Introduction to patent term compensation for Chinese invention patents

In China, the term of an invention patent is 20 years from the application date. The Patent Law, which took effect in 2021, introduced provisions for patent term compensation. There are two types of compensation:

• Patent term adjustment (PTA), which compensates for delays in the authorisation process of invention patent applications; and

• Patent term extension (PTE), which compensates for the time required for the approval of new drugs for marketing.

This article provides an overview of both patent term compensation systems.

The patentee must submit a PTA request to the CNIPA within three months from the date of the patent grant announcement and pay a request fee of CNY200. Late submissions will not be accepted, and restoration is not possible.

The compensation period is calculated based on the number of days the examination of the invention patent was unreasonably delayed. The grant publication date must be at least four years later than the application date and at least three years later than the substantive examination request date. Specifically, it is determined by taking the lower of the number of days between four years after the patent filing date and the date of the patent grant announcement and the number of days between three years after the substantive examination request date and the date of the patent grant announcement, then subtracting the number of days attributed to reasonable delays and delays caused by the applicant.

There is no maximum limit on the compensation period for a PTA.

The terms “filing date” and “substantive examination request date” in the above calculation are clearly defined in the revised Patent Examination Guidelines:

• For an international application, the filing date refers to the date when the international application enters the Chinese national phase; and

• For a divisional application, the filing date refers to the submission date of the divisional application.

The substantive examination request date refers to the date on which the applicant submits the request and fully pays the substantive examination fee. If this date precedes the publication date, the three-year period will be calculated from the publication date instead.

Regarding “reasonable delays” in the above calculation, the details are as follows:

• Delays due to the re-examination procedure – if the patent is granted after the re-examination stage, during which the application documents were amended, the delay is counted from the issuance date of the decision of rejection to the issuance date of the decision of re-examination;

• Delays caused by procedural suspensions and preservation measures; or

• Delays due to other reasonable circumstances, such as administrative litigation proceedings.

Regarding “unreasonable delays caused by the applicant” in the above calculation, the details are as follows:

• Failure to respond to a notification – if the applicant fails to respond to a patent office notification within the specified time limit and requests an extension, the delay is counted from the expiry date of the original time limit to the date the response is submitted;

• Deferred examination – if the applicant requested deferred examination, the delay period corresponds to the actual deferred time;

• Delays due to incorporation by reference – the delay is counted from the time taken to submit the supplementary application documents;

• Restoration of rights – if a delay occurs due to a request for right restoration, the delay is counted from the expiry date of the original time limit to the issuance date of the approval notification, unless it can be proven that the delay was caused by the patent office; and

• International applications entering the Chinese national phase – if an international application enters the national phase in China within 30 months from the priority date, but the applicant fails to request early processing, the delay is counted from the national phase entry date to the expiry of the 30-month period from the priority date.

When the same applicant applies for a utility model patent and an invention patent for the same invention on the same day, and the invention patent is granted, the duration of the invention patent right is not eligible for compensation.

After examination, if the patent office determines that the request for a PTA does not meet the conditions for compensation, the applicant shall be given at least one opportunity to provide their opinions and/or correct the documents. If the request still fails to meet the conditions, a decision denying duration compensation will be issued.

If the patent office finds that the request for a PTA meets the conditions for compensation, it will issue an approval decision specifying the number of compensable days.

An applicant is required to fulfil the following conditions to be able to request a PTE:

• The announcement date of the patent authorisation for which compensation is requested must be earlier than the approval date of the drug marketing authorisation application;

• At the time of filing the request for a PTE, the patent right must be in effect;

• The patent must not have been given any compensation for the duration of the drug patent right;

• The claims of the patent for which compensation is requested must include technical solutions related to the new drug that has obtained marketing approval;

• If a drug is covered by multiple patents, the patentee may request a PTE for only one of the patents; and

• If a patent covers multiple drugs, a request for a PTE can be made for only one drug.

The patentee must submit a request for a PTE to the patent office within three months from the date the drug receives marketing authorisation in China and pay a request fee of CNY200.

For drugs granted conditional marketing authorisation, the request must be submitted within three months from the date of formal marketing authorisation in China. However, the compensation period will be calculated based on the date of the conditional marketing authorisation.

