Pharmaceutical IP and competition law in Spain: overview

A Q&A guide to pharmaceutical IP and competition law in Spain.

The Q&A gives a high level overview of key issues including patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports.

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, visit Medicinal product regulation and product liability in Spain: overview.

To compare answers across multiple jurisdictions, visit the Pharmaceutical IP and competition Country Q&A tool.

The Q&A is part of the global guide to life sciences law. For a full list of jurisdictional Q&As visit www.practicallaw.com/lifesciences-guide.

Contents

Patents

1. What are the legal conditions to obtain a patent and which legislation applies? Which products, substances and processes can be protected by patents and what types cannot be patent protected?

Conditions and legislation

An invention can be protected by a patent if it (Article 4, Law 11/1986):

  • Is new.

  • Involves an inventive step.

  • Is capable of an industrial application.

  • The invention is sufficiently described.

Patents are regulated by:

  • Law 11/1986 (modified by Law 10/2002, which brought into force Directive 98/44/EC on the legal protection of biotechnological inventions).

  • Royal Decree 2245/1986, Implementing Patents Law Regulation.

  • Convention on the Grant of European Patents 1973 (European Patent Convention).

  • WIPO Patent Cooperation Treaty 1970 (Patent Cooperation Treaty).

Scope of protection

Article 4 of Law 11/1986 allows patents related to biological material and genetic data, but excludes the following:

  • Discoveries, scientific theories and mathematical methods.

  • Elements included in copyright law (Intellectual Property Rights Law), for example literary, scientific, or aesthetic works, or any kind of aesthetic piece of art in general.

  • Plans, rules or methods related to intellectual activities, games or economic activities, including software.

  • Methods to present information.

  • Chirurgic, therapeutic or diagnostic methods, applicable to the human body or animals.

 
2. How is a patent obtained?

Application and guidance

Patent rights can be obtained by an application to the Agency of Patents and Trade Marks (Oficina Española de Patentes y Marcas) (OEPM) (www.oepm.es). The website provides guidance on the application procedure.

The fees for 2016 are as follows:

  • EUR74.92 for the patent application (EUR63.68 for online applications).

  • EUR691.50 for the report (EUR587.78 online).

  • EUR26.46 for granting rights.

The patent holder must pay annual fees from the third year following the date of registration of the patent (see www.oepm.es).

Process and timing

OEPM carries out a formal examination of the application but does not examine whether the requirements of novelty or an inventive step have been met. The application is refused if the product is not patentable or if any formal defect is not remedied by the applicant within two months of notification of the defect. After the formal examination of the patent application, the applicant must request a report on the state-of-the-art (report). The applicant can then choose either one of the two following processes to obtain a Spanish patent.

General process. Where:

  • The application must be published in the Official Journal of Industrial Property (Boletin Oficial de la Propiedad Industrial) (Official Journal).

  • The report is issued by OEPM, communicated to the applicant and published in the Official Journal.

  • Third parties can file observations on the report, which are notified to the applicant who can submit representations in response.

  • OEPM decides, based on the report, third party observations and other representations, whether to grant the patent. If it does, the decision is published in the Official Journal.

  • The procedure to obtain registration usually lasts between 30 and 36 months. A rejection can be appealed before the administrative courts.

Process with previous examination. Where:

  • The process is the same as for a general process but, at the applicant's request, the OEPM will issue a patentability report examining the suitability of the invention description, novelty and inventive step.

  • If the OEPM decides that the application does not meet any of the requirements, it will give the applicant a deadline to cure the defect.

  • The patent will only be granted if the patentability report has been passed.

 
3. How long does patent protection typically last? Can monopoly rights be extended by other means?

Duration and renewal

Provided renewal fees are paid and the patent is not revoked, patent rights last 20 years from the date the application is filed.

Patents cannot be renewed.

Extending protection

The effective term of patent rights for medicinal products can be extended by a supplementary protection certificate (SPC) for up to five years under Regulation (EEC) 1768/92 concerning the creation of an SPC for medicinal products. The extension is equal to the period between the date when the patent application was lodged and the date when the first MA was granted in the EU minus a period of five years.

