As we approach 2025, the pharmaceutical and biotech industries are poised to face significant legal and regulatory changes. Life sciences practitioners must stay vigilant and informed about these developments to navigate the evolving landscape effectively. This article delves into five critical areas that will shape the future of pharma and biotech patents.
Orphan Drug Regulation and Market Exclusivity Rights
Interpreting Market Exclusivity Rights
The Orphan Drug Regulation (Regulation (EC) No 141/2000) has long been a cornerstone in granting market exclusivity rights to pharmaceutical companies, helping to encourage the development of drugs for rare diseases. Yet, recent legal precedents have started to blur the lines of these rights, creating uncertainty about their interpretation and enforcement. The District Munich I’s decision in “Eculizumab II” (21 O 10225/23, GRUR-RS 2024, 31059) has referred several fundamental questions to the Court of Justice of the European Union (CJEU), probing whether the regulation indeed grants subjective civil law rights of market exclusivity.
Traditionally, market exclusivity rights granted under the Orphan Drug Regulation were not seen as subjective rights enforceable in civil law disputes. However, recent cases have increasingly involved these exclusivity rights in litigations formerly centered around patents. The higher engagement with market exclusivity rights has raised questions about whether these rights offer protective legal positions that holders can enforce against third parties in civil litigation. The Court of Appeals Munich’s decision in “Eculizumab I” emphasized this growing ambiguity by rejecting the District Court Munich’s initial stance that the Orphan Drug Regulation constituted a subjective right under Section 823 (1) BGB. This legal battle has reshaped the initial understanding of the regulation’s scope, suggesting it prevents competitors’ drug authorizations rather than directly conferring enforceable rights.
Legal Implications and Emerging Trends
The unfolding legal drama surrounding the Orphan Drug Regulation and its interpretation has engendered significant discussions and speculation within the life sciences community. With the referral to the CJEU, many practitioners and stakeholders are now eagerly awaiting the court’s interpretation, which is expected to provide much-needed clarity and direction. A conclusive interpretation from the CJEU is particularly crucial as it will determine the boundaries and enforcement mechanisms for market exclusivity rights, potentially influencing future legal and regulatory strategies within the pharmaceutical and biotech sectors.
This pending judgment is anticipated to have far-reaching implications, not only influencing future cases but also shaping regulatory policies and commercial practices. If the CJEU confirms that the Orphan Drug Regulation grants subjective rights, it could lead to a surge in litigation involving market exclusivity claims. On the other hand, a ruling that denies these rights may compel companies to rely more heavily on traditional patent protections. Life sciences practitioners must stay ahead of these developments, preparing to adapt their strategies to align with the forthcoming legal landscape. In this context, understanding the nuances of the Orphan Drug Regulation will become increasingly crucial in the competitive and highly regulated world of pharmaceutical innovation.
Supplementary Protection Certificate (SPC) for Combination Products
Criteria for Granting SPCs
Supplementary Protection Certificates (SPCs) are designed to extend the protection period of patented pharmaceutical products, compensating for the time lost during the lengthy approval processes. However, granting SPCs for combination products—those comprising multiple active ingredients—has sparked considerable debate and confusion. Articles 3(a) and 3(c) of the SPC Regulation (Regulation (EC) No 469/2009) have been at the center of this debate, with varying interpretations complicating the application process.
In December 2024, the CJEU addressed this contentious issue, aiming to clarify the criteria under the SPC Regulation. The ruling confirmed that Article 3(c) does not prevent granting an SPC for products comprising two active ingredients, even if one ingredient had a prior SPC or was known during the patent filing. This clarification was significant, as it confirmed that combination products could be eligible for SPCs, thus potentially extending their market exclusivity beyond the original patent term. However, the CJEU also emphasized the importance of Article 3(a), stating that merely mentioning a product in the patent claims is insufficient for SPC protection. The product must be intrinsic to the patent’s actual invention, a determination that requires a detailed examination from a skilled person’s perspective.
