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Taipei High Administrative Court's Latest Ruling: Patent Information of "Category II New Drugs" Allowed to be Submitted in Patent Linkage Registration System
Regarding the scope of the "new drugs" for which the patent information thereof can be submitted in the Patent Linkage Registration System under Article 48-3 of the Pharmaceutical Affairs Act ("PAA"), the competent authority (i.e., the Food and Drug Administration (the "TFDA") under the Ministry of Health and Welfare) previously determined that it is limited to the pharmaceutical preparations with "new active ingredient", "new therapeutic combination" or "new administration route", as stipulated under Article 7 of the PAA (i.e., "New Drugs" or "Category I New Drugs"), and does not include pharmaceutical preparations with "new dosage form", "new usage dose" or "new unit strength" (i.e., "Category II New Drugs"). However, when the TFDA first launched the Patent Linkage Registration System, accounts were already set up thereby specifically for the marketing authorization ("MA") holders of Category II New Drugs to submit their patent information in such system. It is our firm's opinion that the TFDA's subsequent decisions to delete such accounts and remove the patent information of such Category II New Drugs from the Patent Linkage Registration System (the "Decisions") are in fact in contravention of the legislative intent of such system. Lee and Li then represented the affected MA holders to appeal against the Decisions and to initiate administrative actions against the TFDA.
Regarding this highly contentious issue, on December 29, 2022, the Taipei High Administrative Court, in response to the two administrative actions (Ref. Nos. 110-Su-844 and 110-Su-1060) instituted by the plaintiffs represented by Lee and Li, overturned the TFDA's Decisions as well as the subsequent determinations on the administrative appeals against the Decisions, and ordered the TFDA to reinstate the patent information of the plaintiffs' Category II New Drugs in the Patent Linkage Registration System.
The key opinions of the two judgments are summarized as follows:
I. The "new drugs" referred to in Chapter 4-1 of the PAA regarding the Patent Linkage Registration System are not limited to the new drugs defined under Article 7 of the PAA (i.e., Category I New Drugs):
Considering the circumstances where the Patent Linkage System (i.e., Chapter 4-1 of the PAA) was introduced (i.e., when Taiwan’s regulations were being overhauled for the purpose of boosting Taiwan's chance of being accepted into the Trans-Pacific Partnership, TPP), legislators have no intention to limit the scope of the "new drugs" referred to under Chapter 4-1 of the PAA to those defined under Article 7 of the PAA, i.e. pharmaceutical preparations with "new active ingredient", "new therapeutic combination" or "new administration route", let alone those under Subparagraph 1, Article 4 of the Regulations for Registration of Medicinal Products. The TFDA's Decisions are erroneous as they mistakenly determined that the plaintiffs' Category II New Drugs could not be disclosed in the Patent Linkage Registration System for not being the new drugs defined under Article 7 of the PAA (i.e., Category I New Drugs).
II. The purpose of the Patent Linkage System is to balance the rights and interests of manufacturers of new drugs and generic drugs; limiting the new drugs that may disclose their patent information in the system will compromise the transparency of patent information and is in contravention of the legislative purpose of the system:
The purpose of the Patent Linkage System is to balance the investment made by the manufacturers of new drugs in research and development and to promote reasonable market competition between new drugs and generic drugs. Through the disclosure of patent information by the manufacturers of new drugs, manufacturers of generic drugs will be able to learn the patent status of the news drug through transparent patent information; such mechanism encourages the manufacturers of generic drugs to design around the patent, and can help clarify infringement concerns before the release of generic drugs. Under the mechanism, the 12-month exclusivity period granted to the first generic drug that successfully challenges or designs around a patent on one hand protects the R&D interests of new drugs and on the other promotes the market competition of generic drugs. Hence, it is unnecessary to limit the scope of new drugs that can disclose patent information in the Patent Linkage Registration System to those defined under Article 7 of the PAA. The unnecessary restriction will only compromise the transparency of patent information, which not only does not help strike the abovementioned balance, but will even induces more disputes over patent rights, and may even cause the suspension of sale of generic drugs due to the infringement issue, which will further affect patients' rights to use the drugs.
III. The Patent Linkage System has a mechanism allowing for public review of patent information, and the competent authority has no authority to examine or control the patent information. If the competent authority is allowed to unilaterally remove any patent information from the Patent Linkage System, the mechanism and design aimed to balance market competition will be completely compromised
Article 48-3 of the PAA and Paragraph 1, Article 48-4 of the PAA provide that if the patent information disclosed to the public is not consistent with the actual status thereof, in order to reinstate the correct status of the public disclosure, Article 48-6 of the PAA stipulates that the MA holder of new drug has the obligation to change or delete the submitted patent information within a certain period of time. Article 48-7 of the PAA establishes a mechanism for public inspection of patent information, which stipulates that any person may file a complaint in this regard with the competent authority and the competent authority shall forward the information to the MA holder of new drug for a response and making the change or deletion of the patent information of new drug. Based on the foregoing, there is no room for the competent authority to examine or control the patent information. If any patent information disclosed in the Patent Linkage Registration System is in accurate, it will mainly be addressed via public review, and the legal effect thereof does not include the removal of such patent information by the competent authority. Therefore, the Decisions clearly represent a premature intervention by the healthcare competent authority in the dispute between manufacturers of new drugs and generic drugs, and such intervention does not necessarily protect the patent of the new drugs and deprives the manufacturers of generic drugs of the opportunities to challenge or design around the patent of new drugs in order to be granted a certain period of exclusive sale. The Decisions completely compromise the mechanism and design aimed to balance the market competition of generic drugs through the transparent disclosure of patent information of new drugs in the Patent Linkage Registration System.
Such rulings are not only a victory for the two MA holders that we represented, but will also have a significant impact on the rights of all the pharmaceutical companies that market Category II New Drugs in Taiwan. Please do not hesitate to contact us if your company wishes to submit the patent information of your Category II New Drugs in the Patent Linkage Registration System.