4.5.5 Patent-related civil cases involving pharmaceutical products
The protection of pharmaceutical product patents is essential to the innovative development of the pharmaceutical industry and to the health and happiness of the people. While motivation systems and judicial safeguards are provided for the independent innovation and high-quality development of the pharmaceutical industry, the accessibility of pharmaceutical products and the health of the people are also considered. In particular, given the huge costs for the development and research of new pharmaceutical products, strong intellectual property protections are critical for motivating continuous innovation in the pharmaceutical industry.
To strengthen protections for pharmaceutical product patents and realize the early resolution of pharmaceutical product patent disputes, both the Opinion on Deepening the Reform of Examination and Approval Policy, issued in October 2017, and the Opinions on Strengthening the Protection of Intellectual Property Rights issued on November 24, 2019, were proposed to “explore and establish a pharmaceutical product patent linkage system.”123
4.5.5.1 Amendments to the Patent Law related to pharmaceutical product patent disputes
During the fourth amendment to the Patent Law, the legislature stipulated an early resolution mechanism for pharmaceutical product patent disputes at the suggestion of relevant competent departments and by reference to the pharmaceutical product patent linkage systems of relevant countries. Consequently, Article 76 of the Patent Law now stipulates the following:
In the review and approval process before the marketing of a pharmaceutical product, where the applicant for marketing approval of the pharmaceutical product has any disputes over the relevant patent right associated with the pharmaceutical product applied for registration with the relevant patentee or interested party, the party concerned may file a lawsuit before the people’s court and request a judgment on whether the technical solution related to the pharmaceutical product that is applied for registration falls within the protection scope of any pharmaceutical product patent right owned by others. The medical product regulatory department under the State Council may, within a prescribed time limit, make a decision on whether to suspend the marketing approval of the pharmaceutical product according to the effective judgment or written order of the people’s court.
The applicant for marketing approval of the pharmaceutical product, the relevant patentee or the interested party may also petition the patent administration department under the State Council for an administrative adjudication on the disputes over the patent right associated with the drug applied for registration.
The medical products regulatory department under the State Council shall, in conjunction with the patent administration department under the State Council, formulate specific cohesive measures for patent right dispute resolutions at the stages of pharmaceutical product marketing license approval and pharmaceutical product marketing license application, which shall be implemented after the approval of the State Council.
In Article 42 paragraph 3 of the Patent Law, a provision on patent term compensation for pharmaceutical product patents was also added.
4.5.5.2 Formulation of relevant judicial interpretations and regulatory documents
To implement Article 76 of the Patent Law and improve the early resolution mechanism of pharmaceutical product patent disputes, the National Medical Products Administration and the CNIPA, in conjunction with relevant departments, issued the Implementation Measures for Pharmaceutical Product Patent Disputes on July 4, 2021.124 Then, on July 5, 2021, the Supreme People’s Court issued their Provisions on the Patent Rights of Drugs, and the CNIPA issued the Adjudication Measures for Pharmaceutical Product Patent Disputes.125 Both documents came into effect on the same day.
The Provisions on the Patent Rights of Drugs focused on procedural issues to be resolved after the implementation of the pharmaceutical product patent linkage system and the connection and matching of litigation procedures with the review and approval process and administrative adjudication procedure. This thereby promoted the uniformity of administrative enforcement and judicial adjudication standards. The provisions included 14 articles to provide for jurisdiction, specific causes of action, materials required for filing a lawsuit, ways of filing such a lawsuit, the linkage between administrative and judicial procedures, defenses, the protection of trade secrets during litigation, act preservation, counterclaims for damages against the losing party, means of service and so on, thereby providing clear guidance for the fair and timely trial of such cases and promoting the implementation of the pharmaceutical product patent linkage system.
4.5.5.3 Main issues involved in the early resolution mechanism of pharmaceutical product patent disputes
4.5.5.3.1 Jurisdiction
Article 1 of the Provisions on the Patent Rights of Drugs stipulates the jurisdiction and causes of action over disputes related to pharmaceutical product patents. Civil cases of first instance involving lawsuits in relation to pharmaceutical product patents come under the concentrated jurisdiction of the Beijing Intellectual Property Court to facilitate the organization of superior judicial resources and unify the adjudication standard.
Furthermore, given that such civil cases often also involve administrative patent right confirmation cases related to the patent and administrative cases filed by the concerned parties because they disagree with administrative adjudications made by the CNIPA, centralized jurisdiction safeguards the organic linkage between different litigation procedures and facilitates work coordination with relevant administrative departments under the State Council.
