UK consults on 'no deal' Brexit SPC waiver law

SPCs, or supplementary protection certificates, serve to extend the life of patents owned by pharmaceutical manufacturers by up to a maximum of five years. The rationale for SPCs is to compensate patent holders for the period of patent protection during which they are prevented from commercialising their products owing to the lengthy drug approval process. Patent protection lasts 20 years but it often takes drugs companies around a decade to develop new medicines and gain marketing authorisation.

Since 1 July this year, SPC waivers will begin to apply under EU law permitting manufacturing and related activities in the EU that would otherwise require consent of an SPC holder where they are undertaken for the purpose of exporting the goods to territories outside of the EU. The waiver will also allow producers of generics or biosimilars to store new products in the EU ready for release on the EU market upon the expiry of an SPC during the last six months that the SPC is valid.

Generic and biosimilar manufacturers must conform to a series of notification and labelling requirements to be eligible for the waiver. The scope of the waiver extends to all SPCs applied for before the new rules came into force but which become effective after 1 July 2019, only from 2 July 2022.

The UK Intellectual Property Office (IPO) said UK manufacturers will continue to benefit from the waiver rights in a 'no deal' Brexit scenario. However, it has confirmed that to achieve this, the EU's SPC manufacturing waiver regulation cannot simply be copied word-for-word into the UK statute book.

Changes are necessary to account for the fact that EU legislation is rooted in terms specific to the EU market and that the UK will no longer be an EU member state in a 'no deal' Brexit scenario, the IPO has said. It has opened a consultation on proposed new UK regulations to address this point. The amendments introduce the concept of a new 'UK waiver' in the law of SPCs.

"We propose that, after a no-deal exit, the legislation would allow UK-based manufacturers to make SPC-protected medicines for export outside of the UK, or, in the last six months of the SPC, for storage in the UK ready for sale on the UK market after the SPC expires," the IPO said.

"We are keen to ensure that the amendments will work in practice for users of the system and to avoid any unintended consequences," it said.

Patent law and life sciences expert Charlotte Weekes of Pinsent Masons, the law firm behind Out-Law, said: "There are some aspects of the EU regulation which are very unclear so it would be great if the consultation can result in some tightening up of the language. Indeed the UKIPO itself provides some examples of 'related acts' connected with the manufacture, export or stockpiling, for example 'temporary storage of product in an export port, or importing ingredients for the manufacturing process'. It is unclear what the latter is intended to cover – many ingredients that might be imported for a pharmaceutical manufacturing process would not infringe any patents or SPCs so this could not be intended to be a 'related act' requiring notification."

"The UK will become the ‘home’ market and ‘third countries’ will be replaced by 'outside of the United Kingdom' in the UK regulations. This should enable UK-based manufacturers to export to EU countries where patent or SPC protection does not exist," she said.

SPCs are provided for under an EU regulation which is directly applicable across the whole of the EU, but they only apply in the EU countries in which they have been applied for and registered.

It is intended that the proposed Patents (Amendment) (No.2) (EU Exit) Regulations 2019 would supplement the existing Patents (Amendment) (EU Exit) Regulations 2019 which have already been approved by the UK parliament. Those regulations, finalised earlier this year, would make changes to areas of patent law, including in respect of SPCs, in a 'no deal' Brexit scenario.

The IPO's consultation is open until 11:45pm on 9 August. The UK is scheduled to leave the EU by 31 October.