Analysis of the Status of Intellectual Property Rights in China's Pharmaceutical Business         

The pharmaceutical industry is a special and important technological field. On the one hand, the invention of a new drug requires a large investment and a long cycle, has high risks and is strongly dependent on the protection of intellectual property rights (IPR); but on the other hand, the IPR protection of pharmaceuticals will inevitably enhance their prices and thus it can be argued that they adversely affect public health.
   The IPR legislation in China's pharmaceutical field has both universality and particularity. The universality is that China has made macro-level IPR legislation in the patent, trademark, copyright, anti-unfair competition, customs and border protection. The particularity is mainly that IPR protection in the pharmaceutical field is faced with some special problems that are exclusive to this field.

1.  Status of macro-level
IPR legislation

China established its IPR protection system from the "Trademark Law" enacted on August 23rd, 1982. Later, China subsequently formulated the "Patent Law," "Copyright Law" and "Anti-Unfair Competition Law." After more than 10 years of legislative efforts, by the early 1990s, China had basically established a relatively complete system of IPR laws. Before and after joining the World Trade Organization (WTO), in accordance with the requirements of the TRIPS Agreement, China made significant modifications to the "Patent Law," "Trademark Law," "Copyright Law" and their supporting regulations, making China's macro-level IPR legislation meet international standards on the whole. In 2008, China revised the "Patent Law" for the third time. In 2010, China revised the "Copyright Law" for the second time. A revision of the "Trademark Law" is underway.
   After a series of important legislation and revisions, China's macro level IPR legislation has becoming increasingly refined. This has adapted to the international situation and also satisfied the needs of China's economic and technological development.

2. Status of IPR legislations exclusive to the pharmaceutical field

    1)  The administrative protection of patented pharmaceuticals in a special period. Relevant laws related to this system are the "Regulations on Administrative Protection of Pharmaceuticals" enacted on December 12th, 1992 and the "Implementing Rules for Regulations on Administrative Protection of Pharmaceuticals" enacted on December 30th, 1992. The pharmaceuticals administrative protection system was designed to implement the international duty that China promised when China signed bilateral IPR agreements with the United States, European Union, Switzerland and Japan. Its main content was that pharmaceutical patent holders in the above countries and regions could apply for a 7.5-year administrative protection in China for their pharmaceuticals that were patented in these countries and regions during January 1st, 1986 to January 1st, 1993. After the completion of its mission, this special pharmaceutical IPR protection system will completely retreat from the historic stage.
    2)  Traditional Chinese medicines protection system. The relevant legislation of the system is the "Regulations on the Protection of Traditional Chinese Medicines" enacted on October 14th, 1992. Its main content is that any traditional Chinese medicines that are manufactured in China and meet relevant regulations are given a 7-year, 10-year, 20-year or 30-year protection period according to their levels of protection.
    3)  The patent linkage system in the approval of drug registrations. The patent linkage system provides that while the state drug administration departments are reviewing the registration applications of drugs, they check the safety, effectiveness and quality controllability of the drugs as well as examine whether the drugs infringe upon others' patents. The "Drug Registration Regulation" that became effective December 1st, 2002 establishes a formal patent linkage system in China for the first time. It requires that applicants provide information about the patents and ownership of their drugs, prescriptions or processes that they wish to register in China, submit warranties that their drugs do not infringe on others' patents and promise to be responsible for the consequences of such infringements.
    4) The protection system on unpublished data. The 35th article of the "Regulations for Implementation of The Drug Administration Law" issued on August 4th, 2002 stipulates: "For drug producers or sellers who have obtained the licenses to produce or sell drugs that contain new chemical ingredients, the state protects the unpublished experimental data or other data that they have personally obtained and submit to related authorities. No one is allowed to make use of these data for unfair commercial purposes. Within 6 years after the drug producers or sellers obtain the licenses to produce and sell the drugs containing the new chemical ingredients, the drug administration departments can grant licenses to others who use these data to apply for licenses to produce and sell the drugs only with the permission of the licensed drug producers or sellers." The "Drug Registration Regulation" enacted subsequently also has similar provisions.
    5) The Bolar Exception system. This system grants exemption to infringement behaviors that use relevant patents in the validity period of the patents in order to obtain the registration information of drugs (including medical devices). Because most of China's pharmaceutical companies mainly produce generic drugs, it is very common that China's pharmaceutical companies imitate others' patented pharmaceuticals to do clinical trials within the protection period of the patents. In order to protect China's pharmaceutical companies' legal rights to produce patented drugs for clinical research in accordance with international practices and enable the general public to obtain cheap generic drugs as soon as possible after the patents expire, in 2008 China revised the "Patent Law" for the third time and introduced the "Bolar Exception" system with reference to international common practices.
    6)  The compulsory licensing system for pharmaceutical patents. In order to prevent patent owners from using their patent rights to hurt public interests, the world's patent laws all stipulate the patent compulsory licensing system for applying patents. The 49th article of China's existing "Patent Law" stipulates: "In national emergency or extraordinary circumstances or for the purpose of the public interest, the state patent administration department may grant compulsory licenses to use invention or utility model patents." Although there is a legal basis for the compulsory licensing of drug patents, China has not yet enacted any drug patent compulsory licenses so far.

3. Problems to solve

1)  Further improve the management and protection of trade names of drugs

China has established a special examination and approval system for the trade names of drugs, but unlike the trademarks of drugs, the trade names of drugs do not have the legal status as an exclusive civil right. So when the trade name of a drug is the same as the trademark of another drug, it will be unable to get the approval from the state drug administration departments due to the exclusive right of the trademark.

2) Establish an ex