China: How to Protect Pharmaceutical Products in China With or Without a Patent

Last Updated: 20 April 2006
Article by Tony Chen and Helen Cheng

China surpassed the United States as the world’s most litigious country for intellectual property disputes in 2005, with a total of 13,424 cases filed with Chinese courts. In comparison, 10,905 cases were filed in the U.S. during the same period.1

International companies were involved in only 268 of the IP cases filed in China last year, which represents an increase of 76 percent over the number in 2004. This overly cautious approach in IP enforcement by international companies in China is partly due to their unfamiliarity with Chinese civil litigation.

In addition, a significant number of international companies have opted not to apply for patents in China. For example, while companies from the U.S. have consistently filed more international patent applications under the Patent Cooperation Treaty than companies from other countries, they have been filing only half as many patent applications in China as their Japanese counterparts. One consequence of this inaction on the part of international life sciences companies is that many of their pharmaceutical products are not protected by patents in China.

This Commentary discusses practical approaches to three intellectual property issues frequently faced by international pharmaceutical companies in China:

How to protect pharmaceutical products without a patent in China.

  • How to deal with patent invalidation actions in China.
  • How to enforce pharmaceutical patents in China.

How to Protect Pharmaceutical Products Without a Patent in China

Patent protection has been available to pharmaceutical compounds, compositions, formulations, and indications in China since 1993. In addition, pharmaceutical products can be protected by the following regulatory mechanisms:

Monitoring Period Exclusivity. After a new drug is approved for entering the market in China, the State Food and Drug Administration ("SFDA") will impose a "monitoring period" to observe the safety and efficacy of the drug. During the monitoring period, the SFDA will not grant approval to any other enterprises to manufacture, distribute, or import this drug, unless the competing product has been approved for entering clinical trials in China prior to the beginning of the monitoring period. The monitoring period exclusivity is available for new drugs manufactured in China.

The monitoring period lasts from three to five years, starting on the issuance date of the drug manufacturing certificate.

Data Exclusivity. Under China’s Regulations on Drug Registration, data submitted to the SFDA for the approval of a drug containing a new chemical entity is protected against improper commercial use for six years from the date of marketing approval. Such data exclusivity protection does not extend to new indications or formulations. A second applicant must generate its own data to support a competing drug registration.

Administrative Protection of Pharmaceuticals. Administrative protection of pharmaceuticals is a quasi patent protection designed to address the lack of patent protection in China for pharmaceuticals prior to 1993. Protection is available for active ingredients as well as dosage forms that meet the following requirements:

  1. No protection is afforded by the Chinese Patent Law prior to January 1, 1993.
  2. One or more patents were granted in the applicant’s home country between January 1, 1986, and January 1, 1993.
  3. The item has not been marketed in China prior to the application date for administrative protection.

How to Deal With Patent Invalidation Actions in China

Patent Linkage. China’s Regulations on Drug Registration require a drug manufacturer to declare that it does not infringe any third-party patent when filing a registration application. A generic drug manufacturer may file for registration with the SFDA two years prior to the expiration of a patent. The SFDA will review the application but withhold approval until patent expiration in China. In addition, a patentee may, on the basis of an infringement judgment, request the SFDA to revoke an approved drug registration.

Patent Invalidation Challenges. Because patent linkage provides an effective barrier to the introduction of generic drugs in China, there are an increasing number of invalidation proceedings at the Patent Reexamination Board ("PRB") of the State Intellectual Property Office ("SIPO") to challenge the validity of pharmaceutical patents. Patentees and invalidation petitioners have opportunities to file written comments and present oral testimony before the PRB. During the invalidation proceeding, the patentee can make amendments to the existing patent claims but cannot add claims or amend the specification of the patent. The decision of the PRB is subject to judicial review by the Beijing No. 1 Intermediate Court. Further appeal can be taken to the Beijing High Court.

