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October 2016

After the United Kingdom's decision on 23 June 2016 to leave the EU, much of the discussion about the impact of 'Brexit' on intellectual property rights in the life sciences sector has focussed on patents. The reason for this is Brexit's effect on the much anticipated opening of the Unified Patent Court and the coming into force of the unitary patent. Aside from these important issues, the existing patent system in Europe, which is governed by a non-EU treaty, the European Patent Convention, will be largely unaffected by Brexit.

What has been less noted, is the potential impact of Brexit on forms of exclusivity associated with patents and the marketing of medicinal products in the UK. In particular, Supplementary Protection Certificates ("SPCs"), paediatric extensions to SPCs and market exclusivity for orphan medicinal products. This article draws attention to these three exclusivity rights, which should be watched during the Brexit process.

SPCs

The system by which the term of exclusivity of a pharmaceutical product can be extended by an SPC after patent expiry is governed by Regulation 469/2009 (“SPC Regulation”). Due to the delays often incurred when obtain marketing authorisation ("MA"), pharmaceutical companies bringing a product to market frequently lose the full benefit of exclusivity provided under the patent term. The purpose of obtaining an SPC is to mitigate these circumstances by compensating for such delays. Depending on the period of exclusivity the product has had on the market before patent expiry, an SPC can provide up to five years further monopoly protection.

Paediatric extensions to SPCs

On top of the additional period of exclusivity that may be allowed under an SPC, as described above, Regulation 1901/2006 (the "Paediatric Regulation") can allow a further extension of the SPC by six months. This additional protection is available when a new MA for a medicinal product, or any application for the authorisation of new indications of an existing product, includes results obtained in compliance with an agreed paediatric investigation plan.

Market exclusivity for Orphan Medicinal Products

Drugs treating rare diseases have correspondingly low sales. Therefore, to encourage companies to develop such drugs, the Orphan Medicinal Products Regulation 141/2000 provides, amongst other incentives, a ten year period following the grant of an MA of an orphan medicine during which no directly competing or similar product can be placed on the market.

Why might these rights be affected?

These three rights are potentially affected by Brexit, because they are all provided by EU Regulations. A Regulation is a legislative instrument that has 'direct effect', which means that it is automatically applicable in all the EU Member States as soon as it comes into force, without the need for national implementing legislation. This is in contrast to Directives, which are legislative instruments that set out harmonising standards for national law, but are not themselves directly effective. Instead, Directives must be enacted by the Member States in national legislation in a manner open to their own discretion.

For example, the Human Medicines Regulations 2012 No 1916, implements, in the UK, Directive 2001/83/EC, which relates to medicinal products for human use. Whilst statutory instruments such as this one may make reference to parts of the underlying Directive for certain details and possibly require amendment of sections dealing with other European legislation, as UK legislation they will remain in force after the UK leaves the EU. However, after the much discussed period of two years from the triggering of Article 50 TEU, European law will no longer apply to the UK, unless an extension can be agreed. The UK will no longer be bound by Regulations after this period.

If the rights afforded by the three Regulations above are to be continued, they will need to be implemented in to UK law before the two year (or longer) period runs out, or replaced by similar legislation. The British Prime Minister announced on 2 October 2016 that, to ensure a smooth transition immediately after Brexit, a Great Repeal Act will come into force to implement the majority of EU law, including Regulations, into UK law.

The extent to which the content of the above Regulations will be amended, if at all, when it enters into UK law, or subsequent to Brexit, remains to be seen. However, this process may provide an opportunity for positive changes. In particular, the SPC Regulation has been widely criticised by industry, practitioners and judges alike in recent years. Brexit may therefore provide an opportunity for the UK to improve on these particular rights. We will be watching how these issues develop.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

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