This period can be extended for an additional six months if the product has been authorised for paediatric use.

 
4. How can a patent be revoked?

Revocation of a patent right can be requested by any person who considers itself damaged by the patent authorisation, and by the government. A patent is revoked when any of the following occur:

  • The invention does not meet one of the patentability requirements.

  • The invention is not described sufficiently clearly and completely so as to be carried out by an expert.

  • The purpose of the patent exceeds the description in the patent application.

  • The patent owner was not entitled to apply for a patent.

 
5. How is a patent infringed? How is a claim for patent infringement made and what remedies are available?

Conditions for infringement

A patent is infringed if any third party either (Article 64, Law 11/1986):

  • Manufactures or imports the object protected by the patent or uses the process patented without the consent of the patent holder.

  • Exploits the patent in any other way (for example, selling the patented object illicitly), if the patent holder has previously requested the infringement to stop.

Criminal offences are committed by a person, who for industrial or commercial purposes, without the consent of the patent holder, and knowing that the patent is registered (Article 273, Criminal Code, Organic Law 1/2015):

  • Manufactures, imports, possesses, uses, offers or introduces in the market a product protected by a patent.

  • Uses, or offers the use of, a patented procedure.

  • Possesses, offers or introduces the product into the market.

  • Uses a product obtained directly from the patented procedure.

Claim and remedies

Claims must be brought in the mercantile courts, and accompanied by relevant documents and reports of independent technical experts. Mercantile court decisions can automatically be appealed before the provincial courts (audiencias provinciales), which in turn can be appealed to the Supreme Court on certain specific grounds only (tribunal supremo).

The patent holder may also be entitled to file a criminal action against the infringer.

The patent holder can request the following civil remedies:

  • Cessation of the infringing acts.

  • Compensation for damage.

  • Seizure of the infringing products.

  • Attribution of ownership of the infringing products.

  • Adoption of any measures that may be required to stop infringement.

  • Publication of the court's judgment.

The court can grant an interim injunction if the applicant provides evidence of both the following (Article 133, Law 11/1986):

  • If an injunction is not imposed, it may jeopardise the effectiveness of a future decision (periculum in mora).

  • The applicant has the right to ask for an interim injunction (fumus boni iuris).

Criminal punishments include fines, imprisonment and professional disqualification.

 
6. Are there non-patent barriers to competition to protect medicinal products?

Authorised generic medicinal products cannot be marketed until ten years have elapsed from the date of the initial authorisation of the reference medicinal product.

This ten-year period can be extended up to a maximum of 11 years if, during the first eight years of the ten-year period:

  • The holder of the medicinal product obtains an authorisation for one or several new therapeutic indications.

  • During the scientific evaluation before authorisation, it is established that the indications involve a significant clinical benefit in comparison with existing therapies.

 

Trade marks

7. What are the legal conditions to obtain a trade mark and which legislation applies? What cannot be registered as a trade mark and can a medicinal brand be registered as a trade mark?

Conditions and legislation

A trade mark must be:

  • Capable of graphic representation.

  • Distinctive.

  • Capable of distinguishing the goods of one person from those of another.

Trade marks must not incur various absolute and relative prohibitions (see below, Scope of protection).

Trade marks are regulated by both of the following:

  • Spanish legislation, that is:

    • the Trade Marks Law 17/2001; and

    • Royal Decree 687/2002, Implementing Trade marks Law Regulation.

  • EU legislation, that is:

    • Regulation (EC) 207/2009 on the Community trade mark (CTM); and

    • Regulation (EC) 2868/95 implementing Regulation (EC) 40/94 on the Community trade mark.

Scope of protection

Medicinal product brands can be protected by registration as trade marks, provided the trade mark does not incur the absolute and relative prohibitions in Article 5 and 6 et seq of Law 17/2001, including being:

  • Identical or similar to the sign and the designed products or services of a previous Spanish or Community registration.

  • Identical or similar to a previous trade mark, which identifies different products or services, when the trade mark is well-known or reputed.

