article / 01 May 2014

Does supply from a third party fall under the Bolar exemption?

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Medicinal products take a long time and huge effort to develop. It is estimated that the cost of bringing a new product to the market exceeds on average half a billion US dollars. Patent protection is vital for originators in order to recover some of the spending for research and development invested in new medicines.

There are, however, exemptions from the exclusivity granted to the patent holder. One is the use of an invention for experiments relating to the invention itself. Patent law promotes the development of new inventions. However, the exemption for such experimental use is supposed to  be narrowly interpreted (and is obviously interpreted and implemented in different ways within the EU).

Closely related to the exemption for experimental use is the so called Bolar exemption. The Bolar exemption stems from the development in the US and later on the Hatch-Waxman Act. In short – and in this context – the Hatch Waxman Act states that it is not an infringement to use a patented invention for uses related to the development and submission of information to the FDA.

Within the EU, the corresponding Bolar exemption is regulated by EU Directive 2004/27/EC (amending inter alia. the EU Directive on Medicinal Products for Human Use). The Directive establishes that conducting the “necessary studies and trials with a view to the application of [a marketing authorization] and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products”.

There are different interpretations among the member states of the EU as to which acts are exempted from infringement. It is likely that a party wishing to carry out trials necessary to obtain marketing authorization for a generic product, may manufacture the product relying on the Bolar exemption. It is not clear, however, if third parties supplying patented substances to the generic industry for the use in obtaining marketing authorization also may refer to the same exemption.

Recently a dispute between the Polish company Polpharma, a manufacturer of the active ingredient solifenacin succinate, and Astellas Pharma, the proprietor of a European patent for solifenacin succinate, highlighted the question of supplies from a third party in national proceedings in Poland and Germany (Düsseldorf court).

Polpharma advertised the active ingredient on its website and in journals. In parallel, Polpharma had also supplied Hexal in Germany with solifenacin succinate. Polpharma asserted that the supply had been made subject to the condition that Hexal must use the active ingredient only for the purpose of conducting the studies required to obtain marketing authorization, i.e. in accordance with the Bolar exemption.

The Düsseldorf court considered that third party supply is only exempted in accordance with the Bolar regulation under limited and narrow conditions, emphasizing the role of the supplier as a part of the tests and studies carried out by the customer under the Bolar exemption. The court held that these conditions were not met and that it was not necessary to refer the question to the CJEU. The Polish court seems to have come to the same conclusion.

However, the Oberlandesgericht Düsseldorf decided that clarification from the CJEU is required and referred a number of questions to the CJEU concerning the scope of the Bolar exemption, including if the exemption applies to acts by which a third party, for purely commercial reasons, supplies to a manufacturer of generic products a patentprotected active substance.

Although the Bolar exemption aimed to harmonise the position in the EU member states, the implementation of the Directive into national law seems to differ. It is also said that the UPC has narrowed the approach to interpretation of the Directive. The referral to the CJEU is of importance for the pharmaceutical industry and the outcome is awaited with great interest.



Practice areas:

Life Sciences

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