This month, China has issued three important updates on the nation's patent linkage system, which represents a significant step in finalising this system, which is now officially available to pharmaceutical companies. Detailed information can be found below:
I. Implementing measures on the patent linkage system now in effect
On 4 July 2021, the National Medical Products Administration (NMPA) and the China National Intellectual Property Administration (CNIPA) jointly announced that the Implementing Measures for the Early Resolution Mechanism for Drug Patent Disputes (for Trial Implementation) had been enacted. With the issuance of these Measures, the patent linkage system is officially in effect, which represents a significant step by the government in the reform of the pharmaceutical industry in China. In addition, the NMPA published a Notice on the implementation of the Measures on the same day, which invited brand-name companies to upload patent information to the patent registration platform (here) and requested generic companies to submit declarations and send the declarations and the supporting documents to the drug marketing authorisation holder.
The Measures contain 16 articles that mainly include information on the following: the patent registration platform on which drug patents can be registered, the patent-status declaration system for generic drug applicants, the time limit for the patentee or interested parties to raise objection and the establishment of a nine-month waiting period, drug review and approval process, and first generic exclusivity.
Patent information registration platform
The Measures stipulate that the Centre for Drug Evaluation (CDE) will establish and maintain a patent information registration platform for drugs marketed in China. Drug marketing authorisation holders will register the patent information of the drugs to be marketed on the platform with relevant patent information, which will be published and made available to the public. The information includes the name, dosage form, and specification of the drug; the name of the drug marketing authorisation holder; the number, name, holder, licensee, grant date, expiration date, status, type, and the drug corresponding claim of the relevant patent; and address, contact person and contact information. The drug marketing authorisation holder should register the information within 30 days after obtaining the drug registration certificate. When there is a change in information, the drug marketing authorisation holder should record it within 30 days after the effective date of the change.
The drug marketing authorisation applicant should submit a patent-status declaration against each relevant patent listed on the platform. The patent information recorded on the platform will be used as the basis for a generic company to fill the declaration. The declaration will be published and searchable on the platform.
Drug marketing authorisation holders and drug marketing authorisation applicants are responsible for the authenticity, accuracy and completeness of the provided information.
Drug patents can be registered on the platform
The drug patents that can be registered on the 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 patents directed for medical use; and
for traditional Chinese medicines: composition patents, extraction patents, and patents directed for medical use.
According to the Policy Interpretation issued by the NMPA and the CNIPA, patents direct to intermediates, products for the metabolism, crystal forms, preparation methods, or detection methods may not be registered on the platform.
Patent status declaration system for generic drug applicants
As discussed above, 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 documents. The declaration is classified into four categories:
Category I: there is no patent information related to the brand-name drug on the platform;
Category II: the relevant patent of the brand-name drug registered on the platform has expired or has been declared invalid;
Category III: the platform records patents related to the brand-name drug, and the generic drug applicant undertakes that it will not market the generic drug before the expiration of the patent terms; and
Category IV: the patent rights related to the brand-name drug registered on the platform should have been declared invalid, or the generic drug does not fall within the protection scope of the relevant patent rights.
Within ten days after the acceptance of the drug marketing authorization application, the CDE will publish the drug application and the related declaration on the platform. The drug marketing authorisation applicant should inform the drug marketing authorisation holder of the declaration and the supporting documents by sending both a hard copy of those required documents and an email to the contact person of brand-name drug company through the email address left on the platform. When the declaration is a Category IV declaration, the drug marketing authorisation applicant should provide a form comparing the technical solution of the generic drug and that of the brand-name drug, and also relevant technical materials to the brand-name drug company.
Time limit for raising objections and nine-month waiting period
Within 45 days from the publication of the drug marketing authorisation application with a Category IV declaration, the patent holder or interested party can file a lawsuit before the people’s court or an administrative adjudication request before the CNIPA. Within 15 business days after the acceptance of the case by the relevant authority, the patentee or interested party should submit a copy of the acceptance notice to the CDE and inform the generic drug applicant.
Upon the receipt of the acceptance notice, the NMPA will set a nine-month waiting period for chemical drugs only. The nine-month waiting period starts from the case-acceptance date and will be set up for once only. Drug marketing authorisation review will not be stopped during the waiting period.
If the patent holder or interested party fails to file a lawsuit or request administrative adjudication within the prescribed time limit, the generic drug company may file a lawsuit or request an administrative ruling to confirm that the technical solution of the drug does not fall within the protection scope of the relevant patent.
Drug review and approval process
For a generic chemical drug application with a patent status declaration falling within category I or II, approval of the marketing authorisation will be based on the results of the CDE review. 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 relevant patent rights and the market exclusivity period.
For an application with a Category IV declaration where a nine-month waiting period was triggered, the patent holder or interested party or the chemical generic drug applicant should submit the relevant decision to the CDE within ten business days from the receipt of such. The CDE will consider the effective judgment from the people’s court or a decision from the CNIPA and proceed in the following way:
If the effective judgment or decision holds that the generic chemical drug falls within the protection scope of the patent, the CDE will commence the approval process before the expiration date of the patent;
If the effective judgment or decision holds that the generic chemical drug does not fall within the protection scope of the patent, the parties settle the dispute, the patent is invalidated or the NMPA does not receive an effective judgement, decision or a settlement agreement, the CDE will proceed with the approval process; and
If during the approval process, the NMPA received the effective judgment or the decision holds that the generic chemical drug falls within the protection scope of the patent, the CDE will commence the approval process before the expiration date of the patent.
If during the waiting period the court eventually reverses the original administrative adjudication decision, the parties settle the dispute, the patent is declared invalid, or the patent holder or interested party withdraws the litigation or administrative adjudication request, the generic chemical drug applicant can request the NMPA to continue the drug-approval process.
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 review results from the CDE and the effective judgment or administrative adjudication decision (if available before approval).
First generic exclusivity
A market exclusivity period of 12 months will be awarded to the first generic chemical drug. During this period, the NMPA will not approve a generic drug of the same type for marketing, unless the patent was successfully co-challenged by multiple parties together. The exclusivity period will not exceed the term of the challenged patent. During the exclusivity period, the CDE will not stop reviewing applications. For other generic chemical drugs of the same type that receive a positive review result, the CDE will commence the approval process before the expiration date of the exclusivity period.
For clarification, “successfully challenge the patent” means the generic chemical drug applicant files a Category IV declaration, submits an invalidation request, and as a result the patent right is invalidated so that the generic drug can be approved for marketing. Therefore, it appears that market exclusivity does not apply to biosimilars and traditional Chinese medicines with the same name and recipe.
The approval cannot be revoked based on a patent infringement decision. Submitting an incorrect declaration, intentionally submitting irrelevant patent information or information of patent types that should not been registered on the platform – and as a result harms the right of patent holder or other concerned parties – will result in punishment.
Compared to the draft-for-comment version published on 11 September 2020, the structure of the patent linkage system in the Measures has not been changed much. The most notable adjustment is that the drug marketing authorisation applicant is obligated to notify the brand-name drug company of the drug application, the declaration and the supporting documents. However, it should be noted that the 45-day window for the brand-name company to take legal actions starts from the publication date of the drug marketing authorisation application with a Category IV declaration instead of the date notification was received from the generic drug applicant. As a result, monitoring of the platform is recommended.
Link to the Notice here.
II. CNIPA is ready to handle drug patent disputes
On 5 July 2021, the CNIPA issued the Administrative Adjudication Measures for Early Settlement Mechanism of Drug Patent Disputes. These Official Measures took effect on the same day. The CNIPA also provides template documents on the same date. It should be noted that previously on 10 February 2021, the CNIPA published the draft version of the Official Measures for public comments. Compared with these Draft Measures, the Official Measures contain several important clarifications and include the following important information:
the legal basis for handling the drug patent disputes;
requirements to be met for applying for administrative adjudication;
application documents; and
procedural rules for administrative adjudication.
(1) Legal basis for handling the drug-patent disputes
The CNIPA will handle drug-patent disputes according to Article 76 of the Patent Law. However, according to the Official Measures, the CNIPA will set a separate administration adjudication board for specially handling the early settlement of drug patent disputes. Accordingly, drug patent disputes will not be handled by the Patent Review and Invalidation Department.
(2) Requirements to be met for applying for administrative adjudication
The Official Measures stipulate that in order to file an administrative adjudication request before the CNIPA, the requester needs to fulfil the following requirements:
The correct requester(s). The requester should be the drug marketing authorisation applicant, relevant patent holder or interested party, wherein the interested party refers to the licensee of the relevant patent or the registered drug marketing authorisation holder. If the patent right is co-owned by multiple parties, all the co-owners should jointly file the request unless some of the co-owners clearly agreed to give up the relevant rights. The drug marketing authorisation holder or the exclusive licensee of the patent right can file the request under its own name. The sole licensee can file the request in its own name when the patent holder fails to do so.