  • A sign:

    • not capable of graphical representation;

    • non-distinctive, descriptive, habitual, deceitful or composed exclusively by the product form;

    • contrary to law and public order;

    • identical or confusing with a guarantee of origin, in which the product cannot be included;

    • identical or confusing with an official coat of arms, flags or other emblems.

In addition, the trade mark cannot (Article 14.2, Royal Legislative Decree 1/2015 and Article 35, Royal Decree 1345/2007):

  • Mislead as to the therapeutic properties or the nature of the medicinal product.

  • Be confused with a Spanish official denomination or an international common denomination.

  • Be confused with another medicinal product in the market, or a cosmetic product, or food sold in pharmacies.

  • Have been used by a medicinal product that was annulled within the previous five years.

Generic medicinal products are identified by the abbreviation EFG (medicamento genérico) following their denomination. Generics can also be identified with a trade mark when the trade mark complies with the provisions set out above.

 
8. How is a trade mark registered?

Application and guidance

Trade mark applications must be made to the:

  • OEPM or Autonomous Community where the applicant is domiciled, or has its industrial or commercial establishment.

  • OEPM, when the applicant is not domiciled in Spain.

  • Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), for CTMs.

The OEPM website (www.oepm.es) provides guidance on the application procedure.

The following fees apply:

  • EUR144.58 for a Spanish application (EUR122.89 online) (in 2016).

  • EUR900 for a CTM application online (in 2016).

Process and timing

The following are the key stages:

  • The relevant office (Office) carries out a formal examination of the application (OHIM for CTM applications or OEPM for Spanish applications). The Office then publishes the trade mark application in the Official Journal, unless it considers the trade mark contrary to public policy.

  • Third parties who consider they would be damaged by a grant of a trade mark can oppose the application. Opposition is notified to the applicant who can submit representations in response.

  • The Office decides whether to reject or accept the application. This decision can be appealed before the Office and eventually administrative courts.

The length of the process depends on whether the application is opposed, and usually takes between eight and 20 months.

 
9. How long does trade mark protection typically last?

Trade mark registration is valid for ten years. A registration can be renewed for successive ten-year periods on payment of a fee, which is currently EUR167.39 (EUR1,350 for CTMs' renewal online).

 
10. How can a trade mark be revoked?

A trade mark can be revoked by a court's final judgment where any of the following apply:

  • The trade mark owner was not entitled to apply for registration.

  • The trade mark infringes the absolute prohibitions contained in Article 5 of Law 17/2001.

  • The applicant acted in bad faith.

  • The trade mark conflicts with the relative prohibitions (that is, it conflicts with prior rights) contained in Articles 6 to 10 of Law 17/2001.

A claim for nullity of a trade mark must be filed before a mercantile court. Decisions can be appealed to a provincial court. A further right of appeal may be available to the Supreme Court. A claim for nullity cannot be filed if the same causes have been invoked in an opposition process before the administrative courts.

 
11. How is a trade mark infringed? How is a claim for trade mark infringement made and what remedies are available?

Conditions

A registered trade mark is infringed when a third party uses in the course of trade and without the consent of the trade mark holder (as in patent infringement):

  • Any sign identical to the trade mark for identical products or services for which the trade mark is registered.

  • Any sign identical or similar to the trade mark and identifying identical or similar products or services, which is misleading to the public.

  • Any sign identical or similar to the trade mark, which identifies different products or services, when the trade mark is well-known or famous in Spain, and its use may lead to an unfair profit or damage to the trade mark.

A criminal offence is committed by a person who, for industrial or commercial purposes, without the consent of the trade mark holder, and knowing that the trade mark is registered (Article 274, Criminal Code):

  • Reproduces, imitates, modifies, or uses an identical sign or a sign capable of being confused, to identify the same or similar products or services.

  • Intentionally imports those products without the consent of the trade mark holder, irrespective of the lawful or unlawful nature of the product in its country of origin.

Claim and remedies

A claim must be brought in a mercantile court. Decisions delivered by that court can be appealed to a provincial court which can, in turn, be appealed to the Supreme Court. The trade mark owner is entitled to request the following remedies:

  • Cessation of the infringing acts.

