From 2017 to 2021, after nearly five years of twists and turns, China’s drug-patent linkage system has finally been launched. On July 4 2021, the National Medical Products Administration (NMPA) and the China National Intellectual Property Administration (CNIPA) jointly issued an announcement (No.89, 2021), declaring that ‘Implementing Measures for Early Resolution Mechanism for Drug Patent Disputes (Trial)’ ( Implemented Measures) would come into effect on that same day.
One day later, on July 5 2021, the Supreme People’s Court and CNIPA issued the ‘Provisions of the Supreme People’s Court on Several Issues Concerning Application of Law in Trial of Civil Cases Involving Patent Disputes Related to Drugs Under Approval for Marketing Authorisation’ (Judicial Interpretations), and the ‘Measures for Administrative Ruling on Early Resolution Mechanism for Drug Patent Disputes’ (Administrative Ruling Measures).
As a result of these three proclomations China’s drug-patent linkage system is now well established, providing legal regulations for resolving patent disputes during evaluation and approval of generic drug marketing, facilitating benefical competition and healthy development of the pharmaceutical industry, and stimulating innovation in the pharmaceutical industry.
The highlights of these three proclomations are described in detail below. The Implemented Measures include some noteworthy changes compared to the earlier text of ‘Implementing Measures for Early Resolution Mechanism for Drug Patent Disputes (draft)’ ( Draft Measures) that are also outlined below.
Figure 1: Summary of the requirements for the patent information registration platform (changes or clarifications compared to the Draft Measures are shown in red)
In order to allow generic drug companies to know which marketed drugs are still under patent protection, and allow brand name drug companies to know which generic drug companies have filed an abbreviative new drug application (ANDA) corresponding their own brand name drug, the NMPA has established two platforms for both sides to exchange information:
The MAH should take the initiative to register relevant information about an approved drug on the patent information registration platform for drugs marketed in China within 30 days after obtaining drug marketing approval. Compared with the Draft Measures, the Implemented Measures delete reference to NDA or NADA applicants, and clearly define that it is the MAH that should register relevant information on the patent information registration platform.
Furthermore, patents for medical use of biological products are newly added as another patent type that should be registered on the patent information registration platform (rules 2–5 of the Implemented Measures), see Figure 1 for details.
According to the implemented measures, when submitting an ANDA an applicant for either chemical generic drugs, Chinese medicines with the same name and the same formulation, or bio-similar drugs shall, according to the requirements of the patent information registration platform, make a declaration against each patent related to the relevant brand name drug. Within 10 working days after the ANDA is made, the generic drug applicant shall notify the MAH of the corresponding declaration and the basis for declaration.
Compared with the Draft Measures, the obligation of generic drug applicants to notify the MAH, together with the basis for the declaration was added to the Implemented Measures. Specifically, the Implemented Measures stipulate that “As to a declaration where the generic drug does not fall within the protection scope of a relevant patent, the basis for declaration shall include a comparison table between the technical solution of the generic drug and the relevant patent claims, together with the relevant technical data. In addition to paper materials, generic drug applicants should also send the declaration and the basis for declaration to the e-mail address registered by the MAH on the patent information registration platform for drugs marketed in China, and keep relevant records.”
Furthermore, in declaration category II, the scope has been expanded to cover the circumstance wherein a generic drug applicant has obtained a license from the patentee. Figure 2 below summarises the key details.
Figure 2: Categories of declaration in the information platform of the national drug evaluation department (the change compared to the Draft Measures is shown in red)
The Implemented Measures clarify the interaction rules between the related parties during evaluation and approval of a generic drug, namely the MAH, the generic drug company, the NMPA, the CNIPA and the IP Court.
Where the patentee or interested party has any objection to a patent declaration under category IV, it may, within 45 days from the date when the national drug evaluation department discloses the ANDA, bring or request a a lawsuit or administrative ruling on whether a relevant technical solution of a drug under approval for marketing authorisation falls within the protection scope of a relevant patent ( ‘affirmation of falling within or not’). Where a party concerned does not accept the administrative ruling made by the CNIPA, it may bring a lawsuit to the People’s Court after receiving the administrative ruling.
