Upgrading the single market: updating the Bolar exemption

December 2015

We have previously reported on the varying ways in which the “regulatory review defence” (better known as the “Bolar exemption”) provided by Directive 2001/83/EC (the "Directive"), has been implemented in the national courts of the EU member states. These differences have led to inconsistent application of Bolar by the national courts. In countries, such as the UK and the Netherlands, where the national Bolar provisions adhere more closely to the wording of the Directive, its application is narrow: it exempts from patent infringement activities conducted only for the purpose of an abridged marketing authorisation application and only for the European Union market. By contrast, in other countries, most notably Germany, national provisions have created a broader exemption: there is no distinction between marketing authorisations for generic and innovative drugs and the exemption applies regardless of whether these authorisations are obtained in Europe or elsewhere. The German and Polish courts have also differed on the application of Bolar to third party supply of APIs.

Bolar exemption

In the Unified Patent Court Bolar will be implemented by the UPC Agreement as one of the "Limitations of the effects of a patent" in Article 27(d). This is effected by reference to the text of the Directive, suggesting, by comparison to the UK and the Netherlands, that it will be narrowly interpreted.

UK law has recently been amended, via the experimental use exemption, to bring it into line with the more generous provisions of the German application of Bolar, which are widely considered to be the 'gold standard' in Europe. As a result, the scope of the Bolar exemption in the UPC (and the Directive) now looks out of step with national developments.

It is in this context that the European Commission has suggested that the Bolar exemption might be updated. The European Commission Communication titled "Upgrading the Single Market: more opportunities for people and business", published on 28 October 2015, says as follows:

    An update of the scope of the EU patent research exemption would lead, among other things, to a smooth supply of active pharmaceutical ingredients throughout the Single Market.

Further explanation is provided in the Commission staff working document accompanying the Commission Communication. This states that:

    …Member States implement the patent research exemption and the 'Bolar exemption' in different ways. On the one hand, some Member States do not allow the supply of active pharmaceutical ingredients (APIs) to EU-based generic manufacturers for the purpose of seeking marketing authorisation. On the other hand, in a number of Member States, it is not certain whether testing in the EU by originators and biosimilars can benefit from these exemptions for the purpose of seeking marketing authorisation in the EU and in non-EU countries, or for meeting emerging regulatory requirements such as those related to health technology assessment. Providing clarity on the application of the EU ‘Bolar exemption’ would also be important with the advent of the unitary patent and its centralised jurisdiction.

The fresh look at Bolar that is being proposed by the Commission is also stated to be necessary "notably in view of the upcoming establishment of the Unified Patent Court, and taking into account best practice implemented in certain Member States." The reference to best practice appears to indicate that the Commission has the broad, German, model for the exemption in mind. If this is correct, as well as greater consistency in the scope of application of the exemption in national courts, the application of Bolar in the UPC (either for unitary patents or non-opted-out European patents) will be broader than the UPC Agreement currently allows.

There is no precise timescale given to any of the ideas outlined in the Communication. The Commission states only that it will come forward with initiatives to consolidate and modernise the intellectual property framework and that it envisages that its overall strategy for upgrading the single market will be launched in 2016 and 2017.

Other initiatives being considered by the Commission include an SPC manufacturing waiver and a unitary SPC.

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Bolar exemption

Paul England

Paul is a senior associate and professional support lawyer in the Patents group based in our London office.

"The reference to best practice appears to indicate that the Commission has the broad, German, model for the exemption in mind."