Supplementary Protection Certificates - the Genentech Appeals
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Jane Lambert
Court of Appeal (Lord Justices Floyd and Arnold and Lady Justice Nichola Davies) Genentech Inc v Comptroller and Master Data Center v Comptroller [2020] EWCA Civ 475 (31 March 2020)
These were appeals from the decision of Mr Recorder Campbell QC in Master Data Center, Inc v Comptroller [2020] EWHC 572 (Pat) (11 March 2020) which I blogged in Supplementary Protection Certificates - Master Data Center, Inc v The Comptroller on 18 March 2020. The cases are remarkable for the speed with which they progressed from the hearing officer to the Court of Appeal. They were before Mr Micklewright on 21 Feb 2020 (see Re Genentech, Inc. and Master Data Center, Inc. BL O/111/20 21 Feb 2020), Mr Campbell on 4 March 2020 and the Court of Appeal on 26 of that month (Genentech Inc v Comptroller and Master Data Center v Comptroller [2020] EWCA Civ 475 (31 March 2020). The cases are also remarkable for being heard entirely online in accordance with Practice Direction 51Y with a media representative attending by joining the video conference pursuant to paragraph 3 of that Practice Direction.
The reason why those cases progressed so fast is that Genentech's supplementary protection certificate ("SPC") was due to expire on 2 April 2020. As I explained in my previous case note, an application for an SPC for ranibizumab, the effective ingredient of EP0973804 for anti-VEGF antibodies, was made by Master Data Center Inc. ("MDC") on Genentech's behalf on 23 Feb 2007. That date was less than a month after Genentech, the patentee had received marketing authorization but over 11 years before the patent was due to expire. Genetech would have been entitled to an SPC that would have expired on 22 Jan 2022 and possibly even later with a paediatric extension. For reasons that are not entirely clear, MDC applied and paid for an SPC which came to an end on 2 April 2020. The application was accepted and SPC/GB07/012 was granted to Genentech.
These appeals concern attempts by Genentech and MDC to extend the term of the SPC. On 12 July 2019, MDC asked the IPO to correct what MDC called 'an irregularity of procedure connected with the payment of this fee' so that the SPC could remain in force until 23 Jan 2022. The alleged irregularity was the IPO's practice of allowing applicants for SPC to choose a period that was shorter than the period specified in art 13 of Regulation (EC) No 469/2009. MDC argued that the practice was contrary to EU law and that it could be corrected by rule 107 (1) of the Patents Rules 2007. In a separate application dated 24 Sept 2019, Genentech applied for a paediatric extension to the SPC and enclosed a further application form in respect of the annual fees payable for the 3rd and 4th years so as to extend the SPC to its maximum duration. On 20 Dec 2019 Genentech applied for its 2007 application to be rectified to enable it to apply and pay for a 4-year term. None of those applications was successful so MDC and Genentech appealed.
Both the hearing officer and the recorder rejected their appeals. Mr Recorder Campbell refused permission to appeal to the Court of Appeal in Master Data Center, Inc v Comptroller (Costs) [2020] EWHC 601 (Ch) (11 March 2020). According to paragraph [2] of his judgment, Lord Justice Floyd granted permission to MDC and Genentech to appeal on 20 March 2020.
Both the hearing officer and the recorder rejected their appeals. Mr Recorder Campbell refused permission to appeal to the Court of Appeal in Master Data Center, Inc v Comptroller (Costs) [2020] EWHC 601 (Ch) (11 March 2020). According to paragraph [2] of his judgment, Lord Justice Floyd granted permission to MDC and Genentech to appeal on 20 March 2020.
MDC's argument before the Court of Appeal was substantially the same as it had been before Mr Micklewright and Mr Campbell. It contended that rule 116 of the Patents Rules 2007, rule 6 of the Patents (Fees) Rules 2007 and Form SP2 were irregularities attributable at least in part to the Comptroller as they were incompatible with art 13 of Regulation (EC) No 469/2009 ("the SPC Regulation"). That was because they provided for a term for an SPC that was less than the periods provided by art 13. It was therefore open to the Comptroller to extend the time limit in rule 116 (2) pursuant to rule 107 (3) of the Patents Rules 2007.
Delivering judgment on behalf of the Court of Appeal, Lord Justice Floyd said at [29]:
"Viewed in isolation, this submission as to the construction of rule 6 of the Fees Rules has attraction. In my judgment, however, the submission is not in accordance with authority or with the wider legislative context."
The authority to which Lord Justice Floyd referred was paragraph [50] of Lord Justice Kitchin's judgment in Tulane Education Fund [2014] RPC 10, [2013] Bus LR 1225, [2013] WLR(D) 315, [2013] EWCA Civ 890:
"Turning now to the fee structure set out in rule 6 of the Patents (Fees) Rules, it can be seen that as the number of years for which the certificate is to have effect increases, so also does the fee. Further and importantly, an applicant is not required to take a certificate for the whole period permitted by the Regulation. He 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. Thus far, as it seems to me, the prescribed fee may properly be described as an annual fee. It is calculated by reference to the number of years for which a certificate is to have effect."
Delivering judgment on behalf of the Court of Appeal, Lord Justice Floyd said at [29]:
"Viewed in isolation, this submission as to the construction of rule 6 of the Fees Rules has attraction. In my judgment, however, the submission is not in accordance with authority or with the wider legislative context."
The authority to which Lord Justice Floyd referred was paragraph [50] of Lord Justice Kitchin's judgment in Tulane Education Fund [2014] RPC 10, [2013] Bus LR 1225, [2013] WLR(D) 315, [2013] EWCA Civ 890:
"Turning now to the fee structure set out in rule 6 of the Patents (Fees) Rules, it can be seen that as the number of years for which the certificate is to have effect increases, so also does the fee. Further and importantly, an applicant is not required to take a certificate for the whole period permitted by the Regulation. He 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. Thus far, as it seems to me, the prescribed fee may properly be described as an annual fee. It is calculated by reference to the number of years for which a certificate is to have effect."
