It is widely believed that acquiring the role of virtual manufacturing (or OBL manufacturer) under the MDR will be much more complex than under the MDD: and this assessment is certainly true. Some say (even) that it will no longer be possible: however, this is not correct, given that art. 2 lett. 30 of the European Regulation 745/2017 on the definition of the manufacturer absolutely allows to acquire the role of manufacturer, although not performing any activity of “material realization” of the good.
The so-called manufacturer in Obl is in fact the person who places on the market, under his own name, a medical device which is already produced and marked CE by a different person, called ‘original equipment manufacturer’ (Oem). The full legality of this commercial practice – which was already widespread under the previous Directive 93/42/EEC – is then fully confirmed in Article 2 of the new regulation, where point 30, dedicated to the definition of the figure of the ‘Manufacturer’ states that it is ‘the natural or legal person who manufactures or reconditions a device or has it designed, manufactured or reconditioned, and markets it under his name or trademark’. There is therefore no doubt that the so-called ‘Obl manufacturer’ is considered, to all intents and purposes, to be a ‘legal’ manufacturer of the device, irrespective of the fact that he has not participated in any way in the material production of the device itself.
The new MoR, however, has a strong impact on this case with regard to documentation obligations. If, in fact, in the force of the previous directive, it was considered sufficient for the most part that the “manufacturer Obl” held only a copy of the declaration of conformity, a copy of the instructions for use and the index of the technical documentation relating to the device, (remaining the integral documents at the manufacturer Oem which, in case of need, undertook to make it available to the first) today the discipline of the Mdr appears much more stringent. The manufacturer in Obl in fact, as a “legal manufacturer”, is required to fulfil all the obligations under Article 10 paragraph 4 which states that “manufacturers of devices other than custom-made devices shall draw up and keep up to date a technical documentation for such devices. The technical documentation shall be such as to enable the conformity of the device with the requirements of this Regulation to be assessed. The technical documentation shall include the elements referred to in Annexes II and III.
The question therefore arises as to whether the manufacturer in Obl must actually hold “all” the documentation referred to in Annexes II and III or whether a different legal solution is possible. This question is far from being a legal nicety; on the contrary, it has a very strong impact on the market. There is no doubt that the delivery of all documentation by the manufacturer in Oem to the manufacturer in Obl would lead to a strong disincentive to trade. This is due to the fact that this documentation contains company information and know-how, which is now, moreover, subject to specific protection under Directive 2016/943/EC.
It is therefore very important to draw up a contract between a Virtual Manufacturer (Vm) and an Original Equipment Manufacturer (Oem). First of all, it is important to highlight that, from a strictly civil law point of view, the contract is a contract of sale of medical devices. If then Oem and Vm are both Italian companies, art. 1490 et seq. of the Civil Code shall apply; if instead one of the two companies is a legal person of another country (EU or non-EU), the Vienna Convention shall (most likely) apply (unless otherwise agreed by the parties).
However, since this is a product (DM) subject to product regulations of a Community nature (the MDR), the contract (already regulated by the Civil Code and/or the Vienna Convention) will necessarily have to be supplemented with specific articles that allow both parties to comply with the MDR. This opens up the issue of Article 10, paragraph 4, which provides that each manufacturer (including the DMV) must be provided with “technical documentation to allow the conformity of the device with the requirements of this Regulation to be assessed” and “The technical documentation shall include the elements set out in Annexes II and III”.
In essence, the Vm must have the same dossier as the Oem. Now, there is no problem if the OEM is willing – within the framework of the existing contract – to deliver the complete file to the OEM. The situation becomes more complicated, however, if – a fairly frequent occurrence – the OEM does not intend to hand over all the documentation, considering some documents covered by company know-how.
Article 34 of the Vienna Convention provides that the seller (the Oem) is obliged to deliver to the buyer (the Vm) all documents necessary for the use of the goods sold. This general obligation to deliver documents may find a limit through the provisions of EU Directive 943/2016, establishing that trade secrets are the object of protection.
However, the rule specifies that only business information and technical-industrial experience with the following characteristics can be qualified as ‘trade secrets’ – and therefore prevented from access –
– they are secret, in the sense that they are not in their entirety or in the precise configuration and combination of their elements generally known or easily accessible to experts and operators in the sector
– have an economic value by virtue of being secret
– are subjected by the persons under whose legitimate control they are subject to measures which are reasonably calculated to maintain their secrecy.
Only if these requirements and characteristics are met, may the OEM oppose the request of the VM to hand over those documents (in whole or in part) which may be considered legally protectable.
In other words, it is not enough for the Oems to declare that certain documents (or parts of documents) cannot be delivered “because they are secret”, but it is necessary that such documents actually contain information that is not generally known or easily accessible to the operators in the sector, that their “secrecy” has a commercial value and, above all, that the Oems manufacturer has put in place a series of technical and organisational measures suitable to protect their secrecy: that is, it has implemented a system to protect the documents themselves.
As regards the world of medical devices, the recent Guidance Virtual manufacturing of medical devices UK (updated on 3 February 2021) states that they may be considered protectable:
1) unique material formulas or ingredients that are specific to the medical device and not general purpose, provided they represent a high commercial and competitive advantage for the Oem.
2) unique manufacturing processes designed by the OEM, again provided that they confer a competitive advantage on the market to the OEM
3) technical designs and technologies (applicable if a patent is also applied for) but not yet granted
4. software algorithms
In substance, the OEM may send a “limited” dossier (or with partial documents), proving that otherwise it would lose a competitive advantage on the market and also that it has implemented a protection system to protect such information; at the same time, however, in order to allow the OEM to comply with the Mdr, it must contractually undertake to allow the accessibility of the documents in full format by the Nb and/or the competent Authority.
In addition to the specific elements mentioned above, the contract must also contain a series of other clauses that allow the Vm to be able to demonstrate full compliance with the (more complex) Mdr.
In particular:
– a clear link between the medical devices placed on the market by the Oem and those placed on the market by the Vm (especially where accessibility to documents is not complete for the reasons mentioned above)
– specific contractual provisions for post-marketing surveillance and vigilance activities, so as to create a clear and direct link and communication channel between the subjects that within the two companies (the OEM’s and the VM’s) carry out the aforementioned activities; essentially, it is necessary to ensure that the VMs communicate all incidents or potential incidents to the OEM and vice versa, so that both subjects can take the appropriate actions in relation to their own MDs;
– contractual provisions relating to post-production controls, including mutual assurance that post marketing clinical follow-up activities (which may also be co-ordinated) are in place
– arrangements for any changes made to the devices to be communicated to each other by the parties (with the possible obligation for the Vm to obtain the Oem’s authorisation for any changes it intends to make);
– contractual regulations concerning the hypothesis in which the Vm’s Nb wishes to carry out an audit (also unannounced) at the Oem’s premises
– contractual regulations on the assumption that the Vm’s Nb wishes to carry out an audit (even unannounced) at the Oem’s critical suppliers
– provisions relating to possible entries in databases
– accessibility (as explained above) by the Nb and/or the competent authority to information and/or documents not in the Vm’s possession which are relevant for the purposes of assessing the compatibility of the file with the MDR.
Finally, it seems appropriate for the Vm to assess and regulate contractually also the hypothesis in which the Oem “loses” the EC certification (or the same is suspended): from this point of view, not only it seems appropriate to regulate the communication modalities of such possible events, but it will also be necessary to regulate the possible possibility to use another Oem, thus managing the “initial” Oem as a critical supplier.
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