11 August 2020
China released its latest proposed amendments to the Patent Law in early July 2020 (“Proposed Amendments”) for public comments. Patent linkage and patent term compensation for pharmaceuticals are two major reform proposals included in the Proposed Amendments. These changes, if implemented, will introduce sea change to patent litigation and market approval of new drug products in China.
Patent linkage
Potential patent infringement is not currently a consideration when the National Medical Products Administration (“NMPA”) examines an application for marketing authorization (“MA”) by a generic drug company in China. Even if an MA application involves technology suspected of infringing one or more patents recorded with the NMPA (the “Recorded Patents”), a patentee of innovative drug products in China will have to wait until a generic drug product is put into the market before infringement proceedings can be filed. In a number of major biopharmaceutical markets like the U.S. and Canada, a patent linkage system is provided tying the market approval process for generic drugs with and allowing an early determination of potential patent disputes which can otherwise delay entry of the lower-cost drug products into the market.
The Proposed Amendments outline a mechanism which may be regarded as China’s latest attempt to provide a patent linkage system:
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a patentee (or an interested party) may file a civil proceeding with a People’s Court or an administrative complaint with the China National Intellectual Property Administration (“CNIPA”) against an MA applicant for patent infringement within 30 days the NMPA publishes the relevant MA application (“Prescribed Period”);
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an MA applicant may request a People’s Court or the CNIPA to declare non-infringement of the relevant Recorded Patents if no civil or administrative proceeding is commenced by the patentee (or interested party) within the Prescribed Period;
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the NMPA will take into account the outcome of judicial or administrative proceedings involving relevant Recorded Patents in determining whether to approve an MA application, provided: (i) such decision was issued within nine (9) months the case was accepted by the judicial or administrative authority and (ii) the generic chemical drug at issue has passed the requisite technical evaluation.
The framework described in the Proposed Amendments is rather skeletal in nature. A lot of details on the mechanics for linking patent protection and market approval of drug products are not yet available (e.g. will there be a new platform for Recorded Patents) and the meaning of many key terms (such as “interested party”) and scope of application (including whether biologics can take advantage of the linkage regime) remain to be defined or clarified.
Patent term adjustment and extension
The useful life of patents relating to biopharmaceutical and other regulated products are often cut short due to undue delays during examination by the CNIPA and/or the regulatory approval process of the NMPA. Hence, jurisdictions with highly developed patent and drug regulatory systems (like the U.S. and E.U.) have put in place measures to adjust and/or extend the effective period of such patents. Analogous compensatory arrangements have been set out in the Proposed Amendments.
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patent term extension – the CNIPA may extend the term of an invention patent of a new drug for up to five (5) years to compensate for curtailment of patent term occasioned by the MA granting process of the NMPA but the resulting term of protection must not last longer than 14 years post-marketing
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patent term adjustment – a patentee may apply to adjust a patent term if there is “unreasonable delay” on the part of the CNIPA in examining and allowing the underlying patent application
No details relating to the implementation of the above provisions are available. In particular, the Proposed Amendments are silent on the meaning of important terms such as “new drug”, “marketing” and “unreasonable delay”. Irrespective of how such provisions may be administered, a longer term of protection for drug products would be welcomed by owners of pharmaceutical patents in China.
Patent linkage and patent term compensation are coming to China. Implementation of these legislative initiatives will leapfrog the patent protection and regulatory approval regime for pharmaceutical products in China. Their developments should therefore be closely watched.
Cedric Lam, Partner, Eversheds Sutherland
