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No More Squatter SPCs? High Court Refers Question to the CJEU

In a judgment handed down on 1 March 2019 Mr Justice Arnold has referred the following question to the CJEU:

"Does the SPC Regulation preclude the grant of an SPC to the proprietor of a basic patent in respect of a product which is the subject of a marketing authorisation held by a third party without that party's consent?"

The question arises in the context of Genentech's application SPC/GB16/056 for an SPC to Lilly's ixekizumab (Taltz®), based on Genentech's patent EP1641822 and Lilly's marketing authorisation.

The referral here is surprising in that many would have considered the matter to be settled. Although perhaps an unintended consequence of the framing of the SPC Regulation, it has largely been accepted by national patent offices that the patent proprietor and the marketing authorisation holder may be different. This has simplified partnerships in which the patent and the marketing authorisation are obtained by separate entities, which then co-operate to file SPC applications without needing to supply any evidence of their relationship. More controversially, however, it has enabled so-called "squatter" SPCs such as that applied for by Genentech – where the parties are clearly not in co-operation.

The leading CJEU case on this point is usually taken to be 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. More recently, however, indirect comments in CJEU decisions including C-493/12 (Lilly) and C-121/17 (Teva) have been interpreted as supporting the opposite view. 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.

Taken as a whole, Mr Justice Arnold considered there to be sufficient ambiguity in the matter to merit referring a direct question to the CJEU. The industry will be watching the outcome with interest.