China releases Latest Draft Amendments to Patent Law

By Alison Wong, Anthony Wilkinson, Martoe Xu

07-2020

In what has been a much anticipated announcement, the National People's Congress in China released for public opinion on 03 July 2020 its second draft amendments to the "Patent Law of the PRC" ("Patent Law") – ("draft amendments to the Patent Law"). Significant changes include the introduction of a Patent Linkage system and a Supplemental Protection Period. These issues have long been discussed but there had been no further information released since the Supplemental Protection Period had been included in the previous draft of 4 January 2019. The draft amendments to the Patent Law are open for public opinion until 16 August 2020 and the text of the amendments and methods for comment can be found here.

Patent Linkage

The provision for Patent Linkage is included in Article 75 of the draft. It is an addition to the provisions found in Article 69 of the current Patent Law and is included after the exemptions to non-infringement.

Under the proposed Patent Linkage provisions, a patentee/interested party can commence legal proceedings against the party seeking marketing authorisation ("MA") for a drug which falls within the scope of a patent recorded in the "Chinese Marketed Drug Patent Information Record Platform" ("Record Platform"). However, the term "interested party" has not been specifically defined in the draft, but it should include an exclusive licensee who has the right to sue. In addition, it is not immediately evident whether the Record Platform refers to the current "Orange Book", the National Medical Products Administration ("NMPA") website or a new platform. The "Orange Book" is officially called the "Marketed Drugs Catalogue of China” and was introduced in December 2017. It contains information on active pharmaceutical ingredient, dosage form, specification, MA holder, and patent information for drug products approved in China. Patent information on a new drug can be uploaded on MA application, or within 30 days from the grant of the MA. For already listed drugs, the MA holder should provide the relevant information within 30 days from the patent being granted or on relevant patent information changes. The types of patents that may be listed in the Orange Book are compound patents (specifically excluding crystal forms), product patents (preparation and composition), and use patents (indication). As the exact mechanisms for the Record Platform are not yet clear, it will require further monitoring to confirm exactly what provisions are implemented.

To utilise the proposed Patent Linkage provision, the patentee/interested party must commence proceedings before the court (the exact court remains undefined at this time) or the China National Intellectual Property Administration ("CNIPA") within 30 days of the MA application being published by the NMPA. The forum within which to commence an action is at the discretion of the patentee/interested party. If the patentee/interested party does not file an action against the new drug MA applicant within the statutory 30 day time period, the MA applicant may file for a declaration of non-infringement with the court or CNIPA.

However, the filing of legal proceedings does not appear to stay the review of an MA application. What is stipulated in the draft amendments is that if the court or CNIPA makes a judgment/ruling within nine months of accepting the complaint, the NMPA may grant the MA approval once a chemical drug has passed its technical review. The specific use of the term "chemical" and the wording in the section makes it unclear as to whether these provisions relate to biologics.

While the draft has outlined the general provisions for Patent Linkage, more detail on the procedure will be formulated by the NMPA and the CNIPA for the State Council's authorisation. The one clear mechanism stated is that for appeal from the CNIPA route, which requires that the party unsatisfied with the ruling has 15 days within which to appeal the decision to the court (under current provisions for jurisdiction in China, this would be the Beijing IP court).

Supplemental Protection Period

The second key amendment is the provision for a Supplemental Protection Period ("SPP"). Under Article 42 of the draft amendments to the Patent Law, the proposal is to provide the invention patent for a new drug obtaining MA approval in China with a SPP of up to five years provided that the total post market protection does not exceed 14 years. The SPP is determined on the patentee filing a request with the CNIPA and is to compensate for the time taken for the review and approval of a new drug for its MA. The exact procedure, and the method of calculating the period of supplemental protection, has not yet been defined.

The use of the term "new drug" creates an element of confusion in the draft. The term has not been clearly defined and it has been a discussion point over recent years. The proposed SPP provision in the previous draft of the Patent Law of 4 January 2019, suggested that SPP only be available to innovative new drugs marketed in China and overseas at the same time. This idea was supported in the "Opinions of the State Council on the Reform of the Review and Approval System for Drug and Medical Device" issued in 2015 ("2015 Opinions") that suggested the definition of new drug be those not marketed in China or overseas and include the classification of innovative drug or improved new drug. However, in contradiction to the 2015 Opinions, the current "Implementing Regulations for the Drug Administration Law" of March 2019 ("Implementing Regulations") state under Article 77 that "new drugs refer to the drugs which have not been marketed within the territory of the People's Republic of China". The NMPA also released two new documents on 1 July 2020 that address drug classification for the purpose of filing drug registration applications in China – "Chemical Drug Registration Classification and Application Materials Requirements" and "Biological Product Registration Classification and Application Materials Requirements". These documents confirm the currently utilised drug classes in China.

There are the five classes for chemical drugs:

  1. Innovative drug, which is not marketed in China or overseas.

  2. Improved new drug, which is not marketed in China or overseas.

  3. Generic drug for originator marketed overseas but not marketed in China.

  4. Generic drug for originator marketed in China.

  5. Drug marketed overseas seeking MA in China.

And, there are three classes of Biologics (not including vaccines):

  1. Innovative biologic, which is not marketed in China or overseas.

  2. Improved biologic.

  3. Biologic marketed in China or overseas.

As evidenced, the terms "innovative" and "improved" are utilised in the classification but the term "new drug" is not specifically defined in these documents. As there exists the contradiction between the 2015 Opinions and the current Implementing Regulations, it is hoped that the elements of what constitutes a "new drug" will be clearly defined prior to any implementation of the SPP provisions.

Summary

The draft amended Patent Law contains several other new provisions in addition to the Patent Linkage and the SPP provisions, such as the draft Article 24 which proposes a six month grace period of novelty for an invention and creation that is first published for the public interest during a national emergency/extraordinary situation. However, the most relevant to the pharmaceutical industry are Patent Linkage and SPP. These proposed amendments are welcome to the industry although there is still uncertainty as to their practical application of enforcement. The time frame for the implementation of these provisions is currently not defined, so further monitoring of the situation will be required.