China’s new pharmaceutical patent term compensation system

China has recently implemented significant amendments to its patent law effective January 20, 2024, including the introduction of a novel pharmaceutical patent term compensation system. This reform is especially pertinent to the pharmaceutical industry and comes subsequent to the adoption of the 2023 Detailed Rules for the Implementation of the Patent Law and the Guidelines for Patent Examination under the updated Chinese Patent Law.

These alterations, impacting various stakeholders within the sector, bring forth a more nuanced approach to patent protection, particularly concerning innovations in new drugs. Ming Liu, a patent attorney at Purplevine IP in Beijing, clarified that the term “new drug-related invention patent” encompasses patents related to new drug products, methods of drug preparation, and medical use, as defined by the regulations.

Liu underscored the comprehensive protection provided by the compensation system, extending not only to patents for drug products but also to those for drug use and preparation methods. The objective is to safeguard the rights of innovative drug manufacturers, thereby fostering continued innovation within the pharmaceutical domain.

According to Liu, a prolonged compensated patent term for holders of new drug patents translates into increased profits through market exclusivity, thereby stimulating innovation in the pharmaceutical sector. Conversely, for manufacturers of generic drugs, an extended compensation period poses a significant delay in the launch of generic alternatives, directly impacting their economic interests.

The method of calculating the compensation period, as outlined in Chinese Patent Law and its regulations, aims to strike a balance between the interests of innovative drug inventors, generic drug manufacturers, and the general public.

Detailed in Rules 80 to 84, the pharmaceutical patent term compensation delineates the applicable scope, calculation methods, protection parameters, compensation criteria, and examination procedures.

Further clarification from the guidelines defines “new drugs” as innovative drugs approved for market release by the National Medical Products Administration (NMPA), as well as improved new drugs meeting specified criteria. Specifically, the guidelines stipulate that “improved new drugs meeting specified criteria” pertain to those that have been recognized in certain categories through a registration certificate issued by the NMPA, which may include biological products and Traditional Chinese Medicines (TCMs).

In response to these regulatory changes, Liu advises innovative drug companies to strategically plan their patents in China, considering scenarios where one patent may cover multiple drugs or vice versa. Additionally, patent holders are encouraged to diligently monitor deadlines and promptly apply for Patent Term Extensions (PTE) within three months of new drug market approval in China.

For generic drug companies, Liu recommends staying abreast of the patent extension status of innovative drug companies and adjusting project timelines accordingly. Utilizing patent information analysis to assess infringement risks and pursuing enhanced imitation strategies can aid in mitigating legal challenges.

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– You could see How To Register Trademark in China here.

– You could visit here to see Procedure of Trademark in China.

– You could visit here to check Required documents of filing trademark in China.

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