In order to build a strong patent picket fence, pharmaceutical companies need to increase the number of their patent claims and enhance the quality of their patents in China. In addition, because a patent is considered valid in China until a final decision is made by the court,2 pharmaceutical companies should use the appeal process in China to fully litigate the issues presented in invalidation proceedings.

How to Enforce Pharmaceutical Patents in China

International pharmaceutical companies have had litigation successes in China. For example, in 2003, GlaxoSmithKline stopped several generic drug makers from obtaining licenses for commercializing generic copies of Avandia, a patented drug for the treatment of Type 2 diabetes.

In China, as in other countries, litigation instituted by intellectual property owners is the main course for enforcement. The chief judge of the intellectual property chamber of the Supreme People’s Court has encouraged international companies to bring more cases to court in China. In that regard, China has two routes for enforcing IP rights: administrative procedures and judicial actions.

Administrative Procedures. Depending on the nature of intellectual property rights and infringement, the IP owner can ask the State Administration for Industry and Commerce, the Public Security Department, the Copyright Office, the Trademark Office, or the SIPO to enforce intellectual property rights through inspection, seizure, reprimand, and fines. The administrative decisions in China are subject to judicial review.

In addition, upon identifying infringing products, the intellectual property owners can request Chinese customs to seize such products in an effort to prevent their export. To facilitate customs enforcement, the IP owner should record its copyrights, trademarks, and patents with the General Office of Chinese Customs.

Judicial Actions. China has a four-tier court system: the Supreme People’s Court, the Higher People’s Court, the Intermediate People’s Court, and the Basic People’s Court. The Supreme People’s Court is the highest court in China. It handles appeals from lower courts and issues judicial interpretations and guidelines to clarify legislation or to harmonize lower-court procedures. Due to the complexity of patent cases, the Supreme People’s Court has set up intellectual property chambers within the courts to hear patent cases; these chambers have the power to determine permanent injunction, preliminary injunction, and damages. At present, about 50 intermediate courts spread over the country have jurisdiction over first-instance patent-related civil disputes.

In China, there is no equivalent of discovery proceedings available in common-law jurisdictions. The general rule on presentation of evidence is that the party asserting the allegation bears the burden of proof. Therefore, the plaintiff in a patent infringement case is under the burden of proof and needs to collect sufficient evidence to discharge that burden. Moreover, any party may request the court for evidence preservation/collection under certain circumstances, such as when the evidence is likely to be lost or destroyed. There is an exception relating to patents covering the production process of a new product (i.e., a product that was marketed in China before patent filing). In such cases, the alleged infringer must furnish proof to show that its production process is different from the patented process.

Upon winning a lawsuit, the IP owner is entitled to an injunction to deter infringement in China. In addition, the court has authority to order pretrial injunctions to stop infringement and collect infringement evidence.

Damages are determined as either the patentee’s lost profit or the infringer’s gain. Loss suffered by the patent owner is generally calculated by multiplying the patentee’s loss in sales by the reasonable profit margin attributable to the product. Gain reaped by an infringer may be determined by multiplying the infringer’s sales by a market average profit margin. If the patent owner’s loss and the infringer’s gain are difficult to calculate, royalties and patent license fee may be considered. Short of evidence for the above-listed calculations, the court may impose statutory damages. The court may also award to the patentee reasonable expenses incurred in halting the infringing act, including legal and investigation costs, although there are no punitive damages for patent infringement in China.

By proactively obtaining and enforcing patents in China, international pharmaceutical companies can play an important role in improving Chinese patent law and enforcement mechanisms.


1. These statistics come from the Supreme People’s Court of China. A breakdown of the IP cases filed in China in 2005 is as follows: 6,096 copyright cases (vs. 4,595 in the U.S.), 2,947 patent cases (vs. 2,812 in the U.S.), 1,782 trademark cases (vs. 3,498 in the U.S.), 1,303 unfair-competition cases, 636 technology contract disputes, 156 plat varieties cases, and 504 other cases.

2. For example, while the Viagra patent invalidation decision by the PRB is being appealed in China, the SFDA has not approved any generic copies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions