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IP Newsletter | Winter 2014/15
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PATENT
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Final Draft of Pharmaceutical Affairs Act Legislation for the Korean Patent-Regulatory Approval Linkage System Submitted to the National Assembly
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As part of the Korea-US Free Trade Agreement ("KORUS FTA"), a patent-regulatory approval linkage system has been introduced in Korea, which is being implemented in two stages. The first stage, which was completed March 15, 2012, allowed brand companies to list patents relating to their products and required generic companies to notify the brand companies of their generic approval applications if challenging the listed patent. In the second stage, to be effective beginning March 15, 2015, a stay mechanism will be implemented allowing brand companies meeting certain criteria to request a temporary stay of specific generic product sales. Moreover, generic companies will be able to obtain exclusivity rights for a certain period of time preventing the sales of the same generic product by other companies. Notably, one of the requirements for obtaining exclusive rights is for the generic company to successfully bring a legal action against the patentee (either in the form of a scope confirmation action or invalidation action). Thus, it is likely that many generic companies will file legal actions against the patentee before filing for their generic approval applications.
The Ministry of Food and Drug Safety ("MFDS") announced the first draft of the Pharmaceutical Affairs Act legislation on March 21, 2014, the revised second draft on July 25, 2014, and then submitted the final draft to the National Assembly on October 22, 2014 to fully implement the linkage system. The draft legislation includes revised provisions regarding the current patent listing and generic notice systems, and new provisions regarding the stay mechanism and generic exclusivity. Although the Korean linkage system is based on the US Hatch-Waxman Act, the final draft legislation contains significant differences from the US system. The major details are summarized below, along with a comparison between the relevant provisions of the Korean linkage system and the US Hatch-Waxman Act.
Patent Listing
Patent Listing Requirements
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| Who must apply |
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The marketing approval holder (MAH) must file the Patent Listing Application (PLA) – if different from the patentee, consent from the patentee is also required.
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| When |
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Within 30 days after the product approval date or patent registration date, whichever is later.
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| Claim types allowed |
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Claims directed to a substance, formulation, composition, or medicinal use.
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| Requirements |
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Claims "directly relevant" to the approved product and the patent application for which are filed before the regulatory approval of the product.
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| Amendments |
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A PLA can be amended after filing but the following amendments must be filed within 30 days of product approval/patent registration:
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Amended drug name
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Amended patent number
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New patent claims
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Comparison with the US linkage system
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| Korean Linkage System |
US Hatch-Waxman System |
| The MFDS reviews the substance of the PLA and only selects patents directly relevant to the approved product for inclusion on the Green List |
The Food and Drug Administration ("FDA") simply lists patents on the Orange Book as requested and serves a purely ministerial role |
| The MFDS requires a detailed explanation of the direct relationship between the patent claims and approved product for the patent listing |
No such requirement except for method-of-use patents |
| The MFDS has the authority to change and delist listed patent information for failing to meet listing requirements |
The FDA does not conduct any substantive review and has no such corresponding authority |
| The MFDS publishes a patent listing application examination report containing a table identifying the "Patent Claims Requested for Listing" and their "Direct Relationship Basis"* with the approved product, where the claims are edited to be limited to information specific to the approved product as published (generally, approved ingredient & indication(s)) |
No such practice |
| The Korean linkage system covers biological products as well as chemical products |
The US Hatch-Waxman system covers only the chemical products and biological products are regulated under a separate system |
| * The MFDS has taken the position that the "Direct Relationship Basis" column serves merely to provide generic product companies with the relevant patent information for a listed product, but has no bearing on the operation of the stay mechanism, which will be based on potential infringement of the actual patent claims (rather than the claims as edited for the "Direct Relationship Basis"). This position is consistent with the final draft legislation. |
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Changing or Deleting Listed Patent Information
A change to or deletion of the patent information listed on the Green List may be requested at any time, with the exception that a change of the expiration date of the patent (e.g., due to the patent term extension) must be filed within 30 days of the change (with a further 30 day extension possible).
Once an application to change or delete listed information is filed, the MFDS must receive comments from interested parties (such as the patentee and generic product approval applicant) before deciding the request.
