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Interpretation of the Measures for Administrative Adjudication of the Mechanism for Early Settlement of Drug Patent Disputes
 Last update:2021-11-09  browse:216 viewed

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The China National Intellectual Property Administration (hereinafter referred to as the CNIPA) has been actively promoting the handling of cases involving the administrative adjudications of patent disputes in the process of drug marketing approval for the purpose of implementing the decisions and arrangements of the CPC Central Committee and the State Council to comprehensively strengthen intellectual property protection, of effectively safeguarding the legitimate rights and interests of patentees, and of encouraging innovation in drug research and development. By October 27, 2021, the CNIPA had received 23 requests for administrative adjudication of drug patent disputes filed by patentees or drug marketing authorization holders, which was the first batch of administrative adjudication cases involving the mechanism for early settlement of drug patent disputes that has been accepted since the revision of the Patent Law. According to the Measures for Administrative Adjudication of the Mechanism for Early Settlement of Drug Patent Disputes, the Administrative Adjudication Committee for the Mechanism for Early Settlement of Drug Patent Disputes conducted a preliminary examination of the above requests, issued acceptance notices to 12 of them that met the acceptance conditions, and officially filed the cases. In the next step, the CNIPA shall legally try related cases in accordance with laws and regulations.

Policy Retrospection

Background 

In October 2017, the General Offices of the CPC Central Committee and the General Office of the State Council issued the Opinions on Deepening the Reform of the Review and Approval System and Encourage Innovation on Drugs and Medical Devices, requiring the exploration of the establishment of a drug patent linkage system. In November 2019, the General Offices of the CPC Central Committee and the General Office of the State Council issued the Opinions on Strengthening the Protection of Intellectual Property Rights, proposing to explore the establishment of a drug patent linkage system once again. In October 2020, the 22nd Session of the 13th NPC Standing Committee adopted a decision on amending the Patent Law of the People's Republic of China (hereinafter referred to as the Patent Law). On June 1, 2021, the revised Patent Law officially came into force, in which Article 76 stipulates that the applicant for drug marketing authorization and relevant patentees or interested party may request an administrative adjudication to the Patent Administration Department under the State Council on the patent disputes related to the drug applying for registration. On July 4, with the consent of the State Council, the State Medical Products Administration (SDA) and the CNIPA formulated and distributed the Implementation Measures for the Mechanism for Early Settlement of Drug Patent Disputes (for Trial Implementation) (hereinafter referred to as the Implementation Measures (for Trial Implementation)). On July 5, the CNIPA issued the Measures for Administrative Adjudication of the Mechanism for Early Settlement of Drug Patent Disputes (hereinafter referred to as Measures for Administrative Adjudication). The amendment of the patent Law and the issuance of the above measures provide legal and institutional basis for the early settlement mechanism of drug patent disputes.

 

The main content

The Measures for Administrative Adjudication consists of 24 articles, which stipulate the subject of administrative adjudication, the scope of drug patents that can be adjudicated, the coordination with judicial channels, the relationship between administrative adjudication and invalid procedure, the execution and publicity of administrative adjudication, judicial remedy of administrative adjudication and other case handling procedures.

 

(1) Subjects that may request administrative adjudication

The subject of the request for administrative adjudication can be the patentee of the relevant patent, the interested party, and the applicant for drug marketing authorization. The interested party refers to the licensee of the relevant patent or the registered drug marketing authorization holder.

 

(2) The time limit for requesting an administrative adjudication

According to the relevant provisions of the Implementation Measures (for Trial Implementation), the patentee or interested party may, within 45 days from the date on which the application for drug marketing authorization is made public by the National Drug Review Institution, make a request for administrative adjudication to confirm that the drug-related technical solutions applied for drug marketing authorization fall within the scope of the protection of relevant patent. Where the patentee or interest party does not file a lawsuit with the People Court or request administrative adjudication within 45 days from the date on which the application for drug marketing authorization is made public by the National Drug Evaluation Institution, the drug marketing authorization applicant may make a request for administrative adjudication to confirm the drug-related technical solution applied for drug marketing authorization do not fall within the scope of protection of relevant patent.

