As we reported in our October 2020 and May 2021 Newsletters, the Fourth Amendment to Chinese Patent Law has become effective from June 1, 2021. In this regard, we want to draw your attention to the following two provisions in the new Patent Law.

Article 42.2  For patents granted after four (4) years from the application date and three (3) years from date of request for substantive examination, the CNIPA, upon patentee's request, shall compensate the patent term due to unreasonable delays during prosecution of the patent, except for delays caused by the applicant. (We refer this provision as Patent Term Adjustment or PTA).

Article 42.3  In order to compensate for time used for new drug evaluation and approval, the CNIPA, upon patentee's request, shall compensate the term of a relevant patent for an approved new drug in China. The added term shall not exceed five (5) years and the total remaining term of the patent, from the date the new drug enters the market, shall not exceed fourteen (14) years. (We refer this provision as Drug Patent Term Extension or PTE).

As we reported earlier, the corresponding amendments to the Implementing Regulations of the Chinese Patent Law and the Patent Examination Guidelines have not been enacted yet. Therefore, many practical details regarding how the PTA and PTE will be implemented remain unclear.

According to the Temporary Rules published on May 24, 2021, applicants can now make relevant requests regarding the PTA and/or PTE. However, the CNIPA will only examine such requests after the enactment of the amended Implementing Regulations of the Chinese Patent Law.

Under such circumstances, we would like to provide the following comments and advice regarding the two provisions.

Patent Term Adjustment (PTA). We believe that the interpretation of (a) "unreasonable delays" (during prosecution of the patent by the CNIPA) and (b) "delays caused by the applicant" will be the key in implementing Article 42.2.

Regarding (a), one proposed interpretation is that any delays beyond "4 years after application date and 3 years after request for substantive examination" in granting the patent would be regarded as unreasonable on the part of the CNIPA. We think this is a reasonable interpretation, although we do not have any additional information or guidance from the CNIPA or elsewhere in this regard. However, since applicant's actions will most likely be irrelevant to the interpretation of this term, we do not think it is necessary to do too much analysis or speculation in this regard.

On the other hand, interpretation of (b), delays caused by applicant, is much more important. In this regard, the Draft Amendment to the Implementing Regulations of the Chinese Patent Law does provide some guidance. According to the draft, the following actions would be considered as delays caused by the applicant:
(1) Failure to respond to a CNIPA official notice within the specified time period,
(2) Filing a requesting for deferred examination,
(3) Incorporation by reference, and
(4) Others

It is not clear whether the above actions by the applicant would disqualify him from requesting a PTA at all, or the CNIPA would simply deduct the time corresponding to the above delays caused by the applicant from the compensated patent term. In this regard, we of course suggest that applicants keep the above (1) – (3) actions in mind during the application and prosecution process. We further note that, in (1), official notices include not only Examination Reports (Office Actions), but also all other official notices with the specified response time period. In this regard, please let us know if you have any questions, or contact our responsible attorney in a specific case.

Drug Patent Term Extension (PTE). Many details are still not very clear, especially regarding the definition of "new drug in China" and how a patent would be linked to the drug. However, considering the potentially substantial extension term, we encourage relevant patentees to actively consider this option.

We suggest that, if the patentee believes that a patent may belong to the Article 42.3 situation, namely, the patent's term is diminished while the patentee waits for review and approval of a new drug (relating to a chemical drug, a biological product, or a Chinese medicine), he should consider requesting for patent term extension (PTE) of the corresponding patent (including but not limited to product patent, process patent and medical use patent, but possibly only one of them), within three (3) months from the approval date of the new drug in China.

In this regard, please let us know if you have any questions, or contact our responsible attorney in a specific case.

Another uncertainty regarding the PTA and PTE is how they would work together. Would the compensated terms from the PTA and PTE be added together, or would there be restrictions or limitations when both requests are made?

As can be seen, although Patent Term Adjustment and Drug Patent Term Extension are very much welcome changes to patentees, many practical details regarding the implementation of these changes are still not very clear. However, despite the uncertain situation, we strongly encourage patentees to actively consider making the relevant requests for suitable patents.

If you have any questions, please contact us at sinda@chinasinda.com.