Published on April 27, 2022

Recently, a judgement of the first pharmaceutical patent linkage litigation was issued since the establishment of the Chinese patent linkage system.

A Japanese company CHUGAI PHARMACEUTICAL CO., LTD. (‘Chugai’) filed a lawsuit against a Chinese company Haihe Pharmaceutical Co., Ltd. (‘Haihe’), seeking a declaratory judgement as to ascertain whether the generic drugs of Haihe, which is the drug seeking marketing approval, falls within the scope of Chugai’s patent [1]. The disputed generic drug of Haihe is Eldecalcitol Capsule and the asserted patent is the Chinese patent No. 200580009877.6 entitled “ED-71 Preparation” owned by Chugai. In the judgement, Beijing IP Court decides that the technical solution of Haihe’s drug is different from the solution claimed in Chugai’s patent. Therefore, Haihe’s drug does not fall within the scope of Chugai’s patent. If either party is not satisfied with the judgement, it may appeal the judgement up to the Supreme Court of P. R. China. In spite of the short history of the Chinese linkage system, patentees and generic drug manufacturers have started to actively participate in the proceedings.

The Chinese patent linkage system is only initiated very recently. The United States established the pharmaceutical patent linkage system in 1984. Canada, Australia, and South Korea also introduced such systems in recent years. The start of the Chinese patent linkage system was marked by the issuance of Implementing Measures for the Early Resolution Mechanism for Drug Patent Disputes (for Trial Implementation) (the “Measures”) on July 4, 2021 jointed by China’s National Medical Products Administration (“NMPA”) and the China National Intellectual Property Administration (“CNIPA”). The Measures became effective immediately upon issuance [2].

The pharmaceutical patent linkage system links marketing approval for a generic drug with the patent of the brand-name drug manufacturer. The patent linkage system provides early dispute resolution for patent infringement before the potentially infringing generic drug enters the market. According to the Measures, the patent linkage system is generally composed of four parts, the patent list, notification process, wait period and first generic exclusivity.

1. The patent list
Pursuant to Article 2 of the Measures, the Patent Information Registration Platform for Marketed Drugs (“Platform”, website: zldj.cde.org.cn) should be established and maintained by NMPA. After a brand-name drug manufacturer obtains market approval for a new drug, it shall register information of patents corresponding to the approved drug within 30 days. See Measures, Art. 4. The patent list is similar to Orange Book publication in the U.S. patent linkage system.

2. Notification process
When the generic drug manufacturer files an application for market approval for a generic drug, a declaration of one of the four categories below should be provided,
Category I: No patent is identified under the drug on the Platform;
Category II: One or more correspondent patent (s) has (have) been identified but it (they) has (have) been terminated or invalidated; or, the brand-name drug manufacturer has licensed the patent to the generic drug manufacturer;
Category III: One or more correspondent patent (s) has (have) been identified. The generic drug manufacturer agrees not to market the drug before the expiration of the patent;
Category IV: One or more correspondent patent (s) has (have) been identified. It is believed that the correspondent patent should be invalidated, or the generic drug manufacturer’s drug does not fall within the scope of the patent.

Within 10 days after the application is accepted, NMPA should publish the application information and the declaration on the Platform. It is also required by the Measures that the generic drug manufacturer should send the declaration and relevant supportive documents to the brand-name drug manufacturer. If the generic drug manufacturer claims that its drug does not fall within the scope of protection of the patent, besides the declaration, claim chart and other supportive technical documents should also be provided to the brand-name drug manufacturer. See Measures, Art. 6.

3. Wait Period
If the brand-name drug manufacturer is not satisfied with the Category IV declaration, it may initiate a proceeding either before Beijing IP Court or before CNIPA within 45 days from the publication of the drug marketed approval application. See Measures, Art. 7.

Upon receipt of the copy of the official notice of acceptance issued by the Court or CNIPA, a wait period of 9 months will be imposed by NMPA. During the wait period of 9 months, technical review of the generic drug application will continue to proceed. See Measures, Art. 8.

4. First generic exclusivity
Beijing IP Court will hear the case and decide whether the patent is valid or whether the generic drug falls within the scope of the patent. Once the judgement is issued, a copy of the judgement should be forwarded to NMPA within 10 days after the judgement is received.
If the drug falls within the scope of the patent, the generic drug application will be processed for final administrative approval only close to the expiration of the patent. On the other hand, the generic drug application will be processed for final administrative approval under the following circumstance: 1) the Court or CNIPA decides that the generic drug does not fall within the scope of the patent, 2) the Court or CNIPA decides that the patent is invalidated, 3) a reconciliation agreement is entered by both parties, 4) no effective judgement or decision is received before expiration of the wait period. See Measures, Art. 9.

For the first manufacturer who files a Category IV declaration and succeeds in invalidating the patent and obtain the drug approval, a 12-month exclusivity would be granted by NMPA. During this 12-month period, NMPA would not approve another generic version of the new drug. See Measures, Art. 11.

For years, the patent linkage system has been proved to be an effective way for solving the patent dispute before the approval of the generic drug in different jurisdictions. It’s expected that there would be more and more patent linkage litigations in China in the coming years as the pharmaceutical market grows.

[1] https://m.thepaper.cn/baijiahao_17705605
[2] http://www.gov.cn/zhengce/zhengceku/2021-07/04/content_5622330.htm

Photo Source: https://ec.europa.eu/home-affairs/policies/internal-security/organised-crime-and-human-trafficking/drug-policy_it