[authors: Ralph Cox* & Kinjal Kondhia**]

After a series of papers, reports and consultations on the scope of the research exemptions to patent infringement stretching over 10 years, section 60 of the Patents Act 1977 was finally amended on 1 October 2014 by the introduction of new subsections 6D to 6G.  These subsections clarify the pre-existing 'Bolar' exemption for clinical trials for generic drugs in subsection 6(5)(i) as well as extending it to regulatory tests for new drugs so as to put the UK on a level playing field for the conduct of trials with countries such as Germany, which introduced a wider Bolar exemption from the outset.  But the amendments seem to leave an important point unresolved:  would a manufacturer of active pharmaceutical ingredients (API) infringe by supplying a patent protected drug to another for use in clinical trials? 

Background

The Department of Trade & Industry and the Intellectual Property Institute issued a paper in 2004 saying that the research exemptions in the Patents Act were unclear and pointing to anecdotal evidence that the fear of proceedings dissuaded small research groups particularly from conducting potentially infringing research.  This was picked up by the Gower Report on Intellectual Property in 2006 which recommended that section 60 of the Patents Act be clarified.  Formal and informal consultations by the UK Intellectual Property Office followed between 2008 and early 2014 which, though initially considering research exemptions generally, ended up focusing on whether and how the Bolar exemption should be widened to match its implementation in other European countries.

The Bolar exemption was introduced into the Patents Act 1977 in October 2005 by insertion of 60(5)(i) in order to implement European Union (EU) Directives 2004/27/EC and 4004/28/EC, for veterinary and human drugs respectively.  The Directives limited the exemption to acts required to obtain a marketing authorisation for a generic drug and accordingly so did section 60(5)(i).  While some EU member states took a similarly narrow approach, such as Ireland, Sweden and the Netherlands, others took a wider approach, generally because they had pre-existing Bolar-type provisions in their legislation.  Thus countries such as Germany, France, Italy, Spain and Poland exempted trials conducted for regulatory approval of innovative as well as generic drugs from patent infringement.  This was seen as putting the UK at a competitive disadvantage as a country in which to conduct clinical trials.

A further issue was the scope of the acts covered by the Bolar exemption.  While both the Medicines and Healthcare Products Regulatory Agency (MHRA) and the UK Intellectual Property Office (UK IPO) gave guidance on the activities they considered to be covered, uncertainty persisted, particularly whether conducting bioequivalence and stability studies for a generic marketing authorisation would constitute infringement.  Also, assessments of drugs by, for example, the National Institute for Health and Care Excellence (NICE) to decide whether to recommend their use by the National Health Service, and which could involve comparison studies with patented drugs, were not covered.

Extended Bolar Exemption

As mentioned, the upshot of the consultations was the insertion of new subsections 6D to 6G in section 60 of the Patents Act 1977 from 1 October 2014.  Subsections 6D and 6E read:

"(6D)    For the purposes of subsection (5)(b), anything done in or for the purposes of a medicinal product assessment which would otherwise constitute an infringement of a patent for an invention is to be regarded as done for experimental purposes relating to the subject-matter of the invention.

(6E)      In subsection (6D), "medicinal product assessment" means any testing, course of testing or other activity undertaken with a view to providing data for any of the following purposes—

(a)        obtaining or varying an authorisation to sell or supply, or offer to sell or supply, a medicinal product (whether in the United Kingdom or elsewhere);

(b)       complying with any regulatory requirement imposed (whether in the United Kingdom or elsewhere) in relation to such an authorisation;

(c)        enabling a government or public authority (whether in the United Kingdom or elsewhere), or a person (whether in the United Kingdom or elsewhere) with functions of—

(i)        providing health care on behalf of such a government or public authority, or

(ii)       providing advice to, or on behalf of, such a government or public authority about the provision of health care,

to carry out an assessment of suitability of a medicinal product for human use for the purpose of determining whether to use it, or recommend its use, in the provision of health care."

Subsection 6F then defines "medicinal product" as a human or veterinary drug and 6G says that nothing in 6D to 6F affects the application of the general research exemption in section 60(5)(b) to acts falling outside 6D.  Section 60(5)(b) exempts from infringement acts "done for experimental purposes relating to the subject-matter of the invention".  Quite what research falls within the "subject-matter of the invention" and how the section applies to tests for commercial purposes were concerns that underlay the 2004 paper mentioned above[1].

Apart from making section 60(5)(i) redundant, the effects of 6D to 6F are to extend the Bolar exemption to innovative drugs and to all forms of regulatory drug assessment as well as to clarify that data generated in UK trials can be used for regulatory approval in other jurisdictions.  As the UKIPO's Explanatory Document[2] says, "in short, any tests or studies which are required by regulatory bodies will be allowed".

Discussion

While these amendments are undoubtedly welcome for the pharmaceutical industry, particularly the innovative side, they do not address the remaining uncertainty over section 60(5)(b)'s scope and nor do they address a more recent issue on the supply of API for clinical trials. 

The issue arose from litigation between Astellas Pharma Inc. and Polypharma SA in which the Polish Supreme Court held in October 2013[3] that a third party supplier of an API to a pharma company conducting trials for regulatory approval would not be within the Bolar exemption as it was making the API for its own commercial purposes and had not directly applied for regulatory approval itself.  In a parallel action in Germany a similar decision was reached by the Landgericht Düsseldorf that such a supplier would only be within the exemption if it was a co-organiser of the trials.  The German appeal court sought guidance on the issue of third party supply from the Court of Justice of the EU[4], and the UK IPO consulted on whether to intervene, but the reference was withdrawn in May 2014 with no decision having been made.  This leaves it unclear outside Poland and Germany whether a pharmaceutical company that does not manufacture API itself can source from a third party for a clinical trial. 

For the UK, new subsections 6D to 6F at first read would seem to allow third party supply as they allow "anything done in or for the purposes of a medicinal product assessment".  There is nothing restricting the exemption to acts by the party intending to apply for regulatory approval only and there is no good reason why just because manufacture of an API for use in a clinical trial is outsourced it should infringe.  On the other hand, the UK IPO's guidance[5], while not explicitly addressing the issue, says that "The new provisions do not extend to commercial activities, such as sale, commercial supply, or manufacture in preparation for sale or supply".  Some commentators have taken this to indicate that third party supply for a clinical trial would infringe following similar reasoning to the Polish Supreme Court.  The authors' view is that the UK IPO's statement is directed at commercial supplies generally, rather than the specific circumstances of concern here, and so should not be read as qualifying the broad "anything done" language in 6D.  Third party supply should therefore be within the scope of the extended Bolar exemption but, as ever with new legislation, it is a point that will have to wait for the courts to decide.  In the meantime it leaves unwelcome uncertainty, particularly for smaller generic companies that tend not to manufacture their own API and for EU based API manufacturers, which will lose custom to non-EU competitors.

* Ralph Cox is a Partner with Fasken Martineau LLP (London, UK)
** Kinjal Kondhia is a Trainee Solicitor with Fasken Martineau LLP (London, UK)