Proposal for a EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC) concerning the creation of a supplementary protection certificate for plant protection products
Date: 1994-12-09
Institutions: European Commission
Subjects: consumer protection, environmental protection, health certificate, marketing standard, pharmaceutical product, plant health product

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

COM(94) 579  final 
Brussels,  09.12.1994 

94/0285  (COD) 

Proposal  for a 

EUROPEAN  PARLIAMENT AND COUNCIL REGULATION  (EC) 

concerning the creation 

of a supplementary protection  certificate 

for plant protection products 

(presented  by the  Commission) 

EXPLANATORY  MEMORANDUM 

INTRODUCTION 

PART  ONE: COMPLETING  THE  INTERNAL  MARKET  FOR PLANT PROTECTION  PRODUCTS 

A. 

B. 

C. 

Harmonizing the duration  of protection  for  inventions  in the  plant  protection 
sector 

Preventing distortions of competition 

Remedying the erosion of patent  protection 

(a)  Erosion of effective  patent  protection 

(b)  Operational  differences  between authorization  systems 

D. 

Need for  Community  action 

PART  TWO: 

T HE  NEEDS OF THE PLANT PROTECTION  SECTOR  WITH REGARD  TO 
COMMUNITY  OBJECTIVES 

A. 

Characteristics of the sector 

1.  Scale of research and development 

2.  Impact of environment  policy 

3.  Intensity  of competition 

4.  Industry  profitability. 

B. 

Improving competitiveness  and promoting  research 

PART  THREE: 

T HE  DIFFERENT  INTERESTS  INVOLVED 

A. 

B. 

C. 

Access to the market for generic  products 

Effect  on prices of the supplementary protection  certificate 

Multilateral  application  of the supplementary protection  certificate 

PART  FOUR: 

DETAILS AJ^D CHARACTERISTICS  OF THE PROPOSED  SYSTEM 

A. 

B. 

Operation  of the supplementary protection  certificate 

Legal basis 

PART  FIVE : 

EXAMINATION  OF THE  PROVISIONS 

-  A  -

EXPLANATORY  MEMORANDUM 

INTRODUCTION 

1. 

2. 

3. 

4. 

On  18 June  1992 the  Council  meeting  on  the 
internal  market  adopted 
Regulation  1768/92 concerning  the  creation  of  a  supplementary  protection 
force 
certificate 
on 2 January  1993. When the Council adopted  the common  position  pursuant 
to  the  procedure  under  Article  149(2)  of  the  EEC  Treaty,  it  also  adopted, 
on  19 December  1991, a statement recorded  in the minutes of the meeting: 

products,^)  which 

for  medicinal 

entered 

into 

"The  Council  requests  the  Commission  to  submit  to  it  as  soon  as  possible 
after  this Regulation  enters into force  a proposal  concerning  the creation  of 
a supplementary protection  certificate for  plant  health products. " 

The  Commission  recalls  that,  during  the  discussions  on  Regulation  1768/92, 
it  argued  before  the  Council  and  Parliament  that  it  would  be  possible,  at  a 
later  stage,  to  apply  the  supplementary  protection  certificate  to  other 
products,  such  as plant  protection  products,  provided  the  industry  concerned 
demonstrated  that it was faced  with a situation justifying  such a measure. 

that,  on 

It  should  also  be  noted 
the  scope  of 
Regulation  1768/92, the large majority  of the Member  States took the view at 
the  time  that  it  would  be  more  effective  to  restrict  discussion  to  the 
pharmaceutical  sector,  without  prejudice  to  their  respective  positions  as  to 
the need for  subsequent  action in respect  of other products. 

the  question  of 

The  plant  protection  industry  wished  the  Community  to  intervene,  on  the 
grounds  that  Community  action  was  necessary  to  remedy  barriers  to  the  free 
movement  of  its  products,  distortions  of  competition  and  the  erosion  of  the 
duration  of  effective  patent  protection.  Following  the  Council's  request,  and 
after  examining  the  current  global  situation  of  the  industry  in  question  and 
noting,  in particular,  the obvious erosion  of the  duration  of  patent  protection 
for  plant  protection  products, 
that 
Community action is required. 

the  Commission 

the  view 

takes 

The  proposed  system  prevents  barriers  to  the  free  movement  of  plant 
protection  products  in  the  Union  and  the  distortions  of  competition  that 
would  inevitably  be  caused  by  different  national  laws.  This  is  the  proposal's 
first  objective.  The second  is to  improve the legal  framework  for  firms  in the 
Union  engaged  in  research  and  development  work  on  new  plant  protection 
products by providing adequate protection  for innovations, thereby  improving 
their competitiveness on the world  market. 

W  Regulation  (EEC) No  1768/92,  OJ No L  182,  2.7.1992. 

-2 

PART-ONE:  COMPLETING  THE INTERNAL  MARKET FOR 
PLANT PROTECTION  PRODUCTS 

A.  HARMONIZING  THE DURATION  OF PROTECTION  FOR  INVENTIONS 

IN THE PLANT PROTECTION  SECTOR 

5. 

6. 

7. 

8. 

9. 

The  primary  objective  of this  proposal  is to  harmonize,  at  Community  level, 
the  effective  protection  afforded  to  inventions  in  the  plant  protection  field 
and, consequently, to ensure the proper functioning  of the internal market.  At 
the  moment,  the  theoretical  and,  above  all,  the  effective  duration  of 
protection  for  inventions  in this  field  varies  from  Member  State  to  Member 
State. 

Where  a plant  protection  product  is protected  by patent,  the  duration  of this 
protection  is  generally  twenty  years  from  the  date  on  which  the  patent 
application  is filed in all the Member  States,  whether  on the  basis  of  national 
patent  law  or  the  European  Patent  Convention  (Munich).  However,  this 
duration is theoretical in that marketing authorization  procedures, prior to the 
product's  being  placed  on 
it  considerably  and 
proportionally reduce the length of effective  protection. 

the  market,  shorten 

Action  to  restore  adequate,  effective  duration  of  protection  for  these 
products can be envisaged  only if the conditions for  supplementary  protection 
and  its duration  are  harmonized  between  the Member  States.  Any  disparities 
here,  in  particular  concerning  the  duration  of  protection,  would  lead  to 
restrictions  on  the  free  movement  of  plant  protection  products  which  could 
not be justified  under Community law. 

At  the  moment,  having  regard  to  the  operating  arrangements  of  national 
patent  systems,  the  different  patents  protecting  the  same  plant  protection 
product  in  the  Member  States  can  commence  and  expire  on  different  dates 
owing, in particular,  to the existence of a priority period.  This is the period  of 
twelve  months  during  which  a person  who  has  properly  filed  an  application 
for  a patent  in  one  Member  State  may file another  for  the  same  invention  in 
another  Member  State  without  losing  the  benefit  of  the  novelty  of  the 
invention. It follows that the dates on which these different  patents take  effect 
and expire may vary between the Member States. 

In addition,  a number  of Member  States have only recently  become  members 
of the European  Patent  Convention  (Munich) and the resulting  harmonization 
is not  yet  fully  effective.  Thus,  patents  issued  in  Germany  before  1978 had  a 
term  of  eighteen  years,  former  Irish  patents  one  of  only  sixteen  years  and 
patents  issued  tn  the  United  Kingdom  before  the  entry  into  force  of  the 
Patents  Act  1977 one  of  seventeen  years  from  their  date  of  issue.  The  result 
is that a product which has entered the public domain in some Member  States 
may  still  be  protected  by  an  exclusive  patent  right  in  others,  which  disrupts 
the free  movement of goods. 

10.- 

Lastly,  differences  in the  operation  of  national  registration  systems  cause  an 
imbalance  in  the  duration  of  effective  protection  available  to  the  same  plant 
protection  product  in different  Member  States,  which  interferes  with  the free 
movement  of  these  products  and  free  access  to  the  market  for  competing 
products. As the Court noted in Case C-341/87 fEMI v Patricia), the problem 
there  stems  from  the  differences  between  national  legislation  regarding  the 
period  of  protection  afforded  by  copyright  and  by  related  rights,  those 
differences  concerning  either  the  duration  of  the  protection  itself  or  the 
details thereof,  such  as the time when the  protection  period  begins to  run. In 
this  case, the  imbalance  —  and  the  disruption  to  the  internal  market  ~  arises 
from  the  different  dates  on  which  the  different  patents  covering  the  same 
product  expire throughout  the Union. 

Corrective action is therefore  needed. 

B.  PREVENTING  DISTORTIONS  OF  COMPETITION 

11. 

Because  of  the  differences  currently  existing  between  the  details  of  the 
operation  of  the  patent  system  and  of  the  registration  system,  a  number  of 
producers of plant  protection  products are subject to unjustified  distortions of 
competition.  This  is  particularly  true  of  producers  established  in  Member 
States  where  marketing  authorization  is  obtained  much  more  slowly  than  in 
the other Member  States. 

The  erosion  of  the  duration  of  effective  protection  is  exacerbated  by 
differences  in  the  efficiency  of  the  different  national  registration  systems. 
Depending  on  the  Member  State,  the  time  taken  by  the  national  authorities 
responsible  for  marketing  authorizations  to  approve  an  application  may vary 
from  one  to  four  years.  Faced  with  the  general  erosion  of  the  duration  of 
effective  patent  protection,  which  disrupts  the  proper  functioning  of  the 
internal  market,  firms  are  also  faced  with  substantial  differences  in  the  time 
taken  to  process  their  applications  for  marketing  authorization,  which 
constitutes a form  of distortion  of competition. 

12. 

The  effort  already  made  at  Community  level  to  harmonize  the  rules  on 
marketing  authorizations  for  plant  protection  products  through  the  adoption 
the  completion  and 
of  Directive 91/414/EEC,  which 
functioning  of  the  internal  market  for  this  sector,  must  be  supplemented  by 
the  creation  of a corrective  mechanism  for  the  inadequacies  in the  system  of 
protection  for  plant  protection  research,  which  are  attributable  to  the  very 
same requirements  of the prior marketing  authorization. 

is  essential 

to 

This  corrective  mechanism  must  be  harmonized  at  Community  level,  failing 
which  it  would  only  maintain  --  possibly  worsen  ~  existing  distortions  of 
competition. 

13. 

Putting  plant  protection  products  on  a  footing  similar  to  that  which  would 
obtain in the absence of a marketing authorization  system means placing them 
on  the  terms  that  obtain  in  other  sectors  of  technology  not  subject  to 
is  experiencing 
marketing  authorization.  The  plant  protection  sector 

14. 

distortions  of  competition  in  relation  to  other  technological  sectors  because 
of the very existence of the prior authorization  mechanism. 

The duration  of the supplementary  protection  afforded  by the  certificate  must 
be  sufficient  to  fulfil  the  objectives  of  promoting  research  pursued  by  the 
proposal  while  maintaining  balanced  competition.  In  this  respect,  plant 
protection  research  should  not  be  discriminated  against;  it  should  be  placed 
on  terms  similar  to  those  existing  in  other  sectors.  That  is  why  the 
Commission  is  proposing  that  the  supplementary  certificate  should  have  a 
maximum term of five years and that the total  duration  of effective  protection 
(residual  period  'of  the  basic  patent  to  which  is  added  the  supplementary 
protection certificate)  should be a maximum  of fifteen years,  starting from  the 
first authorization to place the product  on the market  in the Community.  This 
period  is equivalent  to  that  existing  in  other  industrial  sectors  which  are  not 
subject  to prior marketing  authorization. 

C.  REMEDYING THE EROSION  OF PATENT  PROTECTION 

(a) 

Erosion of the duration  of effective  protection 

15. 

The  available  statistics  reveal  that  plant  protection  products  are  suffering 
from increasing erosion  of the duration  of effective  patent  protection  because 
of  the  continuous  increase  in  the  time  taken  to  obtain  the  necessary  prior 
marketing  authorizations.  This  is  not  just  the  time  taken  by  the  national 
authorities  to  examine  applications  for  authorization,  but  rather  the  time 
required by firms to prepare and carry out  all the tests and  analyses  necessary 
to file the application for  authorization. 

The  duration  of  effective  patent  protection  of  plant  protection  products 
(period  of time between the date of obtaining the marketing  authorization  and 
the expiry of the patent  protecting the product)  has fallen  from  an average  of 
twelve years in  1978 to some nine years today. 

These  figures  are  taken  from  analyses  carried  out  on  a  product-by-product 
basis for  each of the Member  States. They reflect  a situation  similar to that  of 
medicinal  products  when  Regulation  (EEC)  No  1768/92 was  adopted 
in  1992, and justify  the adoption  of a similar  measure for  the plant  protection 
sector. 

5-

Table 1:  Duration  of  effective  protection  for  plant  protection  products 
(years) 

12,0 
10,75 
9,5 
9,25 

1978 
1979 
1980 
1981 
1982 
1983 
1984 
1985 

10,0 
11 
11,75 
11,25 
Source: ECPA (European  Crop Protection  Association) 

1986 
1987 
1988 
1989 
1990 
1991 
1992 

11,5 
11,0 
10,5 
10,0 
10,0 
9,75 
9,250) 

16. 

17. 

These  overall  figures  are  confirmed  by  the  analysis  carried  out  in  each 
Member  State.  In  the  United  Kingdom,  the  duration  of  effective  patent 
protection  for  plant  protection  products fell  from  eleven years in  1980 to just 
over six years in  1991. In Germany,  it has also fallen,  from  some twelve years 
in  1980 to nine years at the moment. 

An imbalance thus arises between the interests of the patent-holder  and  those 
of  persons  wishing  to  exploit  the  patented  product  once  the  patent  has 
expired.  Because  of  the  very  nature  of  plant  protection  products,  they  are, 
like  medicinal  products,  easily  reproduced,  without  the  "pirate"  having  to 
bear  the  costs  of  research  and  development  which  went  into  the  original 
product.  This explains the  specific  value and  overwhelming  role of the  patent 
in the strategy  of the plant protection  industry, for  which this instrument  is of 
vital importance since there is no alternative. 

(b) 

Operational  differences  between  authorization  systems 

18.  With regard  to the duration  of effective  protection,  the differences  which  can 
exist  between  Member  States  at  the  level  of  theoretical  protection  are 
exacerbated  by the  operational  differences  between  the  systems  of  marketing 
authorization  for  plant  protection  products.  This is where  the  main  obstacles 
to the proper  functioning  of the internal  market  for  plant  protection  products 
are to be  found. 

19. 

Any  plant  protection  product  must  not  only  be  effective  as  an  insecticide, 
herbicide,  fungicide,  etc.,  but  at  the  same  time  it  must  not  have  any 
unacceptable effect  on health or the environment. 

