China makes progress in establishing patent linkage system

China

On 11 September 2020, the National Medical Products Administration (NMPA) and China’s National Intellectual Property Administration (CNIPA) published a draft of the Measures for Implementation of the Early Resolution Mechanism for Drug Patent Disputes (the “2020 Draft”), which represents an important step in establishing the patent linkage system in China.

With a mandate to protect the legitimate interests of pharmaceutical patent holders, the 2020 Draft encourages new drug innovation and promotes high-quality development of generic drugs. It contains 16 articles covering the establishment of a patent information registration platform, clarification on the scope of drug patent information registration, provision of a patent status declaration system for generic drug applicants, clarification of the time limit for a patentee or interested parties to raise objections and establishment of a nine-month waiting period, categorisation of drug reviews and approvals, and encouraging challenges against pharmaceutical patents.

Detailed information on the measures contained in the 2020 Draft is provided below.

Development of the patent linkage system

The initial exploration of a patent linkage system in China dates back to 2002 when the State Drug Administration (now the NMPA) published Measures for the Administration of Drug Registration (for trial implementation), which required drug applicants to submit guarantees of non-infringement of the patent rights of others.

On 12 May 2017, China's Food and Drug Administration (whose mandate also now falls under the NMPA) published the Relevant Policies on Encouraging Innovation in Drug and Medical Equipment and Protecting the Rights and Interests of Innovators (a draft for public comments), which explicitly called for and provided a framework for the establishment of a drug patent linkage system.

On 8 October 2017, Central Committee of the Communist Party of China and General Office of the State Council published Opinions on Deepening the Reform of the Evaluation and Approval System and Inspiring Innovation of Drugs and Medical Devices, which for the first time sent out a clear signal that the drug patent linkage system will be explored, developed and established.

On 24 November 2019, the same authorities published Opinions on Strengthening Intellectual Property Protection, which again mentioned the exploration and establishment of the drug patent linkage system.

On 3 July 2020, National People’s Congress Standing Committee published the Second Draft of Amendments to the Patent Law. In addition to newly added provisions establishing the linkage between generic drug applications and the patent of an original drug, this amendment also stated that the medical supervision and management department (also now the NMPA) together with the patent administration department (now the CNIPA) of the State Council should designate specific measures for resolving patent disputes during the review and the application stage of drug-marketing authorisation, which formed the preliminary basis for establishing the administrative linkage between the NMPA and CNIPA. 

Current provisions of the 2020 Draft

Establishing a patent information registration platform. The 2020 Draft requires the national drug review institution to establish a patent information registration platform for drugs marketed in China. Drug marketing authorisation holders will register the patent information of marketed drugs on the platform with  relevant patent information to be published and made available to the public. The applicant will submit information related to the name of the drug, the number, type, status, expiration date of the relevant patent, and the name and contact information of the patent-right holder and the marketing-authorisation holder.

For drugs already authorised to be sold on the market, the marketing-authorisation holder can supplement the patent information. If a patent is granted during the drug review, the applicant can submit the patent information to the platform within 30 days from the announcement date granting the patent right. When there is a change in patent information, the applicant or marketing-authorisation holder should record it within 30 days after the effective date of this change.

The information recorded in the platform will be used as the basis for a patent-status declaration to be submitted by generic drug applicants. These measures are not applicable to patent information that is not registered on the platform.

Clarifying the scope of drug patent information registration. Drug patents that can be registered in the patent information registration platform include:

  • for chemical drugs: compound patents of the active pharmaceutical ingredient, composition patents making up the active pharmaceutical ingredient, and patents directed for medical use;
  • for biological drugs: patents of the sequence of biological products; and
  • for traditional Chinese medicines: composition patents, extraction patents, and patents directed for medical use.

The applicant or drug marketing authorisation holder will be responsible for the authenticity, accuracy and completeness of the relevant patent information.

Patent status declaration system for generic drug applicants. When a generic-drug applicant submits an application for drug marketing authorisation, it must submit a declaration against each corresponding patent registered on the patent information registration platform and provide relevant supporting evidence. The declaration is classified into four categories:

  • Category I: there is no patent information related to the original drug on the platform;
  • Category II: the relevant patent of the original drug registered on the platform has expired or has been declared invalid;
  • Category III: the platform records patents related to the original drug, and the generic drug applicant undertakes that it will not market the generic drug before the expiration of the patent terms; and
  • Class IV: the patent rights related to the original drug registered in the platform is declared invalid, or the generic drug does not fall within the protection scope of the relevant patent rights.