A clear respondent. For the patent infringement allegation, the respondent should be the drug marketing authorisation applicant. For non-infringement declaratory judgements, the respondent should be the patent right holder.
Clear allegations and the specific facts and reasoning.
The information of the relevant patent has been registered on the patent information registration platform for drug marketing in China, and the information meets the relevant stipulations in the Implementing Measures for the Early Resolution Mechanism for Drug Patent Disputes.
People’s courts have never accepted a patent dispute case over the drug.
For the situation where a drug marketing authorisation applicant brings an administrative adjudication request, the patent holder or the interested party has not brought a lawsuit before the people’s court or an administrative adjudication request within 45 days from the date when the national drug evaluation institute published the drug marketing authorisation application.
Determination of whether the technical solution of the drug applies to marketing authorisation falls within the protection scope of one claim per administrative adjudication request only.
(3) The application documents
The requester’s information such as: name, address, the name of the legal representative or the responsible person, contact information, and name of the representing attorney and the name, address, and contact information of the firm if a representing attorney is hired;
The respondent’s information such as: name, address, the name of the legal representative, contact information and other information;
The information of the patent registered on the patent information registration platform, such as the patent number, type, status, patent holder, expiration date, and the relevant claim number;
The relevant information of the drug applied for marketing authorisation and its declaration type;
Whether reasoning for the technical solution falls or does not fall within the protection scope of the relevant claim;
Evidence list: evidence and supporting documents can be submitted as an annex to the request form; and
A power of attorney.
Certificate of subject qualification.
Information of the relevant patent registered on the patent information registration platform, the drug marketing authorisation application, and the declaration and supporting documents thereof filed by the drug marketing authorisation applicant. And,
If the requester is the drug marketing authorisation applicant, the technical solution of the drug seeking marketing authorisation should also be submitted. If the technical solution is confidential, it should be submitted separately.
(4) Procedural rules for the administrative adjudication
The Official Measures provide more detailed recusation principle. Previously, the Draft Measures stipulate that personnel on drug patent dispute cases should not have a direct conflict of interest with the concerned parties. The Official Measures clarify the situation where a conflict of interest is recognised. Namely, persons who are immediate family members of concerned parties or their representing agents, have a conflict of interest with the patent application or patent rights, or have other relationships with the concerned parties or their representing agents that could have an impact on the fairness of a trial should recuse themselves from the administrative adjudication case.
Other procedural rules include: If any of the documents do not meet formality requirements, the CNIPA will issue a notice to the requester asking for corrections within five business days. The request will be rejected if there is a failure to submit the correction or if the correction is invalid.
For the following circumstances, the CNIPA will not issue a notice of correction and will reject the request:
The request form lacks the requester’s name, address or other basic information, or lacks the information of the relevant patent.
There is no clear respondent.
The requester or respondent does not meet the relevant requirements of subjects.
The patent type is incorrect or the patent information is inconsistent with that of the declaration.
The relevant claim of the patent has been declared invalid.
The request form does not specify the relevant claim number and does not provide a specific allegation for adjudication.
The requester does not specify the reasoning, or does not provide reasoning with evidence.
The request form is filed against more than one technical solution or concerns more than one claim.
The patent dispute concerning the same drug has been accepted by the people’s court.
(5) Other important rules include:
The CNIPA can combine the trial when multiple requests concerning multiple claims filed against the same drug.
CNIPA can refuse to suspend the infringement case when an invalidation request is brought against the relevant patent.
After the decision is made by the CNIPA, it will deliver the decision to the parties and the National Medical Products Administration. Confidential information will be deleted from the decision when it is published.
For provisions lacking in the Official Measures, the CNIPA shall consult "Measures for Patent Administrative Enforcement" and the relevant provisions on administrative adjudication on patent infringement disputes issed by the CNIPA.
A speedy trial is key to the proper functioning of the patent linkage system because the patent linkage system operates only when the patent infringement decision can be issued before the National Medical Products Administration approves the drug for marketing. In the Official Measures, the CNIPA has provided its solution (1) the CNIPA will establish a different department specialised in handling drug patent disputes; (2) the CNIPA will also adopt a bifurcated system, which handles patent invalidation and drug patent dispute separately instead of handling them together in one trial, and the infringement case may not be suspended due to an invalidation request brought against the relevant patent; and (3) the request form should be filed against one technical solution concerning one claim only. In addition, it should be especially noted that, according to the Guidelines to Administrative Adjudication of Patent Infringement Disputes issued by the CNIPA, the administrative decision on patent dispute becomes effective as soon as it is made. It is therefore preferred to initiate the administrative adjudication because it is quicker to obtain an effective decision that can be relied upon by the NMPA for making the approval decision.
