Affirmation of UK SPC Annual Fee Structures in Accordance with EU Regulation: Genentech Inc. v. Comptroller General of Patents: England and Wales Court of Appeal (Civil Division)

Introduction

The case of Genentech Inc. v. The Comptroller General of Patents ([2020] EWCA Civ 475) adjudicated by the England and Wales Court of Appeal (Civil Division) on March 31, 2020, revolves around the procedural and substantive aspects of Supplementary Protection Certificates (SPCs) within the UK's patent law framework. The dispute arose when Master Data Center, Inc. (MDC), acting as Genentech's agent, erroneously applied for a two-year SPC instead of the instructed maximum duration, leading to the imminent lapse of the SPC on April 2, 2020.

The central issues pertained to the interpretation of the UK's fee structure for SPCs, specifically whether the prescribed fees constituted annual fees as mandated by the European Union's SPC Regulation. The case examined the compatibility of the UK's national procedures with EU legislation, setting a crucial precedent for future SPC applications and the enforcement of patent protections in the pharmaceutical sector.

Summary of the Judgment

The Court of Appeal, presided over by Lord Justice Floyd, dismissed both appeals filed by Genentech and MDC. The core determination was that the UK's fee structure for SPCs, particularly the prescribed fees outlined in the Patents (Fees) Rules, aligns with the EU's SPC Regulation. The judgment upheld that the UK system appropriately implements annual fees, allowing applicants to elect for shorter SPC durations by paying corresponding fees, and ensures compliance with Article 14(c) of the SPC Regulation, which mandates the lapse of the certificate upon non-payment of fees.

The court rigorously analyzed MDC's contention that the fee structure did not permit the election of shorter SPC terms and that procedural irregularities existed in the notification process. However, referencing the precedent set in Tulane Education Fund's Supplementary Protection Certificate [2013] EWCA Civ 890, the court affirmed that the prescribed fees are indeed annual fees and that the UK's procedural framework does not deviate from EU mandates.

Genentech's alternative arguments regarding the correction of procedural errors and the possibility of a paediatric extension were also dismissed, reinforcing the integrity of the UK’s adherence to the SPC Regulation.

Analysis

Precedents Cited

The judgment extensively referenced the Tulane Education Fund's Supplementary Protection Certificate [2013] EWCA Civ 890, which previously addressed the compatibility of the UK's SPC fee regime with EU regulations. In Tulane, the Court of Appeal had affirmed that the prescribed fees under the UK system qualified as annual fees, consistent with Article 12 of the SPC Regulation. Lord Justice Floyd reiterated this interpretation, underscoring its binding nature on the current case.

Additionally, the court considered principles from R (Kadhim) v Brent London Borough Council Housing Benefit Review Board [2001] QB 955, which delineates the boundaries of binding precedents, particularly regarding assumed versus explicitly decided propositions. However, Lord Justice Floyd concluded that the Tulane precedent sufficiently guided the interpretation without the need to extend Kadhim's principles.

Legal Reasoning

The court's legal reasoning hinged on the alignment of the UK's SPC fee structure with the EU's SPC Regulation. Article 13 of the SPC Regulation prescribes a formula for calculating the duration of an SPC based on the period between the patent application and the market authorization of the medicinal product, reduced by five years and capped at five years. Article 12 permits Member States to impose annual fees but leaves the specifics to national discretion.

Lord Justice Floyd examined the UK's Patents (Fees) Rules, particularly Rule 6 and Rule 116(5), to determine whether the prescribed fees functioned as annual fees. He concluded that:

The fees increase with the SPC’s duration, consistent with the concept of annual fees.
Applicants can elect for shorter durations by paying corresponding fees, validating the annual fee structure.
The prohibition against "topping-up" fees post-application reinforces the necessity for upfront decision-making regarding SPC duration.

The court dismissed MDC's arguments by affirmatively applying the Tulane precedent, rejecting the notion that the inability to annualize fee payments undermined the classification of prescribed fees as annual fees. Furthermore, Genentech's attempts to rectify procedural errors under Section 117 were deemed insufficient, as they conflicted with the specific directives of Rule 116(5) and the broader framework of the SPC Regulation.

Impact

This judgment reinforces the UK's commitment to adhering to EU standards concerning SPCs, particularly in the pharmaceutical domain. By affirming that the prescribed fees constitute annual fees, the court clarified the operational mechanisms for SPC holders, ensuring that the UK’s fee structure remains transparent and in harmony with established EU regulations.

Future applicants for SPCs in the UK can rely on this precedent to understand the necessity of accurately completing fee-related documentation and adhering to prescribed durations. Moreover, the dismissal of attempts to circumvent the fee structure through procedural rectifications sets a clear boundary, discouraging similar challenges and preserving the integrity of the SPC system.

The judgment also serves as a deterrent against misinterpretations of fee structures, emphasizing the importance of meticulous compliance with both national and EU regulations in the realm of intellectual property.

Complex Concepts Simplified

Supplementary Protection Certificates (SPCs)

SPCs are extensions of patent protection specifically tailored for medicinal products. They compensate for the time lost in obtaining regulatory approval, effectively extending the patent's life by up to five years beyond its original expiry date.

Annual Fees

In the context of SPCs, annual fees are payments made each year to maintain the validity of the certificate. These fees are structured to increase with the duration of the SPC and are essential for keeping the certificate in force.

Rule 116(5) of the Patents Rules

This rule stipulates that once an SPC takes effect, no further fees may be paid to extend its term unless a paediatric extension is applied for. Essentially, it prevents applicants from prolonging the SPC beyond the initially elected duration through additional fee payments.

Section 117 of the Patents Act

Section 117 allows for the correction of errors in patent documents, including SPC applications. However, it does not override specific procedural rules like Rule 116(5), ensuring that general correction provisions do not conflict with specialized regulations.

Conclusion

The Court of Appeal's decision in Genentech Inc. v. The Comptroller General of Patents solidifies the interpretation of the UK's SPC fee structure as compliant with the EU's SPC Regulation. By upholding the annual fee classification and dismissing attempts to alter the fee structure through procedural errors, the court ensures that SPCs serve their intended purpose of providing extended patent protection without deviating from established regulatory frameworks.

This judgment underscores the necessity for precision in administrative processes related to patent law and reinforces the boundaries within which SPCs operate. Stakeholders in the pharmaceutical and patent sectors can thus proceed with greater confidence, knowing that the UK's legal system maintains coherence with broader EU mandates, safeguarding the balance between incentivizing innovation and protecting public interest.

Affirmation of UK SPC Annual Fee Structures in Accordance with EU Regulation: Genentech Inc. v. Comptroller General of Patents