  • Compensation for damages. The trade mark owner has the right to compensation equivalent to 1% of unlawful sales made with no requirement to provide evidence. If evidence is provided, compensation may be increased.

  • Interim remedies to prevent trade mark infringement, in particular, withdrawal from trade of infringing products, packages, advertising material, labelling and other documents.

  • Destruction or charitable donation (if possible) of the products unlawfully identified with the trade mark, at the offender's cost.

  • Attribution of seized property (where possible).

  • Publication of the court's judgment.

Criminal sanctions include fines, imprisonment and professional disqualification.

 
12. Outline the regulatory powers and enforcement action against counterfeiting in the pharmaceutical sector.

Law 10/2013 of 24 July has introduced into Royal Legislative Decree 1/2015 the definition of a counterfeited medicinal product.

Additionally, the manufacture, importation, exportation, intermediation, distribution, dispensation and sale of counterfeited medicinal products, including distance sale, has been introduced as a very serious infringement. This can be sanctioned with:

  • Fines ranging from EUR90,001 to EUR1 million and increased up to five times the value of the products that are the object of the infringement.

  • Seizure of the benefit obtained and the temporary closure of the premises up to a period of five years.

The infringement procedure is enforced by the Agency on Medicinal Products and Medicinal Devices (AEMPS).

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, see Medicinal product regulation and product liability in Spain: overview ( www.practicallaw.com/8-500-4409) .

IP and competition law issues

13. Briefly outline the competition law framework in your jurisdiction and how it impacts on the pharmaceutical sector. In particular, the competition authorities and their regulatory powers, key legislation, whether pharmaceutical investigations are common, key recent activity and case law.

Competition law in Spain is governed by Law 15/2007 3 July on the Defence of Competition, and Royal Decree 261/2008 22 February approving the Regulation on Defence of Competition.

The competition rules are applied by the courts (specifically, mercantile courts) and administrative authorities (the National Commission on Markets and Competition (CNMC) at national level and certain competition authorities from the Autonomous Communities). Both national and regional authorities have similar regulatory powers to other authorities, such as the European Commission (for example, to request documents and carry out dawn raids in professional and private premises).

Pharmaceutical companies have been recently investigated in relation to both:

  • Their pricing strategy linked to parallel commerce.

  • Eventual settlements between innovative and generics companies, in the framework of the European Commission's Sector Inquiry into the pharmaceutical sector.

 
14. Briefly outline the competition issues that can arise on the licensing of technology and patents in a pharmaceutical context

Regulation (EC) 316/2014 on the application of Article 101(3) of the TFEU to categories of technology transfer agreements (Technology Transfer Block Exemption Regulation) applies in Spain.

In the context of the Technology Transfer Block Exemption Regulation:

  • A distinction is made between agreements entered into by competing and non-competing companies.

  • There is an outright prohibition on restricting the ability to determine the sale price of products and to enter into territories or customers allocated to others. However, the treatment of active and passive sales differs, depending on whether the parties to the agreement are competitors.

To be exempt, agreements should not contain:

  • Clauses contesting the validity of the licensed rights (though termination of exclusive agreements is possible).

  • An obligation on the licensee to grant an exclusive licence or assign to the licensor its own improvements of the licensed technology.

However, many competition law issues in licence agreements in Spain are now dealt with under Regulation (EU) 330/2010 on the application of Article 101(3) of the TFEU to categories of vertical agreements and concerted practices (Vertical Restraints Block Exemption) to the extent the licensed rights are ancillary to the relationship between non-competing companies.

 
15. Are there competition issues associated with the generic entry of pharmaceuticals in your jurisdiction?

Certain innovative and generics companies in Spain have been investigated in the framework of the European Commission's Sector Inquiry into the pharmaceutical sector and by the CNMC, in relation to patent settlements or patent enforcement actions that may have delayed generic entry into the Spanish market. Settlement agreements are now expressly dealt with by the Guidelines for Technology Transfer Agreements.

