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CJEU Declines to Issue Judgment on Squatter SPCs

The CJEU has declined to issue a judgment in C-239/19 (Eli Lilly v Genentech). The case concerned a referral from the UK High Court, requesting clarification as to whether grant of an SPC is precluded if the application is made without the consent of the marketing authorisation holder. In other words, it concerned the validity of so-called "squatter" SPCs. By rejecting the referral as inadmissible, the CJEU ensure that the leading case on this point remains C-181/95 (Biogen). This did not consider the question of "squatter" SPCs directly, but implicitly indicated that a relationship between patent proprietor and marketing authorisation holder is not required for grant of an SPC.

As a consequence, parties may continue to file SPC applications without the consent of the marketing authorisation holder and can reasonably expect them to be granted – at least for now. As reported in our original 4 March 2019 discussion of C-239/19, indirect comments in CJEU decisions including C-493/12 (Lilly) and C-121/17 (Teva) have been interpreted as support for the view that the consent of the marketing authorisation holder should be required. In particular, comments in Lilly have been interpreted as suggesting that an SPC should (as a matter of policy) only be provided to a party carrying out research leading directly to a marketable product, and thus (in effect) to the marketing authorisation holder. As such, it can be expected that this matter will return to the CJEU in future.

Indeed, it may even return to the CJEU in the guise of the exact same dispute between Eli Lilly and Genentech. The CJEU rejected the referral in C-239/19 as "manifestly inadmissible" essentially on procedural grounds. The UK court had held the underlying basic patent to be invalid, and thus the CJEU's judgment on the SPC Regulation was not required to resolve the dispute. However, should the court in another EU member state find the patent to be valid, or if Genentech should be successful in their appeal against the finding of invalidity in the UK, then a new referral to the CJEU will be possible.

Industry will continue to watch with interest.