Introduction to China’s Drug Patent Linkage System 

I. What is the Drug Patent Linkage System?

1. Origin of the Drug Patent Linkage System
   • The drug patent linkage system originated in the United States with the Hatch-Waxman Act, officially known as the Drug Price Competition and Patent Term Restoration Act. The primary function of this act is to balance the interests of original drug manufacturers and generic drug manufacturers, ensuring patent protection for original drugs while encouraging competition in drug pricing by expediting the approval of generic drugs. Before this act, generic drug companies could only use the data and information of original drugs for research and trials after the patent expiration, delaying the development of generics and inadvertently extending the market exclusivity period of original drugs. However, after the act, generic drug companies can use relevant data from original drugs for research and development before the patent expires without constituting patent infringement.
2. Development of the Drug Patent Linkage System in China
   • China introduced the drug patent linkage system during the third amendment of the Patent Law in 2008, but due to the lack of supporting patent and approval systems, progress was slow. It wasn’t until the fourth amendment of the Patent Law in 2020, with the addition of Article 76, that the system saw rapid development.
   • On July 4, 2021, the National Medical Products Administration (NMPA) and the China National Intellectual Property Administration (CNIPA) jointly issued the “Implementation Measures for the Early Resolution Mechanism for Drug Patent Disputes (Trial).” This document clarified the patent registration, patent declaration, waiting period, and patent challenge systems. On the same day, the NMPA announced the implementation of these measures and the official launch of the China Listed Drug Patent Information Registration Platform (https://zldj.cde.org.cn/home).
   • On July 4, 2021, the Supreme People’s Court issued the “Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Patent Disputes Related to Drugs Applying for Registration,” explaining the application of Article 76 of the 2020 revised Patent Law in civil disputes. The next day, the CNIPA issued the “Administrative Adjudication Measures for the Early Resolution Mechanism of Drug Patent Disputes,” detailing the administrative adjudication procedures for patent disputes during the drug review and approval process. Thus, the preliminary framework of China’s drug patent linkage system was established.

II. Specific Provisions of the Drug Patent Linkage System

1. How Original Drug Manufacturers Register Patents
   • According to the “Implementation Measures for the Early Resolution Mechanism for Drug Patent Disputes (Trial),” original drug manufacturers need to register the patent information related to drugs registered and listed in China on the China Listed Drug Patent Information Registration Platform.
   • If the relevant patent information is not registered on the platform, the drug patent linkage system does not apply. Marketing authorization holders for chemical drugs can register patents for active pharmaceutical ingredients, drug compositions containing the active ingredient, and medical uses on the platform. The holders are responsible for the authenticity, accuracy, and completeness of the registered information.
2. How Original Drug Manufacturers File Patent Linkage Lawsuits or Administrative Adjudications
   • When a generic drug applicant submits a drug marketing authorization application, they must refer to the patent information disclosed on the China Listed Drug Patent Information Registration Platform and make a declaration regarding each relevant drug patent of the original drug. The declarations are categorized into four types:
     • Type I Declaration: There is no relevant patent information for the original drug on the platform.
     • Type II Declaration: The relevant patent rights recorded on the platform have expired, been invalidated, or the generic drug applicant has obtained a license from the patent holder.
     • Type III Declaration: The relevant patent recorded on the platform exists, and the generic drug applicant commits not to market the generic drug before the patent expires.
     • Type IV Declaration: The relevant patent recorded on the platform should be declared invalid, or the generic drug does not fall within the scope of the relevant patent rights.
   • Patent holders or interested parties who disagree with the Type IV declaration can, within 45 days from the public disclosure of the generic drug marketing application by the national drug review agency, file a lawsuit with the people’s court or request an administrative adjudication from the CNIPA to determine whether the proposed technical solution of the listed drug falls within the scope of the relevant patent rights. Parties dissatisfied with the administrative adjudication can file a lawsuit in the people’s court within 15 days of receiving the decision.
3. What is the Market Exclusivity Period for the First Generic Drug?
   • When a generic drug applicant submits a Type IV declaration, the patent holder/original drug marketing authorization holder can file a lawsuit with the Beijing Intellectual Property Court or request an administrative adjudication from the CNIPA within 45 days from the disclosure of the generic drug application. Within 10 days from the filing or acceptance date, they must submit a copy of the acceptance notice to the national drug review agency, initiating a challenge to the patent protection scope or validity. If it is a chemical generic drug, a 9-month waiting period is set from the filing or acceptance date during which the national drug review agency does not suspend technical reviews. However, biological and traditional Chinese medicines are not subject to the waiting period.
   • For chemical generic drug applications that pass technical review, the drug regulatory department will handle them based on court judgments or administrative adjudications:
     • (a) If confirmed to fall within the scope of relevant patent rights, the application will be moved to the administrative approval stage 20 working days before the patent expires.
     • (b) If confirmed not to fall within the scope or if both parties reach a settlement, the application will proceed to the administrative approval stage.
     • (c) If the relevant patent is invalidated, the application will proceed to the administrative approval stage.
     • (d) If no effective judgment or administrative decision is made within the waiting period, the application will proceed to the administrative approval stage.
     • (e) If a judgment or administrative decision confirming that the product falls within the scope of relevant patent rights is received during the administrative approval period, the application will be handled according to the provisions of item (a).
   • For the first generic drug that successfully challenges the patent and is the first to receive marketing approval, a market exclusivity period is granted. The national drug regulatory department will not approve the same generic drug for 12 months from the approval date. This market exclusivity period cannot exceed the remaining patent term of the challenged drug.

III. What Should Pharmaceutical Companies Do?

1. Original Drug Companies
   • Original drug companies should pay attention to the regulations of the China Listed Drug Patent Information Registration Platform and promptly register drug and patent information. They should also continuously monitor the platform for infringement and determine whether generic drug applications infringe on their patents. If infringement is identified, they should timely file lawsuits or administrative adjudications to delay the approval of the generic drug.
2. Generic Drug Companies
   • Generic drug companies should conduct thorough preliminary research and patent infringement risk assessments. Risk assessment is crucial in generic drug development to avoid infringement risks as much as possible. Securing a first generic drug status is also important as it grants a 12-month market exclusivity period. When faced with lawsuits or administrative adjudications from patent holders, generic drug companies should respond actively and use reasonable technical defenses.

With the implementation and continuous improvement of the drug patent linkage system, the number of drug patent disputes will temporarily surge, posing higher requirements for companies’ patent work. Both original drug companies and generic drug companies need to strengthen their patent protection efforts.

IV. Comparison of Drug Patent Linkage Systems between China and the U.S.

By understanding the intricacies of the drug patent linkage system and adapting strategies accordingly, pharmaceutical companies can better navigate the patent landscape and ensure compliance while protecting their intellectual property.