An applicant for a marketing authorisation does not have to provide the results of the required pre-clinical and clinical trials if it can prove that the medicinal product is a generic of a reference medicinal product that is or has been authorised for a minimum period of eight years in any EU member state, or by the EU, even when the reference medicinal product would not be authorised in Spain, without prejudice to rights relating to industrial and commercial property protection (Articles 17.3 and 18, Royal Legislative Decree 1/2015). However, the generic cannot be marketed until ten years have elapsed from the date of the initial authorisation of the reference medicinal product (this can be extended to 11 years under certain conditions).

 
16. Have abuse of dominance issues arisen in the pharmaceutical sector in your jurisdiction?

Spanish competition authorities have been reluctant to conclude that dominant positions exist in the pharmaceutical market, since mandatory regulations and the significant buyer-power of the NHS prevent companies from behaving independently, despite high market shares held by companies. However, the European courts have more recently held that the existence of such mandatory regulations are not an impediment to concluding that pharmaceutical companies can hold a dominant positions for certain medicinal products. The Spanish authorities also seem to be widening their traditionally narrow approach to dominance in the sector.

 
17. Have parallel imports of pharmaceuticals raised IP and competition law issues in your jurisdiction?

Due to the comparatively low prices in Spain, parallel commerce has been a frequent issue in Spain. For instance, the Court for the Defence of Competition (former National Competition Commission) decisions in Cases Laboratorios Farmacéuticos of 12 February 2001, 5 December 2001 and 19 February 2004 are landmark cases, where the competition authorities' point of view is made clear.

These cases were initiated following claims filed by exporting wholesalers of concerted agreements between the relevant laboratories to prevent parallel imports, and alleged abuses of dominant position for unjustified denials of supplies. The authorities concluded that no restrictive agreements or abuses had been found.

Under the former Spanish legal framework on pricing, the more recent judgment on parallel trade and dual pricing system (DPS) is a Supreme Court ruling dated 3 December 2014, which confirms the ruling issued by the Spanish National Audience. The National Audience ruling annulled the Spanish National Competition Commission decision dated 21 May 2009 not to initiate a sanctioning procedure against Pfizer for its DPS.

The Supreme Court and the National Audience understand that the Spanish legislation cannot be construed as if it imposed on Pfizer an obligation to apply different prices to Spanish wholesalers, depending on the products being financed and sold in the Spanish market. Therefore, such DPS would be regarded as contrary to Article 81 (now 101) of the Treaty on the Functioning of the European Union, although the application of Article 101.3 (former Article 81.3) is not excluded. The case is now being examined by the CNMC.

 
18. Does a patent or trade mark licence and payment of royalties under it to a foreign licensor have to be approved or accepted by a government or regulatory body? How is such a licence made enforceable?

There is no such requirement.

Under Article 79.2 of Law 11/1986, a patent licence must be registered with the OEPM to be enforceable against third parties. Likewise, under Article 46.3 of Law 17/2001, licences of a trade mark are enforceable against third parties when registered with the OEPM.

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, see Medicinal product regulation and product liability in Spain: overview ( www.practicallaw.com/8-500-4409) .

 

Contributor profiles

Héctor Jausàs, Partner

JAUSAS

T +34 93 415 0088
F +34 93 415 2051
E hjausas@jausaslegal.com
W www.jausaslegal.com

Professional qualifications. Spain, Solicitor, 1995

Areas of practice. Pharmaceutical and healthcare law; EU law; competition law.

Languages. Spanish, Catalan, English, French.

Professional associations/memberships. Member of Conferénce Bleue (European Lawyers' Conference on Pharmaceutical and Health Care Affairs) since 1997 and Co-Managing Partner since 2012.

Publications. Author of the International Encyclopedia of Agency and Distribution Agreements, Kluwer Law International, 1997. Since 1996, he has been a regular contributor to influential magazines and newspapers.

Gemma Colomer, Senior Associate

JAUSAS

T +34 93 415 0088
F +34 93 415 2051
E gcolomer@jausaslegal.com
W www.jausaslegal.com

Professional qualifications. Spain, Solicitor, 1998

Areas of practice. Pharmaceutical and healthcare law; litigation law.

Languages. Spanish, Catalan, English, Italian, German.

Publications. She usually collaborates with several Spanish specialised magazines and media.


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