How does it work?
Effect and scope of the Manufacturing Waiver
The Manufacturing Waiver (adopted in 2019 with EU Regulation 2019/933) is implemented technically by an amendment to Article 5 of the EU SPC Regulation (No 469/2009) which deals with the effects of an SPC. Article 5 (2) SPC Regulation states that the SPC shall not confer protection to the manufacture of a product, provided that the conditions laid out in the provision are met (please note that in the interest of better readability we will refer to the "product" in the following, whereby a product as well as a medicinal product containing that product is meant). As a result, the SPC holder cannot prohibit the manufacturer from committing these acts.
Permitted acts
The acts covered by the waiver can be divided into two groups:
- Manufacture of the product for the purpose of exporting the product to third (i.e. non-EU) countries (Article 5 (2) a) (i) SPC Regulation) and
- Manufacture of the product no earlier than six months before the expiry of the SPC for the purpose of storing it in the Member State where the manufacture took place in order to place that product in the EU after the expiry of the SPC (Article 5 (2) a) (iii) SPC Regulation).
In both cases, also such related acts that are strictly necessary for the manufacture and/or storing of the product in the EU are excluded from the SPC's scope of protection (cf. Article 5 (2) a) (ii), (iv) SPC Regulation).
The Waiver does not apply to acts that serve to import products into the EU for the mere purpose of repackaging, re-exporting or storing.
Conditions of the Manufacturing Waiver
In order for a manufacturer to be able to rely on the waiver, all conditions as provided in Article 5 (2) SPC Regulation must be met.
Covered Acts
The manufacturer must perform one of the permitted acts, with the exclusive intention that the act is done for one of the privileged purposes.
Notification of the IP office and information to SPC holder
The manufacture must notify the Intellectual Property office of the Member State where the manufacture shall take place no later than three months before the start date of the manufacturing, or no later than three months before the first related act, prior to that making, that would otherwise be prohibited by the SPC. If the manufacture shall take place in more than one Member State, the IP office in each of these Member States must be notified. The notification must include
- Information about the manufacturer;
- Purpose of the manufacture: export, storing or both;
- Member State in which manufacture and/or the storing is to take place, as well as Member State in which prior related acts are to take place;
- The number of the affected SPC in the Member State where the act is to take place
- The reference number of the Marketing Authorisation in the third country to which the product shall be exported.
This notification is to be made by using a standard form that is provided by the IP office of the respective Member State (for example, the form issued by the DPMA in Germany can be found here).
The information to the SPC holder must include the same information as is provided to the IP office in the Member State (use of the standard form is however not required). The use of such information by the SPC holder is limited to the verification of the conditions of Article 5 (2) SPC Regulation and to initiate legal proceedings for non-compliance, if necessary.
Notification of any changes
If any of the information provided to the IP office in the Member State and the SPC holder changes, the manufacturer has to notify both of such changes.
Attachment of EU export logo to product
The manufacturer – in case that the manufacture takes place for the purpose of export to third countries – must attach the following logo to the outer packaging of the product and, if feasible, to its immediate packaging:
Information to third parties
The manufacturer must ensure that any party they are in a contractual relationship with and that performs one of the permitted acts is fully informed that
- those acts are subject to the conditions laid out in Article 5 (2) SPC Regulation; and
- that the placing on the market, import or re-import of the product intended for export to third countries and/or for the storing in a Member State could infringe the concerned SPC where, and for as long as, that SPC applies.
The Regulation requires that such notification must be done through appropriate means, without specifying such means further.
Payment of fees
The manufacturer must, where a Member State requires that the notification about the manufacture to the IP office is subject to a fee, have paid such fee.
Date of application
The extent to which the Manufacturing Waiver applies to an SPC depends on the date of the SPC application and its entry into force:
- The Waiver applies without limitation to all SPCs applied for on or after 1 July 2019.
- The Waiver applies as of 2 July 2022 to all SPCs that have been applied for before 1 July 2019 and take effect on or after that date.
- The Waiver does not apply to SPCs that took effect prior to 1 July 2019.
Potential issues
As with most new legislation, there is a certain degree of ambiguity with regard to the interpretation of terms and concepts introduced with the new provisions of the SPC Regulation, some of which shall be discussed in the following.
What is covered by "related acts"?
The SPC Regulation does not specify what may be understood as related acts that also benefit from the waiver. The wording indicates that this exception has to be construed narrowly, as it shall be confined to acts that are "strictly necessary" for the manufacture and/or the storing of the product. This suggests that these acts must be absolutely essential to the manufacture and/or the storing for the privileged purpose. Recital (9) of Regulation 2019/933 cites as examples the possessing, offering to supply, supplying, importing, using or synthesising an active ingredient for the purpose of making a medicinal product or temporary storing or advertising for the exclusive purpose of export to third-country destinations. It shall be noted that the related act may be performed by a third party who is in a contractual relationship with the manufacturer.
Feasibility of attaching the EU export logo to the immediate packaging
Another issue that may be subject to disputes in the future is the requirement to affix the EU export logo to the "immediate packaging" of the product, where this is feasible. This requirement is included in the Regulation to minimize the risk of unlawful re-imports of products that were manufactured in the Union under the Manufacturing Waiver. This is identified as an important objective inter alia in Recitals (11), (21) and (22) of Regulation 2019/933. The use of the word "feasible" indicates that where it is objectively possible to affix the logo to the immediate packaging, the manufacturer is required to do so (notwithstanding a proportionality threshold). On balance, this does not seem to be an undue burden on the manufacturer given that the waiver is intended to enable export to third countries, and that unlawful re-imports of e.g. repackaged products could jeopardize the SPC holder's exclusivity right.
What are "appropriate means" to comply with the duty to inform third parties?
The manufacturer is subject to certain information duties in relation to third parties, as explained above. The SPC Regulation requires that such information shall be done through "appropriate" means. Generally, this suggests that the means must be sufficient so as to make the respective third parties aware of the limitations which the product manufactured under the waiver is subject to. Recital (20) of Regulation 2019/933 mentions that such means can be contractual means in particular, so that the manufacturer could for example oblige his suppliers and customers to comply with the rules governing the Manufacturing Waiver.
It seems questionable how this requirement may be enforced by authorities or the SPC right holder, as details about the means to inform the relevant third parties do not have to be included in the notification to the IP office and the corresponding information to the SPC holder.
Outlook
It remains to be seen whether the SPC Manufacturing Waiver achieves the objectives to strengthen the competitiveness of the European pharmaceutical industry in relation to pharmaceutical manufacturers in third countries and to facilitate EU day-one entry of generic and biosimilar medicines. It will also need to be considered whether the safeguards in the Regulation are sufficient to protect the exploitation of the exclusivity right through the SPC holder outside of the scope of the waiver. The European Commission will conduct an evaluation of the new rules no later than five years after their entry into force.
Hogan Lovells is prepared to assist you with all questions related to SPC law and the Manufacturing Waiver. Our lawyers in all major European jurisdictions have wide expertise in SPC law and can help you to find cross-border solutions for your business. The multinational structure of our IP practice group puts us in an exceptional position to guide you through the challenges of European patent and SPC law.
Authored by Miriam Gundt and Lukas Sievers
