Government changes UK SPC waiver following BIA intervention

The BIA has successfully argued for a significant change in approach to the UK’s Supplementary Protection Certificate (SPC) manufacturing waiver. The BIA’s engagement with the Government was led by Andrew Hutchinson, Partner at Simmons and Simmons and member of the BIA’s Intellectual Property Advisory Committee (IPAC). Here he provides an update following the Government’s response to the consultation and publication of draft legislation.  

Last year, the Government consulted on secondary legislation to amend the law for the SPC waiver so that it functions in the event of the UK leaving the EU without a deal. (For an explanation of the SPC waiver see the BIA guide here.) The Government proposed to permit the production of SPC-protected medicinal products for export to the EU, which the innovative life sciences industry objected to on the grounds that it could erode their IP rights in some EU Member States.

Following the BIA’s formal response and meetings between members of its IP Advisory Committee (IPAC) and officials, the Government has changed its approach to restrict the export market  under the making for export waiver to only countries outside the EU and UK.

Throughout last year and late 2018, the BIA worked on a number of no-deal Statutory Instruments (SIs) as the UK prepared to leave the EU. The BIA’s position has always been that it is critical that retained EU law functions from a legal perspective and that the changes made do not have unintended and/or adverse impacts on the industry at a time when businesses are already under significant stress as a result of the uncertainty of Brexit. To this end, the BIA is pleased by the Government’s response and the significant changes made to the previously proposed legislation. 
 

Significant changes

The Government published its response to the consultation 13 July and the new no-deal SI - The Intellectual Property (Amendment etc.) (EU Exit) Regulations 2020 (which covers the waiver provisions alongside various other IP provisions) – was also laid in Parliament on the same day.

The Government’s response refers to 3 significant changes to the new SI:

            1. Scope of the Waivers

• The most significant change in terms of the BIA’s position has been made to the scope of the “making for export” waiver. Having originally proposed a scope that would allow “exUK” export (i.e. allowing export to the EU), the new SI requires exportation “outside the United Kingdom, the Isle of Man and the Member States of the European Union”.  The prevention of export to the EU is in line with the firm views of BIA members as to the need to prevent what would have been an erosion of their IPRs protecting their position in the second largest medicines market globally.
• In addition, the scope of the “making for storing” waiver has been extended to allow (in the final 6  months of an SPC), making for storing/stockpiling in the UK ready for ‘Day 1’ sales in the UK or EU postSPC expiry (and not just in the UK as originally proposed).
  
  2. The logo
• Like most respondents, the BIA agreed that the “EU export” logo would be misleading and considered “UK export” (or “UK and EU Export”) to be appropriate.  The Government’s response preserves the requirement to use the words “UK Export” (along with a minor change that the labelling must be “clear and visible to the naked eye”).  More significantly, the new SI gives the Government the power to set out further conditions on how the “UK Export” words should be presented, if needed.  This will be an important area for BIA members to monitor given the importance of the logo to safeguard and prevent diversions back to the home market.

             3. Transitional requirements

• The new SI contains 2 new transitional provisions, which relate to scenarios where, before the before completion of the Implementation Period:
  • the “EU Export” logo has been used (in which case the “UK export” does not need to be affixed as well); and
  • a notification has already been made (in which case, it is to be treated as having been made in the form required by the new SI and without changing its date).

What next?

The SI must be debated by both Houses of Parliament and this cannot happen until September at the earliest. If it passes it will become law if the UK and EU do not reach a deal on their future relationship by the end of the transition period on 31 December 2020.

Despite the positive response from the Government in this consultation, the BIA is disappointed that its calls to reverse the approach taken in the first no-deal SI relating to SPCs - The Patents (Amendment) (EU Exit) Regulations 2019 - have not been addressed. As a result, the position of using the first EU Market Authorisation to calculate UK SPC duration remains unchanged, which could mean innovators have shorter periods of SPC protection in the UK as a result of the UK no longer being part of the European Medicines Agency (EMA). The BIA will continue to engage with Government and Parliament on this important issue.   

Andrew Hutchinson, Partner at Simmons and Simmons