Will changes to patent infringements attract drug research in the UK?

Abstract

Ever since the introduction of the ‘Bolar’ exemption into the national laws of the EU Member States, the UK has been perceived to be a relatively difficult territory in which to conduct clinical trials, as compared to EU territories having very broad ‘Bolar’ exemptions, such as France and Germany. This problem for the UK has now been comprehensively eliminated by an amendment to UK patent law that came into force on 1 October 2014. However, whilst addressing a problem faced by the pharmaceutical industry in connection with conducting clinical trials, the manner in which UK patent law has been amended raises important but as yet unanswered questions about the knock-on effects for enforcement of European patents having unitary effect, if and when the laws governing such patents come into force.

Keywords:

• bolar
• exemptions
• experimental use
• patent enforcement
• patent infringement
• unitary patent

1. Introduction

Regulation of the marketing of medicinal products provides many benefits for patients. In particular, it ensures that marketed drugs have been judged by an independent authority to possess an acceptable risk-benefit profile in respect of the uses for which the drugs have been authorised.

However, it is not always straightforward to conduct the clinical studies demanded by regulators, especially when there are third party patent rights for a product or method used in the studies. This can lead to those studies being either postponed or abandoned, and hence to delays in patients gaining access to new treatment options. At the very least, the decision to perform clinical studies in a particular country may be influenced by the perceived level of risk of patent infringement in that country.

Although other factors (e.g., costs, local regulatory laws and ease of access to quality service providers and relevant patient pools) may have at least as much influence over the selection of a location for conducting clinical studies, it is always important to assess the relative risk of patent infringement in each country under consideration. This is because the consequences of ending up on the wrong end of a patent infringement action can be serious (e.g., significant legal costs and the possibility of termination of the clinical studies and delivery up/destruction of infringing materials or items).

The national laws of all EU Member States contain provisions that attempt to alleviate the problem of patent rights hindering the performance of clinical studies. Those provisions, which exempt certain clinical studies from patent infringement, fall under two categories, namely the experimental use and ‘Bolar’ exemptions. However, the scope of these exemptions, and hence the studies that are exempted, varies from country to country within the EU.

Ever since the ‘Bolar’ exemption was introduced into the national laws of EU Member States, the scope of that exemption in the UK has been narrower than in countries such as Germany. The patent law of the UK was therefore recently amended in an attempt to attract more clinical trials to the UK by ensuring that the perceived risk of patent infringement in the UK is at least as low as that in any other EU Member State (including Germany). Whilst achieving that aim, the amendment of UK patent law leaves the pharmaceutical industry with important but unanswered questions as to what will happen if and when the law relating to European patents with unitary effect comes into force.

2. Background

2.1 The ‘Bolar’ exemption

The European ‘Bolar’ exemption has its origins in EU regulatory law [1]. In its original form, it exempts from patent infringement those studies and trials that are conducted with a view to providing information required for an ‘abbreviated’ marketing authorisation for a human or veterinary medicinal product in the EU (e.g., for human products, an authorisation under any of paragraphs (1) to (4) of Article 10 of Directive 2001/83/EC). Thus, the ‘Bolar’ exemption was designed to only cover studies related to authorisation in the EU of products such as generics and biosimilars.

Despite the original exemption being very narrow, not all EU Member States implemented such a narrow exemption in their national law. The UK was one of the few countries that implemented a narrow ‘Bolar’ exemption. However, countries such as France and Germany implemented very broad exemptions (e.g., the German exemption [2] covers “Studies and trials, including the practical requirements, necessary for obtaining marketing or… to place products on the market within the European Union or approval in a member state of the European Union or a state outside the European Union”).

Thus, the ‘Bolar’ exemption in Germany is broader than that in the UK in that it additionally encompasses studies for:

(a) authorisations in countries outside of the EU and

(b) innovative products (i.e., not just generics and biosimilars).

Until October 2014, the UK was therefore perceived to be a relatively difficult location to conduct clinical studies under either of categories (a) and (b) above. Although some studies under these categories might have been exempted as ‘experimental use’ in the UK, this would not have been the case for all such studies.

2.2 The experimental use exemption

Potentially infringing acts (e.g., those involved in conducting a clinical study) only fall under the experimental use exemption in Europe if they are done “for experimental purposes relating to the subject-matter of the invention” [3]. Judicial interpretation of this provision has been fairly consistent across Europe and can be summarised as follows.

(1) The acts can have a ‘mixed’ (commercial/experimental) purpose, but the preponderant purpose must be experimental [4].

(2) The experiments must be into or on the subject matter of a patented invention [5]. Thus, they must be aimed at uncovering new information about that invention (as opposed to merely using the invention for its known purpose).

