lnfluence and Suggestions on Trial lmplementation Measures for Early Settlement Mechanism of Drug Patent Disputes

Li Wanying,Zhang Weiwei,Jia Siyao,Dong Li

(1.School of Business Administration,Shenyang Pharmaceutical University,Shenyang 110016,China;2.Boehringer-Ingelheim Pharmaceuticals,Ridgefild 06877,USA)

Abstract Objective To study the core contents of the “Implementation Measures for Early Settlement Mechanism of Drug Patent Disputes (Trial)” in China,and to clarify the concerns for enterprises in future work.Methods A comprehensive review of the literature was used to find out the key regulations for detailed decomposition and analysis.Results and Conclusion By analyzing the key clauses of China’s “Implementation Measures for Early Settlement Mechanism of Drug Patent Disputes (Trial)”,some practical countermeasures and suggestions are put forward for related research and development (R&D) innovation and drug declaration of enterprises.

Keywords: patent dispute;solution mechanism;infiuence;countermeasure

On July 4th,2021,the National Medical Products Administration (NMPA) and the National Intellectual Property Administration jointly issued the “Implementation Measures for Early Settlement Mechanism of Drug Patent Disputes (Trial)”,(hereinafter referred to as the “Implementation Measures”),which was carried out from July 4th.On July 5th,2021,the Supreme People’s Court issued the “Provisions on Several Issues for the Application of Laws in the Trial of Civil Cases of Patent Disputes Related to Drugs for Registration”.On the same day,the National Intellectual Property Administration issued the “Measures for Administrative Adjudication on the early Settlement Mechanism of Drug Patent Disputes” and the “Matters Concerning the Acceptance of Administrative Adjudication on the Early Settlement Mechanism of Drug Patent Disputes”.This paper interprets some key information,discusses the impact on enterprises,and makes some suggestions.

1 Introduction of core contents

1.1 The role of patent information registration platform

1.1.1 Regulations of the registration platform on patent types

On July 4th,2021,the NMPA officially launched the China’s listed drug patent information registration platform online,https://zldj.cde.org.cn/home,announcing that the holders of drug listing licenses should complete the registration and active disclosure of relevant drug patent information on the China’s listed drug patent information registration platform in advance as required.If the relevant information that had been registered and made public in the previous period needs to be changed,the holder of the listing license should update it in time.The registered and published patent information serves as the basis for the patent declaration made by the registered applicants of chemical generic drugs,traditional Chinese medicines with the same name and similar drugs.A total of eight types of patents that can be registered,as shown in Table 1.

Table 1 Categories of registered information of China’s listed drug patent information registration platform

1.1.2 Positive influence of patent information registration platform

The registration and publicity of listed drug patent information can stimulate innovation.The patentee can register the specified patent information related to listed drugs to effectively protect the patents already obtained.With the implementation of this system,it can not only avoid the infringement of the market of innovative drugs caused by the early listing of generic drugs,but also make enterprises with innovative drug research and development feel at ease by continuing to invest in innovation,which will promote the innovation and development of the pharmaceutical industry.It can also provide patent infringement risk information for generic drug producers as soon as possible,thus establishing a good environment for pharmaceutical production[1].

1.2 Relevant regulations on generic drug application

1.2.1 Making a statement by the generic drug applicant first

Article 6 of the “Implementation Measures”stipulates that,when submitting an application for drug listing license,an applicant for a generic chemical drug should make a statement on each drug patent related to the generic drug according to the patent information that has been published on the drug patent information registration platform listed in China,as shown in Table 2.

Table 2 Classification and treatment of generic drug applicant’s patent information statement

1.2.2 Notification obligation of generic drug applicants

Within 10 working days after the generic drug application is accepted,the generic drug applicant shall notify the listing license holder of the corresponding statement and the basis of the statement.If the listing license holder is not the patentee,the listing license holder shall notify the patentee.

If the declaration does not fall within the scope of protection of relevant patent rights,the basis for the declaration shall include the comparison table of related claims between generic drug technical scheme and related patents and related technical data.In addition to the paper materials,generic drug applicant should also send a statement and statement basis to the E-mail address registered by the listing license holder in China’s listed drug patent information registration platform and keep relevant records.

1.2.3 Significance of the provisions of the“Implementation Measures”

Having the notification obligation of generic drug listing applicants can minimize the system implementation cost.If the notification obligation is not set,the drug marketing license holder will spend a lot of manpower and material resources to monitor the information platform of the NMPA and track the trends of generic drug marketing applications.This cost is high.If the generic drug listing applicant informs the listing license holder,the cost becomes small,which can significantly reduce the total cost of the system operation and is economically efficient[2].

