Beginning in earnest in 2017 with the issuance of the "Opinion on Deepening the Reform of the Review and Approval System and Encouraging the Innovation of Drugs and Medical Devices", China established a reform plan to improve its IP regime. Since then, China has continuously and gradually revised its patent system. For example, last year, China amended its Patent Law and signed the US-China Phase One Trade Deal committing to make several improvements to its patent system. This year, China's new Patent Law came into force on June 1st. To implement the legal and administrative reforms, the China National Intellectual Property Administration ("CNIPA") has published a number of documents discussing its proposals. This article summarizes the CNIPA's proposals relating to patent term adjustment and patent term extension.

Some of CNIPA's Proposal Documents

Some of the important proposal documents are:

  • Recommendations for Amendments to the Implementing Regulations of the Patent Law (Draft for Comment) 《专利法实施细则修改建议(征求意见稿)》(the "Draft Implementing Regulations") published on 27 November 2020;
  • an "Interim Measures on Disposition of Examination-Related Activities Post Patent Law Implementation" (CNIPA Notice Number 423)《关于施行修改后专利法的相关审查业务处理暂行办法》的公告（第423号）(the "Interim Measures") published on 24 May 2021; and
  • draft amendments to the Patent Examination Guidelines《专利审查指南修改草案(征求意见稿)》(the "Draft Guidelines") published on 3 August 2021.

The CNIPA's Draft Implementing Regulations have not yet been adopted by the State Council as regulations. As such, they may be viewed as recommendations to the State Council. Although the CNIPA is not a legislation-drafting agency, the CNIPA can take on an important role in the drafting process. The US Patent and Trademark Office has shared an unofficial English translation of the Draft Implementing Regulations.

The Interim Measures appear to have a legislation status as they have been listed under the legislative category of "public notice" (公告) on the official Chinese government website www.gov.cn.

The Draft Guidelines are currently open for public consultation and the consultation period will end on 22 September 2021.

CNIPA's Proposal for Patent Term Adjustment

Article 5 of the Interim Measures provides that "for utility patents issued after 1 June 2021, the patentee may, pursuant to the second paragraph of Article 42 of the new Patent Law, submit a request within three months from patent issuance date for patent term adjustment." [Machine translation using Google Translate]

Part IV, Chapter 9 of the Draft Guidelines explains that patent term adjustment is calculated as follows:

Patent Term Adjustment = [CNIPA delay] minus [Applicant delay]

CNIPA Delay. The Draft Guidelines suggest that days of unreasonable delay caused by the CNIPA are calculated based on: "the patent issuance date minus either (i) the date after four years from the application filing date or (ii) the date after three years from the entry of substantive examination, whichever is later." [Machine translation using Google Translate] The application filing date is the actual filing date in China and not the priority date. For PCT applications, the application filing date refers to the national phase entry date. For divisional applications, the application filing date refers to the date a divisional application was submitted to the CNIPA. CNIPA delay does not include "a stay proceeding, a preservation proceeding, an administrative litigation proceeding, and re-examination procedures." [Machine translation using Google Translate]

Applicant Delay. The Draft Guidelines suggest that unreasonable delay caused by the applicant includes:

  • failure to respond to a CNIPA notice by a specified deadline;
  • delay caused by deferred examination;
  • delay caused by restoration of right; and
  • delay in national entry of a PCT application.

Patent term adjustment is not currently available in Canada but Canada will have to add provisions relating to patent term adjustment to comply with its obligations under the Canada-US-Mexico Free Trade Agreement ("CUSMA"). CUSMA requires that patents granted more than 5 years from the filing date or 3 years from the request for examination date may be eligible for patent term adjustment.

On a related note, as part of the implementation of the patent term adjustment obligation in the CUSMA, Canada recently published proposed amendments to its Patent Rules aiming to encourage conclusion of patent application prosecution in a timely manner. The proposed amendments include certain limits on patent application processing and fees to discourage lengthy applications, e.g. excess claim fees and a limited number of Examiner's Reports before a request for continued examination (with an associated fee) is required.

CNIPA's Proposed Approach to Patent Term Extension

Article 6 of the Interim Measures provides that patent term extension may be available if a patentee submits a request for it within three months of approval of the new drug marketing authorization from the National Medical Products Administration ("NMPA").

Part IV, Chapter 9 of the Draft Guidelines provides that the term of patent term extension is calculated as follows:

Patent Term Extension = [the date of market authorization] minus [the patent filing date] minus [5 years]

Patent term extension is capped at a maximum of five years and is subject to a 14-year limit for the total patent valid term after the new drug receives market authorization.

The Draft Guidelines provide that only certain drugs are eligible for patent term extension. Such drugs include:

  • Class 2.1 – limited to esters or salts of a known active ingredient;
  • Class 2.2 – vaccines;
  • Class 2.3 – traditional Chinese medicine with new indication; and
  • Class 2.4 – chemical drugs with new indication.

In comparison, patent term extension of up to two years has been available in Canada since 2017 for patents pertaining to new medicinal ingredients or new combinations of medicinal ingredients for human or veterinary use, as a result of Canada's implementation of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

More Developments

China has been continuously and gradually revising its patent system. This article only covers two of the many legislative and administrative reforms that are being implemented. Other reforms include a patent linkage system, measures to enhance patent quality, and a registrar of open patent licensing and related agreements. It is truly an exciting time to monitor the changing landscape of China's patent system and plan strategies that take advantage of such changes.

**This article was originally published by The Lawyer's Daily a division of LexisNexis Canada Inc.

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