The UK Court of Appeal recently issued a judgment concerning late payment of SPC fees for the product “ranibizumab”, which is an active ingredient of Genentech's medicine “Lucentis” for age-related macular degeneration. The SPC was granted to Genentech in 2007 for a period expiring in January 2022, provided that the annual fees required for the SPC were duly paid.
This case is unusual in that the hearing was held by video conference on 26 March 2020, whist the UK was in a lockdown state due to the coronavirus pandemic. The court was provided access to electronic bundles using Dropbox links and allowed a media representative to sit in on the video conference proceedings, meaning that the proceedings were held in public. Video conference hearings will most likely be the norm for the near future, with the patents court also recently having held a case management hearing on 25 March 2020 via video conference in Illumina Cambridge Ltd v Latvia MGI Tech SIA & Ors.
Under the UK's procedural provisions for SPCs (provided by Section 128B of the Patents Act 1977, Paragraph 5 of Schedule 4A to the Patents Act 1977, and Rule 116 of the Patents Rules 2007), the desired effective period and the associated annual fees for the SPC should be specified in a one-off payment covering the desired period paid before the SPC comes into force. This practice differs from renewal fee payments for patents, which are to be paid annually.
Genentech instructed its SPC service provider, Master Data, to attend to payment of the annual fees for the full available term. However, due to an error, only a desired effective period of 2 years was requested, accompanied by 2 years' worth of annual fees. This had the effect of causing the protection afforded by the SPC to end almost 2 years earlier than intended.
The appellants argued that there was an irregularity in the procedure connected with the SPC procedure and that the UK practice of allowing payment which would result in less than the maximum period of SPC protection was wrong. The appellants argued that Article 13 of the SPC Regulation, and the Patents (Fees) Rules 2007 make clear that there is only one fee which may be paid, namely that for the full extent of SPC protection, and that the Comptroller has failed to notify the applicant that such a fee had not been correctly paid.
The appellants also argued that they should be entitled to pay the additional annual fees together with payment of the paediatric extension fee. A paediatric extension to the SPC term provides an additional 6 months to its duration and requires that a further fee be paid.
The judge disagreed with both of these lines of argument, noting that there was no irregularity in the SPC procedure because an SPC owner is entitled to pay for the SPC protection they desire, which may be less than the maximum available term, following the reasoning in Tulane Education Fund's Supplementary Protection Certificate [2013] EWCA Civ 890; [2014] RPC 10. Additionally, the judge held that allowing late payment of the SPC fees together with a request for a paediatric extension would put an applicant for a paediatric extension in a “uniquely privileged position” as compared with other SPC applicants, and that the only fee that may be paid at the time of a request for a paediatric extension was the fee for the paediatric extension itself.
The judgement shows the importance of ensuring that fees are correctly paid at the right time. The consequences of a lapse during the SPC protection period are very severe, due to high levels of revenue for the patented products generated during the SPC period.
The decision can be found here.
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