SPC manufacturing waiver for export and stockpiling comes into force

This article was updated on 26 July 2019, to reflect the SPC manufacturing waiver coming into force

The legislation amending the SPC Regulation EC/469/2009 to introduce a manufacturing and stockpiling waiver for EU-based generic and biosimilar manufacturers entered into force on 1 July 2019. A copy of the new legislation can be found here.

Background to the new legislation

The original manufacturing waiver stems from a proposal from the EU Commission to allow EU-based manufacturers of generics and biosimilars to manufacture a product, protected by an SPC, in the EU for the purpose of exporting it to non-EU markets.

The need for this waiver was said to be the competitive disadvantage EU-based companies face as a result of the SPC system preventing them from manufacturing during the period of SPC protection. During this period, their non-EU competitors will often be free to manufacture and stockpile products, as any equivalent patent protection outside the EU will normally have expired.

When the Commission's proposal was considered by the European Parliament during the legislative process, it was amended to include a stockpiling waiver to enable EU-based manufacturers to be ready to launch in the EU on the first day of SPC expiry.

What does the SPC waiver cover?

Subject to complying with certain safeguards discussed below, the proposed waiver will mean that:

• At any time during the term of an SPC, the manufacture of a product in the EU will not infringe an SPC if that product is for export outside the EU.
• In the last six months of the SPC term, the manufacture and associated storage of a product intended for the EU market will not infringe an SPC. Note that the waiver only permits this "stockpiling" of product which has been manufactured in the EU. It does not allow stockpiling of product manufactured outside the EU.
• Any related acts that are strictly necessary for the activities set out in points above will also not infringe an SPC.

What are the safeguards that need to be complied with?

Three months before starting any manufacture or associated activity, the generic or biosimilar manufacturer must notify the national patent office who granted the SPC, and the SPC holder, with details of:

• The name and address of the manufacturer.
• Whether the manufacture is for the purpose of export and/or stockpiling.
• The SPC number and identity of the EU country in which the manufacture and/or stockpiling will take place.
• For products to be exported outside the EU, the number of the marketing authorisation (or equivalent) in each non-EU country where it is available.

For export to countries outside the EU, a new "EU export" logo must also be applied to the packaging of the product.

The manufacturer must also inform anyone in its supply chain with whom it has a contractual relationship that the placing on the market, import or re-import of the product into the EU will be an infringement of the SPC.

When did the waiver enter into force and which SPCs does it apply to?

The waiver entered into force on 1 July 2019:

• SPCs that were granted and had come into effect (ie the period of SPC protection had started) on or before 1 July 2019 will not be subject to the waiver.
• SPCs that are applied for after 1 July 2019 will be subject to the waiver.
• There is a transitional period which covers SPC applications that were pending or granted but had not come into effect on or before 1 July 2019. These will only be subject to the waiver from three years after the waiver enters into force.