Patent linkage system passed by Legislative Yuan

On December 29 2017 the Legislative Yuan passed the Amendment of the Pharmaceutical Affairs Act, which incorporates the well-known patent linkage system.

Once the patent linkage system has been formally introduced in Taiwan, new drug marketing approval holders will be able to list patents covering their products and force generic drug applicants into infringement litigation at the first instance. Marketing approval holders that obtained approval before the patent linkage system becomes operative may list their patents within three months from the system’s implementation date and receive a ticket for entering the system.

While an implementation date has yet to be decided, the system could come into effect at any time in the near future. Therefore, market approval holders should contact their attorneys immediately and prepare to list their patents.

This report outlines some of the key aspects of the recently approved patent linkage system in Taiwan.

Overview
Patent listing
Under Articles 48-3(1) and 48-5 of the newly amended Pharmaceutical Affairs Act, new drug marketing approval holders will be responsible for listing patents within the following timeframes:

• Any patents covering the new drug must be listed within 45 days of receiving marketing approval.
• Any patents which have not been granted or were granted after marketing approval was received must be listed within 45 days of the patent’s issue date.

Eligible patents
The following eligibility rules apply to listed patents under Articles 48-3(2) and 48-4(1) of the newly amended Pharmaceutical Affairs Act (see Article 48-4(1) for details regarding the required patent information):

• Not all patents relating to the new drug are eligible for the patent linkage system – eligible subject matter is limited to:
  • substances;
  • compositions or formulations; and
  • pharmaceutical use.
• With regard to pharmaceutical use patents, new drug marketing approval holders must specify the patent number and the specific claims covering the stated pharmaceutical use.

Listing changes, deletions and corrections
Articles 48-6, 48-7, 92-1 and 100-1 of the newly amended Pharmaceutical Affairs Act set out the following rules for listing changes, deletions and corrections:

• Any changes to listed information under Article 48-6 (eg, patent term extension approvals and patent rights transfers and expiration) must be requested within 45 days of the date on which the event occurred.
• If the listed patent is unrelated to the new drug, the patent does not come within the scope of the eligible subject matter, the listed information is incorrect or the request for changes to information under Article 48-6 is not duly made, any party may approach the Ministry of Health and Welfare (MOHW) to request a correction.
• On receiving the correction request, the MOHW must notify the new drug marketing approval holder within 20 days.
• New drug marketing approval holders must respond to the MOHW or make necessary listing changes or deletions within 45 days.
• If a new drug marketing approval holder intentionally and fraudulently lists incorrect information, it may be subject to criminal liabilities.

Patent linkage
Generic drug applicant certification
Under Articles 48-9 and 48-12 of the newly amended Pharmaceutical Affairs Act, generic drug applicants must clarify any potential infringements of listed patents in accordance with one of the following sections, which resemble the Hatch-Waxmen Act in the United States:

• Section 1 – the drug has not been listed with patents.
• Section 2 – the patent has already expired.
• Section 3 – the marketing approval of the generic drug is issued by the MOHW after the patent expires.
• Section 4 – the patent is not infringed or is invalid.

Generic drug applicants that submit certifications under Section 4 must notify the MOHW and the new drug marketing applicant holder of its certification and evidence within 20 days of receiving notification from the MOHW that the abbreviated new drug application has been completed for review.

Consequence of certification
The following results may be expected under Articles 48-10, 48-11, 48-12 and 48-13 of the newly amended Pharmaceutical Affairs Act:

• If a generic drug marketing application filed under Sections 1 and 2 is examined and approved, marketing approval will be issued.
• If a generic drug marketing application filed under Section 3 is examined and approved, marketing approval will be held until the listed patents expire.
• Marketing approval for generic drug marketing applications filed under Section 4 will depend on the response of the listed patent's owner. If the owner initiates infringement litigation within 45 days of the notification date by the generic drug applicant, the MOHW will retain marketing approval of the generic drug for up to 12 months following notification from the new drug marketing approval holder.

Rewards for Section 4 generic drug applicants
Under Articles 48-16 and 48-17 of the newly amended Pharmaceutical Affairs Act, the following rewards may apply to applicants filing under Section 4:

• The first generic drug applicant to file a completed abbreviated new drug application with Section 4 certification will be given 12 months of marketing exclusivity.
• The marketing exclusivity period will commence after the earliest actual selling date of the generic product – first applicants must inform the MOHW of the earliest actual selling date and provide evidence thereof.
• First applicants must begin to sell their products no later than 6 months after the date on which the generic drug marketing approval is received.
• If more than one first applicant emerges, all first applicants will be granted 12-month marketing exclusivity, which will commence as soon as one of them starts selling.