This  twofold  requirement  explains  why  research  and  development  on  new 
plant protection  products requires  increasing  amounts  of time and  investment 
and  why these products  cannot  be placed  on the  market  without  having  been 
officially  scrutinized  and authorized  beforehand. 

0)  estimation 

- 6-

20._  On  15 July  1991 the  conditions  and  procedures 

for  authorizing  plant 
protection  products  were  harmonized  at  Community 
level  by  Council 
Directive 91/414/EEC  concerning  the  placing  on  the  market  of  plant 
protection  products/2) 

The system established by the Directive provides  for: 

(a)  a positive list of active substances approved  at Community level; 

(b)  a system  of  authorization,  by the Member  States,  of  products  containing 
one or more active substances included on the Community positive list; 

(c)  mutual  recognition  by  the  Member  States  of  national  authorizations 
provided  that  agricultural,  plant  health  and  environmental  (including 
climatic)  conditions  relevant  to  the use  of the  product  are  comparable  in 
the regions concerned; 

(d)  a  data  protection  mechanism  — submitted  with  the  applications  for 
marketing authorization  ~  for the benefit  of the first applicant for  a period 
often  years from first inclusion of an active substance on the positive list. 

21. 

Harmonization  of authorizations  at  Community  level  and  the  requirement  to 
register  all existing and new active substances is necessary,  but  not  sufficient, 
for  the  completion  of the internal  market,  which  will be  of  long-term  benefit 
to  the  plant  protection  industry  in  the  Union  and  to  users.  The  diversity  of 
national requirements concerning marketing authorization for  plant  protection 
products represents always a substantial  cost to industry. 

D.  NEED FOR COMMUNITY  ACTION 

22. 

The  question  of  whether  the  proposed  measures  are  proportionate  to  the 
objectives pursued  should  also be looked  at. In so far  as one of the  objectives 
is to  prevent  obstacles to the proper functioning  of the internal  market  which 
would  be  created  by  disparities  in  the  application  of  national  laws,  this 
objective  cannot  be  attained  satisfactorily  by  action  taken  solely  at  Member 
State level. To  ensure the proper  functioning  of the internal  market,  the  laws 
of the Member  States should be harmonized  so that the duration of protection 
for  the  same  plant  protection  product  is  identical  throughout  the  Union. 
Harmonization  must  deal  with  not  only  the  duration  of  protection  generally 
but  also  with  such  matters  as  the  date  on  which  protection  expires.  That  is 
precisely what the mechanism chosen in this proposal does. 

23. 

The  data-protection  mechanism  incorporated  into  applications  for  marketing 
authorization  introduced  by  Directive 91/414/EEC  would  not,  for  its  part, 
have the  same  scope  and the  same  effects  as those  conferred  by  a  patent  or 
similar  instrument.  Protection  of  the  registration  data  is  not  absolute  in  that 
manufacturers  of generic products  can,  if they  so  wish,  themselves  carry  out 

(2>  O J L N o 2 3 0,  19.8.1991, p.  1. 

-7 

24. 

25. 

26. 

27. 

the  tests  needed  to  obtain  marketing  authorization  without  waiting  for  data 
from  the  innovating  firm.  Only  a  patent  or  similar  instrument  can  guarantee 
fully  effective  protection  on  the  market,  enabling  the  investment  made  in 
research  and  development  to  be recovered  and  adequate  financial  reserves  to 
be set aside for R&D activities. 

influence  on  the  general  patent 

As was the  case in  1992 for  medicinal  products,  this proposal  seeks to  create 
a  specific  and  sectoral  industrial  property  instrument  which  is not  such  as  to 
have  any 
to  other 
technological  sectors.  Since what  is being created  is a new industrial  property 
instrument  distinct  from  patents,  the  optimal  harmonization  at  Community 
level  of its  conditions  of issue  and  its method  of  calculation  can  be  achieved 
only by using the legal instrument of a Parliament and Council Regulation. 

laws  applicable 

The  method  of  calculating  the  duration  of  the  supplementary  certificate — 
based  on  the  first  authorization  to  place  the  product  on  the  market  in  the 
Community,  and  for  all  the  Member  States  — means  that  the  different 
certificates  covering  the  same  product  will  expire  on  the  same  date 
throughout  the Union. The date of issue of the marketing  authorization  in the 
different  Member  States has no impact here since the duration  of the  different 
certificates  is  calculated,  for  all the  Member  States,  on  the  basis  of  the  first 
authorization  to  place  the  product  on  the  market  in  the  Union.  Once  the 
different  certificates  issued  by  the  different  Member  States  for  the  same 
product  have  expired,  the  product  will  enter  the  public  domain  at  the  same 
time in all the Member States. 

A heterogeneous and potentially or actually diverging  situation with regard  to 
national  laws  governing  the  conditions  for  granting  the  supplementary 
protection,  its  effect  or  duration  would  be  such  as  to  create  distortions  of 
competition  in  the  Union.  Not  taking  the  initiative  at  Community  level  and 
leaving  to  the  Member  States  the  task  of  determining  the  rules  for  and 
duration  of an extension  of patents  for  plant  protection  products  would  have 
adverse  consequences  on  the  free  movement  of  these  products  and  on  the 
competitive conditions prevailing in this sector. 

A  Community  solution  entailing  harmonization  of  the  conditions  for  the 
application  of  the  system  introduced  and  the  rules  governing  it  and 
standardization  of  the  duration  of  protection  of  plant  protection  products 
therefore  has to  be  found  to  secure the  establishment  and  proper  functioning 
of the internal market and the introduction  of normal  competition. 

However,  with  regard  to  patents,  national  laws  cannot  be  approximated 
without  also  preserving  the  harmonization  between  the  national  systems  and 
the  European  patent  system.  That  is  why  the  certificate  applies  to  all  plant 
protection  products  authorized  to  be  placed  on  the  market  and  protected  by 
patent  in their national territory,  whatever  path —  national  or European  ~  has 
been  followed  for  that  purpose.  A uniform  solution  applying  to  all  patented 
products,  whether  the  patent  was  issued  under  national  law  or  under  the 
European  Patent  Convention  (Munich),  can  be  achieved  effectively  only  by 
action at Community level. 

28..  The  certificate  is  a  national  document  issued  by  a  national  patent  office  but 
whose  conditions  of  issue  and  duration  are  harmonized  at  Community  level. 
In certain aspects it is essentially different  from  the basic patent.  It  contributes 
to  facilitating  the  proper  functioning  of  the  European  patent  system.  The 
result  would  be completely  different  if it were  possible to  obtain  a  certificate 
only  for  plant  protection  products  protected  by  a national  patent.  A  fortiori, 
when use is made of the European  procedure  to  obtain  a Community  patent, 
it  will  be  all the  more  necessary  for  the  certificate  to  apply  equally  to  plant 
protection products protected  by a Community patent.  The proposal  has been 
developed with a view to providing now for this prospect. 

9-

PART TWO:  THE NEEDS OF THE PLANT PROTECTION  SECTOR 

WITH REGARD TO COMMUNITY  OBJECTIVES 

A detailed profile of the plant protection  sector is given in the Annex. 

A.  CHARACTERISTICS  OF THE SECTOR 

1. 

Scale of research and  development 

29. 

The recent  trend  in the  plant  protection  products  industry  is for  a  continuing 
increase  in  expenditure  on  research  and  development  (R&D),  both  as  a 
percentage of total sales and in absolute terms. 

In  1991 R&D  expenditure  by  the  fifteen  leading  firms  in  the  world 
averaged  10.25 %  of turnover.  Biotechnology  has  become,  in  this  respect,  a 
key  factor  in  research,  principally  in  the  field  of  transgenic  plants  and  the 
development  of  pesticides.  The  new  plant  varieties  will  be  resistant  to 
pesticides,  disease,  herbicides,  frost  and  drought,  and  of  improved  quality. 
Biotechnology  research will not  substantially  reduce  sales volume in the plant 
protection  sector but  will produce  significant  changes in the types of  product 
available and in the competition between different  products. 

30. 

Significantly,  expenditure  by  plant  protection  firms  on  research  and 
development  and the development  of new products rose from  ECU 25 million 
per  product  in  1975 to  more  than  ECU  125 million  in  1992,  a  five-fold 
increase. 

It  should  be  noted  that,  among  the  different  development  stages  of  a  plant 
protection  product  (synthesis  and  screening-formulation,  analysis  of  the 
product  and  chemistry-biology-toxicology  and  environment),  it  is toxicology 
and  environment  which  have  expanded  most:  expenditure  on  studies  of  the 
toxicology  and  environmental 
from 
ECU 4 million per product  in  1975 to ECU 50 million in  1992, an  eleven-fold 
increase  (Source:  Fonds  der  Chemischen 
Informationsserie 
No  10"Pflanzenschutz"). 

impact  of  new  products 

Industrie, 

rose 

31. 

However,  plant  protection  research,  like  pharmaceutical  research,  is  a  high-
risk  activity,  involving  extremely  costly  and  hazardous  investment.  It  is 
estimated  that  some  15 000 chemical  compounds  must  be  synthesized  and 
analysed  for  every  new  product  placed  on  the  market.  In  addition,  it  is 
increasingly  difficult  to find new  plant  protection  products  since  solutions  to 
the 
less  complex  research  objectives  have  already  been  found  and 
international  competition  imposes  very  high  standards.  While  new  plant 
protection  products  were  introduced  at  the  rate  of  one  major  innovation  a 
year in the  1960s, this fell to  one every three years in the  1980s.  The  number 
of  new  products  placed  on  the  market  is  therefore  much  lower  in  the  plant 
protection  sector  than  in  pharmaceuticals,  where  fifty  a  year  is  a  normal 
figure. 

10-

32.. 

33. 

In  addition,  whereas  European  firms  were  pioneers  in  the  discovery  of  new 
products  in the  1970s (introduction  of Bayer's fungicide  triazole),  two  of the 
major  discoveries  in  the  past  decade,  imidazoline  and  sulphonyl,  both 
herbicides,  came  from  American  companies  (American  Cyanamid  and  Du 
Pont).  Their  sales of these two  products for  1989 are estimated  at 9 % of the 
world  herbicide  market.  A  fourth  major  new  product,  however, 
the 
insecticide  pyrethrin  with 6 %  of  the  world  market,  was  a  European 
innovation. 

This  shift  in the centres where new products  are  developed  can be  illustrated 
by looking at where the products  currently  registered  as herbicides  in France, 
the most representative part  of the European  plant  protection  market  in terms 
currently 
of 
authorizes  115 herbicide  substances.  The  table  below  shows  where  these 
substances were discovered  during previous decades. 

climate,  were 

researched. 

France 

crops 

and 

Table 2: Origin of herbicides launched in France 

Time  of launch 
1960s 
1970s 
1980s 
Source:ECPA 

Europe 
6 7% 
5 2% 
3 7% 

United  States 

33% 
45% 
51 % 

Japan 
0% 
3% 
12% 

These  data  are  significant  in  that  they  clearly  show  the  downward  trend  in 
new  herbicides  launched  by  European  firms.  If  there  are  no  significant 
changes in the protection  given to research by European firms, it is likely that 
American  groups  will  continue  to  be  the  main  source  of  scientific  and 
technical progress in this sector. 

34. 

In many respects, the constraints on research  in plant protection  are similar to 
those  affecting  pharmaceutical  and  chemical  research.  None  the  less,  a 
number of the sector's specific features  make it even more vulnerable: 

(a)  Plant  protection  products  are used by farmers  to  increase the  profitability 
of  their  farms,  which  reduces  the  producers'  room  for  manoeuvre  with 
regard  to  the  price  levels  of  their  products.  The  market  for  plant 
protection  products  is highly price-sensitive: prices are not  controlled  and 
are  the  result  of  market  forces;  farmers  choose  between  the  different 
products on offer  largely on cost. 

(b) Plant  protection  research  has  a  narrower  range  of  objectives  than 
pharmaceutical  research.  The  aim  is  essentially  to  place  on  the  market 
products  which are more environment-friendly  and more efficient  from  an 
agricultural  point of view. 

(c)  Development  costs are very high because of the fact that formulations  and 
instructions  for  use  of  plant  protection  products  must  take  account  of 
regional differences  in agronomic conditions. 

-11 

- 

(d) Plant  protection  companies  are  particularly  exposed 

to  market 
competition  (no  massive  state  purchases,  as  is  the  case  for  medicinal 
products with a number of public health services). 

2. 

Impact of environment  policy 

35. 

The  scale  of  research  is  directly  linked  to  requirements  concerning  the 
environment.  The  industry  must  balance  its  role  of  crop  protection  with  that 
of not  endangering the environment.  In this respect,  plant  protection  research 
is  intended  not  only  to  limit  the  risk  of  major  agricultural  disasters  and  the 
massive  losses  (some 30 %  of  world  harvests)  caused  by  parasites,  disease 
and  weeds.  Today,  new  plant  protection  products  must  not  only  help  in 
avoiding a fall in yields and  securing food  supplies; they  must  also involve no 
unacceptable risk for man and the environment. 

The major  challenge facing  the industry  is therefore  to  find  a  proper  balance 
the  production 
between  compliance  with  environmental  policies  and 
requirements  of  modern  agriculture.  Moreover, 
level  of 
industry's  chances  of 
reduces 
environmental  requirements  further 
discovering  commercially viable new products. 

the  high 

the 

3. 

' ntensity  of competition 

36. 

The industry  will  have  to  face  an  increasingly  competitive  environment  as  a 
result  of  the  completion  of  the  single  market,  the  reform  of  the  common 
agricultural policy and the GATT agreements on international trade. 

The  frontier-free  single  market  will,  among  other  things,  involve  a  gradual 
alignment  of  prices  in  the Member  States.  Until  recently,  prices  in  Germany 
were the highest,  almost double those in the United Kingdom,  those in France 
lying between  the two.  For  some three years  now,  however, firms have been 
allowing  for 
introducing  products  and  price 
differences  have fallen  to no more than 25 %.  This trend  will  accentuate  even 
the 
further 
c ompetitiveness of firms within the Union. 

importance  of  research  as  a  predominant 

the  single  market  when 

factor 

the 

in 

37. 

In  addition,  reform  of  agricultural  policy  and  implementation  of  the  GATT 
agreements  on  international  trade will reduce  the  amount  of land  farmed  and 
agricultural  subsidies and will lead to a markedly  slower rate of growth  in the 
market  for  plant  protection  products  in  developed  countries,  offset  however 
by  rising  demand  from  developing  countries.  Whereas  the  average  rate  of 
growth  of the  market  in the  Union  was  some 6 %  in  1988, the  situation  has 
seriously  deteriorated  since,  with  a  spectacular  fall  in  sales  on  the  West 
European market of  18 % in 1992. 

The current  reform,  and the completion  of the single market,  will increase the 
intensity  of  competition  in  the  sector.  In  particular,  the  number  of  plant 
protection  firms  in  the  Union  will  probably  fall,  through  acquisitions  and 
mergers, involving particularly firms in biotechnology  research. 

