China's Patent Linkage System

China’s Patent Linkage System is a legal framework that links the regulatory approval of generic drugs with existing patent rights. Its purpose is to protect patent holders by preventing the premature launch of generic medicines before the expiry of valid patents.

Under this mechanism, pharmaceutical companies applying for approval of a generic drug must declare whether their product may infringe an existing patent. If a patent holder believes infringement is likely, they can file a legal action against the generic manufacturer to stop the launch or seek damages.

This system aims to strike a balance between safeguarding patent owners, encouraging innovation and investment in the pharmaceutical sector, and ensuring that the public has access to affordable, high-quality medicines. It came into effect in China on June 1, 2021, and is expected to significantly shape the pharmaceutical landscape.

Legal Basis

The Patent Linkage System is primarily grounded in China’s amended Patent Law, effective June 1, 2021. Key provisions include:

• Article 76 – Requires applicants for drug marketing approval to notify the patentee if the drug may fall within the scope of patent rights. The drug authority must also notify the patentee.
• Article 77 – Allows the patentee to file a lawsuit in the People’s Court within 30 days of notice. The court must issue a ruling within 9 months.
• Article 78 – States that if litigation is initiated, the drug cannot be approved for marketing until the dispute is resolved or the patent expires.

Additional implementing rules include:

• Measures for the Implementation of the Drug Registration Regulations,
• Measures for the Early Resolution Mechanism for Drug Patent Disputes, and
• Guidelines for the Implementation of the Early Resolution Mechanism for Drug Patent Disputes.

Patent Term Extension (PTE)

To offset the time lost in regulatory review, the China National Intellectual Property Administration (CNIPA) may extend the term of patents covering new drugs approved in China.

• The extension cannot exceed 5 years.
• The total effective patent term cannot go beyond 14 years from the drug’s approval date.
• PTE applies to patents on products, preparation processes, and medical uses of innovative drugs, including chemical, biological, and traditional Chinese medicines.

Conditions for PTE

• Application must be filed within 3 months of drug approval.
• If multiple patents cover a drug, only one may be extended.
• If one patent covers multiple drugs, PTE may only apply to one of them.
• The patent must not have previously been granted PTE.
• At least 6 months of patent protection must remain when applying.

The draft rules clarify that PTE is calculated as the period between the filing date of the patent and the date of first marketing authorization in China, minus 5 years. The extension does not broaden the scope of patent protection but is limited to the approved drug and indication.

Retroactivity is limited: the PTE rules took effect on June 1, 2021, but it remains unclear how they apply to drugs approved before that date.

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