Genentech's Ranibizumab appeal fails

United KingdomScotland

The historic remote video hearing last week by the Court of Appeal has resulted in the court’s judgment being delivered the afternoon of 31 March. All the grounds of appeal by Genentech and its agents MDC failed. So Genentech’s SPC will expire today (instead of two years later) and with it goes their hope of a having a six month paediatric extension.

Before plunging into the detail it merits recording that the Court of Appeal, in its unanimous judgment praised the parties and their lawyers in adapting at extremely short notice to the new arrangements which allowed the holding of such a hearing remotely. This was done pursuant to the Practice Direction 51Y brought in only on 20 March concerning video and audio hearings during the Coronavirus Pandemic. It should also be recorded by this writer that the three members of the Court Appeal themselves adapted very well to the unprecedented new environment and delivered a very quick reasoned judgment.

Floyd LJ gave the lead judgement; Lady Justice Davies and Lord Justice Arnold both agreed without further comment.

The facts of this case were set out in our earlier article published here on 1 April 2020. As will be known by those working in this field, an SPC can in effect extend the term of a patent by a maximum of five years. A paediatric extension can extend it further by six months. The latter however must be applied for no later than two years before expiry of the SPC. Under the Regulation Member States may request annual fees for an SPC. Article 14 of Schedule 4A to the Patents Act 1977 as amended , so Floyd LJ held, treats “lapse” of an SPC for non-payment of fees as a species of “expiry”. Rule 116(7) of the Patent Rules, prescribes fees and notices and provides that the Comptroller is required to send a notice to remind SPC applicants when a payment is overdue and of the consequences of non-payment. There is also a clear warning that these annual fees are a one off payment (rather than a series). Floyd LJ said that the statement by Charlotte May QC for MDC that “the duration determines the fee; the fee does not determine the duration”, viewed in isolation, was attractive. However, that interpretation was not in accordance with the authorities or with the wider legislative context. He referred to the judgment of Kitchin LJ in the Tulane Education Fund v The Comptroller General of Patents [2013] EWCA Civ 890; [2013] WLR (D) 315.

Floyd LJ concluded:

  1. The prescribed fees in rule 6 are annual fees for the purposes of the SPC Regulation, for the following two reasons: a) The sums payable increase as the term of the SPC gets longer; and(b) the applicant can elect to take a certificate for a shorter period.
  2. The fees do not cease to be annual fees because they are required to be paid all at once.
  3. Such a scheme does not conflict with Article 13 of the SPC Regulation which defined the maximum duration of the SPC.

The judge rejected the submission that the UK scheme does not permit the applicant to elect and pay for a shorter period of protection than the full five year term for these reasons:

  1. The prescribed fee is the total of the specified fees, albeit payable in one go and in advance.
  2. By paying a prescribed fee appropriate to something less than the full term, the applicant “may elect to take the SPC for a shorter period”.
  3. The applicant is not permitted to pay top-up annual fees as if they fell due yearly year.
  4. If an applicant chooses a shorter period than the maximum, the SPC lapses at the end of the chosen period.

It was true that the Comptroller did not notify the applicant of a fee due for the maximum period for an SPC but he was not obliged to do so. There was therefore no procedural irregularity and it was not necessary to decide whether it was an appropriate case to exercise a discretion to rectify that irregularity.

There were three grounds of appeal put forward by Genentech. They were all rejected. For the record, they were:

  • whether an applicant for an SPC who has paid less than the full amount of the annual fees at the outset is entitled to make up the shortfall if he applies for a paediatric extension; OR
  • does s 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; OR
  • Whether a paediatric extension of 6 months from the current expiry date of 2 April 2020 is permissible?

Genentech prayed in aid s117 of the Patents Act which provides machinery for the correction of errors in patents and applications. They relied on this to try to correct the mistakes in Form SP2. Floyd LJ was not having that either.

At the hearing last week, the Court of Appeal encouraged the appellants to send in their submissions early in support of any application for permission to appeal to the Supreme Court. No mention was made of that in the judgment, or of any such submissions being received. Time will tell whether they have the courage to do so.