Comparing drug patent linkage in China and the US – Lexology

Drug patent linkage originated as an innovation from the 1984 Hatch-Waxman Act in the US. It refers to (1) procedurally linking the approval of the sale of a generic drug and its patent validity review; and (2) functionally linking the US Food and Drug Administration (FDA) and the US Patent and Trademark Office (USPTO). The system effectively provided legal solutions to potential patent infringements before the generic drug launches into the market.

Jumping ahead to 1 October 2017, Chinas general offices of the CPC Central Committee and the State Council called for exploring drug patent linkage and lowering the patent infringement risks of generic drugs with their Opinions on Deepening the Reform of the Evaluation and Approval Systems and Encouraging Innovation on Drugs and Medical Devices, aiming to incentivise generic drug development.

In October 2020, the linkage system was formally introduced into the fourth amendment to Patent Law, an upper-tier law in Chinas legislative hierarchy. On such basis, the National Medical Products Administration (NMPA) and China National Intellectual Property Administration issued the Measures for Implementation of the Mechanism for Early Settlement of Drug Patent Disputes (interim) on 4 July 2021. The following day, the Provisions 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 and the Administrative Adjudication of the Mechanism for Early Settlement of Drug Patent Disputes were released by the Supreme Peoples Court and CNIPA, respectively. Thus, drug patent linkage was implemented throughout administration, lawsuit and administrative adjudication.

By comparing the drug patent linkage systems in China and the US, this article will hopefully prove insightful to our colleagues in the industry.

Patent classifications

Registered drug patents in the US can be classified into drug substance (active ingredient) patents, drug product (formulation and composition) patents, and method-of-use patents.

In China, a drug can be patented as a chemical drug, traditional Chinese medicine or a biological product. Chemical drugs may be further registered as pharmaceutical active ingredient compound patents, pharmaceutical composition patents containing active ingredients, or patents for medical use. As the matter of stay period and exclusivity period below does not apply to traditional Chinese medicine or biological products, this article will focus on drug linkage differences between China and the US in terms of chemical drugs.

Patent declaration

Paragraph II certification in the US means that a patent has expired in spite of its inclusion in the Orange Book, FDA's Approved Drug Products with Therapeutic Equivalence Evaluations.

Class two declaration, Chinas equivalent of the above, means that the patent relating to the drug which is imitated included in the registration platform has been terminated or declared invalid, or that the generic drug applier has obtained the relevant implementation license from the patentee.

Duty of notification and limitation of action

Paragraph IV certification in the US requires that the generic drug applier must notify the patentee and the marketing authorisation holder within 20 days from the acceptance of application. The patentee and holder may file a lawsuit at the court within 45 days of receiving the notification.

Under class four declaration, Chinas equivalent of the above, the NMPA should make a public announcement within 10 working days after accepting a generic drug application, and the applier should submit the declaration and its basis to the marketing authorisation holder, who is entitled to file a lawsuit at a court or apply for administrative adjudication by the CNIPA within 45 days from the announcement date.

Dispute resolution

Generic drug patent infringement is determined via judicial proceedings in the US, while application for patent invalidation may be submitted to a court or the USPTO.

In China, generic drug patent infringement can be determined by court via judicial proceedings or by the CNIPA via administrative adjudication. Patent invalidation, on the other hand, must be submitted to the CNIPA.

Stay period

In the US, a stay period of 30 months will be imposed by the FDA if the patentee or the marketing authorisation holder files a lawsuit within the limitation of action. Stay period can only be ordered once and may be shortened or prolonged by the court.

In China, after receiving a notification of case initiation from the court or a copy of CNIPAs notice of acceptance, the NMPA will impose a nine-month stay period.

Exclusivity period

In the US, the first generic drug that successfully challenges the patent and launches into the market is entitled to a 180-day exclusivity period, which will be invalidated if the first applicant:

Exclusivity period in China is 12 months, but cannot exceed the patent term of the challenged drug. The conditions for losing exclusivity remains a vacant spot in Chinas regulations pending future complementation.

Our thoughts

Chinas drug patent linkage system mirrors the US framework, but also deviates from it where the national situation calls for such a change. For instance, given that China is currently short in new drugs, first generic drugs are given preferential treatment, such as shorter stay period and longer exclusivity, to encourage their earlier launch.

It should be mentioned that Chinas drug patent linkage system is still in a nascent stage, with more refined and detailed provisions on the way. We look forward to seeing the new system evolve in future practices.

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Comparing drug patent linkage in China and the US - Lexology

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