By Miao Li* --
The 4th amendment to the Chinese Patent Law ("New CN Patent Law") will take effect on June 1, 2021. This amendment represents a significant milestone in the evolution of the patent regulatory framework in China, given the unprecedented level of protection to which patent owners will become entitled. A particularly notable change is the introduction of a drug patent linkage system in China, modeled on the U.S. Hatch Waxman Act. The drug patent linkage system includes several key components, namely: term extension eligibility for drug patents, a patent registration platform for approved drugs, and an early resolution mechanism for drug patent disputes. This article aims to present a foundational understanding of each of these components.
Patent Term Extension
Art. 42 of the New CN Patent Law regulates patent term extension (PTE) and patent term adjustment (PTA), both referred to as "patent term compensation". PTA compensates for the unreasonable delay of the CNIPA (China National Intellectual Property Administration) during prosecution and therefore applies to patents in any field. By contrast, PTE is limited to drug patents, to remedy the loss of patent term due to regulatory review of new drugs. Although such regulatory review of new drugs is conducted by NMPA (National Medical Products Administration) in China, PTE is granted by CNIPA upon the patentee's request. PTE shall not exceed 5 years, and the total remaining patent term after drug approval shall not exceed 14 years.
Moreover, Art. 85 of the Implementation Rules for the new Patent Law (Draft for comments) by CNIPA provides more details regarding the proposed plan for PTE eligibility. Key provisions include:
• Eligible patents shall relate to a chemical drug, biological drug, or traditional Chinese medicine ("TCM") approved by NMPA, or the manufacturing method or medical usage thereof (Art. 85/4).
• The new drug product shall be a drug of new active ingredient approved for the first time by NMPA. Particularly, in the case of TCM, the "new drug" definition is broadened to cover both innovative drugs and drugs with a new indication (Art. 85/4).
• PTE = marketing approval date – patent filing date – 5 years (Art. 85/5).
• One PTE per product per patent (Art. 85/7):
-- If one drug has multiple patents, only one extension request can be filed;
-- If one patent covers multiple drugs, only one extension on one drug can be filed;
-- Patent must not have been previously granted PTE;
-- Patent must have no less than 6 months before expiration;
• The extension request must be filed within 3 months after drug approval. The regulation has no retroactive effect, i.e., patents relating to new drugs approved before May 31, 2021 do not apply.
• The protection scope of a patent during PTE is limited to the new drug and the indication approved on the drug by NMPA (Art. 85/6).
Patent Registration Platform
The patent linkage system is to require a patent registration platform where pharmaceutical companies disclose patents related to an approved drug to the public. The purpose is to encourage and facilitate the early resolution of drug patent disputes, especially in the context of generic entries into the market. Accordingly, NMPA built a patent registration platform for pharmaceutical companies to register patents relevant to marketed drugs. The platform has recently opened for testing (https://zldj.cde.org.cn/home) and will launch on the effective date of the CN New Patent Law.
This platform has been referred to as the "Chinese" Orange Book, but its scope is notably broader than the FDA Orange Book. Pharmaceutical companies can register patents related to a chemical drug, biological drug, or TCM, whereas the FDA Orange Book is limited to chemical drugs. For chemical drugs, applicants can register patents regarding an active ingredient, a formulation comprising the active ingredient, and medical usage. For biological drugs, applicants can register sequence patents. For TCMs, applicants can register patents regarding formulation, extract, and medical usage. For previously approved drugs, companies can supplement relevant patent information after the platform launches.
The above details are specified in the Implementation Measures for Early Resolution Mechanism in Drug Patent Disputes (Trial) (Draft for comments) ("Implementation Measures"), jointly issued by NMPA and CNIPA. Also, the Supreme Court and CNIPA announced judicial provisions and administrative measures for early resolution mechanism for drug patent disputes, respectively. The provisions and measures have made it mandatory for pharmaceutical companies to register relevant patents on the platform, otherwise, infringement/invalidity case filings before a court or CNIPA would be deemed inadmissible.
Dispute Resolution Mechanism
Art. 76 of the New CN Patent Law establishes an early resolution mechanism for drug patent disputes, which treats the drug marketing application by a generic applicant as a legalized infringement act, thereby allowing innovators to prevent the market entry of a generic drug or biosimilar during the drug approval process. The mechanism stipulates both judicial and administrative jurisdictions for dispute resolution. NMPA may suspend the marketing approval of the relevant drug based on the effective judgment of a court or the administrative adjudication of CNIPA.
Further, an applicant seeking marketing approval for a generic drug will be required to submit a statement regarding each patent listed for the reference product. The Implementation Measures provides in Art. 6 four types of patent statements. The patent statements asserted by generics are also available on the Patent Registration Platform. The four types of patent statements include:
I. No patent info;
II. The patent has expired or been invalidated;
III. The patent will expire on a certain date, and the applicant will not market the product until the expiry date;
IV. The patent is invalid or not infringed.
A patentee or party of interest is afforded an opportunity to object to the patent statement and may file a lawsuit before a court (i.e., seeking a determination as to whether the drug for which marketing approval has been applied falls within the scope of the patent) or may initiate administrative proceedings before CNIPA. Action must be taken within 45 days from when the application for drug approval is published by NMPA. In the case of judicial proceedings, Beijing Intellectual Property Court has exclusive jurisdiction.
The resolution mechanism and patent statements equally apply to all three types of drugs (chemical drug, biological drug, or TCM). Nevertheless, there are special regulations regarding chemical drugs as stipulated in Implementation Measures. Firstly, the judicial or administrative proceedings trigger an automatic stay of 9-month for the generic drug approval (Art. 8). Secondly, the first generic company who successfully challenges the listed patents and receives the marketing approval will be granted a 12-month market exclusivity, during which NMPA will not grant another generic (Art. 11). By contrast, for biosimilars and TCMs with the same name and prescription, NMPA determines marketing approval directly; and if there is patent infringement, a tentative approval will be granted.
CN vs. US
A comparison of relevant legal regulations between China (CN) and the United States (US) is helpful for formulating a better understanding.
Finally, the New CN Patent Law has been regarded as being in compliance with the China‐US Phase 1 Trade Agreement made in 2020. Nevertheless, it is worth considering the law amendments beyond just the scope of the Trade Agreement. The amendments aim to balance the protection for innovative drugs and the need for generic entry and are in effect a proactive response to the fast development of the pharmaceutical industry in China during the past decade.
* Ms. Li, who is a qualified Chinese patent attorney, is the Product Director at IPDataLab and also a consultant at Globe-Law Lawyers. Previously, Ms. Li assumed the role of product management leader for a global patent search product at LexisNexis, and before that was a patent attorney at Procter & Gamble and ENN Group. Ms. Li holds a Juris Master's degree from Peking University and a LL.M. degree from Munich Intellectual Property Law Center.
This article was reprinted with permission from IPDataLab.
excellent information, very clear Thank you
Posted by: Ramu | July 27, 2021 at 03:06 AM