Having some similarities with that of the generic drug framework under the Hatch Waxman Act in the US, the initiation of China’s patent linkage system will affect the generic drug industry in China. Introducing PTE allows the extension of the 20-year term of the patent. This extension is done to compensate for the period being used for the process of market approval being undertaken for a patent. This period is generally used to check the efficacy of the pharmaceutical product thereby losing out a lot of period in the 20-year term. This PTE will be effective from June 2021.

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Paragraph 3 of Article 42 of the Amended Patent Law says

• 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 an invention related to the new drug for which 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.

The draft PTE rule explains the PTE and its applicability. It states that the PTE is available to the patents related to products and preparation methods or medical use of new drugs. The chemical drugs, biological products, and Chinese traditional medicine will also come under the purview of PTE. The draft explains "New drugs" as active ingredients of new drugs that are approved for marketing for the first time by the regulatory authority. Therefore those patents covering the active pharmaceutical ingredients approved for marketing for the first time in China will be eligible for PTE.

The PTE period and the API

As specified, the patent must not have been granted the PTE before, thereby giving more impetus to the formulation comprising new API or the medical use of new API. The API can be any such chemical compound or the biological product or even traditional medicines. But specifying the use of new API, it is unclear about the interpretation which the API can have. Probably, the bigger question is the drafting of the claims in the patent and the inclusion of API in it, and whether the API has to be specifically recited in the claim. 

As specified earlier regarding the extension of the patent term, not exceeding 5 years, PTE will equal the period which elapsed between the application date of the underlying patent and the date of the first marketing authorization of the drug in China, reduced by a period of five years. The PTE does not extend any scope of the patent and the scope remains limited to the new drug and indication, therefore the scope of PTE is much narrower than the underlying patent.

The amendment is silent on the calculation of the PTE for those drugs whose approval has been given in the foreign country before its approval in China. The draft primarily substantiates itself on the notion of the market approval date in China, thereby giving more benefit to those drugs having a later approval date, but is silent on the approval in the foreign country.

The amendment also specifies the requirement 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, the PTE of the patent is possible for one drug only.
• The patent must not have been previously granted PTE. Therefore, the PTE will be applicable per pharmaceutical product per patent.
• The remaining protection period of the patent when filing PTE is no less than 6 months.

The draft rule is silent on whether the patentee can challenge the decision on PTE if it is not satisfied. Moreover, the draft does provide a remedy to the third party for requesting to invalidate the PTE and the invalidation decision can be appealed to the Court. As per the retroactivity is concerned, the PTE will be effective on 1 June 2021 but it is not clear with regards to the applicability of the drug being approved before the said date or with the patent granted.

Author: Saransh Chaturvedi an associate at Global Patent Filing,  in case of any queries please contact/write back us at support@globalpatentfiling.com.