MDC argued that that passage was not binding as it was not part of the ratio decidendi but Lord Justice Floyd held otherwise. As for the wider legislative context, rule 116 (5) of the Patents Rules 2007 provided:
"The prescribed fee must be accompanied by Patents Form SP2, and once the certificate has taken effect no further fee may be paid to extend the term of the certificate unless an application for an extension of the duration of the certificate is made under the Medicinal Products Regulation."
"The prescribed fee must be accompanied by Patents Form SP2, and once the certificate has taken effect no further fee may be paid to extend the term of the certificate unless an application for an extension of the duration of the certificate is made under the Medicinal Products Regulation."
Lord Justice Floyd noted at [38]:
"That rule provides that, once the certificate has taken effect, no further fee may be paid to extend the term of the certificate (except in certain circumstances related to paediatric extensions to which I will have to come). This rule cannot be read as if it contemplated (in order to prohibit) a fee to extend the certificate beyond the maximum term of the SPC (i.e. the term calculated under Article 13). Such an extension would be prohibited by the SPC Regulation and no domestic legislation would be necessary to point out that no such extension was possible. The rule is only consistent with a scheme in which an applicant might contemplate paying a fee for part only of the maximum duration and then seek to "top-up" the duration by payment of a further fee. The rule makes it clear, therefore, that "topping-up" is not possible. Such a rule is only consistent with a scheme in which it is open to an applicant to elect for a shorter duration than the maximum, contrary to MDC's position."
"That rule provides that, once the certificate has taken effect, no further fee may be paid to extend the term of the certificate (except in certain circumstances related to paediatric extensions to which I will have to come). This rule cannot be read as if it contemplated (in order to prohibit) a fee to extend the certificate beyond the maximum term of the SPC (i.e. the term calculated under Article 13). Such an extension would be prohibited by the SPC Regulation and no domestic legislation would be necessary to point out that no such extension was possible. The rule is only consistent with a scheme in which an applicant might contemplate paying a fee for part only of the maximum duration and then seek to "top-up" the duration by payment of a further fee. The rule makes it clear, therefore, that "topping-up" is not possible. Such a rule is only consistent with a scheme in which it is open to an applicant to elect for a shorter duration than the maximum, contrary to MDC's position."
It followed that there had been no procedural irregularity and that rule 107 (3) could not be invoked. The Court of Appeal, therefore, rejected MDC's appeal.
Turning to Genentech's appeal, Lord Justice Floyd identified the following issues:
"1. On the true construction of rule 116 (5) of the Rules, is an applicant for an SPC who has paid less than the full amount of the annual fees at the outset, entitled to pay a further fee to make up the shortfall if he applies for a paediatric extension?
2. In the alternative, does section 117 of the Act permit a correction to Form SP2 so as to substitute the correct period for the SPC to take effect and the correct fee?
3. In the further alternative, is a paediatric extension of 6 months from the current expiry date of 2 April 2020 permissible?"
"1. On the true construction of rule 116 (5) of the Rules, is an applicant for an SPC who has paid less than the full amount of the annual fees at the outset, entitled to pay a further fee to make up the shortfall if he applies for a paediatric extension?
2. In the alternative, does section 117 of the Act permit a correction to Form SP2 so as to substitute the correct period for the SPC to take effect and the correct fee?
3. In the further alternative, is a paediatric extension of 6 months from the current expiry date of 2 April 2020 permissible?"
As for the first issue, Lord Justice Floyd held at [56] that "read against the background of EU law, and of Schedule 4A paragraph 5, rule 116 (5) should be understood to mean that no further fee may be paid to extend the certificate except the fee for a paediatric extension application." It was possible to pay a fee for the paediatric extension but not annual fees to increase the term of the SPC. He, therefore, rejected the first ground of appeal.
Turning to the second, Lord Justice Floyd said that it was not enough to correct a mistake in Form SP2. Genentech would also have to pay extra fees and that was specifically forbidden by rule 116 (5). Genentech argued that the failure to pay the fee was itself an error that could be corrected under s.117 and that it had sufficient funds in its account with the Intellectual Property Office to pay the right fee. Lord Justice Floyd would not accept that argument. All the funds in Genenetch's account were held to its order and never to the IPO. Moreover. the payment in question was two annual fees. It was not an arithmetical miscalculation.
The Court dismissed the third ground for the same reasons as had been given by Mr Campbell and Mr Micklewright.
As both appeals have been dismissed I would repeat the observation that I made in my previous case note that this case underscores the importance of attending timeously to formalities with regard to fees and time limits. Anybody wishing to discuss this case or SPCs generally should contact me through my message page.
Turning to the second, Lord Justice Floyd said that it was not enough to correct a mistake in Form SP2. Genentech would also have to pay extra fees and that was specifically forbidden by rule 116 (5). Genentech argued that the failure to pay the fee was itself an error that could be corrected under s.117 and that it had sufficient funds in its account with the Intellectual Property Office to pay the right fee. Lord Justice Floyd would not accept that argument. All the funds in Genenetch's account were held to its order and never to the IPO. Moreover. the payment in question was two annual fees. It was not an arithmetical miscalculation.
The Court dismissed the third ground for the same reasons as had been given by Mr Campbell and Mr Micklewright.
As both appeals have been dismissed I would repeat the observation that I made in my previous case note that this case underscores the importance of attending timeously to formalities with regard to fees and time limits. Anybody wishing to discuss this case or SPCs generally should contact me through my message page.
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