In the UK, a recent decision of the Patents Court highlights the importance of ensuring that applicants for supplementary protection certificates ("SPCs") file the correct fee within the time permitted as failure to do so may lead to early expiry of the SPC.
The correct fee for an SPC in the UK is calculated according to the number of years of its duration, but paid upfront in one lump sum. The duration of the SPC granted to Genentech for ranibizumab (marketed as "Lucentis") was almost four years but Master Data Center (Genentech's patent administration company) in error calculated and paid only the sum for a two year term.
The question of whether this could be corrected reached the High Court of England and Wales (Patents Court), which issued its judgment in March 2020: Master Data Center, Inc (and Genentech Inc) v The Comptroller General of Patents  EWHC 572 (Pat). The outcome was that the error had both shortened the term of Genentech's SPC to the two year term paid for, and prevented Genentech from obtaining a paediatric extension to its SPC.
Some background on the law regarding SPCs
An SPC is a form of intellectual property that extends a patent term in respect of pharmaceutical or plant protection products in qualifying circumstances, for up to a maximum duration of five years. SPCs are governed by EU regulation - for pharmaceuticals this being Regulation 469/2009 (the "SPC Regulation") - and national implementing legislation. They may be sought from and granted by national intellectual property offices on a state by state basis.
Further, Regulation 1901/2006 (the "Paediatric Regulation") enables a six month extension of an SPC where necessary paediatric studies have been undertaken.
A granted SPC is therefore a national right, albeit governed in part by EU legislation. Certain requirements on procedural aspects, such as the payments of fees, are left to national law.
The judge summarised the key legal provisions as follows:
- EU Member States can decide whether or not they want to require up front application fees and/or annual fees for SPCs and if so in what amount (Articles 8(4), 12, 19 of the SPC Regulation);
- The duration of an SPC is determined by Article 13 of the SPC Regulation, and the situations in which an SPC may lapse is determined by Article 14;
- In the UK, an SPC does not take effect unless the relevant fees are paid in time. By "in time" the judge was referring to the prescribed period which starts 3 months before the start date of the SPC and ends at the start date of the SPC (if the certificate is granted before that 3-month period, which it usually will be) or in the 3 months period beginning when the SPC is granted (if the certificate is granted later) - paragraph 5A of Schedule 4A of the Patents Act 1977 (the "Act") and rule 116(2) of the Patents Rules 2007 (as amended) ("Patents Rules");
- The relevant payment is the "prescribed fee", which is determined by rule 6(2) of the Patents (Fees) Rules 2007 (as amended) ("Patents (Fees) Rules"). The prescribed fee is calculated according to when the certificate expires relative to the start date. It is paid once and not every year;
- The comptroller has to send a notice to the applicant containing certain information (including "the prescribed fee due") (rule 116(4) Patents Rules);
- The prescribed fee must be paid and accompanied with Patents Form SP2. Once the certificate has taken effect no further fee may be paid to extend the term, unless an application for an extension is made under the Medicinal Products Regulation (rule 116(5) Patents Rules); and
- If the fee is not paid when it should be, the comptroller has to send a reminder within 6 weeks of the end of the relevant period (rule 116(6) Patents Rules).
Rule 6 of the Patents (Fees) Rules provides that the fee payable is:
Where the certificate expires during the period of one year beginning with -
- the start date, the fee is £600;
- the first anniversary of the start date, the fee is £1,300;
- the second anniversary of the start date, the fee is £2,100;
- the third anniversary of the start date, the fee is £3,000; or
- the fourth anniversary of the start date, the fee is £4,000.
What had happened with Genentech's SPC
Genentech applied to the UK IPO for an SPC in respect of ranibizumab in February 2007. The SPC was granted on 17 July 2007.
On 5 January 2018, the UK IPO wrote to Genentech's patent agent stating that Genentech's SPC would take effect at the end of the lawful term of the basic patent, on 03 April 2018. The letter continued:
"The maximum period of duration of the certificate in accordance with Article 13 will expire on 23 January 2022, therefore the period is made up of 4 effective years as defined by Fees Rule 6(2), for which the prescribed fees are:
- for first year or part thereof £600
- for second year or part thereof £700
- for third year or part thereof £800
- for fourth year or part thereof £900
- for fifth year or part thereof £1000"
Genentech's instructions to Master Data Center (MDC) were that the annual fee should be paid for the maximum available term of the SPC, and that the expiry date of the SPC was 23 January 2022.
