China-US Trade Agreement: Consideration of Supplemental Data on Pharmaceutical Patent

written by Haoyu ZHOU (Elliot) and Kerena LIU

On Jan 15, 2020, the U.S. and China signed Phase I “Economic and Trade Agreement”. In the Agreement, there are at least three sections concerning Pharmaceutical Related Intellectual Property, which are

(1) acceptability of supplemental data during Chinese pharmaceutical patent proceedings;

(2) mechanism for early resolution of Chinese pharmaceutical patent disputes; and

(3) introduction of patent term extension (PTE).

The present article will focus on the first section: the acceptability of supplemental data during the patent prosecution and invalidation proceedings.

Article 1.10 of the trade agreement sets forth that, “China shall permit pharmaceutical patent applications to rely on supplemental data to satisfy relevant requirements for patentability, including sufficiency of disclosure and inventive step, during patent examination proceedings, patent review proceedings, and judicial proceedings”.

The acceptability of supplemental data was a question that has been discussed for a long time in the Chinese pharmaceutical IP industry. It was not just about the patent law, but also related to the politics in U.S. and China. While the U.S. is powerful and competent in pharmaceutical innovation, China is a generic country and has a relatively weak capacity in developing new drugs. As a result, the U.S. is more lenient on using supplemental data, or known as post-filing data, to remedy the deficiency of original disclosure, whereas China tends to be stricter and reluctant to accept the supplemental data.

Although the Chinese patent examination guideline was amended in 2017 to require that “the examiner shall examine the supplemental experimental data submitted after the filing date, provided that the technical effect contained in the supplemental experimental data shall be derivable by those skilled in the art from the patent application as filed”, however, in practice, the standard of “derivability” is very high and can be viewed as equivalent to “directly derivable”. According to our experience, if the supplemental data is submitted to overcome the insufficiency of disclosure, the likelihood of being accepted is extremely low. Only if the supplemental data is submitted to overcome the prior art (i.e., novelty or obviousness), the examiner may take a look at the supplemental data.

A notorious invalidation case that suffered from this was the Novartis patent directed to the billion-dollar drug combination Entresto (Chinese Patent No. ZL201110029600.7), which was held invalid in its entirety in 2017. The reason for being nullified was that the specification as filed only “generally describe” that the drug combination provides a synergistic therapeutic effect, but did not describe with any result or data to support such a finding. Even if Novartis submitted post-filing supplemental data during the invalidation proceeding to show that the combination drug indeed demonstrates a “synergistic effect”, the re-examination board of the CNIPA took a strict position that the therapeutic effect described in the supplemental data was not derivable from the patent application as filed.

Not surprisingly, partly due to the reluctance of the CNIPA and the court to accept the supplemental data, many pharmaceutical patents have been nullified over the years. According to a recent statistic report, 54% of the Chinese pharmaceutical patents were invalidated in entirety over the years; 30% were partially invalidated; and only 16% were maintained valid. As a result, the acceptability of supplemental data raised a wide attention from the IP industry and received a lot of complaints worldwide. The U.S. government decided to put this topic into agenda for discussion, aiming to change the game rule in the China-US trade deal.

In order to improve on this and to follow the “China-US trade agreement”, The Supreme Court of China published a “patent examination provision draft” in April of 2020, and the draft is currently seeking for public opinion. Particularly, Article 12 of the draft sets forth that, “for patent applicant or patentee of the pharmaceutical patent who submit experimental data after the filing date, if the experimental data is used to further demonstrate the sufficiency of disclosure of a technical content in relation to a certain technical effect in the specification, or used to further demonstrate the patent application or patent has different technical effect from the reference document, and if those skilled in the art can confirm said technical effect based on the specification, figure as well as common general knowledge at the time of filing, the court shall examine the supplemental data.”

This is, for the first time, the Chinese court explicitly allows the post-filing supplemental data to be used for overcoming the insufficiency of disclosure issue. This is good news for innovative pharmaceutical companies, as they could have a more stable patent in hand. On the other hand, this is also an opportunity for Chinese domestic pharmaceutical companies, as the change of game rules could force Chinese pharmaceutical companies to step out of the comfort zone, in a hope that these companies would be motivated to accelerate the innovation progress.


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