In China, since 1993 the term of a patent for invention (equivalent to utility patent) has been 20 years.

The Fourth Amendment to the China Patent Law ("Amended Patent Law") adopted in October 2020 introduced a brand-new Patent Term Extension (PTE).

According to the Amended Patent Law, PTE allows extension of the 20-year term of a patent related to a new pharmaceutical product approved for marketing in China to compensate for unreasonable curtailment of the effective patent term as a result of the marketing approval process.

In particular, Paragraph 3 of Article 42 of the Amended Patent Law stipulates that:

  • 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 invention related to the new drug for which a marketing approval is obtained in China, at the request of the patentee, and
  • The patent term extension shall not exceed 5 years, and the resulting total effective patent term shall not exceed 14 years from the approval for marketing of the new drug.

New PTE in effect from June 2021

The new PTE will come into effect on June 1, 2021 according to the Fourth Amendment.

Specific rules for implementing PTE were proposed in the Draft Amendments to the Implementing Regulations of the China Patent Law released by CNIPA on November 27, 2020. Below is a summary of the draft PTE rules.

Summary of draft PTE rules

  1. Patent types and drug types eligible for PTE:
  • PTE is available to patents related to products, preparation methods or medical uses of new drugs.
  • PTE is available to chemical drugs, biological products and Chinese traditional medicine that are approved for marketing in China.
  • "New drugs" here means active ingredients of new drugs that are approved for marketing for the first time by the regulatory authority (i.e. NMPA of China).

Accordingly, it can be understood that patents eligible for PTE are those covering an active pharmaceutical ingredient that are approved for marketing for the first time in China ("new API"), pharmaceutical composition or formulation comprising the new API, method for preparing the new API or medical use of the new API. The new API can be a chemical compound, a biological product or a Chinese traditional medicine. The medical use of the new API shall be in the form of Swiss type claims, as treatment and diagnosis methods are not patent eligible in China.

From these draft rules, it is not clear how the new API is to be interpreted and how the claims of the patent shall be drafted in order for the patent to be eligible for PTE. For instance, it is unclear whether a new ester or salt of previously approved acid is eligible for PTE, and whether the API must be specifically recited in the claim.

  1. Calculation of PTE: PTE = (China marketing approval date – the filing date of the Chinese patent) – 5 years.

According to the draft rules, PTE will equal the period which elapsed between the application date of the underlying patent and the date of the first marketing authorisation of the drug in China, reduced by a period of five years. But PTE shall not exceed 5 years, and the resulting total effective patent term shall not exceed 14 years from the approval for marketing of the new drug. We understand that the calculation of PTE is relatively easy and simple, similar to that of supplementary protection certificate (SPC) in the European Union.

As many drugs are not launched in China as quickly as in other countries such as the USA, an interesting question is how the PTE will be calculated if the drug has been approved in a foreign country like in the USA long before its approval in China. According to the draft method of calculating PTE, which depends heavily on the marketing approval date in China, a later approval of the drug in China may get the patent a longer PTE, which may seem unreasonable to some. More specific rules are needed for clarification of the PTE calculation.

  1. Scope of protection during PTE: the protection scope of PTE is limited to the new drug and indication as approved.

The scope of PTE is much narrower than the underlying patent and is limited to the approved drug and the approved indication according to the draft rules. It is not clear whether there is a certain expansion of the scope, for example under a doctrine of equivalents.

  1. Requirements of the patent and drug for PTE:
  • Time limit: PTE application must be filed within 3 months after regulatory approval.
  • If the drug is covered by multiple patents, only one patent can be extended.
  • If a patent covers multiple drugs, PTE of the patent is possible for one drug only.
  • The patent must not have been previously granted PTE.
  • The remaining protection period of the patent when filing PTE is no less than 6 months.

Basically, according to the draft rules, only one PTE is permissible per pharmaceutical product per patent, which is similar to the USA PTE.

Regarding the time limit, we feel the remaining 6-month protection period of the patent when filing PTE is too strict. For the patent that will expire soon after the drug is approved, the patentee should be allowed to file PTE application before patent expiration.

  1. Challenge to PTE decision: the draft rules do not mention whether the patentee can challenge the CNIPA's decision on PTE if the patentee is not satisfied with the decision. It is likely that the patentee can appeal the PTE decision to a certain department (e.g. the Patent Re-examination and Invalidation Department) and then to the court. According to the draft rules, if the PTE is granted, another party can request CNIPA to invalidate the PTE decision and the invalidation decision can be appealed to the court.
  2. Retroactivity of PTE:  PTE will become effective as of 1 June 2021. It is not clear at present whether PTE is available to drugs approved before 1 June 2021 or the  patents granted before 1 June 2021. In our opinion, it is likely that PTE is not retroactive to drugs approved before 1 June 2021, but may be available to the patents granted before 1 June 2021.

We expect that the draft PTE rules will be approved soon along with the draft amendment to the Implementing Regulations of the Patent Law, and that CNIPA will probably release more rules on PTE in the Patent Examination Guidelines.

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.