Good News in China – Faster Approval for Innovative New Drugs Is on the Way

For decades in China, patient access to overseas developed innovative drugs has been partially hampered by the requirement that data be supplied from clinical trials conducted in China (this after the innovator had already completed multiple phases of clinical trials in their country of origin).  Unfortunately, this requirement adds significantly to the time period for approval which can often take as long as eight years.  As a result, China’s Food and Drug Administration (CFDA) has a tremendous backlog of drug approval applications which, in June, stood at 6,000 (compared to a high of 22,000 in 2015).  As a result, between 2001 and 2016, regulators in developed markets approved 433 new drugs whereas China approved just over 100.   Taken together, all of this helps explain why a new drug often appears on the market in China anywhere from five to seven years later than in Europe or the U.S.

Earlier this month, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued a guideline that allows data from overseas clinical trials to be used directly in the innovative drug and medical device application process.  The guideline notes that companies looking to register innovative drugs or medical devices will need to provide clinical trial data related to any racial divergence relevant to the Chinese market.  Regardless, this change is significant and should considerably shorten the time period for approval of future drugs by several years.  However, one concern is that the guideline did not set a timetable for implementation.

The guideline also includes other measures to speed up approvals for clinically needed drugs and equipment, establish a compulsory licensing system and to make it easier for research institutions to conduct clinical trials.  Additionally, the Chinese government has said that it is also exploring a new system linking drug approvals to patent status (a patent linkage system). 

This announcement comes as China aims to boost its drug industry and shift from generic drugs towards more innovative medicines and medical equipment.  China has the second largest drug market next to the U.S.  The changes proposed by the guideline are intended to make China’s industry more competitive and help meet the clinical needs of its nearly 1.4 billion people, for whom high costs and access to health care are significant issues.

This post was written by Lisa Mueller.

Property Rights Protection Guideline Released in China

On November 27, 2016, China released a guideline outlining steps for the “better” protection of property rights (Guideline).  The Guideline is referred to as the “Opinion of the Central Committee of the Communist Party of China (CRC) and the State Council on improving the property rights protection (PRP) system and lawfully protecting property rights”.  Property rights in China include creditor’s rights, stock rights and intellectual property rights. 

The Guideline is the first state-level guideline on property rights protection and its purpose is to raise social confidence and promote justice in China.  While not rule of law, the Guideline is important as it is a centrally-issued policy.  Policy plays an enormously important and influential role in China and embodies and conveys certain values and often obtains broad results relatively quickly while final law is promulgated.

According to the Guideline, China will provide equal, comprehensive and law-based protection to all kinds of property rights, including intellectual property, and encourages the participation of the public in the process.  Although China has worked over the years to improve property rights, many problems still exist, including infringement on private property by public power (governments) and weak enforcement of intellectual property rights.  The Guideline states that securing property rights will help raise the public’s sense of wealth security, raise social confidence, foster positive expectations while raising the “impetus for entrepreneurship and innovation by various economic entities”.  Moreover, the Guideline further notes that improving such protection will facilitate social justice while maintaining healthy economic and social development.

According to the Guideline, the “essential strategy” that will be used to strengthen PRP is to “comprehensively” promote the “Rule of Law” (rather than the “Rule of Men”).  As a result, ten (10) tasks will be carried out.  One of these tasks involves reinforcing intellectual property (IP) rights (IPRs).  With respect to IPRs, the Guidelines lists several sub-tasks that need to be completed.  These include:

1.      Increasing punishment for infringement of IPRs as well as the upper limits of damages available once liability for such infringement has been established.  The Guideline states that the concept of punitive damages should be explored and established.  Moreover, compensation for infringement should also cover the reasonable expenses paid by the patent holder to stop the infringement.

2.      Establishing a mechanism to collect information on the source of counterfeit products.  Additionally, companies and individuals found to have infringed IPRs will have such information incorporated into their credit records.  Finally, improving the transparency of IP related administrative punishment procedures will be promoted.

3.      Improving the procedures of IPR trials and actively increasing the role of the intellectual property courts.  Moreover, the Guideline suggests consolidating three judicial procedures (civil, criminal and administrative) into one system to enhance the cooperation between administrative and criminal enforcement.

4.      Improving the enforcement mechanisms for foreign-originated intellectual property.  Specifically, the Guideline suggests strengthening the international cooperation of criminal enforcements and the intensity of investigations.  The Guideline suggests severely punishing those engaging in unfair competition in order to strengthen brand protection.  Finally, the Guideline suggests the combination of IP protection in IPR utilization in order to speed up IP transfer and transformation. 

It appears that courts in China are already beginning to implement some of the tasks outlined in the Guidance.  On December 8, 2016, the Beijing Intellectual Property Court (Court) issued a decision in favor of the patentee in a patent infringement action involving a patent claiming a USB key used by banks.  In its decision, the Court agreed with patentee’s claimed damages of 50 million RMB (about $7,241,969 U.S. dollars (USD)), including damages of 48,142,000 RMB (about $6,972,857 USD) calculated by multiplying the amount of each infringing product by a reasonable profit for each product, inferred damages of 858,000 RMB (about $124,272 USD) resulting from the defendant refusing to submit evidence of the volume of its sales as well as reasonable expenses of 1 million RMB (about $144,839 USD) incurred by the patentee in enforcing the patent.   

Please continue to watch the BRIC Wall Blog for further updates on the implementation of the Guidance in China.

This post was written by Lisa Mueller.


Foreign Filing Restrictions and Licenses in China – Part 2

This is part 2 in our series examining foreign filing restrictions and licenses in the U.S. and in a number of countries throughout the world. To view part 1, foreign filing restrictions and licenses in the U.S., click here.

Foreign filing restrictions in China

A foreign filing license is always required in China. It is necessary as long as an invention or utility model is developed in China (inventions developed in Hong Kong, Macao and Taiwan are excluded), even if a domestic filing has been made first.

What constitutes “developed in China?” Rule 8 of the Implementing Regulations of the Patent Law (Implementing Regulations) provides some guidance. Specifically, according to this rule, an invention or utility model is considered to be “developed in China” if the “substantive contents” of the technical solution of the invention or utility model have been made or created by an inventor within China. The “substantive contents” of the technical solution can be determined based on the contents of the claims and identification of the inventors. According to Rule 13 of the Implementing Regulations, an “inventor” or “creator” is any person who makes “creative contributions” to the “substantive features” of the invention or creation. Inventors do not include those who solely provide organizational or auxiliary services or support.

According to Article 20.1 of Chinese Patent Law, the Chinese Patent Office (CPO, also known as State Intellectual Property Office of the People’s Republic of China, SIPO) must conduct a “Confidentiality Examination” of any invention or utility model developed in China in advance before an entity or individual files an application for a patent in a foreign country for the invention or utility model.

How is Confidentiality Examination requested?

There are three ways to request a Confidentiality Examination, depending on the type of patent application to be filed.

Method 1: Patent application intended to be filed abroad directly with no corresponding patent application to be filed at the CPO

An Applicant (such as an entity or individual filing a patent application) can file a request with the CPO, called a “Request for Confidentiality Examination of a Patent Application to be Filed Abroad,” and a description of the technical solution of the invention before filing a patent application with World Intellectual Property Office (WIPO) or in a foreign country. Both the request and the description of the technical solution must be in the Chinese language. Any corresponding documents, such as any patent applications to be filed abroad (which can be in their requisite foreign language), may also be submitted for the Examiner’s reference. The description of the technical solution must be identical with the contents of the documents (one or more patent applications) to be filed abroad.

If the technical solution does not need to be kept secret, then the Examiner is required to “promptly” notify the Applicant that the application can be filed abroad. If the technical solution needs to be kept secret, then the Examiner must inform the Applicant that the action of filing abroad will have to be suspended. If this is the result, the Examiner is required to conduct a further Confidentiality Examination.

The timeframe for the Confidentiality Examination is divided into two main parts. The first stage is a four month period, in which the Examiner conducts a preliminary review to determine if the invention is to remain confidential. The Examiner is required to issue a “Notification of Confidentiality Examination of Patent Application to be Filed Abroad” to the Applicant providing notification that further confidentiality review is needed. If such notification is not received within four months from the date of submitting the request, the Applicant can file a patent application for the technical solution in a foreign country. During the second stage of further confidentiality review, the review period will extend to six months from the date of submitting the original request. The Examiner is required to issue a “Decision on Confidentiality Examination of Patent Application to be Filed Abroad” based on the results of the further examination. If the Applicant does not receive this decision by the end of this six month review period, then the Applicant can file a patent application in a foreign country.

Practically speaking, it generally takes about two to four weeks from the date of request to receive a “Notification of Confidentiality Examination of Patent Application to be Filed Abroad.” Once this notification is received, the patent application can be filed in a foreign country. Additionally, under this method, no corresponding application is required to be filed in China.

Method 2: Patent application intended to be filed abroad at or after the corresponding Chinese patent application filed to the CPO

An Applicant can file a patent application in the CPO and request a Confidentiality Examination, at or after filing, prior to filing the application with WIPO or in a foreign country. As with the first case, the contents of the patent applications filed with the CPO and abroad must be identical and filed in the Chinese language. The four and six month periods for notification/decision apply under this procedure as well. Practically speaking, it generally takes about two to four weeks from the date of request to receive a “Notification of Confidentiality Examination of Patent Application to be Filed Abroad”. However, if a request for Confidentiality Examination is filed along with a patent application filing on the same day, the examination period may be shortened to two to five working days

Method 3: International application intended to be filed in the CPO through the Patent Cooperation Treaty (PCT)

An Applicant can file a Patent Cooperation Treaty (PCT) application in the CPO, with the CPO assuming the role as the Receiving Office. Such a request is considered to be a simultaneous request for Confidentiality Examination (a separate request for Confidentiality Examiner does not need to be filed). Under this procedure, at least one Applicant of the international application must have Chinese nationality or a residence in China. If the Applicant is not qualified to file the international application in the CPO, the CPO will forward the application documents directly to the International Bureau (IB), which is the Receiving Office for WIPO. Additionally, this procedure allows for the patent application to be submitted in either Chinese or English.

If the application does not need to be kept secret, then the Examiner handles the international application in accordance with typical PCT procedures. In other words, the CPO will issue a PCT/IB/304 form (“Notification Concerning Submission or Transmittal of Priority Document”) which indicates, among other things, that Confidentiality Examination has been completed. Once the Applicant receives the PCT/IB/304 form, it can file the patent application in a foreign patent office. Practically speaking it takes about four to six weeks to receive the PCT/IB/304 form (depending on how long it takes for the CPO to transmit the priority document to the International Bureau).

However, if the application needs to remain confidential, then the Examiner will issue a “Notification of Not Forwarding Record Copy and Search Copy for National Security Reasons” (Notification) within three months of the filing date. This Notification notifies the Applicant and the IB that the application will not be handled as an international application. The Notification also terminates the international phase and applicants are thereafter not permitted to file the patent application abroad.

Additional information regarding Confidentiality Examination

For each of the three methods of requesting Confidentiality Examination described above, if a patent application relates to the interests concerning national defense and is required to by kept secret, the application is sent to the National Defense Patent Office, which carries out the examination.

If it is believed that a patent application relates to security and other vital interests of China and should be kept secret, an Applicant should indicate such at the time of the filing of the application. In this instance, the patent application should be submitted in paper form (not via the electronic filing system). Additionally, an Applicant can also request that a patent application be kept secret before it is publically disclosed by the CPO.

If a patent application is filed electronically and the CPO determines that it must be kept secret (because the invention relates to the security or other vital interests of the country), examination will be conducted on paper and not using the electronic filing system.

There is no official fee for solely requesting a Confidentiality Examination. Approximately 99.9% of the cases received by the CPO have passed the Confidentiality Examination process and have been permitted to be filed in foreign countries.

The CPO conducts a review on the patent applications/patents to be kept secret every two years and is required to notify an Applicant of declassification of any applications/patents that are no longer required to be kept secret.

Processing after Declassification

When and if a patent application becomes declassified, it is examined and administered as a regular patent application for invention. When and if a granted patent becomes declassified, the decision on its declassification is announced and it is published and administered as a regular patent.


If a foreign filing license is not requested and the patent application is filed abroad, then a patent for the invention will not be granted in China. If the patent application is related to security or other vital state interests, then criminal penalties will result for the Applicant.

Strategic Considerations

Multinational corporations employing global research teams as a part of their research and development must carefully consider their patent application filing strategy for any inventions created and/or developed in China. Some items that should be considered include:

1. Allow yourself as much time as possible to draft your application (especially if you are aware of any impending statutory deadlines). Carefully consider all elements and features of the invention, any potential commercial products and your claiming strategy. For example, if only chemical intermediates were synthesized in China, consider whether or not your claims encompass such intermediates. If you are not claiming intermediates (and your claims do not broadly encompass any such intermediates), the invention may not be considered to have been developed in China and no request for Confidentiality Examination is required. Also allow yourself as much time as possible if, within a year after filing your patent application in China, you intend to add additional information and/or subject matter to your originally filed application.

2. Do a complete and thorough inventorship analysis.

3. Consider whether or not one or more foreign filing licenses will be required from another jurisdiction prior to filing in China. If your application also contains inventors from the U.S., India, Russia, etc., a request for a foreign filing license will be required prior to filing in China.

4. Consider filing a Chinese patent application along with a request for Confidentiality Examination, without paying the official fees for the Chinese patent application. Using this strategy, the period for Confidentiality Examination will be shortened to two to five working days. Because the official fees have not been paid, the Chinese patent application will be deemed as withdrawn and will not be published.

This post was written by Lisa Mueller and Himani Nadgauda of Michael Best and Aaron D. Hurvitz of Kangxin Partners, P.C.

A New Beginning? The Brazilian Patent and Trademark Office has a New President.

Mr. Luiz Otávio Pimentel has been appointed as the new president of INPI (the Brazilian Patent and Trademark Office – BRPTO). The official notice for the nomination was published yesterday, July 28, 2015, in the Federal Register. On April 10, 2015, President Dilma published an official notice dismissing the former president, Otávio Brandelli, who had been in charge of the office for less than one and a half years. Since then, vice-president, Ademir Tardelli, acted as interim head of the BRPTO. There is strong speculation on the reasons for Mr. Brandellis’ departure. Mr. Brandelli had a strong background in Intellectual Property and, while in office, took a series of measures to expedite prosecution and to reduce the BRPTO’s backlog.

What do we know about Mr. Pimentel? He is a professor with expertise on International Law and Intellectual Property. He holds a Masters in Law from the Federal University of Santa Catarina (UFSC) and a Ph.D. in Legal Sciences from the National University of Asunción – Paraguay. He is also an arbitrator at the Ad Hoc Arbitration Court of Mercosur.

Mr. Pimentel faces numerous challenges in his new position as the BRPTO requires strong leadership by an intellectual property expert with the ability to take drastic measures to restore a high-quality management at the office. In addition to having the fortitude needed to fight the battle against the huge backlog, Mr. Pimentel will need to lead the BRPTO with transparency, allowing applicants to have advance knowledge of which guidelines and rules the examiners will adopt during prosecution.

Other important goals that need to be achieved are the acceleration of the examination process and signature of the main international agreements to simplify prosecution, such as the Patent Prosecution Highway.

The next few months will be crucial for the BRPTO’s future and for the development of Intellectual Property in Brazil.

This post was written by Lisa Mueller and Licks Attorneys law firm.

Third Party Observations in China – Part 7 of an 8 Part Series

This is Part 7 of an 8-part series examining post-grant review proceedings, oppositions, and third party observations in the U.S., BRIC and several non-BRIC countries. To see Part 1, Post-Grant Oppositions in Japan, click here. To see Part 2, Third Party Submissions in Russia, click here. To see Part 3, Pre- and Post-Grant Oppositions in India, click here; To see Part 4, Third Party Submissions in the U.S., click here. To see Part 5, Third Party Submissions in Europe, click here. To see Part 6, Third Party Submissions in Brazil, click here.

Public Observations

Rule 48 of the Implementing Regulations of Chinese Patent Law provides that any person may, from the date of publication of an application for invention until the date announcing the grant of the patent right, submit observations to the State Intellectual Property Office (SIPO). Such third party submissions are referred to as “public observations”. Observations can be submitted by any person in its own name or anonymously (such as through a straw man).

Observations can be submitted for invention patents but not for utility model patents.   Any ground of rejection of a patent application can form the basis of an observation. Such grounds can include lack of novelty, lack of inventive step, sufficiency of disclosure, lack of unity, lack of clarity, ineligible subject matter, double patenting, etc.

SIPO has an official form that allows a third party to submit arguments forming the basis of the observations. This form can be submitted electronically, if desired. If a third party wishes to submit documentary evidence (such as evidence of patents, published applications, non-patent literature, etc.) supporting the observations, then the observations and accompanying evidence should be scanned in and submitted electronically. If any evidence is in a language other than Chinese or English, it is recommended that a Chinese translation be provided. There is no official fee for filing observations.

It is recommended that a third party submit observations as early in prosecution as possible (such as prior to issuance of an Office Action) to allow the Examiner sufficient time to consider the observations. A claim chart comparing the features of the claims with the prior art can be submitted to facilitate the Examiner’s understanding of the arguments submitted in the observations.

According to SIPO’s Guidelines for Patent Examination, the public will not be notified of the handling of any observations submitted. In fact, Examiners have discretion to consider observations once received. It is not known what criteria Examiner’s use to determine whether or not to consider observations once received. Additionally, SIPO does not provide any information on the effectiveness or success rate of such observations.

This post was written by Lisa Mueller and Feynman Z. Liang of the Jiaquan IP Law Firm

Revised Seed Law Expected to Come into Effect Soon in China

China has the second largest seed market in the world.  Annually, China uses roughly 12.5 million tons of planting seed. In 2012, the Ministry of Agriculture (MOA) estimated the seed market to be approximately RMB $104 billion (U.S. $17 billion) of which 65 percent was hybrid corn, hybrid rice, vegetable and fruit seeds.

China is in the process of revising its seed law in an effort to develop a stronger domestic seed industry. In January 2014, a revised draft seed law (Seed Law) was completed by the National People’s Congress (NPC) Agriculture and Rural Affairs Committee.  In August 2014, the draft was sent to the State Council for review.  It is expected that the Seed Law will be ready for reading by the Standing Committee of the NPC some time in April 2015.

The draft Seed Law is expected to improve the level of legal protections available for plant varieties.  For example, the draft Seed Law stipulates the content, ownership and grant conditions for plant variety protection (PVP) including application, examination, grant, implementation, infringement and exceptions, the period of protection, termination and invalidation.  Importantly, the draft increases the penalties for the infringement and counterfeiting (such as passing off).  Moreover, the draft reflects some of the advancements of the 1991 International Convention for the Protection of New Plant Varieties Union (UPOV Convention) such as extending the period of protection to 5 years, extending the object of protection from propagation material to receiving goods, etc.

Please watch the BRIC Wall Blog for further updates regarding China’s updated Seed Law.  This post was written by Lisa Mueller.


Is an Abbreviated Pathway for Biosimilars Coming Soon to China?

Presently, no abbreviated pathway is available in China for biosimilars. Accordingly, any biopharmaceutical drug (biologic or biosimilar) must be filed as a new drug application. A new drug application takes anywhere from five to ten years and costs from one to ten million U.S. dollars. However, industry insiders are reporting that guidelines establishing a biosimilar pathway in China are expected to be released by the end of June with regulations to follow by the end of the year. Specifically, the Center of Drug Evaluation (CDE), which is the registration arm of the Chinese Food and Drug Administration (CFDA), expects the guidelines to “fill in” regulatory blanks as well as raise industry standards for biosimilars. Reports from China are that the CDE has put significant effort into drafting the guidelines.

Although the guidelines have not yet been released, the issue of naming of biosimilars is already the subject of a great deal of discussion in China. Several Chinese biopharmaceutical companies are pushing the CDE to adopt the European Medicines Agency’s regulations on naming, namely, that biosimilars share the same international nonproprietary name (INN) as the reference drug and have a unique name for the active substance to be used in conjunction with the company name. With respect to clinical trials, many Chinese biopharmaceutical companies appear to be in agreement that biosimilar clinical trials should focus on the “similarity” of the biosimilar with the reference drug.

The status of several biosimilar drugs in China is provided below:

Non-antibody based biosimilars:

Interferon – several products approved.

Insulin – several products approved.

Erythropoietin – several products approved.

Interleukin 2 (IL2) – several products approved.

G-CSF – several products approved.

Biosimilar Antibodies:

Etanercept (Enbrel®) – at least eight companies have applications pending; at least three products from domestic companies are approved.

Infliximab (Remicade®) – at least two companies have applications pending.

Adalimumab (Humira®) – at least nine companies have applications pending; at least one product is approved.

Bevacizumab (Avastin®) – at least six companies have applications pending; at least two products are approved.

Trastuzumab (Herceptin®) – at least seven companies have applications pending; at least one product is approved.

Rituximab (Rituxan®) – at least eight companies have applications pending.

Cetuximab (Erbitux®) – at least three companies have applications pending.

Nimotuzumab – at least one company has an application pending.

This post was written by Lisa Mueller.