Supreme People’s Court promulgates judicial interpretation on patent linkage litigation

On 4 July 2021 the National Medical Products Administration and the China National Intellectual Property Administration (CNIPA) jointly released measures to implement an early resolution procedure for pharmaceutical patent disputes. The following day the Supreme People’s Court promulgated provisions on several issues concerning how the law is applied in civil case trials involving patent disputes related to pharmaceutical registration applications. The judicial interpretation, which provide clarity on the Chinese patent linkage litigation regime, entered into force on the date of promulgation.

The 14-article judicial interpretation stems from a 19-article draft, which was released for public comment on 29 October 2020. The substantial contents of the 2020 draft’s provisions with regard to jurisdiction, eligibility of parties, case suspension, confidentiality obligations of the parties, requirements for technical solutions submitted to court, behaviour preservation and res judicata remain intact in the finalised text.

The judicial interpretation is as follows:

• Article 1 explicitly categorises pharmaceutical patent linkage litigation as a "dispute where a declaratory judgment is sought as to ascertain whether the generic drugs seeking marketing approval falls within the protection scope of patent rights".
• The first instance of pharmaceutical patent linkage litigation falls under the jurisdiction of the Beijing IP Court (Article 1).
• ‘Eligible litigating parties’ refers to the patentee, stakeholder and applicant seeking the drug marketing approval (Articles 3 and 4).
• In principle, the court must dismiss the party’s application to suspend a patent linkage litigation, provided that the application is based on the ground that the CNIPA has accepted an application for the declaration of invalidation of the relevant patent right (Article 6).
• The parties must assume the obligation of confidentiality for the business secrets or other business information obtained in the litigation (Article 8).
• Where the drug-related technical solutions submitted to court by the applicant seeking the drug marketing approval is obviously inconsistent with the technical materials declared to the National Medical Products Administration so as to obstruct court proceedings, the applicant is subject to fines, detention or criminal prosecution based on the severity of the circumstances (Article 9).
• In principle, the court must dismiss the patentee or stakeholder’s behaviour preservation request to prohibit a drug marketing application or administrative review and approval (Article 10).
• In a patent infringement suit or a suit seeking declaratory judgment of non-infringement involving the same patent right and the same drug applied for registration, where the party argues that the determination of whether the technical solution of a generic drug at issue falls within the protection scope of the relevant patent must be based on an effective judgment of a patent linkage suit (res judicata). In principle, the court must uphold this claim, unless there is evidence to prove otherwise (Article 11).

Exercising the right of action

Article 4 provides that:

Where the patentee or stakeholder fails to file a lawsuit within the prescribed time limit, the applicant seeking the drug marketing approval may initiate a lawsuit before the court, requesting a declaratory judgment being made as to affirm that the drug applied for registration does not fall into the protection scope of the relevant patent.

Further, the judicial interpretation provides the order in which the parties exercise their rights of action: the patentee or stakeholder, followed by the applicant seeking the drug marketing approval. This approach is conducive to avoiding parallel litigation, which could complicate procedures and cause unreasonable delays in drug approval.

Materials for filing the case

Article 3 states that:

Where the patentee or stakeholder initiates, in accordance with Article 76 of the Patent Law, a proceeding before the court, the patentee or stakeholder must submit, in accordance with Article 119.3 of the Civil Procedure Law, the following materials: (1) the relevant patent information registered on the platform created by the competent administrative department under the State Council, including the patent title, patent number, and related claims; (2) The information of the drug applied for registration and published on the platform created by the competent administrative department under the State Council, including the name, type and the registration category of the drug, the correspondence between the drug applied for registration and the listed drug involved, among others; and (3) The fourth types of declaration made by the applicant for drug marketing approval and the basis for the declaration.

The judicial interpretation offers operational guidance in terms of preparing the technical materials, with all the information mentioned in the preceding paragraph available on the China Listed Drug Patent Information Registration Platform.

Correspondingly, in Article 6 the measures provide that the generic drug applicant is obliged to perform the notification obligation. The article reads:

The national drug evaluation agency must make the application and declaration available to the public so that such information is accessible on the China Listed Drug Patent Information Registration Platform, within 10 working days since the acceptance of the generic application. The applicant for the generic drug must notify the holder of the marketing approval of the corresponding declaration and the basis thereof.

With the availability of technical evidence on publicly accessible platforms, the burden of proof for the patentee or stakeholder can be alleviated. According to answers to questions from journalists, which accompanies the Judicial Interpretation release, Article 3 is also applicable to the applicant seeking drug marketing approval.