38.  We  must  not  ignore  the  fact  that  more  than  half  the  world  market  for  plant 
protection  products  concerns  ones  which  are  no  longer  covered  by  patents 

- 1 2-

and  which,  therefore,  will  not  be  able  to  benefit  from  the  Regulation 
concerning  the  supplementary  protection  certificate.  According  to  available 
estimates, 55 %  of  the  world  herbicide  market  is  for  products  no  longer 
covered  by  patents;  the  figures  for  insecticides  and  fungicides  are 58 % 
and 59 %  respectively.  Accordingly,  the  plan  for  a  supplementary  protection 
certificate  will  affect  only  some  of the firms in the  sector,  to  a degree  yet  to 
be determined  (see below). This incentive for  research  should  also  encourage 
competition between plant protection firms to develop new products. 

4. 

Industry  profitability 

39. 

The  aim  of  the  supplementary  protection  certificate  is  to  protect  current 
profitability  levels  in  the  plant  protection  product  industry  so  as  to  ensure 
future  research. Profitability  in the industry, in particular in the Community,  is 
lower than in industry in general and the pharmaceutical  industry in particular, 
and is falling. 

Whereas  in  1990, at world  level, the industry  had  average  profits  of 8.2 %  of 
turnover,  companies  based  in  the  Union  had  to  be  satisfied  with  only 
some 6 %,  while  their  American  competitors  achieved  11.4%.  Since  then, 
margins  have  shrunk  even  further,  1992 being  a  very  bad  year  for  sales  in 
Europe.  The  competitive  position  of  the  European  industry  is  therefore 
considerably weaker than that  of its main competitors,  American  and Asian in 
the main. In a sector where investment  in research  is so substantial  and risky, 
an  adequate  profit  margin  is  essential  to  ensure  the  continuity  of  the  R&D 
process. 

40. 

There are two fundamental  reasons for the global reduction  in the  profitability 
of plant protection  product companies during the  1980s, namely the impact of 
an  increasingly  competitive  market  and  the  significant  increase  in  costs  and 
time spent on developing new products and getting them  authorized. 

The figures  reveal that the plant  protection  industry  does not  generate  profits 
proportionate to the inherently high level of risk  associated  with  its activities, 
which alone would be able to generate adequate financial  reserves to  maintain 
and  carry  on  research  activities.  They  also  show  the  need  to  extend 
supplementary  protection  to  certain  patented  products  which  are  already 
marketed  in the European Union. 

41. 

None  the  less,  the  costs  of  developing  plant  protection  products  (up  to 
ECU  125 million  for  each  new  product  placed  on  the  market)  will  remain 
particularly  high  because  of  the  considerable  volume  of  experimental  data 
required  to  show that  the products  are effective  and  safe.  Unlike  the  case  of 
medicinal  products,  formulations  and  instructions  for  the  use  of  plant 
protection  products  must  take  account  of  regional  variations  in  agronomic 
conditions  and  of  effects  on the  metabolism  ~  not  only  of  plants  but  also  of 
animals  —  and  on the  environment  in general.  It  follows  that  the  recovery  of 
the corresponding  investments is absolutely vital for  the research industry and 
depends,  to  a  large  extent,  on  it  being  guaranteed  an  adequate  duration  of 
effective  protection for  innovations  introduced. 

13 

B. 

IMPROVING  COMPETITIVENESS  AND PROMOTING  RESEARCH 

42. 

43. 

44. 

In its communication  to the  Council  and Parliament  of  16 November  1990 on 
industrial  policy,^)  the  Commission  had  occasion 
to  stress  the  vital 
importance  for  the  position  of  the  Union  in  the  world  economy  of  having  a 
competitive  industry,  one  factor  in  which  is  the  capacity  for  innovation. 
Strengthening  the  competitiveness  of  Community  industry  and  promoting 
research  and  technological  development  are  now  expressly  included  in 
Article 3 of the Union Treaty. 

Support  for the research  effort  in a high-risk industry such as plant  protection 
products  depends  to  a  large  extent  on  recovering  the  cost  of  investments  in 
R&D  on  new  products,  through  the  sale  nnd  exploitation  of  patented 
products. 

The  erosion  of  the  duration  of  effective  protection  under  patents  for  plant 
protection  products,  as  described  above  (point  15),  leads  to  manifestly 
inadequate  protection  which  penalizes  research  precisely  in  the  field  which, 
because  of  the  very  nature  of  the  process  of  innovation,  requires  the 
protection  of industrial property more than other industries. 

The Commission  White Paper  on Growth,  Competitiveness  and  Employment, 
presented  to  the  European  Council  in  Brussels  in  December  1993,  stresses 
the  need  for  action  to  restore  the  competitiveness  of European  firms  and  to 
encourage  growth.  These  measures  are  part  of  an  approach  to  boost  the 
technology/growth/employment 
protection 
certificate  for  plant  protection  products  is  a  sectoral  initiative  which  is  fully 
consistent with this overall  approach. 

supplementary 

cycle.  The 

O 

Industrial  Policy  in an  Open  and  Competitive  Environment,  COM(90)  556  final. 

14-

PART THREE: THE DIFFERENT  INTERESTS  INVOLVED 

A.  ACCESS TO THE MARKET FOR GENERIC  PRODUCTS 

45. 

The  very  nature  of  the  supplementary  protection  certificate  will  ensure  that 
plant  protection  products  benefiting  from  the  provisions  of  the  Regulation 
will continue to  be protected  for  a longer  period  of time.  Thus,  producers  of 
generic  plant  protection  products  have  access  to  certain  patented  products 
only after  several months or perhaps several years. 

A number of important points should be made here. 

46. 

First,  more  than  half  the  plant  protection  products  sold  are  no  longer 
protected  by patent. 

Table 3:  Plant  protection  product  market:  shares  of  patented  and 
patented-expired  products 

Herbicides 
Insecticides 
Fungicides 
Total 

Current patent 
4 5% 
42 % 
41 % 
4 3% 

Patent  expired 
55 % 
58 % 
59 % 
5 7% 

Source: Wood Mackenzie Consultants Ltd. 

These  figures,  which  were  confirmed  by  a  study  carried  out  in  1990 by  the 
UK  Ministry  of  Agriculture,  Fisheries  and  Food  (MAFF),  show  that,  in  the 
three  most  important  sectors  of  the  market  for  plant  protection  products, 
products  not  covered  by  patents  and  thus  freely  accessible  to  manufacturers 
of generic products account for more than 50 % of the market. 

Of  course,  none  of  the  products  in  this  category  will  benefit  from  the 
provisions  of  the  proposed  Regulation,  leaving  manufacturers  of  generic 
products  complete  freedom  of  action.  In  addition,  the  patented  products 
which  account  for  the  rest  of  the  market  will  qualify  for  only  one 
supplementary  protection  certificate  per  active  substance.  Thus,  if the  same 
active  substance  is  used  in  different  forms  (powder,  liquid,  etc.),  only  one 
certificate  can  be  issued  and  not  as  many  certificates  as  there  are  forms 
marketed.  The  certificate  protects  the  active  substance  which  is  contained  in 
the different  forms  or presentations of the product. 

47. 

Second, it should be noted that the supplementary  protection  certificate  is not 
an  automatic  mechanism  giving  five  years'  additional  protection  for  all 
patented  products.  Certificates  are granted  and their  duration  calculated  on  a 
case-by-case  basis,  taking  account  of  the  duration  of  patent  protection 
actually  lost  by  the  product  in  question  during  development  and  the 
authorization  procedure  for  placing  on  the  market.  Thus,  although  the 
supplementary  protection  certificate  can be valid for  a maximum of five years, 

- 1 5-

it  will  be  valid  for  less  than  this  if marketing  authorization  was  granted  less 
than ten years after  the application for a patent  was filed. 

The  non-automatic  nature  of  the  certificate  also  means  that  it  is  granted  by 
national  patent  offices  not  to all products which  might benefit  from  it, but on 
application  by  the  holder  of  the  basic  patent  protecting  the  product 
concerned.  In certain  cases  (development  of  a  revolutionary  plant  protection 
product  within  the  same  group  of  products),  the  patent-holder  could 
deliberately  choose  not  to  exercise  his  right  to  apply  for  a  supplementary 
protection  certificate,  thus  leaving  the  product  to  enter  the  public  domain 
once the basic patent expires. 

The  mechanism  selected  is  such  that  the  maximum  effective  protection  of 
fifteen  years  (residual  duration  of  the  basic  patent  plus  duration  of  the 
supplementary  protection  certificate)  is  calculated  from  the  date  of  the first 
authorization to be placed  on the market in the Community,  which means that 
the  full  fifteen  years  will be  achieved  only  in the Member  State  in which  the 
first  marketing  authorization  is  obtained.  In  each  Member  State  in  which  a 
marketing  authorization  is  obtained  subsequently,  the  total  duration  of 
effective  protection  will  be  reduced  by  the  period  of  time  between  the first 
marketing  authorization  in  the  first  Member  State  and  the  subsequent 
authorization. 

48. 

49. 

A third  feature  of the  proposal  is to  provide  a wide  range  of  information  to 
interested  third  parties  — including  manufacturers  of  generic  products — 
through  publication  of  details  of  the  application,  the  decision  to  grant  or 
reject  the  application,  and  the  expiry  of  the  certificate.  Manufacturers  of 
generic  products will thus be  able to  monitor the  development  of the  market 
for  patented  plant  protection  products  and will  not  suddenly  be  faced  with a 
fait  accompli. 

Lastly,  it  should  be  acknowledged  that  the  generics  industry  depends  to  a 
large extent  on the success of research-based  industry  in that  there will be no 
generics  industry  to  benefit  if  the  research  industry  does  not  develop  new 
plant  protection  products.  Today's  research  findings  are  the  guarantee  of the 
prosperity  of  tomorrow's  generics  industry.  rlhe  supplementary  protection 
certificate  should  contribute  to  the  appearance  of  new  plant  protection 
products  which  one  day  will  be  accessible  to  manufacturers  of  generic 
products. 

B.  EFFECT ON PRICES OF THE SUPPLEMENTARY  CERTIFICATE 

50. 

A tricky problem  posed  by the proposal for  a Regulation  concerns the impact 
of  the  supplementary  protection  certificate  on  the  prices  of  plant  protection 
products  and,  consequently,  on  farmers'  expenditure.  Taking  account  of  the 
overall  situation  of  the  agricultural  world,  there  are  grounds  for  asking  this 
question  and  giving  a  precise  answer.  Various  estimates  suggest  that  the 
certificate  will  have  a  minimal  impact  on  the  prices  of  plant  protection 
products. 

16-

51.-  As mentioned  above (point 46), the proposed  mechanism will not  apply to all 
plant  protection  products;  the 57 %  of the  market  which  has already  entered 
the  public  domain  will  not  be  affected  at  all.  Nor  will  the  granting  of  a 
supplementary  certificate  be  automatic,  since  it  is to  depend  on the  merits  of 
each individual case. 

52. 

Plant  protection  products  placed  on  the  market  after  the  entry  into  force  of 
the  Regulation  will  benefit  from  a  supplementary  protection  certificate  only 
after  ten  years,  i.e.  on the expiry of the basic  patent  protecting  them.  During 
these  ten  years, the  supplementary  protection  certificate  will  have  no  impact 
on their prices. 

The  aim  of  the  transitional  arrangements  —  which  concern  products  already 
on  the  market  when  the  Regulation  comes  into  force  —  is  to  strike  a  fair 
balance between what is needed  to achieve the proposal's  objectives  and what 
can reasonably be accepted  by society.  This balance should  not  allow all plant 
protection  products  already  on  the  market  to  have  a  supplementary 
protection  certificate,  but  should  also not  exclude  all these products  from  the 
transitional  arrangements. 

53. 

Taking  1  January  1985 as the reference  date  for  the transitional  arrangements 
—  this  date  defines  the  size  of  the  group  of  products  already  placed  on  the 
market  when  the  Regulation  comes  into  force  and  qualifying  for  a 
supplementary  protection  certificate  ~  means  that  only 37 plant  protection 
products 
arrangements, 
representing  5.28 %  of  the  total  market  for  such  products  in  the  European 
Union. 

transitional 

benefit 

could 

from 

the 

represent 

a  market  of 

these 37 substances 

Today, 
the  order  of 
ECU 285 million.  As  a  rule,  it  is  estimated  that  the  introduction  of  generic 
versions  of  plant  protection  products  (legal  copies  of  products  no  longer 
protected  by  patent)  leads  to  a  price  reduction  of  some 25 %.  In  addition, 
the 37 substances  concerned  by  the  transitional  arrangements  would  benefit 
from  a  supplementary  protection  certificate  of 2.5 years  on  average.  That 
means  that  the  entry  into  force  of  the  certificate  system  will  put  back 
by 2.5 years  a price  reduction  of the  order  of 25 %  on  a market  estimated  at 
ECU 285 million, i.e. some ECU  180 million. 

This postponement  of a price reduction  —  it  must  be regarded  as such  rather 
than  as  a  genuine  price  "rise"  ~  caused  by  the  supplementary  protection 
certificate  must  be  spread  out  over  a  period  of  ten  years.  This  is  because 
products  that  obtain  marketing  authorization  after  the  entry  into  force  of the 
Regulation  will  not  benefit  from  a  supplementary  protection  certificate  until 
the expiry of the basic patent protecting them, i.e. on average ten years later. 

During  this  period,  only  plant  protection  products  already  on  the  market 
when the Regulation  enters into force will be  affected. 

If  the  additional  expenditure  generated  by  the  supplementary  protection 
certificate  is spread  out  over  a period  often  years, that  gives ECU  18 million 
a year.  This amount  represents an increase in expenditure by farmers  on plant 

-17 

protection  products of the order of 0.33 % a year.  According to  data  supplied 
by  Eurostat,  expenditure  by  farmers  on  buying  plant  protection  products 
accounts  for  6.2 %  of  their  total  outgoings.  The  introduction  of  the 
supplementary  protection  certificate  will  increase  this  figure  to 6.2204  %, 
which is not  a significant  rise. 

On the industry  side, this increase in turnover  —  of the order  of 6.25  % of the 
market  for  products  affected  by  the  transitional  arrangement  ~  should 
generate  additional  resources  to  encourage  research.  These  are  estimated  at 
ECU 4.86 million  a  year  for  each  substance  concerned  during  the  period  of 
additional  protection. 

54. 

It is clear that, by its very nature, the supplementary  protection  certificate  will 
have  an  impact  —  albeit  limited,  as  shown  above  ~  on  prices:  however,  it 
should  safeguard  the future  of plant protection  research in Europe,  and  hence 
the  development  of  products  which  will  be  more  environment-friendly  and 
adapted  to  the  needs  of  agricultural  efficiency.  There  is  strong  demand  from 
farmers  for  such products. 

