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Life Sciences Litigation Update – December 2021

December 22, 2021

China Establishes Patent Linkage System

On July 4, 2021, China’s National Medical Products Administration (“NMPA”) and the China National Intellectual Property Administration (“CNIPA”) jointly issued Implementing Measures for the Early Resolution Mechanism for Drug Patent Disputes (for Trial Implementation) (the “Measures”), which took effect immediately.  On July 5, China’s Supreme People’s Court issued judicial interpretations regarding patent litigation (the “Judicial Interpretations”) that is expected to flow from the new law, and CNIPA issued implementing measures regarding its administrative adjudication.  The promulgation of these rules signifies the formal establishment of China’s patent linkage system.

The patent linkage rules in China generally track the patent linkage framework of the United States’ Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act, which aims to promote the research and development of innovative drugs while attempting to balance the interests of drug developers and the public’s access to lower-cost generic drugs.  Below is an introduction of the key aspects of these patent linkage rules.

Brand-Name Drug Patent Registration

Under the Hatch-Waxman Act, the U.S. Food and Drug Administration (“FDA”) maintains a publication commonly known as the “Orange Book” that identifies, among other things, patent and exclusivity information associated with approved drug products.  Pursuant to the Measures, China’s NMPA establishes and maintains the Patent Information Registration Platform for Marketed Drugs, which contains information similar to the Orange Book.  See Measures, Art. 2.  Under both the U.S. and Chinese systems, the innovator (in the U.S., a New Drug Application (“NDA”) holder, and in China, a marketing authorization holder (“MAH”)) shall register, among other things, information relating to the granted patents corresponding to the approved drug within 30 days after obtaining marketing approval.  See Measures, Art. 4; 21 CFR 314.53(c)(2)(ii).  Patents eligible for registration under the new Chinese law mainly include patents covering active pharmaceutical ingredients (“API”), drug products or formulations containing the API, and approved medical uses of approved drug products.  See Art. 5 of the Measures.  Under both the U.S. and Chinese systems, the NDA holder/MAH is responsible for the accuracy of the information, and the FDA/NMPA typically takes a hands-off approach.  See Measures, Art. 5; 21 CFR § 314.53(f).

Generic Drug Patent Declaration

Under the Hatch-Waxman Act, a generic applicant must make one of four certifications in its Abbreviated New Drug Application (“ANDA”) regarding the patents listed in the Orange Book in connection with the brand-name drug.  See 21 CFR § 314.94(a)(12).  The Chinese system is similar.  Generic applicants in China must choose one of the following four declarations—which generally track the U.S. certifications—for each listed patent: Category I, no patents are registered under the drug; Category II, the patents have expired or have been invalidated, or the applicant has obtained license; Category III, the applicant undertakes not to market the generic drug before the expiration of the patents; Category IV, the patents should be invalidated, or will not be infringed.  See Art. 6 of the Measures.  A generic applicant in China shall notify the MAH of its patent declarations and the materials supporting the declarations, including claim charts if the generic applicant declares non-infringement, within 10 working days after the generic application is docketed by the NMPA.  Id.  Similarly, in the U.S., generic applicants must provide notice of their patent certifications to the NDA holder within 20 days of the FDA accepting the ANDA for filing, and must provide a detailed statement regarding the bases for any invalidity or noninfringement positions that support the patent certifications.  See 21 CFR § 314.95(b).

Judicial and Administrative Linkage; Stay of Approval

Under the Hatch-Waxman Act, if the generic applicant has chosen option IV (that the patents should be invalidated or will not be infringed) and notified the NDA holder that it has done so, if the patent holder files an infringement suit within 45 days after receiving the ANDA notification from the generic applicant, the FDA will be prohibited from approving the ANDA for a period of 30 months from the date of the generic applicant’s notice to the NDA holder.  See 21 CFR § 314.107(b)(3)(i).

Similarly, China provides a 45-day period for the patent holder to file a lawsuit with the Beijing IP Court, but the period starts from the date the generic application is made public.  See Measures, Art. 7; Judicial Interpretations, Art. 1.  Unlike in the U.S., where the details of generic filings are maintained by the FDA as confidential, the NMPA’s Center for Drug Evaluation publishes certain details of Chinese generic applications, including the name of the applicant, the chemical name of the drug product, and the docketing date of the application.  See Measures, Art. 11.

Patent disputes before the Beijing IP Court usually take more than a year to obtain the first-instance court decision, while patent cases in U.S. federal district courts can take several years before a ruling on the merits.  In addition to the Beijing IP Court, China provides for administrative adjudication by CNIPA as an alternative forum for a patent-linkage dispute.  Administrative proceedings at CNIPA (including patent invalidation proceedings) usually finish within 6 months, which is significantly faster than the U.S. Inter Partes review (“IPR”) system, which takes 18 months to complete.  Notably, however, an administrative adjudication by CNIPA would be subject to appeal to the Beijing IP Court, whereas in the U.S., both district court and IPR decisions are both appealed directly to the U.S. Court of Appeals for the Federal Circuit.

Moreover, the stay of approval is significantly shorter in China.  There, the patent holder shall notify the NMPA and the generic applicant within 15 working days after the case is docketed by the court or CNIPA.  See Measures, Art. 7.  The NMPA then sets a one-time nine-month waiting period before the generic application can be approved.  See Measures, Art. 8.  The length of the Chinese waiting period is thus much shorter than its 30-month U.S. counterpart.

Finally, in both China and the U.S., generic applicants are permitted to file declaratory judgment suits or to seek administrative adjudication if not sued by the patentee within the 45-day objection period.  In both jurisdictions, technical/regulatory review of the generic drug application will proceed during the stay / waiting period, which applies only to approval itself.

Drug Review and Approval

            Under China’s new system, generic applications subject to litigation and the nine-month waiting period shall be processed for final administrative approval under the following circumstances: (1) the patents are invalidated; (2) the patents are not infringed; (3) the parties settle the patent disputes; or (4) no effective decisions or settlements are available upon the expiration of the 9-month waiting period.  See Measures, Art. 9.  If the patents are infringed by the generic drug, the generic application will not be processed for final administrative approval before the expiration of the patents.  Id.  In the U.S., if before the expiration of the exclusivity period, the district court decides that the patent is invalid, unenforceable, or not infringed, or the court enters an order of dismissal without a finding of infringement (for example, if the parties settle their patent disputes), the ANDA may be approved on or after the date of the judgment or order.  See 21 CFR § 314.107(b)(3)(viii).

Exclusivity Period for the Generic Applicant

Under Hatch-Waxman, the first ANDA applicant that challenges an innovator’s Orange Book patents is typically eligible for the exclusive right to market the generic drug for 180 days (during which time no other generic versions of the drug may be marketed).  See, e.g., Guidance for Industry, 180-Day Exclusivity: Questions and Answers, FDA, 2017.

China has created a similar rule, but has set a higher bar for the generic applicant and a longer exclusivity period.  In China, a generic applicant has to be: (1) the first to successfully challenge the patents’ validity, and (2) the first to be approved for marketing.  A successful challenge requires a generic applicant to submit a Category IV declaration and successfully invalidate all of the patents registered under a brand-name drug in CNIPA’s Patent Information Registration Platform for Marketed Drugs, which contains information similar to the Orange Book.  See Measures, Art. 11.  Winning on non-infringement or proving only some of the registered patents invalid are insufficient to be a successful challenge.  The successful Chinese applicant will be provided with a 12-month exclusivity period (two times as long as the U.S. exclusivity period) starting from the date of the generic drug’s approval.  Id.


Chinese regulators are only starting to flesh out the country’s new drug patent linkage system.  China has taken many cues from the U.S. Hatch-Waxman system, but the differences may be important.  Additional details will be come as the Beijing IP Court and the CNIPA adjudicate disputes arising under the system.  In the meantime, pharmaceutical companies should adjust their strategies to use the new system to better protect their rights and to minimize business and legal risks in China.