Impact on Future Court Interpretations
The CJEU’s December 2024 decision, while providing some clarity, introduces new complexities that will undoubtedly influence future court interpretations of SPCs for combination products. The decision aligns with the overarching framework of the SPC Regulation but necessitates a deeper understanding of the intricate relationship between patent claims and the actual contributions of combination products to the invention. This ruling effectively applies the Teva/Gilead two-step test (C-121/17), requiring both an expressed mention and a genuine contribution to the invention to justify an SPC.
As a result, this decision sets a precedent that will likely lead to ongoing legal challenges and further referrals to the CJEU in 2025 and beyond. Pharmaceutical companies must now navigate these complexities, ensuring that their patent applications and SPC requests are meticulously crafted to meet the new criteria. This evolving legal landscape underscores the importance of strategic patent filing and thorough product development documentation. Companies need to be proactive, adapting their legal strategies to align with the latest interpretations and ensuring that their combination products are robustly protected under the SPC framework.
Unified Patent Court (UPC) – Unanswered Questions
Initial Judgments and Their Impact
The Unified Patent Court (UPC) represents a monumental shift in the patent landscape, offering a single streamlined approach for patent litigation across participating European countries. Since its establishment, the UPC has started issuing judgments that have significant implications for the pharmaceutical and biotech sectors, particularly concerning issues of novelty and inventive steps. Notable cases, such as Nanostring/10x Genomics and Abbott/Dexcom, have provided early insights into how the UPC might approach these complex matters. However, the absence of a well-defined substantive law within the UPC’s framework has left several critical questions unanswered.
One of the most pressing concerns is that the UPC lacks robust principles to address essential issues such as damage calculations, joint liability, and the territorial scope of indirect infringement under Article 26 UPCA. Practitioners and stakeholders recognize the necessity for coherent standards and mechanisms to guide these decisions. Additionally, there is considerable ambiguity around the “plausibility” requirement within the UPC, an element crucial for establishing the validity and enforceability of patents. This uncertainty creates challenges for companies attempting to navigate the UPC’s evolving legal landscape and underscores the need for clearer, more precise guidelines.
Addressing Ambiguities and Developing Standards
As the UPC continues to develop its jurisprudence, the life sciences community is closely monitoring how the court addresses these unresolved issues. Establishing robust mechanisms and coherent principles is imperative for ensuring fair and predictable outcomes. The UPC’s preliminary decisions hint at the development of unique legal standards that may differ from those established by other jurisdictions, such as the European Patent Office (EPO). This divergence accentuates the need for practitioners to stay vigilant and adaptable, continuously updating their legal strategies to align with the emerging trends within the UPC.
Moreover, the evolving legal standards within the UPC are likely to create a dynamic and somewhat unpredictable regulatory environment for the pharmaceutical and biotech industries. Companies must be prepared to engage in ongoing deliberations and adapt their approaches as the UPC clarifies its stance on critical issues. This period of transition presents both challenges and opportunities, as early adopters of the UPC framework may gain strategic advantages by effectively navigating the new system. Ultimately, the UPC’s development will shape the future of patent litigation in Europe, influencing global patent strategies and reinforcing the importance of staying informed and agile in the face of legal and regulatory changes.
Process Patents in an International Context
Cross-Border Process Patent Infringement
Process patents, which protect the methods of creating a product rather than the product itself, present unique challenges, especially when procedural steps are carried out across international borders. Recent legal cases have brought to light the complexities involved in determining patent infringement for cross-border processes. In particular, the District Court Munich I’s decision in “Proof of analytes” on May 17, 2023, delved into whether infringement occurs when some steps of a patented process are performed in Germany and others abroad.
