Understanding the Patent Term Extension in China

Understanding the Patent Term Extension in China

Last year China adopted the Fourth Amendment to the China Patent Law bringing some of the changes to the said law. In this piece, we will discuss the Patent Term Extension (PTE) being introduced by the amendment.

Introducing PTE allows the extension of the 20-year term of the patent. This extension is done to compensate for the period being used for the process of market approval being undertaken for a patent. This period is generally used to check the efficacy of the pharmaceutical product thereby losing out a lot of period in the 20-year term. This PTE will be effective from June 2021.

Paragraph 3 of Article 42 of the Amended Patent Law says:

• In order to compensate for the time taken for review and approval of a new drug for marketing, the CNIPA shall extend the term of the patent for an invention related to the new drug for which marketing approval is obtained in China, at the request of the patentee, and

• The patent term extension shall not exceed five years, and the resulting total effective patent term shall not exceed 14 years from the approval for marketing of the new drug.

The draft PTE rule explains the PTE and its applicability. It states that the PTE is available to the patents related to products and preparation methods or medical use of new drugs. The chemical drugs, biological products, and Chinese traditional medicine will also come under the purview of PTE. The draft explains "New drugs" as active ingredients of new drugs that are approved for marketing for the first time by the regulatory authority. Therefore, those patents covering the active pharmaceutical ingredients approved for marketing for the first time in China will be eligible for PTE.

As specified earlier regarding the extension of the patent term, not exceeding five years, PTE will equal the period which elapses between the application date of the underlying patent and the date of the first marketing authorization of the drug in China, reduced by a period of five years. The PTE does not extend any scope of the patent and the scope remains limited to the new drug and indication, therefore, the scope of PTE is much narrower than the underlying patent.

The amendment also specifies the requirement of the patent and drug for PTE.

• Time limit: PTE application must be filed within three months after regulatory approval.

• If the drug is covered by multiple patents, only one patent can be extended.

• If a patent covers multiple drugs, the PTE of the patent is possible for one drug only.

• The patent must not have been previously granted PTE. Therefore, the PTE will be applicable per pharmaceutical product per patent.

• The remaining protection period of the patent when filing PTE is no less than six months.

The draft rule is silent on whether the patentee can challenge the decision on PTE if it is not satisfied. Moreover, the draft does provide a remedy to the third party for requesting to invalidate the PTE and the invalidation decision can be appealed to the Court.