In a recent decision announced on March 16 2017 that could have led to the severe shortening or elimination of nearly all existing patent term extensions (PTEs) for pharmaceutical patents in South Korea, the Patent Court emphatically rejected the challenges raised by generics against the existing PTE system and potentially affirmed the validity of the full term of extended patent rights of numerous innovator pharmaceutical companies.

Background

Article 89 of the Patent Act provides that a PTE should equal the length of time that a patented invention cannot be worked after grant due to regulatory approvals or registrations under other statutes required to practice the invention. Article 89 also states that any delays that are attributable to the patentee should not be included as part of the PTE term.

Pursuant to Article 89, the Korean Intellectual Property Office (KIPO) uses the following general formula to calculate PTEs.

PTE period = domestic clinical trial period (from first patient in to last patient out) + Ministry of Food and Drug Safety (MFDS) review period – any delay attributable to the patentee during the MFDS review period

KIPO has further defined the delay attributable to the patentee during the MFDS review period specifically to mean only periods of time where there is a simultaneous supplementation request pending in all MFDS departmental examinations (ie, standard and testing method, safety and efficacy test, good manufacturing practice and drug master file), rather than any time spent on a supplementation request in an individual departmental examination.

In this regard, numerous PTE invalidation actions have been filed in South Korea by generic companies in the past two years (partly because the new patent approval linkage system has incentivised such filings as a basis to obtain generic marketing exclusivity). In view of their similarity and the potential impact of decisions in these cases on KIPO's practice, the Patent Court arranged special panels of judges (including the president of the Patent Court) to hear two cases involving the most commonly asserted PTE invalidity arguments.

To date, generics have primarily challenged the validity of PTEs on two grounds:

  • The PTE is invalid on the procedural ground that the marketing approval holder for the drug on which the PTE was granted was not registered as a patent licensee before the PTE application was filed.
  • Certain periods of time included within the PTE should not have been included under the relevant statutes.

Patent Court's ruling

The Patent Court emphasised the following two points as fundamental principles when it verbally announced its decisions in court:

  • The "time period during which the patented invention could not have been worked" (referred to as 'total delay') begins on the date on which the test for safety and efficacy is initiated or the date on which the patent is registered (whichever is later). It ends on the date on which the regulatory approval is "delivered" to the applicant (rather, than issued), which presumably includes the period from the close of clinical trials to the drug approval application date.
  • The "time period of delay attributable to the patentee" (referred to as 'patentee delay', as above) should be construed to mean periods for which the patentee is responsible and which can reasonably be said to have caused delay in the regulatory approval.

According to the above principles, the Patent Court rejected all alternative PTE term calculation methods proposed by the generics and found the PTE periods as granted to be acceptable.

While the court appears to recognise the propriety of the granted PTE periods according to KIPO's existing method, it suggested a different standard to calculate the PTE period (ie, PTE period = total delay – patentee delay), rather than the existing KIPO method (ie, PTE period = clinical trial period + MFDS review period – patentee delay).

Implications

Based on the court's rulings, if a patentee can prove that it was not responsible for the issuance of a supplementation request or that responding to a supplementation request did not cause any delay in the regulatory approval process, the time spent on these supplementations can be included in the PTE.

Further, since the court did not limit the test for drug approval to domestic clinical trials, it is possible that other test periods (eg, clinical trials conducted in foreign countries after the patent registration and reviewed by the MFDS for the drug approval) may be requested as part of a PTE term. In addition, there may now be a basis to request the time spent preparing the drug approval application (ie, from the closing date of domestic clinical trials to the application date of the drug approval) as part of a PTE application, with supporting evidence.

However, KIPO has been conservative in granting PTE terms, and the Patent Court's decisions do not explicitly state that clinical trials conducted in foreign countries or time spent preparing drug approval applications are also eligible for inclusion in the PTE term; thus, KIPO may continue to exclude such periods from PTEs, regardless of whether the Patent Court's decisions can reasonably be read to allow them. It is likely that further guidance will be needed from the Patent Court to resolve future cases involving these specific issues.

For further information on this topic please contact Duck Soon Chang, Tae Min Kim or Inchan Andrew Kwon at Kim & Chang by telephone (+82 2 3703 1114) or email (ducksoon.chang@kimchang.com, tmkim@kimchang.com or ickwon@kimchang.com). The Kim & Chang website can be accessed at www.kimchang.com.

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