It is therefore easy to see how these criteria would be satisfied by early-stage (Phase I and Phase II) clinical trials on a patent-protected active ingredient that has never before been authorised for the clinical indication that is the focus of the trials.

The situation is less clear from Phase III clinical trials, particularly in the UK (where there has been very little case law that directly relates to the issue of whether such trials fall within the experimental use exemption). However, given the average failure rate at Phase III, there is a reasonable argument that such late-stage trials uncover new information, and so are also exempt from patent infringement across the whole of the EU. Of course, this is not such an issue in countries such as Germany, where many Phase III trials are clearly covered by the ‘Bolar’ exemption.

Further, there are other types of clinical trials on innovative products that do not benefit from the ‘classical’ experimental use exemption (i.e., the exemption having requirements (1) and (2) above). Such trials include those:

(i) using patented research tools (e.g., a method for analysing the level of a biomarker); or

(ii) involving a head-to-head comparison of an innovative drug with an already marketed (and patent-protected) drug.

However, although not exempted as experimental use, trials such as (i) and (ii) above may be deemed not to infringe patent rights in countries (such as Germany) that have a broad ‘Bolar’ exemption, especially if use of the patented research tool or comparator drug could be argued to be ‘necessary for obtaining marketing’.

2.3 The problem for the UK

Prior to the recent amendment of UK patent law, the experimental use exemption was equivalent in scope to that under German national law, but the ‘Bolar’ exemption was much narrower. The UK Intellectual Property Office therefore launched a consultation [6] in 2011 to seek feedback from stakeholders on whether this situation was discouraging companies from conducting clinical trials in the UK. Although it elicited very little in the way of hard evidence, the results of the consultation [7] indicated that the narrow ‘Bolar’ exemption in the UK was a factor (though admittedly not the only factor) in decisions reached by companies to run clinical trials in other jurisdictions. As a result, an amendment to UK patent law was proposed that aimed at levelling the playing field with countries such as Germany.

3. Expert opinion

In the view of this author, the amendment to UK patent law [8], which came into force on 1 October 2014, has succeeded in putting the UK on an equal footing with countries such as Germany. Whilst this might not necessarily provide a positive incentive for the selection of the UK as a base for clinical trials, it greatly increases the chances of (and reduces the costs for) obtaining a legal opinion confirming that conducting trials in the UK will not infringe any patents. This is because the law as amended means that, for clinical studies on human or veterinary medicaments, the risk of patent infringement arising is at least as low in the UK as anywhere else in the EU (or indeed the world).

This reduction in risk is due to new Section 60(6)(D), which states that “anything done in or for the purposes of a medicinal product assessment” is exempt from patent infringement on the grounds that it is “to be regarded as done for experimental purposes relating to the subject matter of the invention”.

Moreover, the term ‘medicinal product assessment’ is defined in new Section 60(6)(E) as including not only trials conducted for the purposes of obtaining a (human or veterinary) marketing authorisation, but also certain post-marketing studies (e.g., studies providing information to support a health technology assessment or variation of an authorisation).

It is important to note that the UK chose to expand the acts that count as experimental use, rather than provide a broader ‘Bolar’ exemption. This unusual approach is no accident, as it aims to ensure consistency between UK law and as yet not in force provisions (from the Agreement on a Unitary Patent Court (UPC) [9]) that will govern European patents having unitary effect.

If and when the UPC Agreement comes into force [10] (which may be as early as 2016, as late as 2018 – or perhaps even never [11]), it is arguable that the relevant provisions of UK law will not require amendment. This is because, in contrast to the situation in countries such as Germany, the ‘Bolar’ exemption of Article 27(d) of the UPC Agreement closely resembles the equivalent UK exemption. The same is true for the experimental use exemption, except that the UPC provision lacks the ‘clarification’ provided by way of Sections 60(6) (D) and (E) of the UK Patents Act.

Although clearly providing a short-term boost for those involved with conducting the clinical trials in the UK, it is uncertain whether this subtle approach to broadening exemptions will benefit the UK pharmaceutical industry in the long term. This is because there are important but unanswered questions on:

• the precise role that UK national law (as opposed to the Article 27(d) of the UPC Agreement and/or the national laws of other EU Member States) will play in determining the acts that will infringe (in the UK) European patents having unitary effect [12]; and

• how (or whether) countries such as Germany will amend the ‘Bolar’ provisions in their national laws [13].

If and when the laws governing unitary patents come into force, the pharmaceutical industry will therefore be paying close attention to how the national laws of different EU Member states will affect how (and against whom) they can enforce their European patents.

Declaration of interest

The author has no relevant affiliations or financial involvement with any organisation or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript that may affect the views expressed in the article. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.