China: Three Supreme Court Cases On Pharmaceutical Patents

S Sam Li and Honghui Hu of Wan Hui Da – Peksung IP Group explain three important Supreme Court cases on pharmaceutical patents.

With some ten thousand cases a year, Chinese law on patent litigation is dynamic. Courts, particularly the Supreme People's Court (the Court), lead the advancement of the law. This article seeks to convey a sense of these developments through three key decisions.

The Simcere Case – amendment of patent claims

The Patent Law Article 33 limits amendments of patent claims to the original disclosure and scope of protection. The Patent Examination Guideline (the Guideline) only permits amendments if they can be directly and unambiguously determined from the original disclosure. It further limits the types of amendment to: deletion of claims, combination of claims and deletion of technical solutions within a claim. The Guideline's restrictive prescriptions and rigid applications give rise to broad dissatisfaction. From 2010, the Court has taken up eleven cases addressing issues involving amendments of claims to remedy the situation. The Simcere case is an example of their efforts.

Simcere Pharmaceutical held a patent for anti-high blood pressure formulations of amlodipine and irbesartan. In an invalidation proceeding, Simcere proposed to amend a claim establishing its formulation of "a pharmaceutical composition comprising a weight ratio of 1:10-30 of active ingredients amlodipine or its physiologically acceptable salt and irbesartan." The proposed amendment narrowed the ratio to simply 1:30. The Patent Reexamination Board (PRB) rejected the amendment because the ratio 1:30 cannot be directly and unambiguously determined from the original disclosure. The PRB's decision was maintained by the court of first instance but overturned by the court of second instance. The PRB petitioned the Court to review the case.

The Court permitted the amendment. It found the amended content in the original disclosure without applying the direct and unambiguous standard. Specifically, the Court opined that the ratio of 1:30 was disclosed in examples in the patent specification. The examples included an optimal combination of amlodipine over irbesartan as l:30 mg/kg, a dosage range of 2-10:50-300 mg and preparations with the two ingredients in weight relationships of 2.500:75.000 mg and 5:150 mg. The examples did not give an explicit description of a generally applicable ratio of 1:30. But examples could only describe specific weights. These weights are all consistent with the claimed ratio. To a person skilled in the art, the ratio is disclosed. The Court also stated that an inquiry into whether all weights corresponding to the ratio can fulfill the inventive purpose should be made under Article 26.4 instead of Article 33.

The Court recognized that the amendment was not a typical deletion of technical solutions. It however noted that the justification for limiting the types of amendments is to protect public reliance on claims and to prevent broadening of their scope, not to punish imperfect claim drafting. In this case, the amendment did not broaden the scope of the claim, it clarified it. The Court also stated that the list of permitted amendments in the Guideline is not exhaustive.

The Court's efforts have advanced rationales for practice concerning claim amendments. A newly released Guideline last month also reflects a more flexible approach. It states that "the specific types of amendments are generally limited to deletion of a claim, deletion of a technical solution, further limitation to a claim [by reciting features in other claims] and correction of an apparent error".

The Telier case – close-end claims

The Guideline allows two types of claims for compositions: open-end claims, typically with claim language like "comprising," and close-end claims, typically with claim language like "consisting of".

An open-end claim would cover a composition with the claimed components regardless of whether the composition also has other components, while a close-end claim would cover a composition with the claimed components only. The Guideline however does not bind courts and had not been expounded in the context of an infringement case. The Telier case for the first time construed a close-end claim in the context of a pharmaceutical composition – whether the addition of pharmaceutically inactive excipients would place a composition outside the scope of a close-end claim.

The case involved a patent covering a composition of lyophilized powder for injection consisting of adenosine disodium triphosphate and magnesium chloride. The defendant's product had the two claimed ingredients but with an added inactive excipient of arginine, known to increase composition stability. It was added together with sodium carbonate in the formulation process and retained in the final product. Adding ingredients in the formulation process is common. The issue was whether such routinely added ingredients in the formulation process would place the resulting composition outside the scope of a close-end claim. The courts of the first and second instances both found infringement because the defendant failed to prove that the added excipient substantially affected the pharmaceutical function of the composition.

Before the Court, the patentee argued for infringement either because the accused product bore the essential features of the claim – containing the two active ingredients, or because it was equivalent to the claimed composition as the addition of arginine is routine in formulation processing.

Because the patentee's claim for the formulation was drafted as a close-end one, which did not include the added arginine, the Court took issue with it. It held that the practice of drafting close-end claims had been around since 1993, with consistent directives from the Guideline. It held that there was a public expectation that such a claim would not cover a composition with additional components. The patentee thus had a duty to know the terms of the art and should bear losses resulting from inappropriate claim drafting. Moreover, the doctrine of equivalence should not apply as it would defeat the purpose of close-end claims.

The decision in the Telier case holds a strict but clear construction of close-end claims for compositions. The case led to a provision in the Court's judicial interpretation of March 2016, directing courts not to find infringement of a close-end claim "unless the additional features are unavoidable impurities" and making the holding generally applicable.

The Lilly case

Low damages for infringement have been a perennial problem. The Patent Law prescribes four methods for damage determination: patentee's loss, infringer's gain, multiples of royalties and discretionary damages capped at Rmb1,000,000. Most cases use the last option due to lack of evidence and the underdevelopment of the other methods. Damages are critical to the pharmaceutical industry for sustaining innovation.

The Court has been leading efforts to increase damages by encouraging exploratory practices, such as imposing damages above the statutory cap and demanding production of financial information held by defendants, coupled with aggressive adverse inference. Consequently, sporadic large damage awards have appeared but reasoned guidance is wanting.

In this case, Lilly sued Watson for infringing its patented manufacturing process for olanzapine, an antipsychotic drug. The Jiangsu Higher People's Court found Watson infringing and ordered it to pay damages of Rmb500,000 for the period of infringement up to 2003. The decision was based on the fact that olanzapine was a "new product," and that Watson had failed to prove the difference of its manufacturing process. Although Watson asserted the use of its own process as filed with the regulatory authority, the court found that, according to a technical appraisal, the process did not work.

With infringement confirmed, Lilly then sued for damages resulting from Watson's use of the process between 2003 and 2011. Lilly gathered evidence from two sources. Based on a report assessing Watson's potential losses if it stopped manufacturing, Watson's monthly profit for selling olanzapine was about Rmb1,660,000 and the total profit for the relevant period was Rmb151,060,000. An extensive market investigation indicated that for the relevant period Watson had hospital sales of Rmb186,914,143, retail sales of Rmb64,975,343. Subtracting the cost of materials (Rmb86,522,830), the gross profit was Rmb165,366,656. Picking the lower of the two profit numbers, Lilly claimed damages of Rmb151,060,000.

The Jiangsu Higher People's Court awarded Lilly damages of Rmb3,500,000. Both parties appealed to the Court. Unfortunately, the Court did not address the damage issue. Instead, it re-opened the issue of infringement. Taking in new trade secret evidence submitted by Watson, the Court declared itself satisfied with Watson's assertion of using its own manufacturing process, different from the claimed process. We'll have to wait for another case for the Court's guidance on damage determination.

Courts are expected to play a leading role in IP protection. Future decisions will give further guidance as they provide specific context for the application of the statutory laws, which inevitably fall behind facts. The precedential value of cases is gaining recognition in China. The Court has required all decisions be made public promptly and encouraged the use of cases in judicial decision making. We expect more illuminating cases from courts, particularly the Court.

Originally published by Managing Intellectual Property.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.