Japan: Summary Of IP High Court Grand Panel Decision On Scope Of Patent Right With Registered Patent Term Extension

Last Updated: 15 March 2017
Article by Masaru Nakajima


The Intellectual Property High Court (IP High Court) handed down a decision on January 20, 2017, in the 11th Grand Panel case in total, i.e., Appeal Case No. 2016 (ne) 10046, in which injunction against patent infringement was sought. The issue of contention was how to determine the effective scope of a patent right the term of which was extended via patent term extension (PTE) registration based on marketing approval of a pharmaceutical product (administrative deposition). In the decision, the IP High Court ruled that the effective scope of a patent right extended via PTE registration shall not be limited to a product identical to the subject of the deposition on which the PTE registration of the patent is based, but shall extend to a product which is substantially identical to the subject of the deposition. The court also ruled that if there is a difference from the subject of the deposition, the allegedly infringing product shall be deemed to be substantially identical to the deposition subject and thereby fall within the effective scope of the patent right extended via PTE registration, provided that the difference is deemed merely a minor difference or a formal difference as a whole.

1. PTE System in Japan:

The Patent Term Extension (hereinafter "PTE") system prescribed in Japan Patent Law is intended to address a situation where there is a period during which a patented invention cannot be worked due to it being necessary to obtain an administrative disposition designated by Cabinet Order. In other words, the PTE system provides compensation for a period lost in order to obtain a disposition by allowing the duration of the patent right (or "patent term") to be extended for up to five years (Article 67, paragraph 2 of the Patent Law).

The dispositions designated by Cabinet Order prescribed in Article 67, paragraph 2 of the Patent Law1 include:

  1. registration of agrochemicals under the Agricultural Chemicals Regulation Act; and
  2. marketing approval and registration of pharmaceuticals, in-vitro diagnostics, and regenerative medical products (also referred to as "pharmaceutical drugs, etc." or simply as "drugs") under the Law on Securing Quality, Efficacy and Safety of Products including Pharmaceuticals and Medical Devices (also referred to simply as "the Pharmaceutical and Medical Device Act")2.

Accordingly, PTE registration is allowed in Japan only for patents granted for inventions relating to pharmaceutical drugs or agrochemicals (the following parts of this article focus on pharmaceutical drugs, although they also apply to agrochemicals).

One characteristic of the PTE system in Japan is that patents the terms of which can be extended by PTE registration are not limited to those claiming an active ingredient, but include other related patents such as those claiming a pharmaceutical/agrochemical composition containing such an active ingredient and those claiming a process for producing such an active ingredient. Another characteristic is that the terms of two or more patent rights can be extended by PTE based on a single administrative disposition, and the term of a single patent right can be extended two or more times by PTE registrations based on two or more administrative dispositions. In other words, it is not necessary to choose one of two or more relevant administrative dispositions as a basis for PTE registration or to choose one of two or more relevant patent rights as a subject of PTE registration.

In order to obtain a PTE registration, the patentee has to file an application for which he seeks PTE registration (hereinafter, a PTE application) at the JPO within a designated period of time, together with evidence proving that there was a period during which the patented invention could not be worked due to it being necessary to obtain an administrative disposition (Article 67bis (67-2) of the Patent Law). The JPO Examiner then examines the PCT application and, if any of the registration requirements is not satisfied, issues a reason for rejection (Article 67ter (67-3), paragraph 1 of the Patent Law). Otherwise, the PTE is granted and registered by the JPO (Article 67ter, paragraphs 2 & 3 of the Patent Law), resulting in extension of the term of the patent right.

2. Background:

Two major issues of contention have arisen in relation to the PTE system based on administrative depositions (e.g., marketing approvals of pharmaceutical products): one relates to the JPO's examination guidelines for PTE applications (Article 67ter (67-3), paragraph 1, item 1 of the Patent Law); while the other relates to the effective scope of a patent right extended via PTE registration (Article 68bis (68-2) of the Patent Law).

