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The EU recently amended its legislation governing Supplementary Protection Certificates (also known as SPCs), establishing a "manufacturing and stockpiling waiver". Like all EU law in force in the UK, this will continue to exist as "retained EU law" when the UK leaves the EU. To ensure that any retained EU law will function effectively after Brexit changes will, however, have to be made.

The "manufacturing waiver" came into force on 1 July 2019, introducing an exception to the general principle that an SPC grants its holder the same basic rights as the patent on which it is based.

The waiver allows third parties to manufacture medicines without permission of the holder of an SPC, provided that such medicines are manufactured either for export to a country outside the EU/EEA, where protection does not exist or has expired, or for storage (stockpiling) during the final six months of the SPC in order to sell it within the EU once the SPC expires.

An SPC provides for an additional five-year period of protection for patented medicines to compensate for delays caused by the compulsory and lengthy testing and clinical trials that medicines require to undergo prior to obtaining regulatory marketing approval.

For more information on SPCs and the manufacturing and stockpiling waiver, please see our previous article on the subject

The manufacturing waiver applies to all applications for SPCs filed after 1 July 2019. As for SPCs applied for before 1 July 2019, which come into force after that date, the waiver will also apply, but only as from 2 July 2022. As for SPCs already ind force on 1 July 2019, the waiver will not be applicable.

In order for the waiver to apply in the UK after Brexit, the Withdrawal Act 2018 was designed to ensure that, to the extent possible, EU law is automatically preserved as "retained EU law" as it is on exit day.

Since, as with all other EU law, the manufacturing waiver is designed to apply within the context of the EU, changes and adjustments are inevitable for the retained EU law to function effectively as UK law, once exiting the EU. Consequently, s. 8 of the Withdrawal Act grants Ministers specific powers to make changes to retained EU law in cases where an issue needs to be addressed to make legislation work properly after exit. The powers to make changes are, however, limited to those changes that are necessary, whereas any extensive changes may be introduced only by primary legislation.

The UK Intellectual Property Office (UKIPO) has given its suggestions for such essential changes in case of a no deal outcome, which may be summarised as follows:

Scope of the waiver
In the current waiver, the maker of the medicines is referred to as being established "in the Union", export is referred to as being to a "third country" and stockpiling is referred to as being for sale in the "markets of Member States".

Once leaving the EU, these terms will no longer apply to the UK. It is suggested that the wording be changed to the effect that, after Brexit, UK-based manufacturers will be allowed to make SPC-protected medicines for export "outside of the UK" or for storage "in the UK" within the last six months of the SPC. In addition, the term "maker" will be limited to someone "operating in the UK".

Whereas the original waiver also covers "related acts" taking place within the EU, such as temporary storage of the product in another Member State, UK law cannot operate on an extra-territorial basis. Therefore, after the exit day, the issue as to whether a "related act" taking place in another country constitutes an infringement must be dealt with in those countries according to their national laws.

The UKIPO therefore proposes that only related acts taking place within the UK should fall within the scope of the UK waiver, thus limiting the scope of the waiver.

Notification and information requirements (safeguards)
Under the manufacturing waiver, the maker of medicines is required to inform both the SPC holder and the national authority in the country where the product will be made (or where related acts will take place) of its intention to rely on the waiver. Unlike the manufacturingwaiver, the UK waiver will only apply to UK SPCs and only to medicines manufactured or other acts taking place within the UK. The UKIPO suggests that the maker only needs to make notifications in advance of making medicines or related acts taking place within the UK.

UKIPO also suggests that the current requirement laid down in article 5(6) of the manufacturing waiver to submit information in a specific form with the relevant national authority be replaced by a reference to a "prescribed" form due to the fact that UK patent law already has its own mechanism for setting out what forms are required for patent and SPC actions.

 

No deal-Brexit consequences for "manufacturing waiver" under Supplementary Protection Certificates

The logo
Under the manufacturing waiver, the manufacturer of medicines  must ensure placement of a specific logo provided with the words "EU export" and the EU emblem on the packaging of any medicines destined for export. When the UK leaves the EU, a different logo is naturally required. Instead of producing a new logo, UKIPO proposes that the packaging set out the export requirement in descriptive terms. The wording will still have to be provided on the outer packaging of the product.

Fees
As a result of the updating of Article 12 of the SPC Regulation, Member States are entitled to charge a fee for the processing of waiver notifications.

According to current UK law, the controller already has the power to charge fees in relation to any services carried out by the UKIPO, including SPCs. The UKIPO therefore finds it unnecessary to create a separate right to set out fees for SPCs after the UK leaves the EU.

Hard Brexit versus soft Brexit
If the UK and the EU come to an agreement on or before 31 October 2019, the UK waiver may take a different form. Yet, it seems likely that the final wording of legislation will in both scenarios be quite similar to the wording proposed by the UKIPO.

Bech-Bruun Comment
At the time of drafting this article, uncertainty still exists as to whether Brexit will take place and whether the parties will arrive at a deal or not. The proposal made is a prudent way of preparing for the unknown. The retained EU law instrument seems to constitute a proper measure, and the proposed changes to specific EU legislation are not surprising as they are obviously necessary for the law to function properly in the UK after Brexit.

From a practical perspective, it may be of interest to distinguish between "related acts" taking place in the UK versus within the EU or a third country, such as, for instance, whether temporary storage in a UK port of products destined for manufacture and packaging in the EU is considered a "related act" subject to separate notification under the waiver. Cross-border manufacturing and the distribution chain may be disrupted.

Bech-Bruun's Life Sciences team monitors the developments within the field and will be available for assistance in relation to pharma-regulatory matters.