The “Proof of analytes” case involved reagents and procedural steps conducted in Germany, while data processing occurred in the United States. The District Court Munich I held that for domestic infringement to be established, the critical factor is achieving technical success within Germany, regardless of whether some procedural steps occurred outside its jurisdiction. This interpretation contrasts sharply with the Court of Appeals Düsseldorf’s 2017 decision in “Prenatal diagnosis,” which required that the final procedural step take place within Germany to constitute domestic infringement. The pending appeal in the Munich case is particularly significant, as it will set a precedent for how cross-border process patents are treated, an issue of growing importance with the rise of medical devices integrating international data processing steps.
Evolving Legal Interpretations
The ongoing evolution of legal interpretations related to cross-border process patents underscores the intricate and often contentious nature of modern patent law. As technological advancements blur the lines between national jurisdictions, courts must navigate complex scenarios to determine the applicability of domestic patent rights. The Munich District Court’s decision suggests a more flexible approach, focusing on the overall technical outcome achieved within a country rather than rigidly adhering to the location of each procedural step. This interpretation has profound implications for companies operating in the pharmaceutical and biotech sectors, where cross-border collaborations and international supply chains are becoming increasingly common.
The outcome of the appeal in the Munich case will be closely watched by legal practitioners and industry stakeholders alike. A ruling that upholds the District Court’s interpretation could pave the way for more nuanced and adaptable approaches to enforcing process patents, potentially reducing the barriers for international cooperation in research and development. Conversely, a decision that aligns with the earlier Düsseldorf ruling could reinforce the need for careful planning and coordination to ensure that all procedural steps are compliant with domestic patent requirements. In either scenario, the evolving legal landscape will demand vigilance and adaptability from companies seeking to protect their intellectual property in an increasingly globalized market.
Competition Law: The Divisional Patent Strategy
Anti-Competitive Maneuvers and Regulatory Stance
Competition law seeks to maintain market integrity by preventing monopolistic practices and ensuring fair competition. In the pharmaceutical sector, the strategic use of divisional patents has raised concerns about potential abuse of market dominance. The EU Commission’s October 2024 decision to impose a hefty fine of EUR 462.6 million on a company for engaging in anti-competitive behavior through divisional patent filings and a disparagement campaign concerning its multiple sclerosis drug Copaxone underscores the regulatory intolerance towards such tactics. This landmark decision marks a significant step in the EU Commission’s ongoing efforts to curb anti-competitive practices within the pharmaceutical industry.
The EU Commission’s fine highlights the serious consequences of exploiting divisional patent filings to extend patent lifespans artificially and stifle competition. By filing multiple divisional patents, companies can create a thicket of intellectual property that complicates market entry for potential competitors, effectively prolonging their monopoly and deterring innovation. Moreover, the combination of these divisional filings with a communication strategy aimed at undermining competitors further exacerbates the anti-competitive impact. This regulatory stance sends a clear message to the industry that such behaviors will not be tolerated and will be met with substantial penalties.
Legal Thresholds and Strategic Patent Filings
As we draw nearer to 2025, the pharmaceutical and biotech industries are set to encounter major legal and regulatory transformations. These changes will significantly impact how these industries operate, innovate, and protect their intellectual property. Life sciences professionals must remain watchful and well-informed about these impending developments to navigate the new landscape successfully.
This article examines five crucial areas that are predicted to shape the future of patents in the pharmaceutical and biotech sectors. One key area is the evolving patent laws which might alter how companies file and defend their patents. Enhanced scrutiny from regulatory bodies is another area of focus, potentially leading to stricter standards for drug approvals and compliance requirements. Additionally, the rise of personalized medicine and biotechnology advancements will demand new approaches to intellectual property protection.
Moreover, international patent regulations are expected to become more complex, requiring companies to adapt their strategies for global markets. Emerging markets and their growing importance will also play a role in redefining patent landscapes. Professionals in the life sciences field must stay updated on these trends and be proactive in their strategic planning to thrive amid these changes.
By understanding these critical areas, life sciences practitioners can better prepare for and adapt to the changing legal and regulatory environment, ensuring their efforts in innovation and patient care are both protected and promoted.