With respect to jurisdiction over appeal cases, in accordance with the NPC Standing Committee’s Decision on the Litigation of Intellectual Property Cases and Article 2 of the Provisions on the Intellectual Property Court, where a party disagrees with a first-instance judgment or ruling made by the Beijing Intellectual Property Court on a pharmaceutical product patent linkage lawsuit, that party may appeal to the Supreme People’s Court.
4.5.5.3.2 Relation between pharmaceutical product patent linkage lawsuits and patent infringement lawsuits
Article 11 of the Patent Law specifically provides for acts of patent infringement. As the act of applying for review and approval before the marketing of a pharmaceutical product does not constitute an act of infringement according to Article 11 of the Patent Law, the provisions on remedies against patent infringement do not apply in such cases. For a civil lawsuit filed by a party in accordance with Article 76 of the Patent Law, the specific request is for a judgment on whether the technical solution related to the pharmaceutical product for which registration is applied “falls within the protection scope of any pharmaceutical product patent right owned by others pharmaceutical product.” The nature of such a lawsuit is a lawsuit for confirmation. However, in a pharmaceutical product patent linkage lawsuit, the applicant for pharmaceutical product marketing approval may still raise a prior art defense or a prior-use rights defense in accordance with Articles 67 and 75(2) of the Patent Law, respectively. If a defense is sustained, the competent people’s court may rule to confirm that the technical solution related to the pharmaceutical product for which registration is applied falls within the protection scope of related patent rights.
4.5.5.3.3 “Relevant patents” in Article 76 of the Patent Law
As a component of the pharmaceutical product patent linkage system, the Provisions on the Patent Rights of Drugs need to be coordinated with the specific measures for linking pharmaceutical product marketing approval with patent dispute resolution during the pharmaceutical product marketing approval application stage – as stipulated in Article 76 paragraph 3 of the Patent Law (i.e., the Implementation Measures for Pharmaceutical Product Patent Disputes) – to implement the provisions of that article.
The early resolution mechanism for pharmaceutical product patent disputes stipulated in Article 76 of the Patent Law only covers specific types of pharmaceutical product patents – “relevant patents.” With respect to the scope of “relevant patents,” Article 2 of the Implementation Measures for Pharmaceutical Product Patent Disputes stipulates the following:
The pharmaceutical product regulatory department under the State Council shall establish the Patent Information Registration Platform of Marketed Pharmaceutical Products in China, for pharmaceutical product marketing approval holders to register patent information related to pharmaceutical products registered and approved in China.
Where relevant patent information is not registered on the Patent Information Registration Platform of Marketed Pharmaceutical Products in China, the Measures shall not apply.
Article 5 of the measures stipulates the following: “Chemical pharmaceutical product marketing approval holders may register patents for compounds as active pharmaceutical ingredients, patents for pharmaceutical compositions containing active ingredient(s), and pharmaceutical use patents, on the Patent Information Registration Platform of Marketed Pharmaceutical Products in China.” Article 12 stipulates the following: “For traditional Chinese medicines, patents concerning Chinese medicine compositions, Chinese medicine extracts, and pharmaceutical use can be registered; for biological products, patents concerning sequence structure of active ingredients and pharmaceutical use can be registered.”
Without making additional provisions for “related patents” but keeping coordination with the above provisions of the implementation measures, Article 2 of the Provisions on the Patent Rights of Drugs stipulates the following: “‘Related patents’ stipulated in Article 76 of the Patent Law refer to those patents for which the measures of the relevant administration departments under the State Council for linking pharmaceutical product marketing approval and patent dispute resolution during the pharmaceutical product marking approval application stage shall apply.”
4.5.5.3.4 Parties entitled to file lawsuits referred to in Article 76 of the Patent Law
Article 76 of the Patent Law stipulates that the applicant for pharmaceutical product marketing approval and the concerned patentee or an interested party may file a lawsuit before a people’s court. Article 2 paragraph 2 of the Provisions on the Patent Rights of Drugs stipulates the following: “The ‘interested party’ in Article 76 of the Patent Law refers to licensees of the patent referred to in the preceding paragraph and marketing approval holders of the related pharmaceutical product.”
According to Article 7 of the Implementation Measures for Pharmaceutical Product Patent Disputes,
[a]ny patentee or an interested party who objects to the fourth type of patent declarations may, within 45 days from the date when the application for pharmaceutical product marketing approval is published by the national pharmaceutical product evaluation institution, may file a lawsuit before people’s court regarding whether the technical solution of the pharmaceutical product for which marketing approval is applied falls within the protection scope of relevant patent rights, or apply to the patent administration department under the State Council for an administrative adjudication.
