Often, research and development companies require the use of patented technology in order to either investigate and research their eventual product, and/or to use patented technology within their development process of a commercial product. Most commonly, generic companies will often require the use of products which are currently patent protected, in order to gather data for submission to the relevant regulatory bodies, for example, for marketing authorisation. This research and development will usually take place before the patent covering the product expires, as generic companies will want to minimise the time between the marketing of their product and the lapse of the patent.

In the UK and in several of the European Union member countries, there exists an exception to infringement for the purpose of allowing innovation and to prevent stifling of emerging technologies. However, this often only applies to the research and experimental stages of product development, whereby it is allowed to use patented products to the extent that the research work attempts to improve the patented invention or to find out something new about the patented product. In contrast, the mere application of the patented product, e.g. to verify what is known, such as, bioequivalence studies for an abridged application, will likely constitute infringement and a license will be needed.

Aside from exemptions to infringement under national patent laws, there exists a further legal exemption known as the “Bolar Exemption”. This exemption is so called as a result of a US law that overruled a previous decision which did not allow for a research and development exemption to infringement (572 F. Supp. 255 (1983) Roche Products v Bolar Pharmaceuticals Co. No. CV 83-4312). This legal exemption specifically refers to actions carried out by a party using patented products and methods for research and development of those products in order to submit data to the relevant regulatory bodies for market approval.

In Europe, the Bolar Exemption is laid out by Directive 2004/27/EC 2004. Specifically, Article 10(6) which states that conducting the necessary studies and trials with a view to showing bioequivalence of a generic medicinal product and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates (SPCs) for medicinal products. In other words, the Bolar Exemption allows the use of patented products, prior to expiry of the patent, for the purposes of providing the clinical trial and experimental evidence required for obtaining regulatory approval, for example, to market a generic version of a patented drug. The generic manufacturer can therefore be ready and set to sell the approved generic drug immediately after expiry of the patent rights.

However, the Bolar Exemption in Europe is applied differently according to each member state. Generally, there appears to be two approaches to applying Bolar Exemptions. The first set of countries (such as the UK, Belgium and Sweden) have a narrower application of the Bolar exemption, referring only to actions for marketing authorisation and approval. The UK Intellectual Property Office (UKIPO) has published a Practice Note to explain their understanding in relation to infringing activities conducted only for the purpose of obtaining an abridged marketing authorisation for a generic medicinal product. The second set of countries (such as France, Germany and Spain) have a much broader application of the Bolar exemption, which includes any act relating to research and development of patented products (including for marketing authorisation and approval) and is not limited to generic medicinal products.

Concerns were raised that the narrow interpretation of the Bolar Exemption in the UK made it less competitive to its neighbours and the UK was losing out on opportunities to conduct clinical trial work in support of getting marketing authorisations. Therefore, a new exemption came into force on 1 October 2014, (under the Legislative Reform (Patents) Order 2014) by way of addition to the original experimental use exemption and is loosely referred to as The New Exemption or The New Bolar. The New Exemption allows not just testing for generic versions of patented drugs but also testing for innovative drugs. In addition, the New Exemption covers activities conducted “for the purpose of a medicinal product assessment”, which would seem to suggest that the provision covers third party supply of patented active ingredients, provided that the supply is for the exempted purpose. Additionally, research tools that are an integral part of a drug therapy and are used in, or for, the purpose of a medicinal product assessment, are interpreted by the UKIPO in their Guidance Notes, to be within the scope of New Exemption.

Thus, the New Exemption provides much broader exclusions from infringement than previously available, not only for generic companies but also for innovator companies. Although the new provisions have not yet been tested in Court, it is hoped that this new legislation will allow the UK to become a more attractive location for carrying out clinical trials.

For further advice on the above exemptions, infringement and freedom to operate, please contact our Attorney experts at Avidity IP.