Improve the Patent Linkage System in Taiwan

Relevant legal adjustments have been undertaken in recent years to meet the regulatory standards of the CPTPP in order to promote Taiwan’s membership in the Comprehensive and Progress Agreement for Trans-Pacific Partnership (CPTPP). Intellectual property rights, in particular, have been identified as a high-priority topic for legal amendments.

Taiwan proposed draft amendments to the Copyright Law, the Trademark Law, and the Patent Law at the start of 2022. It is planned to add Article 60-1 to clearly establish that the patentee of a new drug may file a lawsuit in the examination procedure of a generic drug in order to improve the patent linkage system and create a defined foundation of claims for relevant litigation under the Patent Law. If the patentee does not file a case, the generic medicine license applicant might file a declaratory suit as soon as possible to determine whether there is an infringement dispute.

Below is a brief overview of Taiwan’s current patent linkage system as well as the highlights of the Patent Law amendment:

Taiwan’s current patent linkage system

The patent linkage system ties a generic drug’s right to obtain a drug license to its infringement of new drug patents, and it gives new drug and generic drug operators a certain amount of time to resolve patent issues. The central health authority subsequently approves or rejects the generic drug manufacturer’s drug license application on this basis, in the hopes that patent infringement challenges will be settled first before a generic drug is released, with no impact on drug use or public health.

Since Article 18.53 of the CPTPP stipulates that a patent linkage system be provided before a drug license is granted in order to resolve disputes about the validity or infringement of drug patents in a timely manner, a dedicated chapter concerning “the patent linkage of drugs” was added to the Pharmaceutical Affairs Law in 2018 and took effect on August 20, 2019.

The effect of introducing Article 60-1 to the Patent Law

It’s uncertain whether a new drug patentee can use the anterior of Article 96, paragraph 1 of the Patent Law to file a lawsuit against a generic drug license applicant to stop or prevent infringement under the current patent linkage system because the patent linkage system stage merely clarifies potential infringement disputes in advance while no actual damage has occurred.

The Patent Law is amended to particularly provide that “if a drug license applicant has made the declaration concerning the registered patents on the approved new drug of the new drug license holder pursuant to Article 48-9, Subparagraph 4 of the Pharmaceutical Affairs Law, the patentee may request the elimination or prevention of infringement pursuant to Article 48-9, Subparagraph 4 of the Pharmaceutical Affairs Law, the patentee may request the elimination or prevention of infringement pursuant to Article 48-9.”

Under the current Pharmaceutical Affairs Law, if the patentee of a new drug receives notice of a generic drug license application in which the applicant claims that the new drug’s patents should be revoked or that the generic drug does not infringe on the new drug’s patents, the new drug patentee is required to file a lawsuit within 45 days of receiving notification to suspend the issuance of the generic drug.

However, if the patentee of the new drug fails to file a lawsuit within the above-mentioned time frame, even though the procedure for issuing the generic drug license is not put on hold, the new drug patentee may file an infringement lawsuit against such patent practice in accordance with Article 96, paragraphs 1 and 2 of the Patent Law, when the generic drug manufacturer engages in acts such as sales or offers for sale.

According to the provisions of the Pharmaceutical Affairs Law, a patentee of a new drug’s scope of registration is limited to inventive patents on substances, compositions, formulations, or medicinal applications, not the drug’s “manufacturing method.” Because the drug’s manufacturing method may also be protected, a generic drug’s patent issues might potentially include not only registered but also unregistered patents.

There is no reason why the patents asserted by the new drug patentee should not also include patents registered under the Pharmaceutical Affairs Law and those not registered under the same law in order to resolve potential infringement disputes between a new drug and a generic drug in the same litigation procedure to save the parties’ time and money.

If the patentee of a new drug only files an infringement lawsuit for a part of the patents registered in the new drug license, the generic drug license applicant may also file a declaratory suit to prove if there is any infringement for other patents that have been registered but not asserted and those that have not been registered.

Article 60-1 of the Patent Law was introduced to explain the basis of claims in related actions, based on the “patent linkage system” under the Pharmaceutical Affairs Law. This is advantageous in terms of removing practical implementation issues and barriers, and the subsequent operation and advancements in practice demand the patentees of novel medications and generic drug license applicants’ continuous attention.