Where a patentee or interested party files a lawsuit or requests an administrative ruling within the prescribed time limit, the patentee or interested party shall, within 15 working days from the date on which the case is placed on file by the People’s Court or the date on which the CNIPA accepts the case, submit a copy of the notice of putting the case on file or acceptance of the case to the national drug evaluation department and shall notify the generic drug applicant (Rule 7 of the Implemented Measures).
The NMPA will set a waiting period of nine months for the approval of an ANDA for chemical generic drugs after receiving a copy of the filing acceptance notice from the IP Court or from the CNIPA. The waiting period will be set only once (Rule 8 of the Implemented Measures).
Compared with the Draft Measures, the Implemented Measures additionally stipulate that the patentee or interested party shall notify the generic drug applicant after bringing a lawsuit or requesting an administrative ruling, and clarify that the waiting period for chemical generic drugs shall be set only once.
According to the Implemented Measures the NMPA will make a decision on whether to approve the ANDA of a chemical generic drug declared under categories I, II or III according to the conclusion of a technical evaluation.
Additionally, for chemical generic drug declared under category III, after approval of the ANDA the drug may only be marketed after expiration of the corresponding patent validity period and market exclusivity period. That is, declarations under categories I to III are ‘peaceful’ and do not trigger a lawsuit or administrative ruling, whereas declarations under category IV are ‘challenging’ (Rules 8 and 10 of the Implemented Measures).
For a chemical generic drug that has passed technical evaluation under category IV during the waiting period or administrative examination and approval period, two outcomes are possible. If the drug is ruled to fall within the protection scope of the relevant patent within the waiting period, the ANDA shall be paused and only transferred for administrative examination and approval close to the expiration date of the relevant patent.
In all other cases the ANDA shall be put directly into the administrative examination and approval stage (Rule 9 of the Implemented Measures). According to the Implemented Measures a market exclusivity period shall be granted for the first chemical generic drug that both successfully challenges a relevant patent and where ANDA approval is obtained.
The NMPA will not approve subsequent ANDAs for chemical generic drugs of the same species within 12 months from the date of the successful ANDA, except those that jointly successfully challenge the relevant patents. The market exclusivity period is 12 months unless this exceeds the validity period of the patent being challenged (Rule 11 of the Implemented Measures).
For Chinese medicines with the same name and the same formulation, or for bio-similar drugs the NMPA shall directly make a decision on the ANDA following to the conclusion of a technical evaluation. However, where the IP Court or CNIPA rules that the relevant technical solution falls within the protection scope of a relevant patent, the relevant drugs can be marketed only after expiration of the relevant patent (Rule 13 of the Implemented Measures).
Brand name drug companies should build a well-constructed patent wall and take steps to evaluate in good time the stability of core patent(s). Brand name drug companies should pay more attention to the patent portfolio of their core products, and in particular increase investment in patent protection regarding active ingredients, compositions and medical uses, as unlike crystal forms and preparation methods only these three are included in the patent information registration platform for marketed drugs in China.
In addition, brand name drug companies should evaluate stability of core patent(s) in good time and establish an emergency plan to cope with potential invalidation requests for their core patent(s), considering that the 45-day objection period is too short to prepare well for an invalidation request.
When confronted with the choice of pursuing a declaration under category IV, a lawsuit or an administrative ruling on ‘affirmation of falling within or not’, how should a brand name drug company decide on a best course of action?
Rule 10(9) of the Administrative Ruling Measures stipulates that the CNIPA shall not accept a request for an administrative ruling on a drug patent dispute where a dispute involving the same patent and the same drug has been placed on file by the IP Court.
Meanwhile, Rule 5 of the Judicial Interpretations clarifies that the Beijing IP Court will not suspend or refuse to accept a lawsuit even if the CNIPA has accepted an ‘administrative ruling on affirmation of falling within or not’, which means that proceeding first with an administrative ruling will increase the opportunities for the brand name drug company to achieve a positive outcome.
In addition, the result of an administrative ruling will generally come out within six months, while the outcome of the lawsuit will in general take longer. Given that the NMPA sets a waiting period of nine months for chemical generic drugs, but does not set such a waiting period either for Chinese medicines with the same name and the same formulation or for bio-similar drugs, it is more likely to obtain a result of an administrative ruling rather than from a lawsuit within the waiting period or before NMPA approves the ANDA. Therefore, it is suggested that brand name drug companies should first apply for an administrative ruling on ‘affirmation of falling within or not’.
