According to the provisions of Article 76 of the Patent Law which will take effect on June 1, 2021, where a patent-related dispute arises between the party applying for drug marketing authorization and the relevant patentee or an interested party in the process of marketing review and approval of drugs, the relevant parties may file a lawsuit with the people's court, or apply to the patent administration department for an administrative adjudication.
According to the aforementioned provisions of the Patent Law, the China National Intellectual Property Administration ("CNIPA") issued on February 9, 2021 the"Measures for Administrative Adjudication of Early Settlement Mechanism for Drug Patent Disputes for Seeking Public Comments" (the full text of which is attached hereto as a reference). The Measures provide procedural provisions on the application to the CNIPA for an administrative adjudication.
For the sake of convenience, the aforementioned Measures for Administrative Adjudication of Early Settlement Mechanism on Drug Patent Disputes for Seeking Public Comments are hereinafter referred to as "these Measures". These Measures are formulated in accordance with the Patent Law of the People's Republic of China as well as relevant laws, regulations, and rules, which shall be complied with in handling administrative adjudication proceedings involving patent disputes in the process of marketing review and approval of drugs.
Key points of these Measures are described as follows:
Selection of Administrative Adjudication or Litigation Procedure
Where a party applies to the CNIPA for an administrative adjudication of a drug patent dispute, one of the conditions that must be met is that the party has not filed a lawsuit with the people's court over the drug patent dispute previously, or the case has not been accepted by the people's court before (Point 4, Article 5 of these Measures). Where a party is dissatisfied with the administrative adjudication of the drug patent dispute made by the CNIPA, the party may file a lawsuit with the people's court within 15 days from the date of receipt of the administrative ruling (Article 17 of these Measures).
It is evident that although the relevant parties may either file a lawsuit with the people's court or apply for an administrative adjudication in accordance with Article 76 of the Patent Law, they may not apply for an administrative adjudication if any litigation has been initiated; however, if they apply for an administrative ruling in the first place, they may still file a lawsuit if dissatisfied with the administrative adjudication.
Under the existing legal framework, patent infringement cases require judicial adjudication to reach a final conclusion. Therefore, even after the administrative adjudication procedure, the patentee may still file a lawsuit after the relevant generic drug goes on sale, and an entirely different conclusion may be reached. Therefore, where a patent-related dispute arises in the marketing review and approval of drugs, the parties should fully consider the fact that administrative adjudication procedures allow expeditious resolution, whereas judicial adjudication produces the final conclusion despite its slow process, in deciding an appropriate way to protect their rights.
Distribution of Burden of Proof
Where the party petitioning for an administrative adjudication of a drug patent-related dispute is an applicant of drug marketing approval, the party shall submit a technical solution for the relevant drugs. If the technical solution involves confidential information, the technical solution and a declaration thereof shall be submitted separately (Point 3, Article 5 of these Measures). However, the CNIPA may verify the relevant evidence with the drug supervision and administration department where necessary (Article 10 of these Measures).
It can be seen that when the petitioner is the patentee or an interested party, these Measures do not require the applicant of generic drug marketing approval to submit a technical solution for the drug applied for registration. However, as it is difficult for a patentee or an interested party to provide evidence before the generic drug goes on sale, the CNIPA has to verify the relevant evidence with the drug supervision and administration department, which can be a complicated and laborious process.
Mode of Hearing
The CNIPA may, based on the request of the parties and the circumstances of the case, decide to conduct a written examination or an oral hearing. Where the CNIPA decides to conduct an oral hearing, it shall notify the parties of the time and place of the oral hearing at least three working days in advance. Where the petitioner refuses to participate without proper reason or quits midway without permission, the petition shall be deemed to have been withdrawn; where the respondent refuses to participate without proper reason or quits midway without permission, the case shall be subject to default hearing (Article 11 of the Measures).
Due to the introduction of the administrative procedures for judging "falling within the scope of patent protection," the patentee or the interested party will have to be prepared to deal with these procedures at any time. If the notification of the oral hearing is given only three working days in advance, the parties may not have enough time to get prepared. Therefore, to protect the parties' right to participate fully in the administrative procedures, we believe that it is more appropriate that the notification of the oral hearing is given one month in advance.
If you have any questions about the foregoing or if you need any assistance, please feel free to contact us.
Lee and Li Attorneys-at-Law
Lee and Li-Leaven IPR Agency Ltd.