1.3 Early settlement of disputes

1.3.1 Administrative and judicial ways

The administrative way of dealing with patent disputes is to solve them through the adjudication of patent administrative departments,and the judicial way is to solve patent disputes by bringing a lawsuit to the court.The administrative adjudication does not have the final adjudication right,and if relevant parties are not satisfied with the result,the dispute can be sued again.However,if the first choice is litigation,then no administrative means can be used to resolve disputes.

According to the provisions of Article 7 of the “Implementation Measures”,if the patentee or interested party disagrees with the four kinds of declarations,it may,within 45 days from the date when the NMPA makes the application for listing license of generic drugs public,bring a lawsuit to the court or request the patent administration department under the State Council to make a ruling on whether the technical scheme for applying for listing drugs falls within the scope of relevant patent protection.This is the core clause of the early settlement mechanism of drug patent disputes.After the patentee or interested party starts the patent dispute resolution mechanism,the administrative examination and approval procedures for generic drug listing applications will be suspended,and a waiting period of 9 months will be entered.Otherwise the administrative examination and approval procedures for generic drug listing applications will not be suspended and will move forward normally,as shown in Table 3.And the starting materials are as follows in Table 4.

Table 3 Ways and related regulations of early settlement mechanism of patent disputes

Table 4 List of materials for starting judicial and administrative procedures [3]

1.3.2 Provisions of waiting period

Article 8 of the “Implementation Measures” sets a waiting period of 9 months for the application for registration of chemical generic drugs.The waiting period is only set once after the NMPA receives the notice of filing a case with the court forwarded by the parties concerned or the copy of the notice of accepting relevant disputes from the patent administration department under the State Council.During the waiting period,the NMPA only conducts technical review and suspends the administrative examination and approval of listing applications.If the parties concerned cannot submit the effective judgment or administrative ruling at the expiration of the waiting period,the NMPA will directly promote the administrative examination and approval procedures for generic drug listing applications.

There is no waiting period in the “Implementation Measures” for the registration application of the same name and similar drugs of traditional Chinese medicine,and the NMPA will directly decide whether to approve the listing or not according to the conclusion of the technical review.If the people’s court or the patent administration department under the State Council confirms that the relevant technical scheme falls within the scope of protection of the relevant patent right,relevant drugs cannot be listed until the expiration of the validity period of the corresponding patent rights.

1.4 Provisions of market monopoly period

Article 11 of the “Implementation Measures”stipulates a 12-month market monopoly period,that is,the first chemical generic drug that challenges patent success and is approved for listing shall be given a market monopoly period.The patent administration department under the State Council will no longer approve the listing of generic drugs of the same variety within 12 months from the date of approval of the drug.Through the system design of the market monopoly period,generic drug companies will be greatly encouraged to carry out the research and development of generic drugs,launch patent challenges,actively apply for invalidation of patent rights to compete for the qualification of the first generic drug applicant.These measures will stimulate the positive trend of the research and development of generic drugs.At the same time,they will pose great challenges to patentees.

2 Influence of “Implementation Measures”on innovation and research and development(R&D) of pharmaceutical enterprises in China

2.1 Conducive to reducing R&D risks and controlling costs

Resolving disputes before generic drugs going on the market is the most effective way for drug patentees and generic drug applicants to control risks and costs.Therefore,the early settlement mechanism of drug patent disputes is to resolve drug patent disputes in advance,control risks,protect drug patents and promote the high-level development of generic drugs.

2.2 Encouraging generic drugs to go to market faster

The system design that the first generic drug enterprise enjoys the market monopoly period will greatly stimulate and encourage generic drug applicants to take the lead in launching patent challenges and filing the request for invalidation of patent rights.Therefore,the competition among generic drug enterprises for the first generic drug qualification will intensify,thus promoting the research and development and technological innovation of generic drugs in China.

2.3 Dual regulatory function of patent holders and generic drug applicants

Patent holders can publicly protect drugrelated patents with the help of the listed drug patent information registration platform.Even after the generic drug application is approved,it can be prevented by the court’s preservation ruling from implementing the behavior stipulated in Article 11 of the “Patent Law” within the validity period of the patent right,which will help the patent holders to strengthen the effective protection of their patents.

For generic drug applicants,it is possible to avoid the possibility of infringement litigation through the court’s review of existing technology defense and first-use right defense in this kind of dispute litigation.In addition,the rights and interests can be protected by regulating the patentee’s abuse of litigation as stipulated in Article 12 of the “Judicial Interpretation”.If the generic drug listing applicant thinks that the patentee abuses the litigation rights,he can ask the patentee to compensate him for the reasonable expenses such as legal fees,transportation expenses,room and board expenses according to law.