When submitting a request for a PTE, the applicant must provide the following materials:

• If the patentee is not the same as the marketing authorisation holder, a written consent from the marketing authorisation holder and other relevant materials must be submitted.

• Technical information relevant to determining the scope of patent protection during the PTE period. For example, if compensation is requested for a preparation method patent, the pharmaceutical production process information approved by the drug supervision and administration department of the State Council must be provided.

• Any other supporting documents required by the patent office.

The request must include the drug name, drug registration classification, approved indications, and the patent number for which term compensation is sought. The applicant must specify the claims related to the new drug that has obtained marketing authorisation and, along with supporting materials, provide a detailed explanation of why the designated claims include technical solutions related to the new drug. Additionally, the request should justify the calculation of the requested compensation period and clarify the technical solutions protected during the drug patent compensation period.

Medicines refer to those intended for human use and do not include veterinary medicines or pesticides used on animals.

Patent term compensation applies to innovative drugs approved for marketing by the drug supervision and administration department of the State Council, as well as improved new drugs that meet the relevant guidelines. Compensation may be granted for product invention patents related to active pharmaceutical ingredients, preparation method invention patents, or medical use invention patents.

The definitions of innovative drugs and improved new drugs are determined in accordance with applicable laws, regulations, and provisions set by the State Council’s drug supervision and administration department. The Opinions on Reforming the Review and Approval System for Drugs and Medical Devices, issued by the State Council in 2015, provide the definition of new drugs.

Improved new drugs eligible for a PTE are limited to those classified under the following categories in the drug registration certificate issued by the drug supervision and administration department of the State Council:

• Category 2.1 chemical drugs – esters or salts of known active ingredients;

• Category 2.4 chemical drugs – drugs containing known active ingredients but with new indications;

• Category 2.2 preventive biological products – vaccines improved from known vaccine bacteria and viruses;

• Category 2.2 therapeutic biological products – biological products with newly added indications; and

• Category 2.3 Chinese medicine – traditional Chinese medicine with additional functions and indications.

The technical solutions related to new drugs shall be determined based on the structure, composition, and content of the new drugs approved by the drug supervision and administration department of the State Council, as well as the approved production process and indications. If the designated claims do not encompass the technical solutions of the new drug that has obtained marketing authorisation, patent term compensation will not be granted.

If patent term compensation is granted for a drug, the compensation period shall be calculated as the number of days between the patent application date and the date the new drug obtains marketing authorisation in China, minus five years.

The compensation period shall not exceed five years, and the total effective patent term after drug marketing authorisation approval shall not exceed 14 years.

If, upon examination, a request for a PTE is found not to meet the conditions for compensation, the patent office shall give the applicant at least one opportunity to provide their opinion and/or supplement the documents. If the conditions for compensation are still not met, a decision shall be made to deny compensation for the term.

If, upon examination, it is determined that a PTE should be granted, and the patentee has already filed a request for a PTA but the patent office has not yet issued an approval decision, the examiner shall await the PTA decision before determining the timing for granting the PTE.

If the patentee has not filed a PTA request and the three-month deadline has not yet passed, the examiner shall wait until the PTA request deadline expires before determining the timing for granting the PTE, unless the patentee clearly waives the PTA request.

If, after examination, the request for a PTE meets the conditions for compensation, the patent office shall issue an approval decision and specify the number of days for term compensation in the decision.

For a PTA and a PTE, after the patent office has issued a decision of approval of patent term compensation, it shall register the relevant details in the patent register and announce them in the patent gazette.

If the compensated days exceed one year, an annual fee of CNY8,000 per year shall be paid in a lump sum before the expiry of the 20-year patent term. If the compensated days are less than one year, no annual fee will be charged.

The above provides a practical introduction to the implementation of patent term compensation in China. In practice, applicants may have some concerns. For example, in some cases, it may be uncertain at the time of the patent grant announcement whether patent term compensation can be obtained.

The author recommends that applicants do not miss the three-month deadline for submitting a compensation request, as it cannot be restored once missed. Additionally, if applicants have any doubts about whether a pharmaceutical patent qualifies for compensation, they should contact their agency as early as possible to request confirmation, ensuring that the deadline is not missed.