MDC proceeded to inform the UK IPO that Genentech wanted the period to be effective for "2 years" and that the amount of annual fee was "£1300", which it duly paid. MDC adduced evidence stating that this was done in error.
The UK IPO subsequently refused to permit MDC to make up the shortfall, and refused Genentech a paediatric extension for which the necessary work had been undertaken, a decision that was confirmed by the UK IPO's Hearing Officer. Genentech and MDC appealed to the Patents Court.
The arguments and outcome in the Patents Court
MDC complained that the UK IPO's letter had not specified the exact amount of the prescribed fee for the full duration of the SPC and argued that it was not permissible for the UK IPO to offer the applicant for an SPC anything other than the full duration. Had the UK IPO sent a reminder, MDC would have paid the shortfall, and payment of the additional amount should be permitted under rule 107 of the Patents Rules, which permits correction of irregularities in procedure, attributable at least in part, to any default, omission or other error by the patent office.
MDC argued that the Hearing Officer had fallen into error by interpreting the SPC Regulation as allowing an applicant for an SPC to choose a duration of their certificate for a period that is shorter than the maximum term.
The judge however agreed with the UK IPO that while there can only be one 'duration' for a granted SPC, an SPC may 'expire' for various reasons including surrender and failure to pay the annual fee in time.
In reaching this conclusion, the judge considered the Court of Appeal's judgment in Tulane Education Fund v Comptroller  EWCA Civ 890, in which the upfront fee was held to be an annual fee. In Tulane the court also noted that an applicant "may elect to take the certificate for a shorter period and, if he does so, he will only pay a fee in respect of those years for which he has elected".
MDC tried to argue that this statement was obiter and not binding but the judge did not agree. He held that it makes clear that the fees set out in rule 6 are annual fees, payable upfront and concluded that:
- if the prescribed fees are annual fees, then it must be open to a patentee to elect to pay only for a period he desires;
- it therefore was and is open to the UKIPO to give an applicant the option to pay for a period shorter and only in respect of the years selected;
- having the alternative option to surrender, does not affect that conclusion;
- although the UK is unique in its approach, this does not affect this conclusion; and
- there was therefore no irregularity for the purpose of rule 107.
Genentech argued that under section 117 of the Act, relating to the correction of errors in patents and applications or any document filed in connection with a patent or application, it should be permitted to correct the relevant form and pay the appropriate fee. However, the judge considered it established law that section 117 cannot be used to circumvent a specific mandatory provision, in this case rule 116(5). The fact that on previous occasions of errors by MDC the UK IPO had pointed out the error to MDC, enabling MDC to correct it, did not point to some form of UK IPO practice, merely a practice of repeated mistakes by MDC.
Genentech also argued that rule 116(5) of the Patents Rules allowed further annual fees to be paid if an application for a paediatric extension was made, thereby extending the SPC to its maximum term. However, the judge concluded that the applicant for a paediatric extension is only permitted to pay for the paediatric extension itself. He did not see why SPC holders entitled to a paediatric extension should be uniquely privileged in relation to unpaid annual fees of the SPC. Further, the wording of the SPC Regulation was clear that a paediatric extension only made it possible to extend the maximum duration of an SPC, not some other, shorter, elected time period.
Finally, in a separate judgment ( EWHC 601 (Ch)) the judge refused permission to appeal to both MDC and Genentech. With Genentech's SPC set to expire on 2 April 2020 any application for permission made to the Court of Appeal would therefore need to be expedited.
SPCs can be the most valuable form of intellectual property protection for an invention. Administrative formalities therefore warrant very careful management by individuals who are fully informed of the relevant national rules and procedures, which differ between the different countries within the SPC regime. In the UK, compliance requirements for SPC fee payments are strict. Don't be caught out!