 

(3) The scope of drug patent that can be adjudicated 

The drug patent that can be adjudicated must meet the following conditions, that is, the relevant patent information has been registered and made public on the Patent Information Registration Platform for Drugs Marketed in China, and the patent type complies with the applicable provisions of the Implementation Measures (for Trial Implementation). Specific drug patents that can be registered on the Patent Information Registration platform for Drugs Marketed in China include pharmaceutical active ingredient compound patent of chemical drugs (excluding API), pharmaceutical composition patent containing active ingredient, pharmaceutical use patent; Chinese medicine composition patent, Chinese medicine extract patent, medicine use patent; Patent of sequence structure of active ingredient of biological product, patent of medical use. Relevant patents do not include patents on intermediates, metabolites, crystal types, preparation methods, and detection methods, etc.

 

(4) Coordination between administrative adjudication and judicial channels

According to Article 4 of the Measures for Administrative Adjudication, the filing procedure of administrative adjudication requires that the patent disputes in the process of drug review and approval has not been filed by the People's Court. If the same patent dispute has been filed by the people's court, the CNIPA shall not accept the request for administrative adjudication submitted by the party concerned, so as to ensure that the relevant dispute can be conducted through either administrative or judicial channels and avoid waste and conflict in dispute settlement procedures.

 

(5) The relationship between administrative adjudication and invalidation procedure

According to Article 14 of the Measures for Administrative Adjudication, in the process of administrative adjudication on drug patent disputes, where the part of the claims involved in the patent involved are declared invalid, the CNIPA shall make administrative adjudication on the basis of the valid claims. Where all claims involved in the patent involved are declared invalid, the CNIPA shall reject the request for administrative adjudication. In addition, where the party concerned applies for invalidation of the patent involved in the process of handling the case, the CNIPA may not suspend the handling of the case in accordance with the Article 16 of the Measures for Administrative Adjudication.

 

(6) Enforcement and publicity of administrative adjudications

The Measures for Administrative Adjudication stipulates that after the administrative adjudication is made, it shall be served on the parties and copied to the Drug Regulatory Department under the State Council and be made public in accordance with relevant provisions at the same time. Where administrative adjudication is made public, the information involving trade secrets shall be deleted. Meanwhile, in accordance with the relevant provisions of the Implementation Measures (for Trial Implementation), the patentee or interested party shall submit the administrative adjudication to the National Drug Review Institution within 10 workdays from receipt of the adjudication.

 

(7) Judicial remedy for administrative adjudication

Article 19 of the Measures for Administrative Adjudication stipulates that if a party is not satisfied with the administrative adjudication on a drug patent dispute made by the CNIPA, he or she may bring a suit to the People's Court in accordance with the law. In according with Article 46 of the Administrative Litigation Law of the People's Republic of China, administrative litigation may be filed within 6 months from the date of service of the administrative adjudication.

 

Key Points Interpretation

Coordination between administrative and judicial channels 

On July 5, 2021, the same day that the CNIPA issued the Measures for Administrative Adjudication, China's Supreme People's Court issued the Provisions of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Civil Cases involving Patent Disputes Related to Drugs of Which Applications for Registration are Filed (hereinafter referred to as the Provisions) (the full text see http://www.court.gov.cn/fabu-xiangqing-311791.html).

The Provisions emphasize the specific requirements of legal remedy and make explicit provisions applicable to the courts, specific causes of action, materials for prosecution, ways of exercising the right of action, connection between administrative and judicial procedures, defense grounds, protection of trade secrets in litigation, and preservation of acts. It particularly stipulates the effective judgment of drug patent link lawsuit. The determination of whether it falls into the scope of patent protection has the res judicata for the later patent infringement lawsuit or confirmation of non-infringement lawsuit against the same patent right and the drug applying for registration.