The issue relating to the examination criteria for PTE applications centered on how to interpret Article 67ter (67-3), paragraph 1, item 1 of the Patent Law, which prescribes that a PTE application shall be rejected when "it is not deemed that obtaining a disposition designated by Cabinet Order recited in Article 67, paragraph 2 of the Patent Law was necessary for working the patented invention". This issue was recently settled via a series of rulings rendered by the Grand Panel of the IP High Court3 and accepted by the Supreme Court4, which led to the JPO revising its examination guidelines on April 1, 2016,5 in order to clarify how this article should be interpreted.

The issue relating to the effective scope of a patent right extended via PTE registration lies in how to interpret Article 68bis (68-2) of the Patent Law, which prescribes that a patent right the term of which is extended via PTE registration "shall not be effective against any act other than the working of the patented invention for the product which was the subject of the disposition designated by Cabinet Order recited in Article 67, paragraph 2 of the Patent Law that constituted the reason for the PTE registration (when the specific usage of the product is prescribed in the disposition, the product used specifically for that usage)". Specifically, there has been controversy over how the terms "product" and "usage" in this article should be interpreted. However, there are as yet no definitive criteria or court rulings issued as to the interpretation of this article.

Against this backdrop, the Grand Panel of the IP High Court rendered a side opinion as to the effective scope of a patent right extended via PTE registration, in its decisions mentioned above6. In this side opinion, the IP High Court ruled that "in light of the purpose of the PTE registration system and that of a patent infringement action, it is reasonable to understand that in the case of a patented invention relating to an ingredient of a medicine, a patent right whose duration was extended pursuant to Article 68bis (68-2) of the Patent Law shall be effective within the scope of working of the patented invention identified by 'ingredients (not limited to API)' as the 'product' and by 'effectiveness/efficacy'and 'dosage/regimen'as the 'usage'." This ruling, if interpreted strictly, could mean that the scope of a patent right extended via PTE registration would not be effective against an allegedly infringing medicinal product which is identical to the subject medicine of the deposition in active pharmaceutical ingredient (API), efficacy/effect, and dosage/regimen, but differs slightly from the subject of the deposition only in an ingredient other than the API (such as an excipient). Thus, this ruling could render the effective scope of an extended patent right unduly restrictive. As a result, many pharmaceutical companies, mainly innovators, have expressed strong concern regarding such restrictive claim construction.

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1. The dispositions subject to this article are specifically prescribed in Article 2 of the Order for Enforcement of the Patent Law.

2. Renamed from the previous Pharmaceutical Affairs Law on November 14, 2014.

3. The decisions handed down by the grand panel of the IP High Court on May 30, 2014, (Cases Nos. 2013 (Gyo-Ke) 10195, etc.; suits rescinding trial decisions made by the JPO)

4. The decisions handed down by the third petty bench of the Supreme Court of Japan on November 17, 2015 (Cases Nos. 2014 (Gyo-Hi) 356, etc.; appeal cases against the IP High Court decisions mentioned in footnote 2 above).

5. The Examination Guidelines for Patent and Utility Model in Japan (last revised on April 1, 2016), "IX: Extension of Patent Term", Section 3.1.1, which prescribes that the Examiner shall deem that a disposition designated by Cabinet Order recited in Article 67, paragraph 2 of the Patent Law has been necessary to obtain for working of the patented invention and issue a reason for rejection under Article 67ter (67-3), paragraph 1, item 1 of the Patent Law either:

(i) when an act of manufacturing and distribution of drug products or an act of manufacturing and import of agricultural chemicals subject to the present disposition does not fall under an act of working of the patented invention pertaining to an application for registration of extension; or

(ii) in case an act of manufacturing and distribution of drug products or an act of manufacturing and import of agricultural chemicals subject to both the present disposition and the prior disposition falls under an act of working of the patented invention pertaining to an application for registration of extension, when manufacturing and distribution of drug products or manufacturing and import of agricultural chemicals subject to the prior disposition include those subject to the present disposition.

6. See footnote 2 above.

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.

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