C.  MULTILATERAL  APPLICATION  OF THE SUPPLEMENTARY  CERTIFICATE 

55. 

56. 

57. 

58. 

a 

for 

proposal 

(EEC) 
Regulation, 
This 
No  1768/92 concerning  medicinal  products,  may  benefit  not  only  firms  from 
within  the  Union  but  also  firms  from  outside.  In  fact,  having  regard  to  the 
geographical  distribution  of  the  plant  protection  research  industry,  only 
Swiss, American and Japanese firms are concerned. 

Regulation 

like 

The  obligations  which  the  European  Union  accepted  under  the  GATT 
Uruguay  Round  prevent  any  other  outcome.  Article 3 of  the  TRIPs  text 
(trade-related  aspects  of  intellectual  property  rights)  lays  down  the  "national 
treatment"  principle,  which  requires  the  GATT  Contracting  Parties  to  grant 
to  natural  or  legal  persons  from  the  other  Contracting  Parties  the  same 
treatment  as they give to their nationals. 

A further  consideration  is that  plant  protection  firms  from  the  Union  benefit 
from  restoration  of  patents  in Japan  and  Korea,  and  the  advantages  inherent 
in the  American  system,  where  the  duration  of  the  patent  is,  in  fact,  longer 
than  the  theoretical  17 years  because  of  the  method  of  calculation.  In  the 
United  States  the  duration  of  patents  is  17 years  from  the  date  on  which  the 
patent  is  granted  and  not  from  the  date  on  which  the  application  is  filed, 
which  means that  any  delay  in the procedure  for  awarding  the  patent  —  very 
frequent  because of the judicial  proceedings  in that  country  —  delays the  start 
of protection  and means that  effective  protection  ends later. 

Lastly,  according  to  estimates,  if  the  reference  date  for  the  transitional 
arrangements  is  1  January  1985,  of  the  thirty-odd  products  concerned,  less 
than  ten  are  of American  origin,  while the  rest  are  European.  It  is thus  clear 
that the proposed  measure will not be of greater benefit  to firms from  outside 
Europe.  In  the  context  of  an  open  market,  in  normal  circumstances  it  will 
apply both to European firms and those from  outside the Union. 

- ii 

PART FOUR:  DETAILS AND CHARACTERISTICS  OF THE 

PROPOSED  SYSTEM 

A.  OPERATION  OF THE SUPPLEMENTARY  CERTIFICATE 

59. 

60. 

61. 

The  supplementary  protection  certificate  is  a  sui  generis  industrial  property 
instrument  which  takes  effect  on the expiry  of the  basic  patent  protecting  an 
invention in the plant protection field. The rules governing its granting and its 
duration  are  harmonized  at  Community  level,  although  the  certificates  are 
issued  by  the  national  patent  offices.  The  same  plant  protection  substance 
patented  and  authorized  to  be  placed  on  the  market  in  a number  of  Member 
States  is the  subject  of the  same number  of  applications  for  certificates, filed 
with  corresponding  national  patent  offices.  At  national  level,  the  competent 
patent  office  is that  of the  State which  granted  the  basic  patent  or  on  whose 
behalf it was granted  and in which a marketing authorization  was  obtained. 

The  supplementary  protection  certificate  applies  to  all  patents  existing  at 
national  level,  whether  granted  under  national  law,  the  European  Patent 
Convention  (Munich)  or,  subsequently,  the  Community  Patent  Convention 
(Luxembourg).  Only  legislative  action  at  Community  level,  in  the  form  of  a 
Regulation,  can  achieve  the  degree  of  harmonization  needed  at  this  triple 
level. 

As  was  decided  for  medicinal  products  in  1992,  this  proposal  for  a 
Regulation  harmonizes  the  conditions  for  granting  supplementary  protection 
certificates  and their duration; it does not create a single application  or a body 
specifically  responsible  for  issuing  supplementary  protection  certificates  at 
Community level. 

62.  With  a view  to  maintaining  as broad  as  possible  a degree  of  harmony  in  the 
field of  industrial  property,  the  Commission  takes  the  view  that  a  proposal 
concerning  the  creation  of  a  supplementary  protection  certificate  for  plant 
from  Council 
protection  products 
Regulation  1768/92 concerning medicinal products. 

in  principle,  differ 

should  not, 

This means that  the basic rules, the  procedure  and  the  overall  mechanism  for 
the  supplementary  protection  certificate,  in  particular  its  duration,  should  be 
identical.  Moreover,  this  approach  was  preferred  by  the  national  experts 
attending  the  meeting  of the  Group  of  experts  on  industrial  property  held,  at 
the  Commission's  initiative,  on  1  October  1992.  The  few  changes  in  relation 
to  Regulation  1768/92 are  highlighted  in  the  section  on  examination  of  the 
provisions (see Part Five). 

63. 

Because  of  the  very  high  research  costs  in  the  plant  protection  sector,  it  is 
usual  practice  to  protect  any  invention  in  all  the  Member  States  (in  fact, 
protection  is  generally  wider  since  patent  applications  cover  the  entire 
industrialized  world). With regard to the European Union, that  means that  the 
same plant  protection  substance protected  in all the Member  States  will  have 
its  protection  extended  by  a  maximum  of five years  and  that  this  protection 

- 19 

will  expire  on  exactly  the  same  day  throughout  the  Union.  The  detailed 
for 
procedures  provided  for 
harmonization  of  the  conditions  of  protection  granted  to  inventions  in  the 
plant  protection  sector  and,  through  competition,  a  means  of  ensuring  the 
establishment  and proper functioning  of the internal  market. 

in  this  proposal  are  a  powerful 

force 

64. 

Putting  plant  protection  products  on  a  footing  similar  to  that  which  would 
obtain  in the  absence  of authorization  means  placing them  on  the  terms  that 
obtain  in  other  sectors  of  technology  not  subject  to  authorization.  The 
Commission  puts  the average  period  from  when  the  patent  application  for  a 
given  product  is filed to  when  it  is  placed  on  the  market  at  five  years.  The 
duration  of protection  under the  certificate  thus  calculated  (the  period  "lost" 
less five years) takes effect  on the day after the basic patent lapses. 

If the  duration  of protection  under  the  certificate  (the  period  "lost"  less five 
years)  is  added  to  the  period  of  effective  protection  under  the  basic  patent, 
i.e.  from  the  date  marketing  authorization  is  obtained  to  the  end  of  the 
patent's term, a total period  of effective  protection  for  the product  concerned 
is obtained  of a maximum of fifteen  years, starting from  the first authorization 
to be placed  on the market in the Community. 

B.  LEGA  , BASIS 

65. 

The  introduction  of  a  different  period  of  protection  for  plant  protection 
products  in  each  of the Member  States  of the  Union  would  create  obstacles 
to  their  free  movement  within  the  internal  market  and  distort  conditions  of 
competition. 

The  introduction  of a standard,  adequate  period  of  protection  for  the  results 
of  plant  protection  research  will  help  avoid  problems  in the  internal  market, 
encourage  innovation  and  technical  progress  at  Union  level,  and  promote 
intra-Community  trade  in  plant  protection  products.  In  addition,  because  of 
for 
the  certificate 
the  method  of  calculation, 
harmonization  and  will  facilitate  the  free  movement  of  plant  protection 
products  in  so  far  as  one  and  the  same  patented  product  protected  by 
certificates  in  a  number  of,  or  all,  the  Member  States  will  enter  the  public 
domain on the same day throughout the Union. 

is  a  powerful 

force 

However,  this  proposal  does  not  create,  at  Community  level,  any  new  body 
responsible  for  issuing  certificates;  they  will  be  issued  by  national  patent 
offices. 

The Commission proposes that Article  100a of the EC Treaty be taken  as the 
legal basis for this proposal. 

In  drafting  the  proposal,  the  Commission  has  taken  due  account  of  the 
provisions  of Article 7c of the Treaty  and  has found  that  there  is no  need  to 
provide for  special or exceptional provisions for the time being. 

Similarly,  the  Commission  has  considered  the  question  of  the  high  level  of 
protection required in the field of health,  safety,  environmental  protection  and 

- 2 0-

consumer  protection  under  Article  100a(3)  of  the  Treaty.  In  order  to 
introduce  a  high  level  of  protection,  meeting  both  the  requirements  of  the 
internal  market  and  the  need  to  create  a legal  environment  conducive  to  the 
unhampered  development  of research  activities in the  plant  protection  sector, 
the  duration  of  effective  protection  for  plant  protection  products  should  be 
harmonized  at  fifteen  years  from  the  date  of  the  first  authorization  to  be 
placed on the market in the Union. 

21  -

PART FIVE: EXAMINATION  OF THE  PROVISIONS 

Article 1 

66. 

"Plant  protection  products"  are defined  in  Article 2 of Directive 91/414/EEC 
concerning the placing of plant protection  products  on the market.  The terms 
"substances",  "active  substances"  and  "preparations",  also 
from 
Directive 91/414/EEC,  help  to  identify  better  what  is  covered  by  the 
definition  of plant protection  product. 

taken 

However,  since the objectives of the patent  system are different  from  those of 
the  system  of  marketing  authorization,  it  is  important  to  stress  that,  for  the 
purposes  of the  certificate,  the term  "product"  is not  understood  to  mean  an 
agro-chemical  product  or  a  plant  protection  product  in  the  wider  sense,  as 
presented  for  purchase  by  the final consumer,  but  in  the  narrower  sense  of 
active  substance  or  combination  of  active  substances  contained  in  a  plant 
protection  product. 

The  purpose  of  the  expression  "basic  patent"  is  to  specify  what  types  of 
invention  may serve as a basis for  a certificate:  the proposal  does  not  provide 
for  any  exclusions.  All  plant  protection  research,  provided  that  it  leads  to  a 
new invention that  can be patented, whether it concerns a new product,  a new 
preparation,  a  new  process  for  obtaining  a  new  or  known  product,  a  new 
application  of a new  or  known  product,  or  a new  combination  of  substances 
containing  a  new  or  known  product,  must  be  encouraged,  without  any 
discrimination,  and must be eligible for  a supplementary  protection  certificate 
provided 
that  all  of  the  conditions  governing  implementation  of  the 
Regulation  are  fulfilled. 

It  is  for  the  holder  of  the  patents  for  the  product,  the  process  for  obtaining 
the product,  the application  of the product  or the combination  containing  the 
product,  to  choose  which  of  these  patents  is  to  be  regarded  as  the  "basic 
patent" for the purpose of obtaining a supplementary protection  certificate. 

Article 2 

67. 

This  Article  determines  the  scope  of  the  proposal.  It  refers  to  any  product 
that  is the  subject  of  both  a  system  of  protection  by  patent  and  a  system  of 
administrative authorization  prior to its being placed  on the market. 

It  is  specified  that  the  authorization  concerned  is  that  provided  for  in 
Directive 91/414/EEC  or  in  equivalent  national  law,  thereby  making  it  clear 
that  the  proposal  applies  only  to  plant  protection  products  which  have  been 
authorized  to  be  placed  on  the  market  pursuant  to  current  Community  or 
national law. 

With  rega^  to  the  twelve  Member  States,  Directive 91/414/EEC  came  into 
force  in  J 
993.  However,  applications  for  ma..;eting  authorization  filed 
before  that  date  in  these  Member  States,  on  the  basis  of  the  relevant 

22 

provisions  of  the  different  national  laws,  will  be  governed,  even  once 
authorization  has  been  granted,  by  those  same  national  laws  and  not  by 
Directive 91/414/EEC.  The  reason  for  this  is  that  the  period  between  the 
application  for  marketing  authorization  and  the  date  of  issue  can  run  to 
several  years.  This  explains  why  the  proposal  lays  down  that  products 
covered  by  national  law  — those  in  respect  of  which  the  application  for 
authorization  to be placed  on the market  was filed before  the  entry into  force 
of Directive 91/414/EEC  —  will also be able to  benefit  from  a  supplementary 
protection  certificate  under the conditions laid down by the Regulation. 

With  regard  to  the  countries  which  are  soon  to  become  members  of  the 
European  Union,  the  proposal  allows  for  enlargement  by  laying  down  that 
any  product  which  has  been  the  subject  of  an  application  for  marketing 
authorization  filed  before  the  entry  into  force  of  Directive 91/414/EEC  for 
the  Member  State  in  question  will be  able to  benefit,  under  the  conditions 
laid  down  by  the  Regulation,  from  the  supplementary  protection  certificate. 
If, 
in  the  future,  a  new  Member  States  joins  the  European  Union, 
Directive 91/414/EEC  will  enter  into  force  in  that  Member  State  at  a  later 
date than that  laid down for  the current Member  States. It is possible that  the 
authorization  to  be placed  on the  market  obtained  in this  new Member  State 
will  be  the  first  marketing  authorization  to  be  obtained  in  the  enlarged 
Community;  this  authorization  must  also  enable  a  supplementary  protection 
certificate  to be obtained. The proposal  allows for this type of situation. 

Since the proposal  does not  state under what  kind  of law patent  protection  is 
given, it follows that the proposal  applies to all plant protection products with 
a  patent  in any Member  State,  whether  this be a national  patent,  a  European 
patent or, in due course, a Community patent. 

Only  patented  products  are covered,  whatever  the  legal  source  of the  patent. 
The  aim  here,  with  a view  to  the  single  market,  and  in  accordance  with  the 
solution  adopted  in  Regulation  (EEC)  No  1768/92 concerning  medicinal 
products,  is  to  prevent  the  illogical  situation  whereby,  in  one  and  the  same 
Member  State, a new plant protection  product  may or may not benefit  from  a 
supplementary  protection  certificate  depending on whether  the  corresponding 
patent  was obtained  nationally or at European level. 

The  requirement  for  harmonization  on two  levels,  in  addition  to  the  urgency 
in this  specific  instance  in view  of the  constantly  increasing  periods  required 
to  obtain  authorizations  to  place  plant  protection  products  on  the  market, 
calls  for  the  adoption  of  a  legal  solution  that  maintains  such  harmonization 
and enables it to be implemented  simply and  swiftly.  That is why the proposal 
for  a  Regulation  provides  for  a  system 
in  force 
since 2 January  1993 for  medicinal  products,  i.e.  a  supplementary  protection 
certificate,  the conditions and the rules for  obtaining which are laid down in a 
uniform  manner for  all of the Member  States of the European Union. 

identical 

that 

to 

2 3-

Article 3 

68. 

This  Article  lays  down  the  substantive  conditions  to  be  met  by  a  product  in 
order to obtain  a certificate. 

As  the  certificate  is  a  national  document,  compliance  with  these  conditions 
must  be examined  with  respect  to the Member  State  in which  the  application 
for  a certificate  is submitted  and to the date of application. 

First,  it must  be ascertained  that the product  is protected  by a current  patent. 
It  is this  patent  that  serves  as the basis for  the  certificate  for  the  purposes  of 
the Regulation. 

It  may  be  that  the  same  product  is  protected  by  more  than  one  patent,  e.g. 
one for  the product  and  another  for  the process  for  obtaining  the  product.  In 
this case,  it  is for  the  holder  of the  patents  concerned  to  choose  one  of them 
as  the  basic  patent.  This  choice  is  particularly  important  in  that  the  subject 
and  the  content  of  the  protection  granted  by  the  certificate  are  limited, 
respectively, by the subject  and content  of the basic patent. 

The  product  must  have  obtained  a  valid  marketing  authorization 
in 
accordance  with  Article 4 of  Directive 91/414/EEC.  That  Directive  adopts  a 
two-stage  system  of  authorization:  first,  the  authorization  is  restricted  to 
plant  protection  products  containing  certain  active  substances  on  a 
Community  list  of  authorized  active  substances;  next,  the  final  product  is 
subject,  as  a final product,  and  before  it  is  actually  marketed,  to  a  separate 
authorization  to  be  placed  on  the  market.  Only  plant  protection  products 
which  have  successfully  completed 
for  a 
supplementary  protection  certificate. 

two  stages  qualify 

these 

In addition,  because of the special features  of the registration  system for  plant 
protection  products  (long  delay  between  the filing of the  application  and  the 
issue  of  the  certificate  by  the  competent  authorities  in  the  Member  States), 
there  is  a  need  to  ensure  that  a  product  authorized  on  the  basis  of  an 
equivalent  provision  of national  law can also benefit  from  the proposal. 

It is frequently  the case that  one and the same product  is successively  granted 
several  authorizations  to  be  placed  on  the  market,  in  particular  every  time  a 
modification  is  made  affecting  dose,  composition  or  use,  and  every  time  a 
new  use  for  the  product  is  developed.  In  such  a  case,  only  the  first 
authorization  to  place  the  product  on  the  market  in  the  Member  State  in 
which  the  application  is lodged  is taken  into  account  for  the  purposes  of  the 
Regulation,  in particular  for  calculating  the  period  of  six  months  available  to 
the  holder  of  the  basic  patent  to  submit  an  application  for  a  certificate. 
Furthermore,  if the  first  authorization  given  is  also  the  first  authorization  to 
place  the  product  on  the  market  in the  Union,  it  serves  as  the  sole  reference 
for  all  of  the  Member  States  for  calculating  the  duration  of  each  of  the 
certificates  they grant for the same product  (see Article 13). 

Lastly,  the  product  must  not  have  already  been  the  subject  of  a  certificate  in 
the  Member  State  concerned.  The  certificate  is  designed  to  encourage 

-24 

research  into  new  plant  protection  products  so  that  the  duration  of  protection 
it  affords,  together  with  the  duration  of  effective  protection  by  patent,  is 
sufficient  to  enable  the  investments  made  in  the  research  to  be  recovered. 
However,  it would  not  be  acceptable,  in view  of the balance  required  between 
the  interests  concerned,  for  this  total  duration  of  protection  for  one  and  the 
same  plant  protection  product  to  be  exceeded.  This  might  be  the  case  if  one 
and  the  same  product  were  able  to  be  the  subject  of  several  successive 
certificates. 

This  calls  for  a  strict  definition  of  the  product  as  laid  down  in  Article  2.  If  a 
certificate  has  already  been  granted  for  the  active  substance  itself,  a  new 
certificate  may  not  be  granted  for  that  active  substance,  whatever  changes 
may  have  been  made  regarding  other  features  of the  plant  protection  product 
(use  of a different  salt,  different  excipients,  different  presentation,  etc.). 

In  conclusion,  it  should  be  noted  that,  although  one  and  the  same  substance 
may  be  the  subject  of  several  patents  and  several  authorizations  to  be  placed 
on  the  market  in  one  and  the  same  Member  State,  the  supplementary 
protection  certificate  will  be  granted  for  that  substance  only  on  the  basis  of  a 
single  patent  and  a  single  authorization  to  be  placed  on  the  market,  namely 
the  first  granted  in  the  State  concerned  (the  first  authorization  in  the  Union 
being  taken  only  to  calculate  a  uniform  duration  of  different  certificates  for 
one  and  the  same  product). 

Article 4 

69. 

The  supplementary  protection  certificate  is a sui  generis  protection  instrument 
inasmuch  as  it  is  linked  to  both  an  authorization  to  place  the  product  on  the 
market  (the  first  granted  in the  State  concerned)  and  to  a  previous  patent  (the 
basic  patent).  This  is  already  evident  from  the  conditions  for  obtaining  the 
certificate,  which  require  both  that  the  basic  patent  is  a  current  one  and  that 
the  authorization  is valid,  failing  which  the  certificate  is  void. 

The  delimitation  of the  subject  protected  by  the  certificate  also  illustrates  this 
duality  since the protection  afforded  by  the  certificate  is limited  in two  ways. 

It  is  often  the  case  in  the  plant  protection  field  that  a  patent  protects  a  series 
of  products  based  on  the  same  formula.  However,  only  some  of  these 
products  will  subsequently  be  developed  and  only  one  might  be  placed  on  the 
market.  In  such  a  case,  the  certificate  will  protect  only  the  product  covered 
by the  authorization  and  not  all  of the  products  protected  by  the  patent. 

At  the  same  time,  the  product  authorized  will  itself  be  limited  by  the  patent's 
the 
subject-matter.  Lf  the  basic  patent  protects  a  compound  x,  where 
authorized  product  consists  of  a  combination  of  compound  x  and  another 
active  principle,  only  compound  x will be  protected  by the  certificate. 

Furthermore,  the  certificate  will  protect  only  the  product  covered  by  the 
authorization,  namely  the  product  within  the  strict  meaning  of  Article  2. 

- 2 5-

Lastly,  the  fact  that  the  certificate  is based  on  both  the  basic  patent  and  the 
authorization  can also be seen in the link between  the protection  afforded  and 
the  use  of  the  product.  A  new  product  patent  normally  gives  the  product 
absolute  protection  so  that  any  use  of  the  patented  product,  even  for  non-
patented  applications,  constitutes  an  infringement,  i.e.  the  patent  protects  all 
possible uses that the product may have. 

The certificate  does not given  such protection.  On the one hand, the link with 
the authorization  system implies protection  of the product  covered by the first 
authorization,  while  limiting  it  to  the  uses  of  the  product  successively 
authorized  prior to the expiry of the protection  certificate. 

Plant  health  firms  frequently  develop  new  uses  of  the  same  product,  which 
are the  subject  of new marketing  authorizations.  The marketing  authorization 
is actually granted  several years after  the patent is filed, during which time the 
plant  protection  product  undergoes  multiple  tests  for  one  or  more  very 
specific  uses.  In  view  of  this,  it  would  seem  to  be  logical  to  protect  it,  by 
means  of the  certificate,  for  the  successive  uses  which  have  been  the  subject 
of authorizations. 

in 
Furthermore,  only  uses 
Directive 91/414/EEC  come  under 
the  certificate 
(authorized  use  of  the  product  as  an  additive  in  animal  feedingstuffs,  for 
example, would  not be protected  under the  certificate). 

in  the  plant  protection  field  as  defined 
the  protection  of 

On the  other  hand,  the  protection  granted  by the  certificate  is limited  by that 
of  the  basic  patent.  In  the  case  of  a product  patent,  the  limitation  under  the 
patent  will not  apply  since this type of patent  protects  all possible uses of the 
product.  However,  in  the  case  of  an  application  patent,  the  certificate  will 
protect  only  the  use  or  uses  claimed  in  the  patent,  provided  that  they  were 
authorized  prior to the expiry of the  certificate. 

Article 5 

70. 

The  effects  of the  certificate  on the  subject  to  which  it  refers  as  described  in 
Article 4 are  the  same  as  those  of  the  basic  patent.  The  patent  system  has 
hitherto  been  the  best  way yet  found  of encouraging  research.  It  is  therefore 
not  surprising,  in view  of the  objective  of this Regulation,  that  the  certificate 
grants the same rights, subject  to the same limitations. 

In  the  case  of  a basic  patent  covering  a product,  the  rights  conferred  by  the 
certificate  will be the  same as those  conferred  by the basic  patent,  but  limited 
to any use of the product  authorized  prior to the expiry of the  certificate. 

In  the  case  of  a  basic  patent  covering  a  use  of  the  product,  the  rights 
conferred  by  the  certificate  will  be  the  same  as  those  conferred  by  the  basic 
patent,  but  limited  to  the  use  covered  by  the  patent  and  authorized  prior  to 
the expiry of the  certificate. 

Tn the  case  :_, a basic patent  covering a process  for  obtaining the product,  the 
rights  conferred  by the  certificate  will  be the  same  as those  conferred  by  the 

26 

basic  patent,  but  limited  to  the  process for  obtaining  the  authorized  product. 
The  rights  conferred  by the  certificate  will  be  extended  to  the  product  if the 
law  applicable  to  the  basic  patent  lays down  that  the  protection  of a  process 
for  obtaining  a new  product  extends to  the  product  directly  obtained  by that 
process. 

Lastly,  the  certificate  is  subject  to  the  same  restrictions  as  the  basic  patent. 
Restrictions on private acts for  non-commercial  purposes,  restrictions  on  acts 
for  experimental  purposes  relating  to  the  subject  of  the  certificate  and 
restrictions  on obligatory  licences relating to  the  subject  of the  certificate  are 
some  of  the  possible  restrictions  on the  rights  conferred  by  the  certificate  if 
these are also included  in the basic patent. 

Article 6 

71. 

The  right  to  apply  for  a  supplementary  protection  certificate  belongs  to  the 
holder  of  the  basic  patent;  it  is for  him,  or  his  successor  in  title,  to  choose 
whether  or not to exercise this right. 

Article 7 

72. 

This Article concerns the time during which the application  for  the  certificate 
must be  submitted. 

A  period  of  six  months  is  provided  from  the  date  on  which  the  first 
authorization  to  place the product  on the  market  in the  State  concerned  was 
obtained.  This  solution  takes  account  of the various  interests  involved;  those 
of the patent holder who, after  having applied for the certificate,  may, if he so 
wishes,  forgo  the  certificate  if his  product  proves  to  be  unsuccessful  on  the 
market,  and those of third parties who have every interest  in knowing  as early 
as  possible  whether  or  not  the  product  concerned  will  be  protected  by  a 
certificate  once the patent has expired. 

Furthermore,  there  is  no  danger  of  applications  for  a  certificate  being 
routinely  and  systematically filed each  time  authorization  to  place  a  product 
on  the  market  is  given,  since  the  conditions  laid  down  in  Article 3 for 
obtaining the certificate  are strict and allow only one certificate  per substance. 

It  may be that  authorization  is obtained  before  the basic  patent  is granted,  in 
particular  in  the  field  of  biotechnology  products,  where  patent  applications 
may  be  left  pending  for  quite  a  long  time.  In  such  cases,  the  period  of  six 
months begins on the date on which the patent  is granted  and  not  on the  date 
on which the first marketing authorization  is obtained. 

73. 

This Article concerns the content of the application for  a certificate. 

Article 8 

27 

Few  documents are, required.  Apart from  the request itself,  a copy  of the first 
authorization  to  place  the  product  on  the  market  in  the  State  concerned  is 
required  as  this  enables  the  product  to  be  identified.  If  this  authorization  is 
not  also  the  first  authorization  to  place  the  product  on  the  market  in  the 
Union,  a copy  of the  latter  also  has to  be  attached  since  the  duration  of  the 
certificate  will be calculated,  yi all Member  States in which  an application  for 
a  certificate  is  lodged,  by  reference  to  this  criterion  alone.  Information 
enabling the basic patent to be identified  must also be provided. 

The  authority  responsible  for  granting  the  certificate  will  have  to  verify  that 
the authorization(s)  and the patent refer  to one and the same product. 

Lastly,  the  application  must  contain  a  summary  of  the  product's  features  as 
defined  at  points  A(l)  or  B(l)  of  Annex  II  to  Directive 91/414/EEC  or  by 
equivalent  national  legislation.  These  are  the  features  which  enable  it  to  be 
characterized  as a plant  protection  product  and,  consequently,  which  help  to 
provide  a  better  description  of  the  product.  It  is  also  a  requirement  that  is 
easy to meet once all the tests on the product  have been completed. 

Article 9 

74. 

The  application  for  a  certificate  must  be  submitted  to  the  patents  offices  of 
the  Member  States.  The  office  responsible  for  each  application  for  a 
certificate  is  that  in  the  State  which  granted  the  basic  patent  or  on  whose 
behalf it was granted  and in which the first authorization  to  place the  product 
on  the  market  for  that  State  was  obtained.  For  one  and  the  same  plant 
protection  product  patented  and  authorized  to  be  placed  on  the  market  in 
several  Member  States,  as  many  applications  for  certificates  must  be 
submitted  to the corresponding patents  offices. 

The  application  for  a certificate  must be published  by the patents  office.  This 
important  formality  ensures  that  third  parties  are  informed  as  soon  as 
possible. 

Article 10 

75. 

This  Article  refers  to  the  conditions  governing  the  grant  of the  certificate  or 
the rejection  of the application. 

The procedure  is simple; its application  should  not  give rise to  any  particular 
difficulties.  All  patent  offices  must,  in  particular,  be  able  to  verify  the 
conditions  referred  to  in  Article 3 under  which  the  certificate  was  obtained. 
Contacts  may,  if  necessary,  be  provided  for  between  the  patents  office  and 
the  authority  responsible  for  authorizing  the  product  to  be  placed  on  the 
market. 

28 

Article 11 

76.  With  a  view  to  providing  the  best  possible  information  to  interested  third 
parties, the proposal  for  a Regulation  provides for  publication  of the  decision 
to accept  or reject  applications for  supplementary  protection  certificates.  This 
publication  must  be  accompanied  by  a  series  of  details  intended  to  provide 
information  which is as complete as possible to third parties. 

Article 12 

77. 

This  Article  states  that  the  Member  States  may  provide  that  renewal  of  the 
certificate  is  subject  to  the  payment  of  a fee.  It  is  for  the  Member  States  to 
establish  the  amount  if  they  decide  to  introduce  such  fees,  failure  to  pay 
causing the certificate  to lapse. 

Article 13 

78. 

The  duration  of  protection  granted  by  the  certificate  is  established  on  the 
basis of several  factors. 

First,  the  duration  of  protection  must  be  sufficient  to  meet  the  proposal's 
objectives  of  promoting  research.  In  this  respect,  there  is  a  need  to  avoid 
discriminating against plant  protection  research  and to  subject  it to  conditions 
similar  to  those  which  would  obtain  if  plant  protection  products  were  not 
subject  to authorization  to be placed on the market. 

The  duration  of  the  certificates  covering  the  same  product  in  a  number  of 
Member  States must be calculated  on the basis of specific  reference  dates, the 
effect  of  which,  in  particular,  is  that  all  the  supplementary  protection 
certificates  protecting  one  and  the  same  product  in  the  different  Member 
States  expire  on  the  same  date  throughout  the  Union.  The  proposal  for  a 
Regulation  will therefore  exercise  a powerful  harmonizing  effect  on the  total 
duration  of  protection  for  plant  protection  products  throughout  the  Union. 
This  harmonization  also  means  that  one  and  the  same  plant  protection 
product,  covered  by  supplementary  certificates,  will  enter  the  public  domain 
on the  same day in all the Member  States,  whereas  this is not  the case  under 
the current patent  system. 

However,  it  is also  essential  to  take  account  of the  objectives  of  Community 
policy  as  a whole  and,  in  particular,  to  prevent  the  duration  of protection  of 
plant  protection  products from  becoming a barrier to them. 

Lastly, the  system  must be kept  simple, while allowing for  a certain  degree  of 
balance between  all the interests involved. 

The  Commission  therefore  proposes  that  the  duration  of  the  certificate  be 
calculated  on  the  basis  of  the  protection  period  "lost"  under  the  patent,  i.e. 
the  period  between  the  date  on  which  the  patent  application  is filed and  the 
date on which the first authorization to place the product  on the market  in the 
Community is obtained. 

2 9-

As  the  authorization  dates  for  one  and  the  same  plant  protection  product 
differ  from  one Member  State to  another,  the later  authorization  is given, the 
shorter  the period  of effective  protection  will be. The  Community's  policy on 
authorizations  should  nevertheless  gradually  reduce  the  gaps  between 
Member  States  and  therefore  improve  the  levelling  of  the  durations  of 
effective  protection  afforded  to plant protection  products. 

Putting  plant  protection  products  on  a  footing  similar  to  that  which  would 
obtain  in the  absence  of  an  authorization  system  means  placing  them  on  the 
terms that  obtain  in other  sectors  of technology  not  subject  to  authorization. 
The  Commission  puts  the  average  period  in Europe  from  the  date  on  which 
the  patent  application  for  a  given  product  is filed to  the  date  on  which  it  is 
marketed  at five years.  The  duration  of  protection  under  the  certificate  thus 
calculated  (the  period  "lost"  less five years)  takes  effect  on  the  day  after  the 
basic patent lapses. 

It  should  be  stressed  that,  if  the  effective  period  remaining  under  the  basic 
patent,  i.e.  from  obtaining  the  marketing  authorization  to  the  expiry  of  the 
patent,  is  added  to  the  duration  of  protection  under  the  certificate  — the 
period  lost  less five years ~  a total  period  of effective  protection  for the plant 
protection  product concerned  of fifteen years is obtained,  below which, in the 
Commission's  view,  the  objectives  of this  proposal  for  a Regulation  will  not 
be attained. 

Lastly, it should  be pointed  out that the proposal  also provides  for  a deadline 
after  which  the  plant  protection  product  enters  the  public  domain.  The 
duration of the certificate  may not exceed five years from the date on which it 
takes  effect. 

the 

tests  required 

The  simplicity  of the  system  means that  it  is not  possible  to  take  account  of 
certain  factors,  such  as  the  diligence  that  the  innovating  firm  has  shown 
throughout 
to  obtain  authorization.  The  proposal 
compensates  for  this  shortcoming  by  restricting  the  certificate  in  cases  in 
which authorization  was obtained  very late. For  example,  if the  authorization 
was obtained  eighteen years after  the application for  the corresponding  patent 
was filed, the  duration  of the  certificate  is not  thirteen  years  (eighteen  minus 
five) but five years, after  which there is no further  protection. 

It  should  be  noted  that  fixing  the  maximum  duration  of the  certificate  at five 
years begins to  have a restrictive  effect  if the marketing  authorization  for  the 
plant  protection  product  concerned  is obtained  more  than  ten  years  after  the 
date on which the application  for  the patent  was filed, which  is, however,  the 
norm  in  this  sector.  Thus,  an  authorization  obtained  twelve  years  after  the 
corresponding  patent  application  was filed does  not  produce  a  certificate  of 
seven  (twelve  minus five) years'  duration,  but  a  certificate  of  maximum  five 
years' duration. 

30 

Article 14 

79. 

This Article provides  for  four  cases  of extinction  of the  certificate:  expiry  of 
the certificate  itself; surrender  of the certificate  by its holder; non-payment  of 
the  annual  fees,  and  the  fact  that  the  product  no  longer  has  authorization  to 
be placed on the market obtained in accordance with Community law. 

80. 

The proposal lays down three grounds for invalidity of the  certificate. 

Article 15 

(1) The certificate  is void if the conditions for  obtaining the  certificate  as laid 
down  in  Article 3 have  not  been  complied  with.  This  will  in  particular 
concern cases where the authorization  to place the product  on the  market 
was not valid  or was  not  the first in the Member  State  concerned,  where 
the  basic  patent  was  no  longer  in  force  when  the  certificate  was  applied 
for  and, lastly, where one and the same product  was the subject  of several 
certificates  in the  same  Member  State,  in  which  case  only  the  certificate 
granted  in  respect  of  the  first  authorization  to  place  the  product  on  the 
market in the State concerned will be valid. 

(2) The certificate  is void  if the basic patent  is not valid when  its lawful  term 
expires.  Where  renewal  of  a patent  until  its  term  expires  is indicative  of 
the value of the product  it protects, this ground  for  invalidity  will play an 
important  selective role. Furthermore, the exclusive protection granted by 
the  certificate  over  a  given  period  is  not  lawful  unless  the  product 
concerned  meets  not  only  the  specific  conditions  for  obtaining  the 
certificate  laid  down  by Article 3, but  also the  criteria  of  patentability  for 
the basic patent.  It  is therefore  necessary to  specify  that  the  certificate  is 
void  if  the  basic  patent  or  at  least  that  part  of  the  basic  patent  that 
corresponds to the product  covered by the certificate  has been revoked.  It 
is  therefore  necessary  to  specify  expressly  that  an  application  for 
revocation  of  the  basic  patent,  with  a  view  to  the  revocation  of  the 
certificate,  may be submitted  even after  the lawful  term of the basic patent 
has expired. 

(3). The certificate  is void  if the  subject  that  it protects  is not  covered  by the 
basic  patent.  The  aim  is  to  prevent  a  given  product  not  protected  by  a 
patent  from  enjoying  the  exclusive  protection  of  a  certificate  without 
having  to  fulfil  the  conditions  and  obligations  specific  to  the  patent 
system. This ground for  invalidity is therefore  based  on the same principle 
as the  previous  ground.  It  should  also  be  stressed  that,  if the  subject  of 
the certificate  is only partially  covered  by the basic patent,  the  declaration 
of  invalidity  of  the  certificate  may  take  the  form  of  a  corresponding 
limitation  of the  certificate,  this being  in accordance  with  the  principle  of 
proportionality.  Lastly, the Article specifies that  any person  may request a 
declaration  of  invalidity  of  the  certificate  from  the  authority  which 
granted  it, i.e. the corresponding  patents office.  The decision  of the  office 
will be subject to appeal, as provided for in Article 17. 

31 

Article 16 

81. 

Pursuing  its  objective  of  making  information  widely  available  to  interested 
third  parties,  the  proposal  lays  down  that  notice  be  given  of  the  lapse  or 
invalidity of the  certificate. 

Article 17 

82. 

This  Article  provides  that  any  decisions  of  the  patents  office  to  which  the 
application  for  a  certificate  was  made  are  open  to  the  same  appeals  as 
provided  for  in  national  law  against  similar  decisions  in  respect  of  patents. 
This  is  an  essential  legal  guarantee,  claims  under  which.are  subject  to  the 
national  patents law of the State in which the certificate  was granted. 

Article 18 

83.  Where  the  proposal  for  a Regulation  lays  down  procedural  provisions,  these 
will apply. If it does not, the applicable provisions  are those  laid down by the 
national  law applicable to the corresponding  basic patent,  unless that  law has 
laid down  special procedural provisions. 

In  addition,  the  proposal  states  that  it  is not  possible  to  oppose  a  certificate 
which has been issued. 

Article 19 

84. 

In  accordance  with  the  general  principles  of  law,  the  proposal  for  a 
Regulation  will  apply  to  any  product  protected  by  a  valid  patent  and  which 
has  not  yet  obtained  the  authorization  to  be  placed  on  the  market  when  the 
Regulation  comes into  force. 

The  aim  of  this  Article  is  to  lay  down  transitional  arrangements  concerning 
products  already  authorized  when  the  Regulation  comes  into  force,  a 
particularly  important  and  sensitive  part  of  the  proposal.  The  Commission 
takes the view that  certain  criteria  have to  be  satisfied  in order  to  arrive  at  a 
balanced  solution. 

It  is essential  to  strike  a balance between  all of the  interests  concerned  if the 
desire is to find a solution  acceptable to  everyone: the aim is neither to  cover 
all products already being marketed  nor to exclude them totally. 

The  proposed  solution  must  avoid  any  distortion  to  the  system  for  granting 
authorization  to  place a product  on the market  that  might  make certain firms 
delay submitting an application for  such  authorization. 

Lastly, the  solution  must be free of uncertainty  in order to  enable all firms to 
plan  ahead. 

- 3 2-

That  is  why  the  Commission  proposes  that  the  Regulation  apply  to  all 
products  authorized  since  1  January  1985 and  protected  by  a  valid  patent  on 
the date on which it enters into force. 

The choice of  1 January  1985 as a single reference  date for  obtaining the first 
marketing  authorization  should  enable  European  industry  to  close  the  gap 
between  itself  and  its  foreign  competitors.  Furthermore,  if the  date  of  entry 
into  force  of  the  Regulation  can  be  envisaged  as  the  beginning  of  1996,  a 
product  for  which  a  patent  application  was  filed  in  1976 will  not  be  able  to 
benefit  from  a  certificate  unless  the  corresponding  authorization  was  given 
more than nine years after  the application was filed (after  1985). 

However,  Directive 91/414/EEC  concerning  the  placing  of  plant  protection 
products  on the  market  entered  into  force  only  in mid-1993;  this  means  that 
few  products  which  could  qualify  for  the  transitional  arrangements  of  this 
proposal  for  a Regulation  have  an  authorization  to  be  placed  on  the  market 
granted  on the  basis  of  Directive 91/414/EEC.  Before  this  Directive  entered 
into  force,  the  procedures  for  authorization  to  be  placed  on  the  market  for 
plant  protection  products  were  a  matter  for  national  laws.  It  is  therefore 
necessary  to  specify  in  the  transitional  arrangements  that  plant  protection 
products 
either 
after  1  January  1985 on 
Directive 91/414/EEC  (a  limited  number  of  products)  or  an  equivalent 
provision  of  national  law  (the  majority  of  products)  are  eligible  for  a 
supplementary  protection  certificate,  provided  that  the  other  conditions  for 
obtaining  a  certificate  are  met.  Of  course,  in  order  to  qualify  for  the 
transitional  arrangements,  these  products  must  still  be validly  protected  by a 
current patent on the date on which the Regulation  comes into  force. 

authorized 

basis 

the 

of 

As  regards  the  transitional  arrangements,  the  proposal  for  a  Regulation  lays 
down that the application  for  a certificate  must  be filed during the  six months 
following  the entry into force  of the Regulation. 

33-

ANNEX 

PROFILE OF THE PLANT PROTECTION  SECTOR 

The agro-chemicals  industry comprises two principal  sectors,  fertilizers  and  chemical 
products  protecting  crops,  also  known  as  plant  protection  products,  which  include 
herbicides, insecticides, fungicides  and plant growth regulators. 

Firms in the  plant  protection  sector  can be split  into two  broad  groups: those  which 
base  their  activities  on  substantial  research,  with  a  view  to  placing  new  plant 
protection  products  on  the  market,  and  those  which  do  not  carry  out  research  but 
depend  on the first group  for  making  lawful  copies  of  products  no  longer  protected 
by patent: these latter firms are commonly called manufacturers  of generics. 

A. 

The market for plant protection  products 

is  estimated  at 
The  world  market 
ECU 22 000 million 
for 
some 27 % of this market,  the twelve Member  States  of the  European  Union 
for  26 %, the Far East for 25 %, and the rest of the world for  22 %. 

for  plant  protection  products 
(1992  figure).  The  United  States  accounts 

Table 1:  Plant protection products:  market size by region  (1992) 

Herbicides 

(ECU  million) 
USA 
Western  Europe 
Far  East 
Latin America 
Eastern  Europe 
Rest of World 
Total 

Insecticides 
1311 
878 
2160 
606 
297 
931 
6183 
Source: County NatWest WoodMac. 

3649 
2275 
1606 
976 
293 
765 
9564 

Fongicides 

456 
1510 
1475 
406 
142 
133 
4122 

Other 
286 
1022 
197 
52 
122 
39 
1718 

Total 

5702 
5685 
5438 
2040 
854 
1868 
21587 

In  terms  of  the  value  of  plant  protection  products,  it  is  estimated  that  the 
European  Union,  with  some 36 %  of  world  production,  remains  the  largest 
producer,  the  United  States  lying  second  with  almost 28 %.  They  are 
followed  by Japan (14 %) and the rest of Western Europe  (10 %). 

The current position of the European industry is based  on experience over  the 
last  forty  years  in  developing  products  initially  aimed  at  the  markets  of 
Europe, Africa,  Australasia and Latin America. 

France,  Germany, Italy  and  the  United  Kingdom  are the  largest  producers  of 
plant  protection  products  in  the  Union;  with  Spain,  these  countries  are  the 
largest  consumers  since  between  them  they  use  more  than 80 %  of  the 
herbicides  and  fungicides,  and  more  than 75 %  of  the  insecticides  consumed 
in Europe. 

In  1992 France,  along with the United  States  and  Japan,  accounted  for  55 % 
of  the  world  market  for  herbicides  and,  on  its  own,  for  8 %  of  world  sales. 
Today,  herbicides  form  the  largest  production  and  market  in the  Union,  with 

34-

the exception  of Italy,  where  sales of fungicides  have been greater than  those 
of  herbicides  since  1990,  and  Spain,  where  sales  of  insecticide  exceed  those 
of herbicides. 

B. 

Trade  balance 

The  trade  balance  is  very  favourable  to  the  Union  since  its  exports  run  at 
twice  the  level  of  its  imports  although,  since  1985,  imports  have  been 
increasing  more  strongly  than  exports  (see  Table 2).  The  market  for  plant 
protection  products in the European Union generates a positive trade balance 
of some ECU  850 million (1991). 

Whereas  in  1986 the  Soviet  Union  was  the  Union's  largest  export  market 
(19%),  in  1991 its  successor  States  accounted  for  only  11 %  of  sales.  The 
countries  of central  Europe  and  EFTA  have taken  over,  even  if it  is the  rest 
of  the  world  which  accounts  for  the  highest  percentage  of  Community 
exports (46 %).  With regard to imports, the major  competitors  of Community 
firms  are  in  the  EFTA  countries,  with  more  than 50 %  of  total  Community 
imports, followed  by the United  States (33 %). 

Table 2: Plant protection products:  external trade 

(ECU million) 
Exports extra-EC 
Imports extra-EC 
Trade balance 
Ratio of exp/imp 
Intra-EC trade 

1982 
1074.7 
257.1 
817.6 
4.1 
97 9.6 

1983 
1242.6 
301.3 
941.3 
4.12 
1091.9 

1984 
1527.1 
374.2 
1152.9 
4.08 

1985 
1732.9 
426.3 
1306.6 
4.07 
1518.3 

2.91 
1413.0 
1628.4 
Source: Panorama  of European Industry and Eurostat  1991 

4.23 
1521.9 

1987 
1380.0 
392.0 
988.1 
3.52 
1476.9 

1986 
1599.9 
378.5 
1221.5 

198B 
1342.9 
461.2 
881.7 

1989 
1404.2 
571.0 
833.2 

2.46 

1932.5 

1990 
1423.0 
593.6 
'829.5 
2.4 
2162.0 

1991 
1478.7 
633.2 
845.5 

2.34 

2111.0 

However,  these  figures  reveal  a  decline  in  the  relative  position  of  the 
European  plant protection  industry at international  level. Whereas the ratio  of 
exports/imports  was 4.18 in  1982 — which  indicates  that  exports  of  plant 
protection  products  from  the  Union  were  more  than  four  times  higher  than 
imports  ~  this  fell  to 2.34 in  1991. During  this  period,  the  amount  of  plant 
protection  products  bought  outside the Union  rose  from  ECU 257 million  to 
ECU 633 million,  an 
from 
increase  of  146%,  while  exports 
ECU  1 074 million to ECU  1  478 million, an increase of 37 %. 

rose 

Leading firms 

Most  of  the  main  producers  of  plant  protection  products  —  estimated  to  be 
forty  worldwide  ~  are  located  in  the  United  States  (9),  Japan  (11),  or  in 
Western  Europe  (14).  Almost  all are part  of multinational  chemical firms and 
the plant  protection  sector  represents  only  a small  fraction  of the total  group 
sales. 

Monsanto  (USA)  is regarded  as the  leading  producer  of  herbicides  (14 %  of 
the  world  market),  followed  by  Ciba  (Switzerland)  with  12 %,  Rhône-
Poulenc  (France)  and  BASF  (Germany)  with 6 %  each.  In  the  field  of 
insecticides,  Bayer  (Germany)  and  Rhône-Poulenc  (France)  are  the  leaders, 
followed  by  FMC  (USA)  and  Hoechst  (Germany).  The  main  producers  of 
fungicides  are  Bayer  (18 %  of  the  world  market),  Ciba,  Rhône-Poulenc,  Du 
Pont  (USA) and BASF (see Table 3). 

35-

Table 3: Plant protection  industry: leading  firms 

Firm 

Sales, of plant protection  Plant protection  products 

j 

Ciba  (CH) 
Du Pont (USA) 
Bayer (D) 
Rhône-Poulenc  (F) 
Zeneca  (ex-ICI)  (GB) 
Monsanto  (USA) 
Dow Elanco  (USA) 
Hoechst  (D) 
BASF  (D) 
American Cyanamid (USA) 

products 
(ECU million) 

2416 
1669 
1595 
1572 
1465 
1405 
1349 
1138 
975 
854 

as 
% of total sales 
18J> 
52 
7,3 
12.5 
28Ji 
21^2 
100.0 
4J 
42 
Ij^O 

Source: County NatWest WoodMac —  1992 figures 

In  terms  of  the  breakdown  of  turnover  of  plant  protection  products  by 
product  group,  it  is  estimated  that  herbicides  account  for 45 %  of  the  total, 
insecticides 29 %,  fungicides  19 %,  plant  growth  regulators  and  other 
products 7 %. 

36-

Proposal  for a 
EUROPEAN  PARLIAMENT AND  COUNCIL REGULATION  (EQ 
concerning the creation 
of a supplementary  protection  certificate  for plant protection  products 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN 
UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  100a thereof, 

Having regard to the proposal from  the Commission/1) 

Having regard to the opinion of the Economic and  Social Committee/2) 

(1)  Whereas plant protection  research contributes to the continuing improvement  in crop 

production; 

(2)  Whereas plant  protection  products, especially those that  are the result  of long,  costly 
research,  will  not  continue to be  developed  in the  Community  and  in Europe  unless 
they  are  covered  by  favourable  rules  that  provide  for  sufficient  protection  to 
encourage such research; 

(3)  Whereas  at  the  moment  the period  that  elapses  between  the  filing  of  an  application 
for  a  patent  for  a  new  plant  protection  product  and  authorization  to  place  the 
product  on  the  market  makes  the  period  of  effective  protection  under  the  patent 
insufficient  to  cover  the  investment  put  into  the  research  and  to  generate  the 
resources needed to maintain a high level of research; 

(4)  Whereas  this  situation  leads to  a lack  of protection  which  penalizes  plant  protection 

research  and the competitiveness of the sector; 

(5)  Whereas,  in  its  Resolution  of  1  February  1993<3)  on  a  Community  programme  of 
policy  and  action  in  relation  to  the  environment  and  sustainable  development,  the 
Council  adopted  the  general  approach  and  strategy  of the  programme  presented  by 
the  Commission,  which  stressed  the  interdependence  of  economic  growth  and 
environmental  quality;  whereas  improving  protection  of  the  environment  means 
maintaining  the  competitiveness  of  industry;  whereas,  accordingly,  the  issue  of  a 
supplementary  protection  certificate  can be regarded  as a positive  measure  in  favour 
of environmental  protection; 

W  O J N oC 

(2)  O J N oC 

<3)  O J N oC  138,  17.5.1993, p. 1. 

-37 

(6)  Whereas  a  uniform  solution  at  Community  level  should  be  provided  for,  thereby 
preventing  the  heterogeneous  development  of  national  laws  leading  to  further 
disparities  which  would  be  likely  to  create  obstacles  to  the  free  movement  of plant 
protection  products within  ihe Community  and thus  directly  affect  the  establishment 
and  the  functioning  of  the  internal  market;  whereas  this  is  in  accordance  with  the 
principle of subsidiarity as defined  by Article 3b of the Treaty on European Union; 

(7)  WTiereas,  therefore,  the  creation  of  a  supplementary  protection  certificate  granted, 
under the same conditions, by each of the Member  States at the request  of the holder 
of  a  national  or  European  patent  relating  to  a  plant  protection  product  for  which 
marketing  authorization  has  been  granted  is  necessary;  whereas  a  Regulation  is 
therefore the most appropriate legal instrument; 

(8)  WTiereas the duration of the protection granted by the certificate  should be such as to 
provide  adequate,  effective  protection; whereas,  for  this purpose,  the  holder  of both 
a patent  and a certificate  should be able to enjoy  an overall maximum of fifteen years 
of  exclusivity  from  the  time  the  plant  protection  product  in  question  first  obtains 
authorization to be placed on the market in the Community; 

(9)  Whereas  all  the  interests  at  stake  in  a  sector  as  complex  and  sensitive  as  plant 
protection  must  nevertheless  be  taken  into  account;  whereas,  for  this  purpose,  the 
certificate  cannot  be  granted  for  a  period  exceeding  five  years;  whereas  the 
protection  granted  should  furthermore  be  strictly  confined  to  the  product  which 
obtained authorization to be placed on the market as a plant protection  product; 

(10)  Wliereas a fair  balance  should  also be struck  with regard  to the  determination  of the 
transitional  arrangements; whereas  such arrangements  should  enable the  Community 
plant  protection industry to catch up to some extent with  its main competitors, while 
making  sure  that  the  arrangements  do  not  compromise  the  achievement  of  other 
legitimate  objectives  concerning  the  agricultural  and  environment  policies  pursued 
both at national and Community level; 

(11)  Whereas  only  action  at  Community  level  can  be  effective  in  attaining  the  objective, 
which  consists  in  ensuring  adequate  protection  for  innovation  in  the  field  of  plant 
protection,  while guaranteeing the proper functioning  of the internal market for  plant 
protection  products; 

HAVE ADOPTED THIS REGULATION: 

38 

Article 1 
Definitions 

For the purposes of this Regulation, the following  definitions  shall apply: 

1. 

'plant  protection  products':  active  substances  and  preparations  containing  one  or 
more  active  substances,  put  up  in  the  form  in  which  they  are  supplied  to  the  user, 
intended to: 

1.1. 

1.2. 

1.3. 

protect  plants or  plant  products  against  all  harmful  organisms  or  prevent  the 
action of such organisms, in so far  as such  substances  or preparations  are not 
otherwise defined  below; 

influence  the  life  processes  of  plants,  other  than  as  a  nutrient  (e.g.  plant 
growth  regulators); 

preserve  plant  products,  in  so  far  as  such  substances  or  products  are  not 
subject  to special Council or Commission provisions on preservatives; 

1.4. 

destroy undesired  plants; or 

1.5. 

destroy parts of plants, check or prevent undesired growth of plants; 

2. 

'substances':  chemical  elements  and  their  compounds,  as  they  occur  naturally  or  by 
manufacture,  including  any  impurity  inevitably  resulting  from  the  manufacturing 
process; 

3. 

'active  substances':  substances  or  micro-organisms  including  viruses,  having  general 
or specific  action: 

3.1. 

against harmful  organisms; or 

3.2. 

on plants, parts of plants or plant products; 

4. 

'preparations':  mixtures  or  solutions  composed  of two  or  more  substances,  of  which 
at least one is an active substance, intended  for use as plant protection  products; 

5. 

'plants': live plants and live parts of plants, including fresh  fruit  and seeds; 

6. 

'plant  products':  products  in the  unprocessed  state  or  having  undergone  only  simple 
preparation  such  as  milling,  drying  or  pressing,  derived  from  plants,  but  excluding 
plants themselves as defined  at point 5; 

7. 

'harmful  organisms': pests of plants or plant products belonging to the animal or plant 
kingdom, and also viruses, bacteria and mycoplasmas and other pathogens; 

3 9-

8. 

9. 

'product':  the  active  substance  is  defined  at  point 3 or  combination  of  active 
substances of a plant protection  product; 

'basic  patent':  a  patent  which  protects  a  product  as  defined  at  point  8 as  such,  a 
preparation  as defined  at point 4, a process to obtain a product  or  an application of a 
product,  and  which  is designated  by its holder  for  the  purpose  of the  procedure  for 
grant of a certificate; 

10. 

'certificate': the supplementary protection  certificate. 

Article 2 
Scope 

Any product  protected  by a patent  in the territory of a Member  State and  subject,  prior to 
being  placed  on  the  market  as  a  plant  protection  product,  to  an  administrative 
authorization  procedure  as laid  down  in  Article 4 of  Council  Directive 91/414/EEC^4),  or 
pursuant  to  an  equivalent  provision  of  national  law  if  it  is  a  plant  protection  product  in 
respect  of which the  application  for  authorization  was  lodged  before  the  entry  into  force 
of  Directive 91/414/EEC  for  the  Member  State  concerned,  may,  under  the  terms  and 
conditions provided  for  in this Regulation, be the subject  of a  certificate. 

Article 3 
Conditions for  obtaining a  certificate 

A certificate  shall be granted  if,  in the Member  State in which the application  referred  to in 
Article 7 is submitted,  at the date of that  application: 

(a) 

the product  is protected  by a basic patent  in force; 

(b)  a valid authorization to place the product  on the market  as a plant  protection  product 
has  been  granted  in  accordance  with  Article 4 of  Directive 91/414/EEC  or  an 
equivalent provision of national law; 

(c) 

the product  has not already been the subject  of a certificate; 

(d) 

the  authorization  referred  to  in  (b)  is the first authorization  to  place  the  product  on 
the market  as a plant protection  product. 

Article 4 
Subject-matter  of protection 

Within the limits of the protection  conferred  by the basic  patent,  the protection  conferred 
by a certificate  shall extend  only to the product  covered by the  authorizations to  place the 

W  OJNoL230,  19.8.1991, p. 1. 

40 

corresponding  plant  protection  product  on the market  and  for  any use of the product  as a 
plant protection  product that has been authorized before the expiry of the  certificate. 

Article 5 
Effects  of the  certificate 

Subject  to  the  provisions  of  Article 4,  the  certificate  shall  confer  the  same  rights  as 
conferred  by  the  basic  patent  and  shall  be  subject  to  the  same  limitations  and  the  same 
obligations. 

Article 6 
Entitlement to the  certificate 

The certificate  shall be granted to the holder of the basic patent  or his successor in title. 

Article 7 
Application for a certificate 

I.  The  application  for  a  certificate  shall  be  lodged  within  six  months  of  the  date  on 
which the authorization  referred  to in Article 3(b) to place the product  on the market 
as a plant protection product was granted. 

I.  Notwithstanding  paragraph  1,  where  the  authorization  to  place  the  product  on  the 
market  is granted  before  the basic  patent  is granted,  the  application  for  a  certificate 
shall be lodged within six months of the date on which the patent  is granted. 

Article 8 
Content of the application for  a  certificate 

1.  The application for  a certificate  shall contain: 

(a)  a request for the grant of a certificate,  stating in particular: 

(i) the name and address of the applicant; 

(ii)  if  he  has  appointed  a  representative,  the  name  and  address  of  the 

representative; 

(iii) the number of the basic patent and the title of the invention; 

(iv) the number and  date of the first authorization  to place the product  on the 
market,  as  referred  to  in  Article 3(b)  and,  if this  authorization  is  not  the 
first authorization  to  place the product  on the  market  in the  Community, 
the number and date of that  authorization; 

41 

(b)  a copy  of the  authorization  to  place the product  on the  market,  as referred  to  in 
Article 3(b),  in  which  the  product  is  identified,  containing  in  particular  the 
number  and  date  of  the  authorization  and  the  summary  of  the  product 
characteristics listed in Part  A.I or B.I  of Annex II to Directive 91/414/EEC  or in 
equivalent  national  laws  of  the  Member  State  in  which  the  application  was 
lodged; 

(c)  if the  authorization  referred  to  in  (b)  is  not  the  first  authorization  to  place  the 
product  on  the  market  as  a  plant  protection  product  in  the  Community, 
information  regarding  the  identity  of  the  product  thus  authorized  and  the  legal 
provision  under  which  the  authorization  procedure  took  place,  together  with  a 
copy of the notice publishing the authorization  in the Official  Journal  or any other 
document  including the information  required. 

2.  Member  States may provide that a fee is payable upon application for  a  certificate. 

Article 9 
Lodging of an application for a  certificate 

1.  The  application  for  a  certificate  shall  be  lodged  with  the  competent  industrial 
property  office  of  the  Member  State  which  granted  the  basic  patent  or  on  whose 
behalf  it  was  granted  and  in  which  the  authorization  referred  to  in  Article 3(b)  to 
place  the  product  on  the  market  was  obtained,  unless  the  Member  State  designates 
another authority for the purpose. 

2.  Notification  of  the  application  for  a  certificate  shall  be  published  by  the  authority 
referred  to  in  paragraph  1.  The  notification  shall  contain  at  least  the  following 
information: 

(a)  the name and address of the applicant; 

(b) the number  of the basic patent; 

(c)  the title of the invention; 

(d) the  number  and  date  of  the  authorization  to  place  the  product  on  the  market, 

referred  to in Article 3(b), and the product  identified  in that  authorization; 

(e)  where  relevant,  the  number  and  date  of  the  first  authorization  to  place  the 

product  on the market  in the Community. 

Article  10 
Grant  of the certificate  or rejection  of the application 

1.  Where  the  application  for  a  certificate  and  the  product  to  which  it  relates  meet  the 
conditions laid down in this Regulation,  the authority  referred  to  in Article 9(1)  shall 
grant the  certificate. 

-42 

2.  The  authority  referred  to  in  Article 9(1)  shall,  subject  to  paragraph  3,  reject  the 
application  for  a certificate  if the  application  or the  product  to  which  it  relates  does 
not meet the conditions laid down in this Regulation. 

3.  Where  the  application  for  a  certificate  does  not  meet  the  conditions  laid  down  in 
Article 8, the authority referred  to in Article 9(1)  shall ask the applicant to  rectify  the 
irregularity,  or to settle the fee, within a stated time. 

4. 

If the irregularity is not rectified  or the fee is not  settled  under paragraph  3 within the 
stated time, the authority shall reject the application. 

5.  Member  States  may  provide that  the  authority  referred  to  in  Article 9(1)  is to  grant 
certificates  without verifying  that the conditions laid down  in Article 3(c)  and  (d)  are 
met. 

Article 11 
Publication 

1.  Notification  of  the  fact  that  a  certificate  has  been  granted  shall  be  published  by  the 
authority  referred  to  in  Article 9(1).  The  notification  shall  contain  at  least  the 
following  information: 

(a)  the name and address of the holder of the  certificate; 

(b) the number of the basic patent; 

(c)  the title of the invention; 

(d) the  number  and  date  of  the  authorization  to  place  the  product  on  the  market 

referred  to in Article 3(b) and the product  identified  in that  authorization; 

(e)  where  relevant,  the  number  and  date  of  the  first  authorization  to  place  the 

product  on the market  in the Community; 

(f)  the duration  of the  certificate. 

2.  Notification  of the fact  that the application  for  a certificate  has been  rejected  shall be 
published  by the authority  referred  to in Article 9(1). The notification  shall contain  at 
least the information  listed in Article 9(2). 

Article 12 
Annual  fees 

Member  States may require that the certificate  be subject  to the payment  of annual fees. 

-43 

Article 13 
Duration of the  certificate 

1.  The certificate  shall take effect  at the end  of the lawful  term  of the basic patent  for  a 
period  equal  to  the  period  which  elapsed  between  the date  on  which  the  application 
for  a  basic  patent  was  lodged  and  the  date  of  the  first  authorization  to  place  the 
product  on the market in the Community, reduced by a period of five years. 

2.  Notwithstanding  paragraph  1,  the  duration  of  the  certificate  may  not  exceed  five 

years from  the date on which it takes  effect. 

Article 14 
Expiry of the  certificate 

The certificate  shall lapse: 

(a)  at the end of the period  provided  for  in Article  13; 

(b) 

if the certificate-holder  surrenders it; 

(c) 

if the annual fee laid down in accordance with Article  12 is not paid in time; 

(d) 

following 

the  withdrawal  of 

if and  as long  as the  product  covered  by the  certificate  may  no  longer  be  placed  on 
the  appropriate  authorization  or 
the  market 
authorizations 
in  accordance  with  Article 4 of 
the  market 
Directive 91/414/EEC  or  equivalent  provisions  of  national  law.  The  authority 
referred  to  in Article 9(1) may decide on the lapse  of the  certificate  either  on its own 
initiative or at the request  of a third party. 

to  place 

it  on 

Article 15 
Invalidity of the  certificate 

1.  The certificate  shall be invalid  if: 

(a)  it was granted  contrary to the provisions of Article 3; 

(b) the basic patent has lapsed before  its lawful  term expires; 

(c)  the basic patent  is revoked  or limited so that the product  for  which the  certificate 
was  granted  would  no  longer  be  protected  by  the  claims  of  the  basic  patent  or, 
after  the basic patent  has expired, grounds for  revocation  exist which would  have 
justified  such revocation  or limitation. 

2.  Any  person  may  submit  an  application  or  bring  an  action  for  a  declaration  of 
invalidity  of  the  certificate  before  the  body  responsible  under  national  law  for  the 
revocation  of the corresponding basic patent. 

- 4 4-

Article 16 
Notification  of lapse or invalidity 

If  the  certificate  lapses  in  accordance  with  Article  14(b),  (c)  or  (d),  or  is  invalid  in 
accordance  with  Article  15,  notification  thereof  shall  be  published  by  the  authority 
referred  to in Article 9(1). 

Article 17 
Appeals 

The  decisions  of  the  authority  referred  to  in  Article 9(1)  or  of  the  body  referred  to  in 
Article  15(2)  taken  under  this  Regulation  shall  be  open  to  the  same  appeals  as  those 
provided for  in national law against similar decisions taken in respect of national patents. 

Article 18 
Procedure 

In the absence  of procedural  provisions in this Regulation,  the procedural  provisions 
applicable  under  national  law  to  the  corresponding  basic  patent  shall  apply  to  the 
certificate,  unless that law lays down  special procedural  provisions for  certificates. 

Notwithstanding  paragraph  1,  the  procedure  for  opposition  to  the  granting  of  a 
certificate  shall be excluded. 

TRANSITIONAL  PROVISIONS 

Article 19 

Any  product  which,  on  the  date  on  which  this  Regulation  enters  into  force,  is 
protected  by  a valid  basic  patent  and  for  which  the  first  authorization  to  place it  on 
the  market  as  a  plant  protection  product  in  the  Community  was  obtained 
after  1  January  1985 under  Article 4 of  Directive 91/414/EEC  or  an  equivalent 
national provision may be granted  a certificate. 

An application for  a certificate  as referred  to in paragraph  1 shall be submitted  within 
six months of the date on which this Regulation  enters into  force. 

45 

FINAL PROVISION 

Article 20 
Entry into force 

This  Regulation  shall  enter  into  force  three  months  after  its  publication  in  the  Official 
Journal of the European  Communities. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable  in  all  Member 
States. 

Done  at, 

For the Parliament 
The President 

For the Council 
The President 

46 

FINANCIAL  STATEMENT 

TITLE 

Proposal  for  a  Parliament  and  Council  Regulation  concerning  the  creation  of  a 
supplementary  protection  certificate  for plant protection  products. 

DESCRIPTION  OF THE MEASURE 

The objective  is to promote research in a high-risk  sector by creating  a new industrial 
property  instrument,  the  supplementary  protection  certificate.  The  measure  also 
harmonizes  the  conditions  for  granting  the  supplementary  protection  certificate  and 
calculating its duration  at Community level. 

The measure has no financial  impact on the Community budget. 

47-

IMPACT OF THE PROPOSAL ON FIRMS 
(in particular  SMEs) 

1.  WHY IS COMMUNITY  LEGISLATION  NECESSARY? 

In  order  to  harmonize  at  Community  level  the  arrangements  for  granting  and 
calculating the  duration  of the supplementary  protection  certificate,  in pursuit  of the 
following  objectives: 

(a)  improving the functioning  of the internal  market  for  plant  protection  products by 

ensuring their freedom  of movement; 

(b) preventing the distortions of competition  currently facing plant protection firms; 

(c)  ensuring that plant protection  research  can benefit  from  better  protection  through 
a single measure with direct and uniform  effect  throughout the  Community; 

(d) improving  the  competitiveness  of  the  plant  protection  industry  by  supporting 

European  research. 

2.  WHICH  SECTORS WILL BE AFFECTED? 

(a)  Firms manufacturing  plant protection  products,  essentially those which base their 
activities  on  research,  will benefit  from  the  measure,  provided  that  the  products 
concerned  are  protected  by a valid  basic  patent  when  the Regulation  comes  into 
force. 

(b) Most  of these firms belong to  international  groups  operating  in several  sectors  of 
the  chemical  industry  (basic  chemistry,  plant  protection  products,  colorants, 
plastics, etc.) and human or animal health. Plant protection  generally accounts  for 
a  relatively  small  percentage  of  their  total  activities,  but  it  is  characterized  by  a 
very high  level  of risk. However, the proposed  measure  is such  as to  apply to  all 
plant protection firms irrespective of size. 

The  rights  to  supplementary  protection  must  be  respected  by  third  parties,  such 
as  manufacturers  of  generic  plant  protection  products.  However,  the  proposal 
contains  limitations,  in  particular  concerning  the  maximum  duration  of  the 
supplementary  protection  certificate,  intended  to  prevent  any undue  effect  on the 
activities of manufacturers  of generics in the sector. 

48 

(c)  There  are  no  grounds  for  supposing  that  certain  geographical  areas  will  profit 

more than others from  the measure. 

3.  WHAT MUST FIRMS DO TO COMPLY WITH THE MEASURE? 

The  supplementary  protection  certificate  will  be  granted  to  plant  protection  firms 
which apply for it, provided that all the necessary conditions are met. 

All applications  for  a supplementary  certificate  must  be  submitted  to  national  patent 
offices:  the  application  may  be  subject  to  the  payment  of  a  fee  to  be  set  by  the 
competent  authorities of the Member States. 

4.  WHAT ARE THE LIKELY ECONOMIC EFFECTS OF THE MEASURE? 

(a) 

On  employment. 

The  creation  of  the  supplementary  protection  certificate  will  provide 
innovating firms in the  plant  protection  sector  with  an  incentive  to  maintain, 
even  increase,  their  investment  in  research.  It  will  help  to  establish  an 
appropriate  legal  framework  for  protecting  innovation  in  the  sector;  it  will 
thus have a positive effect  on employment, in particular in research. 

(b) 

On investment  and the creation  of new firms. 

Harmonization  at  Community  level  of  the  conditions  for  granting  the 
certificate  and the method  of calculating  its duration  should  provide the firms 
concerned  with more certainty  about recovering their costs, thus  encouraging 
them  to  invest.  Since  patents  are  the  best  instrument  for  encouraging 
research,  it  is  certain  that  the  supplementary  protection  certificate  —  a  sui 
generis instrument  providing  similar protection  to a patent  ~  will be  regarded 
as an incentive to research in the plant protection  industry. 

(c) 

On the competitiveness  of firms. 

By placing the plant protection  industry in a competitive  situation  comparable 
the 
to  that  prevailing  in  the  other  important  regions  of  the  world, 
supplementary  protection  certificate  should  be  an  incentive  for  maintaining 
investments  in  Union  territory.  The  European  plant  protection  industry, 
which  makes  a  substantial  contribution  to  the  European  Union's  positive 
balance  of payments, will  thus  have the  opportunity  of better  establishing  its 
competitive position on domestic and international  markets. 

49 

5.  DOES THE PROPOSAL CONTAIN MEASURES TAKING ACCOUNT OF 

THE SPECIAL CIRCUMSTANCES  OF SMES? 

The  measures  contained  in  the  proposal  are  not  specifically  aimed  at  small  and 
medium-sized  businesses, although they can also take advantage of it in so far  as they 
meet the conditions required  for  a supplementary protection  certificate  to be granted. 

6.  CONSULTATION 

A meeting of national experts was held on  1  and 2 October  1992 at the  Commission's 
initiative.  The  experts  examined  the  need  for  supplementary  protection  for  patents 
for  plant  protection  products  in  the  light  of  a  Commission  working  document.  The 
main  subjects  discussed  were  determination  of  the  scope  of  a  Community  measure 
and the transitional  arrangements.  This proposal  takes account  of the initial  approach 
emerging from  that meeting. 

In  addition,  Commission  departments  have  contacted  the  various  organizations 
representing the interests concerned  by the proposal. 

The  organization  representing  the  research-based  plant  protection  industry,  the 
ECPA/1)  supplied  the  Commission  with  data  which  established  with  certainty  that 
the industry  was suffering  from  substantial  erosion  of the duration  of effective  patent 
protection,  which has a negative impact on the sector's research activities. The ECPA 
estimates  that  the  supplementary  protection  certificate  will  help  to  ensure  that 
innovating  industries  will  be  able  to  recover  over  a  long  enough  period  the 
increasingly large investments needed to develop new products. 

Commission  departments  also  received  a  contribution  from  GAME/2)  an  informal 
grouping  of  several  (currently  four)  producers  of generic  products,  which  takes  the 
view  that  the  proposed  measure  will  delay  free  access  to  protected  products  and, 
consequently,  is opposed  to  any  extension  of patent  protection  or  of  supplementary 
protection.  GAME  is  eager  to  see  generic  products  appearing  on  the  market  as 
quickly  as  possible  after  the  expiry  of  a  patent  in  order  to  promote  competition,  in 
particular price  competition. 

0)  European  Crop Protection  Association. 

(2)  Generic Agrochemical  Manufacturers  of Europe. 

50 

Lastly,  COPA-COGECA(3)  submitted  its  position,  voicing  its  concerns  about  the 
effects  of  the  supplementary  protection  certificate  on  the  prices  of  plant  protection 
products  and,  as  a  result,  on  expenditure  by  farmers  on  buying  these  products. 
Commission  departments  have made  estimates  to  assess,  where  possible,  the  effects 
of the proposed  measure on farmers' outgoings. 

(3)  Committee of Agricultural Organizations in the European Community; General Committee for 

Agricultural Cooperation in the EC. 

51  -

ISSN 0254-1475 

COM (94) 579 final 

DOCUMENTS 

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03  08 

Catalogue number : CB-CO-94-601-EN-C 

ISBN 92-77-83316-5 

Office for Official Publications of the European Communities 

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