The link to the Official Measures here.
Template documents can be found here.
III. SPC of China finalises the provisions regarding patent linkage system
On July 5 2021, The Supreme People's Court (SPC) issued the Provisions on Several Issues Concerning the Application of Law to the Trial of Civil Dispute Cases Related to Patent Rights Pertaining to Drugs under Application for Registration (i.e. the Provisions), which came into effect on the same day.
The promulgation of the above Provisions is to clarify Article 76 of the Patent Law, which was added in the fourth revision of the Patent Law on October 2020 to set up an early settlement mechanism for drug patent disputes and is commonly referred to as the patent linkage system.
The Provisions contain 14 articles covering matters concerning jurisdiction over civil dispute cases related to the patent right of drugs under registration, claimants eligible for initiating lawsuits, requirements for the submitted documents, and procedural rules.
Detailed information on the measures contained in the Provisions is provided below.
The action raised under Article 76 of the Patent Law on determining whether the drug under application for registration falls within the scope of patent protection, will be subject to the jurisdiction of the Beijing Intellectual Property Court.
The following are eligible:
Licensees of the patent; and
Relevant drug marketing authorisation holders;
Drug marketing authorisation applicants, for filing a declaratory judgment for recognising the non-infringement of a relevant patent.
Requirements for the submitted documents
The requirements include:
The relevant patent information registered in the platform established by the CDE, including the patent name, patent number, and related claims, etc.
The relevant information of the drug under registration published on the platform established by the CDE, including the drug name, drug type, registration category, and the corresponding relationship between the drug under registration and the relevant drug that has been marketed in China, etc.
The Category IV Declarations and the supporting document submitted by the applicant.
During the response period of the first-instance, the drug marketing authorisation applicant will submit to the people's court a copy of the technical materials that it submitted to the CDE for the determination of whether the drug falls within the protection scope of the relevant patent.
No suspension. The people’s court will NOT suspend the litigation on the grounds that the CNIPA has accepted the request for administrative adjudication under Article 76 of the Patent Law, and in general will NOT suspend the litigation on the ground that the invalidation request of the relevant patent is accepted by CNIPA after initiating the lawsuit in accordance with Article 76 of the Patent Law.
Recognition of non-infringement. The people’s court may hold that the technical solution does not fall within the protection scope of the relevant patent when the following circumstances are proven to be true:
The technical solution is available in the public domain;
The product is obtained through authorised sale; or
There is a valid prior use defence.
Behaviour preservation. A request for prohibiting the drug marketing authorisation applicant from performing patent infringement actions such as manufacture, use, offer to sell, sale and import of infringing products while the relevant patent right is valid will be handled in accordance with the Patent Law and the Civil Procedure Law. Any request for prohibiting the drug marketing authorisation application from applying for a drug review or prohibiting the CDE from conducting the review will be refused.
res judicata. When determining whether the same drug falls within or outside the protection scope of the same patent, in general the court will recognise a previous effective judgment. The exception is when evidence exists that the technical solutions in the concluded patent infringement litigation and the drug under application for marketing are different, or there is a new allegation.
Counterclaim for loss. The drug marketing authorisation applicant is entitled to claim the damages before the Beijing Intellectual Property Court if the patent holder or interested party knows or should have known that the patent right should have been invalidated, or the relevant technical solution of the drug under registration does not fall within the protection scope of the patent, but the holder or interested party still files a lawsuit or requests an administrative adjudication.
Other stipulations. Other stipulations include: requiring protection for trade secrets, imposing sanctions for submitting obviously inconsistent technical materials, and stipulating that documents will be delivered to the contact person recorded in the patent information registration platform.
Compared to the Provisions draft for comment, important changes were made, such as the people’s court will NOT suspend the litigation on the grounds that the CNIPA has accepted the request for administrative adjudication under Article 76 of the Patent Law and the deletion of court’s finding of non-infringement when the relevant patent is clearly invalid.
The SPC’s Provisions attempt to clarify the stipulations in Article 76 of the Patent Law. Based on our understanding, the Notice, Official Measures, and Provisions collectively clarified the role of the CNIPA, the NMPA and the people’s courts, and offer direction for the concerned parties. For now, brand-name companies are advised to file an administrative adjudication with the CNIPA and after it accepts the case, file a lawsuit before the Beijing Intellectual Property Court, if necessary.
Link to the SPC Provision here.
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