Decision on European Patent Overlap Disappoints Industry

May 12, 2005

The European Court of Justice has issued a significant final ruling on a long-running case over conflicting exclusivity periods within the European Union (EU) and the European Economic Area (EEA) trade bloc. The dispute arose because of the fact that Liechtenstein recognises marketing approvals granted in Switzerland, which unlike Liechtenstein is not an EEA member. This potentially shortens exclusivity periods granted under the EU's Supplementary Protection Certificates (SPCs), which offer five-year extensions to patents on drugs approved for the EU and the EEA.

The judgement will effectively allow the date of Swiss marketing approval to be considered as the start of a patent term for a product marketed within the EU and EEA. Legal sources opposing the ruling have claimed that this undermines the extra marketing exclusivity allowed by some EU SPCs. A number of SPCs that were awaiting legal clarification on the status of Swiss approvals are now likely to be granted on this basis.

Lawyers claim that Swiss marketing approvals are earlier than their EU equivalents for up to 25% of products awaiting SPCs, potentially shortening European exclusivity on a number of leading multinationals' products. However, it should also be noted that drugmakers benefit from the issuance of EEA-compatible SPCs upon later approval in Switzerland. This alleged anomaly, which infringes the EU's principle that exclusivity may only be extended by a maximum of 15 years, will be unaffected by the ruling.

In the future, the practical consequences of the decision on the overlap between Swiss and EEA/EU approvals are likely to include strong efforts by drugmakers to secure EU approvals before seeking the same in Switzerland. As some Liechtenstein/EEA SPCs will outlast their EU equivalents, the EU's attempts to harmonise this area of international patent legislation are now in doubt.