The generic drug marketing authorisation application and the corresponding declaration will be published.

Clarifying the time limit for the patentee or interested parties to raise objections and setting up a nine-month waiting period. The patentee or interested parties of the patents registered on the platform can file a lawsuit or apply for an administrative decision within 45 days from the publication date of the generic drug application. If there is no legal action taken by the patentee or interested party within the time limit, the NMPA will decide whether to approve the generic drug application on the basis of the results of the review by the national drug review institution and the declaration submitted by the generic-drug applicant. If the patentee or interested parties file a lawsuit or an administrative litigation within the 45-day time limit, they must deliver a copy of the notice of acceptance to the national drug review institution within ten days after the acceptance date of the case.

If the pending application is a chemical drug, the NMPA will set a nine-month waiting period starting from the acceptance date of the case. During this period, the application will not be approved, but the national drug review institution will not stop reviewing the application.

For biosimilars and traditional Chinese medicines with the same name and recipe, the NMPA will not set up a nine-month waiting period and will decide whether to issue the approval based on the results of the review by the national drug review institution.

Categorising drug reviews and approvals. For a generic chemical drug application with a patent status declaration falling in category I or II, the decision whether to approve the marketing authorisation will be made based on the results of the review by the national drug review institution. For an application with a category III declaration, if approval is made, the drug will be allowed for sale only after the expiration of the patent rights.

For an application with a category IV declaration, if the patentee or interested parties take legal action within 45 days after the publication date of the generic chemical drug application, they shall deliver the judgment or decision within ten days after receiving it to the national drug review institution. For a generic chemical drug application that receives a favourable review result, the national drug review institution will take this judgement under consideration.

If a judgment or decision holds that a generic drug falls within the protection scope of the patent, the national drug review institution will only commence the approval process 20 days before the expiration date of the patent. If this judgment or decision is made during the approval process before the NMPA, the application will be returned to the national drug review institution and the approval process will only recommence 20 days before the expiration date of the patent. The national drug review institution will commence the approval process if the parties settle their dispute, the patent is declared invalid, or there is no judgment or decision made by the court or the patent administrative department or there is no settlement agreement reached between the parties during the waiting period.

If during the waiting period, the court eventually reverses the original judgment or administrative decision, the generic chemical drug applicant can request the NMPA to continue the drug review. In this case, the NMPA will decide whether to approve the application in view of the results of the review by the national drug review institution and the court’s final judgment.

It should be noted that for biosimilars and traditional Chinese medicines with the same name and recipe, there is no waiting period, and the NMPA will decide whether to approve the application based on the results of the review by the national drug review institution. Further, the approval cannot be revoked based on a patent infringement decision. Accordingly, the patentee or interested parties should file a lawsuit or administrative litigation for patent infringement within 45 days after the publication of the drug application and seek to obtain a favourable judgment or decision before the end of the approval process, in which case, the drug will only be allowed for sale after the expiration of the patent.

Encouraging challenges against pharmaceutical patents. When there is a generic chemical drug applicant who is the first successful challenger of a patent and obtains marketing authorisation, the NMPA will not approve another generic chemical drug of the same type for a 12-month exclusivity period. The exclusivity period will not exceed the patent term of the challenged patent. During the exclusivity period, the national drug review institution will not stop reviewing applications. For other generic chemical drugs of the same type that receive a positive review result, the national drug review institution will commence the approval process 20 days before the expiration date of the exclusivity period.

Other important provisions. The 2020 Draft states that the marketing authorisation of a drug will not be revoked due to a finding of patent infringement.

The applicant or the agent who intentionally submits misrepresentations in a declaration or records irrelevant patent information in the patent information registration platform will be punished and the drug applicant will be prohibited from submitting a drug application for one year.

The 2020 Draft remains open for public comment until 25 October 2020. We will monitor the developments of this legislation and keep you updated.

It is almost certain, however, that the establishment of the patent linkage system will lead to an increase in the number of generic drug applications together with patent infringement and invalidation disputes in the pharmaceutical field in China.

Link to the 2020 Draft.

For more information on the 2020 Draft and the Chinese pharmaceutical industry, contact your regular CMS adviser or local CMS experts: