China to allow patent extension of term?

Update 18 May 2018

Since publishing the piece below, it has been confirmed that the term of pharmaceutical patents is not being extended in China. However, this does not mean that patent landscape will remain static.

China is part of the Regional Comprehensive Economic Partnership negotiations which may require changes to Chinese IP legislation. Both patent extension of term and data exclusivity have formed part of those negotiations. China also has two important policies which have the potential to benefit patent owners – Made in China 2025 which intends to make China’s manufacturing base more innovative and globally-competitive and Healthy China 2030 which makes public health a precondition for all future economic and social development.

Tim Jackson, Rouse’s Head of Patent Strategy & Development, believes that there will be opportunities for patent owners as a result of these initiatives. As the initiatives develop we will report back in later editions of the magazine.

Unconfirmed reports are circulating that China will allow extensions of patent term of pharmaceutical patent from 20 to 25 years starting this month. This is said to be in response to U.S. criticism over intellectual property violations.

These reports appear to be based on a decision of an executive meeting of the State Council (China’s Cabinet) presided over by Premier Li Keqiang on April 12, 2018 (http://www.xinhuanet.com/politics/leaders/2018-04/12/c_1122674781.htm). This decision refers to the strengthening of protection for intellectual property rights, the removal of tariffs from common imported drugs including cancer drugs, cancer alkaloid-based drugs, and imported traditional Chinese medicines, and allowing for a 5 year extension of patent term for pharmaceutical patents for an innovative medicine (which would ordinarily exclude at least process and composition patents).

There is no reference in the decision to any time frames for the introduction of the patent term extension but the removal of tariffs is said to apply from May 1. It is likely that any introduction of a patent term extension will take some time as this would require a change in the current Chinese patent law.

If China does introduce patent term extension, it would mean that China is following countries such as Canada who have extended pharmaceutical patent terms as a result of trade negotiations. This is becoming a standard concession as the extension usually only applies to patents filed after the legislation is in force, which allows 20 years for businesses and consumers to adjust. However, it appears from the Chinese language report and the State Council’s decision that China intends to allow the extension to apply to existing pharmaceutical patents but on the condition that the patent owner applies for a manufacturing license in China and overseas. If the patented product is only imported into China, the extension may not be available.

This condition is interesting as it fits with the Made in China 2025 policy to improve China’s abilities in the biomedicine area. However it also means that issues of knowledge transfer behind the recent trade dispute between China and the United States remain alive.