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UK – Genentech Inc and Master Data Center Inc v. Comptroller General of Patents

15 May 2020

Genentech Inc v The Comptroller General of Patents and Master Data Center Inc v Comptroller General of Patents [2020] EWCA Civ 475, 31 March 2020

The Court of Appeal, with Floyd LJ giving the lead judgment, dismissed Master Data Center Inc (“Master Data”) and Genentech Inc’s (“Genentech”) appeals of the High Court decision of Douglas Campbell QC (see previous headnote here), who held that when a supplementary protection certificate (“SPC”) for a pharmaceutical patent only requested and paid the fees for a two-year term, this could not be subsequently extended.

The Court of Appeal

Master Data
Master Data’s appeal relied on rule 107 of the Patent Rules 2007. This affords the Comptroller a discretion to rectify an “irregularity of procedure”, if the irregularity can be attributed to the Comptroller. Master Data argued there were three such irregulates:

1. the notice provided by the UKIPO to Master Data failed to notify the applicant of the prescribed fee due;

2. the notice and the form contained therein wrongly indicated that the applicant could select a period of protection which was shorter than the duration prescribed by Article 13; and

3. the Comptroller failed to notify the applicant of the failure to pay the prescribed fee due.

The heart of these submissions was that applicant is not permitted to elect for a shorter period of SPC than that prescribed by Article 13.

The Court of Appeal held that:

“…the salient features of the UK scheme are as follows:

1. The prescribed fee is the total of specified annual 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 certificate for a shorter period”.

3. The applicant is not permitted to pay top-up annual fees, or annual fees as if they fell due year by year.

4. If the applicant chooses a shorter period than the maximum, the SPC lapses at the end of the chosen period.” (Para 42)

For all those reasons, Floyd LJ 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 Article 13 term and concluded that “it is not therefore necessary to decide whether, if there had been an irregularity in procedure, this would be a proper case in which to exercise the discretion to rectify it…I would dismiss MDC’s (Master Data’s) appeal.” (para 47)

Genentech’s appeal had three limbs:

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?

The first question was essentially that the wording in rule 116 (5), allowed Genentech to pay the shortfall and extend the SPC. The Court of Appeal was not convinced by this argument, finding that:

• the only reward required or allowed by EU law under the paediatric extension was a six month extension of the SPC;

• UK law envisages a single fee to be paid in order to bring the SPC into effect;

• Genentech’s construction would mean that an applicant for a paediatric extension was placed in a uniquely privileged position as to the payment of top-up fees as compared with other SPC applicants; and

• the Court’s analysis of the UK national scheme means that by paying a reduced fee for a reduced term, an applicant commits to allowing the SPC to lapse for non-payment of fees in accordance with Article 14(c) and the paediatric extension should not interfere with this.

Floyd LJ concluded:

In my judgment, 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. I would therefore reject this ground of appeal.” (para 56)

The second ground of appeal was also dismissed:

The difficulty with this argument is that it is not sufficient for Genentech to rectify the mistake in Form SP2. It must also pay the further annual fees. Further annual fees are, however, specifically prohibited by rule 116(5).” (para 60)

The third ground of appeal was also dismissed; this was not an adequate basis for contemplating the grant of an SPC with a duration not contemplated in the Regulations.

The Court of Appeal upheld the decision of the High Court and the appeals by both Master Data and Genentech were dismissed.

A copy of the judgment can be found here.

Headnote: Luke Norton and Amy Crouch, Simmons & Simmons LLP