The Standing Committee of the 13th National People’s Congress, China’s top legislature, adopted the Fourth Amendment to the 1984 Chinese Patent Law on October 17, 2020. The Fourth Amendment follows a series of amendments that were last adopted in 2008 and will become effective on June 1, 2021. Among the provisions is Article 76, establishing a new pharmaceutical patent linkage system modeled after the U.S. Hatch-Waxman Act. Article 76 of the Fourth Amendment was implemented in accordance with Article 1.11 of the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China.
Key provisions of Article 76 of the Fourth Amendment include:
- Establishment of a platform for registering patent information for marketed drugs (similar to the U.S. FDA’s Orange Book), where a holder of a drug marketing approval or patentee of a chemical drug, biological preparation, or traditional Chinese medicine can register information such as relevant patent number, status, and assignee.
- A requirement for an applicant seeking market approval for a generic drug to submit a non-infringement statement (Type I-IV), similar to Paragraph I-IV certifications made by ANDA applicants in the United States.
- A resolution mechanism in which a patentee objecting to the non-infringement statement can file an opposition at the People’s Court or the China National Intellectual Property Administration (CNIPA) within 45 days from when the National Medical Product Administration (NMPA) publishes the drug marketing authorization application, initiating an automatic 9-month stay of the generic drug regulatory approval.
- For non-infringement statements under Type I-III, the NMPA will make an administrative ruling based on a technical examination of a drug. For non-infringement statements under Type IV, the NMPA will make an administrative ruling based on a technical examination of a drug further in consideration of the decision made by the CNIPA or the People’s Court.
- The automatic stay period does not stop the NMPA’s technical examination of the drug. The NMPA will issue an administrative ruling when the People’s Court or the CNIPA: 1) determines the drug does not fall within the scope of the patent, 2) declares the patent invalid, 3) finds the parties to have settled and reached an agreement, or 4) fails to reach a verdict within the 9 months.
- 12-month market exclusivity from the date of marketing authorization for the first generic applicant entrant filing a Type IV non-infringement statement and receiving the marketing authorization.
There are several key differences between the U.S. Hatch-Waxman system and the new Chinese law. China’s patent linkage system is not limited to small molecules and also includes biologics and traditional Chinese medicine. Further, China provides a much shorter stay period of only 9 months. This 9-month stay period only applies to small molecules and excludes biologics or traditional Chinese medicine. The market exclusivity period for first generic entrants (12 months), however, is far longer than that of the United States (180 days).
The patent linkage system for pharmaceutical patents in China is just developing, and the resolution mechanism for patent disputes under Article 76 of the Fourth Amendment currently lacks detail for both generic market entrants and patentees. One notable piece of information missing in the current legislation is whether there is an obligation for the generic market entrants to notify the patentee of the non-infringement statement. In this regard, stay tuned for updates on finalized draft rules, which are expected to provide further guidance on China’s new patent linkage system.
The text of the Phase One Trade Agreement with China (2020) is available at: https://ustr.gov/sites/default/files/files/agreements/phase%20one%20agreement/Economic_And_Trade_Agreement_Between_The_United_States_And_China_Text.pdf. Article 1.11 begins on page 1-6 on Chapter 1 (page 7 of the PDF).