The Measures for Administrative Adjudication and the Provisions give solutions in administrative and judicial channels to applicable provisions of Article 76 of the revised Patent Law, which is related to early settlement of drug patent disputes. At the same time, these two laws also constitute a legal resolution process with each other, which will have a significant impact on pharmaceutical research and development and pharmaceutical enterprises.

 

The establishment of drug patent linkage system 

China's pharmaceutical industry is dominated by generic drugs. In a long period of time, due to drug patent problems, domestic generic drug enterprises often fall into patent disputes with foreign pharmaceutical enterprises, which consumes huge human and material resources and time costs. The reason behind is the lack of mechanism for patent dispute settlement. 

However, with the Implementation Measures (for Trial implementation) and the Measures for Administrative Adjudication successively issued by the CNIPA, and the Provisions issued by the Supreme People's Court on the same day, China's drug patent linkage system has finally established in both administrative and judicial aspects this year. From the perspective of administrative adjudication and judicial review, the patent linkage system interprets the interaction and connection among the original drug manufacturer, generic drug manufacturer, the SFDA, the CNIPA, the Intellectual Property Office and the court. Since the General Office of the State Council issued the Opinions on Deepening the Reform of the Review and Approval System and Encourage Innovation on Drugs and Medical Devices in 2017, China has finally established its own drug patent linkage system after five years. The acceptance of the first batch of administrative adjudication cases of the mechanism for early settlement of drug patent disputes marked the success of the drug patent linkage system.

 

Impacts on Industries 

The formal implementation of the Measures for Administrative Adjudication and the improvement of drug patent linkage system will certainly have a significant impact on Chinese pharmaceutical enterprises and drug research and development. How to legally protect the interests of enterprises, improve the distribution of drug patents, promote research and development of drugs, and improve the market competitiveness in an sound environment, is a difficult problem in front of every pharmaceutical enterprise.

 

Improve the drug patent registration strategy

The drug patents marketing authorization holders shall attach great importance to the registration of drug patent information, comprehensively considering register protection scope, characteristics of protection, and protection period of different types of patents when register. At the same time, they shall not register the patents of which the protection scope has nothing to do with the drugs approved the marketing authorization, or the patents do not belong to the type that shall be registered. Enterprises should develop an appropriate patent registration strategy that suits themselves on the basis of drug distribution characteristics.

 

Build a mechanism for early settlement of patent disputes

According to the Measures for Administrative Adjudication, the patentee shall submit the application for dispute settlement within 45 days from the date of receipt of the notice from the generic drug applicant, which requires a quick preparation of the patentee to face the following patent dispute settlement. Therefore, pharmaceutical companies should establish an early dispute settlement mechanism of registered drug patents. For example, building a professional patent agencies team in advance and preparing corresponding dispute response strategy for registered drugs can help enterprises make a timely respond after receiving the declaration and notification materials from the generic drug applicant.

 

Issue the fourth type of statement with caution

For generic drug applicants, issuing the fourth type of statement should be cautious, because they not only need to ensure the authenticity of the statement, avoiding violating the law, but also make a good plan to prevent lawsuits in advance. Therefore, it is recommended that the generic drug applicant entrust professionals to conduct a comprehensive and rigorous analysis of relevant drug patents, including but not limited to patent stability analysis, patent protection scope analysis, and patent circumvention design analysis, before issuing the statement. Only with the full coordination between internal R&D team and external patent team, can the application of generic drugs be strongly supported.

 

Improve R & D capacity of drugs

For the applicants of generic drugs, it is essential to improve the ability of drug research and development and enhance the originality of drugs. According to the Measures for Administrative Adjudication, the first generic chemical drug that successfully challenges and be approved for marketing will be granted a 12-month market exclusivity period, during which the generic drug in the same type will not be approved for marketing. It is undoubted that this policy will greatly improve the enthusiasm of generic drugs companies to apply for patents, but it also poses challenges to the innovation of generic drugs and the validity of the corresponding original drug patents. For both the patentee and the applicant of generic drugs, it is necessary to constantly improve their research and development capabilities if they want to survive in the market competition.