Generic drug companies should act according to circumstances and fight back appropriately. Based on the rather explicit drug-patent linkage system, it is suggested that before submitting an ANDA, generic drug companies fully evaluate the feasibility of a declaration under category IV, and if found unfeasible, instead turn to a declaration under category III, or even consider the option to license-in and turn to a declaration under category II.
Generic drug companies should evaluate the stability of patents relevant to their targeted brand name drug in advance. If there is sufficient evidence to invalidate the relevant patent, a generic drug company can then raise a patent challenge in a timely manner.
An extra counter-attack weapon for generic drug companies is also availble. Rule 12 of the Judicial Interpretations stipulates that, “where a patentee or interested party knows or should have known that the relevant patent should be declared invalid, or that the technical solution of the relevant drug under approval for marketing authorisation does not fall within protection scope of the relevant patent, but still files a lawsuit or requests for an administrative ruling as referred to in Article 76 of the Patent Law, the drug marketing authorisation applicant may file a lawsuit for damages with the Beijing IP Court”.
In practical terms, generic drug companies should focus on proving that the technical solution does not fall within protection scope.
In conclusion, China’s drug-patent linkage system aims to facilitate a healthy competition between brand name drug companies and generic drug companies, and thereby promote and encourage innovation and development of the pharmaceutical industry.
In order to survive competition, both brand name drug companies and generic drug companies should increase the research and development of core products with independent IP rights, and strengthen the IP protection of core products.
Lili Wu focuses on providing a full array of IP services to her clients. She has extensive experience in strategically managing IP portfolios for mid- and large-sized clients to increase the value of their IP assets.
Lili’s experience spans a broad range of technology industries, including AI, electronic devices, internet, telecommunications, information technology, automobile, medical device, manufacturing, and green energy. She also frequently counsels clients in cross-border technology transfer and trade secret matters. Lili has a master’s degree in information systems from the Beijing Institute of Technology. She also has a master’s degree (LLM) from the Franklin Pierce Law Centre.
Ying Li's expertise covers patent prosecution, invalidation and litigation, patent searches, patent transactions, and other IP-related counselling in life sciences, pharmaceuticals and healthcare areas. She has extensive experience in providing a range of legal services both to domestic and multinational clients and has assisted many industry-leading clients in obtaining patents in China. Prior to joining Han Kun Law Offices, Ying practiced with the CCPIT Patent and Trademark Law Office for 16 years, where she was a group leader for nine years.
Ying has successfully represented many clients before the China National IP Administration and the courts in various patent invalidation and administrative litigation cases. She has taken charge of many large and complex cases and is widely recognised and trusted by her clients for obtaining excellent results and for her clear communication. Ying has a PhD in microbiology and biochemical pharmacy from the Institute of Medical Biotechnology, Peking Union Medical College. She also has a bachelor’s degree and master’s degree in microbiology and biochemical pharmacy from Jilin University and Shenyang Pharmaceutical University as part of a joint programme.
Yulian Hu’s expertise lies in patent invalidation, litigation, freedom-to-operatesearch and analysis, and other IP-related counseling. She has extensive experience in many technical fields such as biology, medicine, materials, photoelectric testing, and machinery.
Prior to joining Han Kun Law Offices, Yulian practiced with the CNIPA Patent Examination Cooperation Centre for 19 years, where she was a group leader for 11 years, in charge of team patent examination quality control and specialised business training. She is very familiar with the procedures and standards for patent examinations, reexaminations, invalidations, and trials. Yulian received her bachelor’s degree and master’s degree in cell biology from Beijing Normal University from 1995 to 2002. She also has a master’s degree in civil and commercial law from the China University of Political Science and Law.
Linlin Zhang is a patent attorney at Han Lun Law Offices. Her practice focuses on patent prosecution, reexamination, invalidation, patent due diligence, patent licensing and transactions, and other IP-related counselling. Linlin is an experienced patent attorney who mainly engages in the fields of biological/chemical pharmaceuticals, medical devices, nutrition and health, chemical materials, etc. Linlin received a bachelor’s degree in biotechnology in 2011 from Zhengzhou University, and a master’s degree in biochemistry and molecular biology in 2015 from Peking University.