Generic Notice
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| Who must send |
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Any party filing for product approval based on a listed drug's safety & efficacy data (Generics or Incrementally Modified Drugs)
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| To whom |
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Patentee & MAH
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| When |
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No explicit deadline (but implicitly, before generic approval)
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| What must be sent |
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Filing date of product approval
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Statement that filing for approval to sell product before patent expiration
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Why the patent is invalid or not infringed
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| Penalties |
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If a generic fails to notify the patentee/MAH of its application, the generic product cannot be approved
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If the generic notice is sent later than 20 days after filing for product approval, the actual notice date will be deemed as the generic application date for first generic exclusivity purposes
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| Published information |
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Generic approval application date, API, formulation, and certain other information are published on MFDS website (but NOT generic company or product name)
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| Exception |
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If an application is filed on the assurance that generic sales will begin after the listed patents expire, or if there is consent from the patentee and marketing approval holder, notice is not required
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Generic Stay Mechanism
Request for Stay of Generic Sales
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| Who may request |
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Patentee (or exclusive licensee, if any) |
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| Deadline |
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Within 45 days after a generic notice is received |
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| Requirements |
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The patentee must file a patent infringement or scope confirmation action against the generic, or respond to a scope confirmation action filed by the generic company, in connection with any listed patent
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| Limitations |
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Only one request may be made against the same generic; if the generic company files to change indication, requiring a generic notification against any listed patent, another stay can then be sought
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MFDS Decision on Generic Stay
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| Requirements |
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The MFDS must grant the generic stay, unless:
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the stay request fails to meet the 45-day deadline;
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the patent has expired;
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a legal action required for a stay has not been filed/responded to;
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the patent was listed in a false or otherwise illegal manner;
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the request is made against less than all generics sharing the same (a) type & amount of active ingredient, (b) dosage form, (c) usage & dosage, and (d) indication(s);
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another version of the same generic product, for which approval has been granted and sales are feasible, already exists;
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there has been an unfavorable decision for the patentee in a scope confirmation action, a patent invalidation action, or an administrative action regarding the wrongful listing of a patent; or
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Article 106-2, paragraph (1) of the Patent Act applies (i.e., it is deemed necessary to non-commercially work a patented invention due to a national or extreme emergency, or for the public interest)
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| Stay period |
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The generic stay period is 12 months from the generic notice receipt date
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| Termination |
Termination of the stay occurs after any of the following:
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Decision of non-infringement (litigation or scope trial)
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Decision finding the patent or listing invalid
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Withdrawal, settlement, arbitration, or mediation
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Withdrawal of listed drug approval
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Patent expiration
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Decision finding a violation under the Fair Trade Law
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Determination that the sales stay is illegal
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Comparison with the US linkage system
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| Korean Linkage System |
US Hatch-Waxman System |
No automatic stay
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Patentee (or exclusive licensee) must affirmatively request sales stay, although the MFDS grants a stay as long as formal requirements, e.g. deadlines & litigation filing, are met (thus substantially "automatic" once requested)
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Automatic stay |
| "Generic sales" will be stayed |
"Generic approvals" are stayed |
| The generic stay period is 12 months |
The generic stay period is 30 months |
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Generic Exclusivity
Requirements for Generic Exclusivity
According to the draft legislation, the Korean system provides first generic exclusivity to the appropriate generic to prevent sales by other generic companies.
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| Requirements |
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The generic must:
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have filed the first generic approval application |
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have filed a trial (invalidation/scope action) before filing its generic approval application, and received a favorable decision within 12 months of its generic notification being received; and |
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show that the trial in (ii) above meets any of the following requirements:
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the trial must have been the first trial filed; |
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the trial must have been filed within 14 days of a first trial as in (a) above; or |
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a favorable decision must have been received before any trial under (a) or (b) |
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| Period of exclusivity |
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12 months from when the generic is approved, extendable for up to 2 months if insurance drug price needs to be listed |
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| Scope of exclusivity |
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Exclusion of sales of other generic products with the same (i) type & amount of active ingredient, (ii) dosage form, (iii) usage & dosage, and (iv) indication(s)
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| Publication |
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Information on the product (active ingredient, formulation, approval date, etc.), which was granted a generic exclusivity, is published on the MFDS website
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Comparison with the US linkage system
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| Korean Linkage System |
US Hatch-Waxman System |
| Generic exclusivity is given to the first generic company that files a trial or action before filing its generic approval application |
Generic does not need to file legal action in order to obtain exclusivity |
| First generic exclusivity is given for 12 months |
First generic exclusivity is given for 180 days |
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Duty to Submit Settlement Information
The draft legislation requires that detailed notice regarding any settlements involving generic exclusivity or any manufacture or sales of a product that is related to a generic notification must be provided to the MFDS and the Korea Fair Trade Commission within 15 days of the settlement.
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For more information, please visit our website: www.ip.kimchang.com
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