2.4 Standardizing the effective ways and methods for early settlement of drug patent disputes

In the “Implementation Measures”,the ways and methods to solve drug patent disputes are specified in great detail,which enables law enforcement agencies to have laws and rules to follow in the process of dealing with drug patent infringement disputes,thus improving law enforcement efficiency.Related parties can choose administrative and judicial ways to solve the dispute.The jurisdiction responsibilities of the National Intellectual Property Administration and Beijing Intellectual Property Court are clarified.At the same time,the specific process,detailed information of the submitted materials and other contents are standardized,which is helpful for the parties to clarify the rules on the choice modes and time limit.

3 Suggestions for the pharmaceutical enterprises in China

3.1 Making full use of patent navigation to lead the R&D and innovation activities of pharmaceutical enterprises

On July 6th,2021,the National Intellectual Property Administration issued the “Notice of the Office of the National Intellectual Property Administration on Strengthening Patent Navigation”,which stipulated that all regions should build or improve the urgently needed patent navigation service bases in local areas by relying on enterprises,universities,institutions,service agencies and other units according to local conditions,and gradually form the normalization and marketization of patent navigation services[4].

Drug R&D cannot be separated from patent navigation at first.By analyzing the patent information of related technologies,enterprises can scientifically coordinate the drug research and development roadmap and patent layout planning according to their actual conditions,which will help them effectively avoid patent infringement and develop products with patent protection.

3.2 Developing extensive generic drugs actively

Eight types of patents registered in the registration platform have been clearly defined in the“Implementation Measures”,but these related patents do not include patents of intermediates,metabolites,crystal forms,preparation methods,and detection methods.Then generic drug enterprises should actively carry out drug R&D and innovation.Based on the later R&D,they can apply for patents,which will protect their technology.

3.3 Choosing a more effective way to resolve disputes

Articles 7 and 8 of the “Implementation Measures” stipulate the judicial and administrative ways to resolve disputes.Then the parties need to choose one of them.They can make a comparison according to the specific situation.Article 9 of the“Implementation Measures” stipulates that the NMPA shall,according to the effective judgment of the court and the administrative ruling of the patent administration department under the State Council[5],conduct administrative examination and approval on generic drug listing applications according to the specific situation,as shown in Table 5.

Table 5 Classification approval form of the National Medical Products Administration

According to the above situation,the parties can choose the judicial channels or administrative channels in combination with their patent cases,especially the 9-month waiting period stipulated in the “Implementation Measures”.Generally,for the litigation channels,it is difficult for the court to make a judgment,so the choice of administrative channels may be more favorable.

3.4 Playing the role of patent invalidation actively

After issuing the “Implementation Measures” for early settlement mechanism of drug disputes,patent invalidation procedure will become more important.The regulations in the “Implementation Measures”make the patent challenge and invalidation request of generic drug applicants play an increasingly important role.The patent reexamination and invalidation decision of the National Intellectual Property Administration will be beneficial to generic drug applications.Therefore,enterprises should pay attention to giving full play to this regulation and making strong patent challenge[6].

3.5 Striving for the market monopoly period of the first imitation drug

For generic drug enterprises,only when two conditions are met at the same time can they obtain a 12-month market monopoly period: (1) The first patent challenge is successful;(2) The first patent is approved for listing.This is a huge challenge for enterprises[7].On the one hand,it is necessary to strengthen their R&D level and speed up R&D.On the other hand,it is urgent to monitor the R&D progress and achievements of competitors to ensure that the above goals can be achieved[8].

3.6 Paying more attention to the right of first use

If the drugs applied for listing are existing technologies or generic drug listing applicants enjoy the right of first use,the court may decide that the drugs applied for registration do not fall within the scope of relevant patent protection[9].Accordingly,in this kind of dispute litigation,the court can also review the existing technology defense and the defense of the right of first use.Therefore,enterprises must keep the proof of their right of first use intact and make active efforts to apply for and defend it[10].

4 Conclusion

The “Implementation Measures” for early settlement mechanism of drug patent disputes refers to the system that connects the approval procedures for listing related drugs with the procedures for settling patent disputes.The implementation of this system not only refiects the achievements of China’s pharmaceutical review and approval system reform,but also highlights the protection of pharmaceutical intellectual property rights in recent years.

The “Implementation Measures” also clearly stipulate the connection between innovative drugs and generic drugs,which not only protects the interests of original researchers,but also helps to encourage enterprises to continue the research and development of innovative drugs.At the same time,it points out the path for the production and operation of legal generic drugs,thus accelerating the entry of new drugs and good drugs into the market and reducing the medication cost of patients.Therefore,it plays a positive role in promoting the research and development of innovative drugs and the development and listing of generic drugs.