China’s New Patent Linkage System: A Guide for Foreign Chinese Patent Holders

“Speed will be of the essence if China’s patent linkage system is to be useful to U.S. patent holders.”

https://depositphotos.com/76008441/stock-illustration-china-long-shadow-flag-with.htmlIn compliance with the Phase One Trade Agreement, China has implemented a patent linkage system in their amended patent law, which became effective June 1, 2021 (Article 76 of the Patent Law of the People’s Republic of China (2020)). The Chinese patent linkage system prevents marketing approval of generic drugs until after the expiration of patents covering the drugs or uses. Specifically, the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) has set up a registration system to register patents covering: chemical drugs and uses; traditional Chinese medicines (TCM) and uses; and biologics: Active Pharmaceutical Ingredients (API) sequence structure and medical use. The registration system started public testing in May and is now live.

On July 4, 2021, the NMPA and the China National Intellectual Property Administration (CNIPA) then jointly released the Measures for the Implementation of Early Resolution Mechanisms for Drug Patent Disputes (Trial) (hereinafter Implementation Measures) explaining how the patent linkage system will work, including the two mechanisms for dispute resolution – litigation and administrative adjudication (Article 4).

On July 5, 2021, the Supreme People’s Court released the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Concerning Patent Disputes Related to Drugs Applied for Registration (hereinafter Provisions) detailing the litigation mechanism.

Also, on July 5, 2021, the CNIPA released the Administrative Adjudication Measures for Early Resolution Mechanisms for Drug Patent Disputes (hereinafter Administrative Adjudication Measures) detailing the administrative adjudication measure.

Of note is that, while the Implementation Measures set a nine-month moratorium when resolving a dispute, neither the Provisions nor the Administrative Adjudication Measures provide a corresponding nine-month deadline to conclude a trial. Accordingly, speed will be of the essence if China’s patent linkage system is to be useful to U.S. patent holders.

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Registration

Drug marketing authorization holders must register their relevant patents within 30 day of receiving the drug registration certificate as well update their registrations within 30 days of any change (Article 4 of the Implementation Measures).  Specifically, holders must register the drug name, dosage form and specifications, the holder of the drug marketing authorization, the relevant patent number, patent name, patentee, patent licensee, date of patent granting, date of expiry of the protection period, patent status, patent type, relationship between the drug and the relevant patent claims, mailing address, contact person, contact information, etc.

 

Bayer’s registration for Rivaroxaban20mg. Bayer also registered Rivaroxaban10mg and 15 mg doses separately.

Patents that can be registered on the platform include:

  • chemical drugs: Active pharmaceutical ingredient (“API”) compound patents, API-containing pharmaceutical composition patents and medical use patents;
  • traditional Chinese medicines (TCM): TCM composition patents, TCM extract patents and medical use patents; and
  • biologics: API sequence structure patents and medical use patents.

Generic Declarations and Notification of Marketing Authorization Holders

Generic applicants can make one of four declarations when attempting to register a generic drug:

  1. There are no relevant patents registered on the platform;
  2. The relevant patent has lapsed or was declared invalid or the generic applicant has a license;
  3. This is a registered patent but the generic applicant will not sell the drug before expiration of the patent.
  4. There is a registered patent on the platform, but it will be declared invalid or the generic is outside the scope of protection of the patent.

If class 4 is selected with the generic being outside the scope of protection, the generic applicant must also provide a claim chart detailing the differences.

Within 10 working days, the CDE will publish the application on its platform. As of this writing, there are four published declarations. The generic drug applicant must also directly notify the holder via email although no deadline is provided.  Accordingly, holders should monitor the CDE platform regularly as holders must file either a request for adjudication or litigation within 45 days of publication.

Dispute Resolution

Within 45 days of publication of the generic’s application the holder must file a complaint with the Beijing Intellectual Property Court or a request for administrative adjudication with the CNIPA. (Note that while the Implementation Measures specify a holder may object to all 4 types of declarations, there is some debate in the patent community if a holder can only object to a Class 4 declaration.) Within 15 days of receiving a Notice of Acceptance, the holder must notify the CDE with a copy of the same or a Notice of Docket and notify the generic drug applicant.  The CDE will then impose a 9-month moratorium on marketing authorization approval but will not stop the evaluation of the generic’s application. Note that generics of biologics and TCMs are excluded from the 9-month moratorium. Accordingly, if no decision is reached within 9 months, the generic’s application could be approved shortly thereafter making the speed of the dispute resolution essential.

Choice of Venue

Holders may either litigate at the Beijing IP Court or administratively adjudicate at the CNIPA. With patent litigation at the Beijing IP Court taking 274.5 days on average, adjudication at CNIPA may be preferable as it may be potentially faster for several reasons. Unlike litigation, oral hearings are not automatic in CNIPA adjudications thereby reducing time to a decision. Also, historically, administrative actions at CNIPA have tended to be faster than litigation (e.g., patent invalidations take an average of 5.9 months). Formalities tend to be less stringent at CNIPA, such as with powers of attorney, as compared to the Beijing IP Court thereby reducing potential delays and leading to a quicker decision.  Finally, CNIPA may feel bound to issue a decision within the 9-month moratorium as CNIPA jointly released the Implementation Measures with the NMPA in contrast to the court system which may not feel any obligation to meet a deadline imposed by a different government division.

Another reason to select CNIPA for adjudication in favor over litigation at the Beijing IP Court is that the CNIPA does not provide for the litigation defenses of prior use or existing technology in administrative adjudication making a marketing authorization holder win potentially more likely at CNIPA. (Article 7 of the Provisions state that a generic can use the defenses of Articles 67 and 75.2 of the Patent Law. In contrast, the Administrative Adjudication Measures do not list these defenses implying they are not available.)

Be Prepared to Move Quickly

Accordingly, due to the short moratorium and other deadlines, marketing authorization holders should closely monitor generic drug applications and be prepared in advance to litigate or adjudicate quickly when necessary.

 

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The Author

Aaron R. Wininger

Aaron R. Wininger is a Senior Attorney and Schwegman’s Director of China Intellectual Property Practice. Aaron counsels both U.S. and Chinese companies on patent and trademark portfolio development, non-infringement and invalidity opinions, and cross-border enforcement of intellectual property rights. He has worked with clients in the areas of software, networks, lasers, medical devices, semiconductors and physics. His knowledge of both the Chinese and American markets allows him to advise his clients as they expand and enforce their intellectual property portfolios. He frequently publishes articles on his blog, China IP Law Update.

Aaron R. Wininger

Austin Chang is counsel at Beijing EastIP Law Firm.

Aaron R. Wininger

Carol Wininger is a student at the Harker School where she is co-President of the Law Club. Raised in China and now living in Silicon Valley, she is fluent in Chinese. She is also the co-founder and co-President of The Eleos Foundation, which supports mental health initiatives.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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