – in terms of validity – based on a strong basic patent may actually be an option for the UPC system. This should be reviewed and decided soon, as the sunrise period for opting out of the system will likely start beginning of 2023.

Now, having talked a lot of European patents as basic patents for SPCs, how about Unitary Patents? Can Unitary Patents also serve as a basic patent for SPCs?

Yes, this will be the case. Yet, also with regard to SPCs based on a Unitary Patent, we will have a divided system: While the UPC has exclusive competence for examining the infringement and validity of an SPC based on a Unitary Patent as the basic patent – obviously with no possibility to opt out of the UPC’s jurisdiction –, the national Patent Offices will (at least initially) still be competent for the grant of SPCs based on a Unitary Patent, since the UPCA lacks a provision in this respect.

So, to sum it up for our listeners:

While initially no differences will arise from the new court system regarding the grant of SPCs unless you actively opt out of the system, the UPC will be competent regarding the enforcement and validity challenges of the SPCs – initially in parallel to national courts and following the transitional period, the UPC will have exclusive competence.

More extensive changes to the SPC system are, however, on the horizon. This includes plans for a centralized way of granting SPCs.

Yes, Axel. Thank you for pointing this out.

In a “Study on the legal aspects of Supplementary Protection Certificates in the EU” on behalf of the European Commission, published on May 28, 2018, – we will put the link in the show notes for you – the Max Planck Institute concluded that introducing a unitary grant procedure for SPCs seems reasonable. Following this study, in March 2022, the European Commission suggested the Introduction of a centralized system for the grant of SPCs and issued a call for statements regarding a corresponding initiative. Again, please refer to the show notes for the link. What is conceivable in this respect is a unitary SPC or, at any rate, one single (so to say “unitary”) procedure for the grant of a bundle of national SPCs.

Hence, it remains to be seen whether an SPC with unitary effect will also be created in the future. But in view of the costs associated to the current grant practice and the high administrative effort due to the grant on a national level, a unitary SPC as an actually logical addition to the Unitary Patent indeed seem desirable in my opinion, also with regard to a further harmonization European patent law.