If a patentee or interested party fails to file a lawsuit within the said 45 days, the applicant for pharmaceutical product marketing approval may, in accordance with Article 4 of the judicial interpretation, “file a lawsuit before a people’s court to request for confirmation that the pharmaceutical product for which registration is applied does not fall within the protection scope of relevant patent rights.”
4.5.5.3.5 Act preservation
Article 10 of the Provisions on the Patent Rights of Drugs stipulates that, where a patentee or an interested party
requests for prohibiting an applicant for pharmaceutical product marketing approval from implementing the acts stipulated in Article 11 of the Patent Law within the term of the relevant patent right, the people’s courts shall handle such a request as per relevant provisions of the Patent Law and the Civil Procedure Law; requests thereof for prohibiting acts of applying for pharmaceutical product marketing approval or acts of pharmaceutical product marketing review and approval shall not be supported by the people’s courts.
Provisions on act preservation are made in Chapter IX (“Preservation and Preliminary Enforcement”) of the Civil Procedure Law, Chapter 7 (“Preservation and Preliminary Enforcement”) of the Interpretation of the Civil Procedure Law, and the Provisions on Act Preservation in Intellectual Property Disputes. Additionally, Article 105 of the Civil Procedure Law stipulates the following: “If an application is made wrongfully, the applicant shall compensate the person against whom the application is made for any loss incurred as a result of the act preservation.”
4.5.5.3.6 Counterclaim for compensation against vexatious litigation
To better balance the interests of patentees and interested parties and the applicants for pharmaceutical product marketing approval, Article 12 of the Provisions on the Patent Rights of Drugs provides for a counterclaim system for compensation against vexatious litigation, in accordance with Article 132 of the Civil Code, Article 13 of the Civil Procedure Law, and Articles 20 and 47 of the Patent Law.
There are two prerequisites for counterclaiming compensation against vexatious litigation. First, the subjective prerequisite is that the patentee or interested party knows or should have known that the patent right was declared invalid or that the technical solution related to the pharmaceutical product for which marketing approval is applied does not fall within the protection scope of the patent right. Here, “knows” or “should have known” are determined following the same criteria as for general infringement cases. Second, the objective prerequisite is that the applicant for pharmaceutical product marketing approval has suffered losses caused by the litigation.
With respect to jurisdiction over counterclaims for compensation against vexatious litigation, and given the close relation of such cases with pharmaceutical product patent lawsuits, it is stipulated that such cases also come under the jurisdiction of the Beijing Intellectual Property Court.
4.5.5.3.7 Administrative adjudication
With respect to the protection of patent rights, China adopts a dual-track system whereby judicial and administrative protections work in tandem. For “disputes arising from patents related to related to the pharmaceutical product for which marketing approval is applied” (Article 76 of the Patent Law), the concerned party may either file a lawsuit before a people’s court or “petition the patent administration department under the State Council for an administrative adjudication on the disputes” as per Article 76 paragraph 2 of the Patent Law.
Article 5 of the Provisions on the Patent Rights of Drugs stipulates the following:
Where a party asserts that a lawsuit referred to in Article 76 of the Patent Law should not be accepted or requests for suspension of the lawsuit on the ground that the patent administration department under the State Council has accepted the application for administrative adjudication referred to in Article 76 of the Patent Law, such an assertion or application shall not be supported by the people’s courts.
Article 4 of the Adjudication Measures for Pharmaceutical Product Patent Disputes stipulates the following: “Where a party applies for administrative adjudication, the prerequisite to be met is that no people’s court has accepted a case over the pharmaceutical product patent dispute.” A party having first chosen to apply for administrative adjudication can still file a lawsuit before a people’s court later. However, if a party has filed a lawsuit before a people’s court, and the case has been accepted, then the party can no longer apply to the CNIPA for administrative adjudication on the same pharmaceutical product and patent.
Both Article 7 of the Implementation Measures for Pharmaceutical Product Patent Disputes and Article 19 of the Adjudication Measures for Pharmaceutical Product Patent Disputes stipulate that, where a party disagrees with an administrative adjudication made by the CNIPA on a pharmaceutical product patent dispute, the party may file an administrative lawsuit before the Beijing Intellectual Property Court. Where the party still disagrees with the judgment made thereby, it may appeal to the Supreme People’s Court.