IP Newsletter | Winter 2017/18
	PATENT
	Kim & Chang Successfully Defends Against PTE Challenges at the Supreme Court
	In a decision issued on November 29, 2017, the Supreme Court conclusively rejected recent generic patent term extension ("PTE") validity challenges in Korea based on alternative term calculation and license registration timing proposals put forward by the generics, upholding two Korean Patent Court special panel decisions previously issued on March 16, 2017 (Patent Court Decisions Nos. 2016 Heo 21 and 2016 Heo 4498).
	As our firm has previously reported, generics in Korea have been challenging the validity of issued Korean PTEs on two primary grounds: that the PTE is invalid because the marketing approval holder for the related drug was not properly registered as a patent licensee prior to the PTE application being filed, and that various periods of time included within the PTE should not have been included under the relevant statutes. While the license registration issue is relatively straightforward and the Supreme Court had been expected to uphold existing practice (as did the Patent Court), the PTE term calculation issue has been of great interest to pharmaceutical companies due to the potential for substantial shortening of granted PTE terms in Korea.
	However, the Supreme Court has finally confirmed that there was nothing illegal about the Patent Court's findings as to what periods may be included in the PTE term.
	As background, current Korean Intellectual Property Office ("KIPO") PTE calculation practice under Article 89 of the Korean Patent Act and Regulations uses the following formula:
	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 Patentee during the MFDS review period
	KIPO's practice has been to find "delays attributable to Patentee" only during periods of time where there is a supplementation request pending from all examination departments (i.e., standard and test method, safety and efficacy test, GMP inspection and DMF). If only some departments have supplemental requests pending, that time is not a delay that is attributable to the patentee.
	Generics' arguments against granted PTE terms
	The generics in these cases have argued that the granted PTE terms were invalid because the full amount of delays attributable to the patentee was not excluded from the total time period during which a patented invention could not have been worked (the "Non-Working Period"), leading to longer PTE terms than were legal.
	The generics suggested various other PTE term calculation methods, such as limiting the Non-Working Period to the specific duration of the MFDS safety and efficacy examination alone, or aggregating the total length of all departmental supplementations to count as delay attributable to the patentee, or to simply treat the longest examination period out of all the individual departmental examinations as the Non-Working Period. Further, some generics argued that even if KIPO's current practice regarding "delays attributable to Patentee" is accepted, if certain departments have completed their review, they should not be counted when determining delays attributable to the patentee. Thus, any time supplemental requests are pending (if all other departments' reviews are complete) should be a delay attributable to the patentee. Each of these methods would have resulted in a shorter PTE term than was actually granted by KIPO.
	The Patent Court's rulings regarding PTE terms
	The Patent Court outlined certain basic standards for PTE terms:
	1) The "time period during which the patented invention could not have been worked" under Article 89 of the Patent Act (i.e., the Non-Working Period) begins on the day when the test for safety and efficacy is initiated or the day when the patent is registered (whichever is later), and ends on the date when the regulatory approval is delivered to the applicant. 2) The "time period of delay attributable to the patentee" should be construed to mean periods for which the patentee bears responsibility and can reasonably be said to have caused delay in the regulatory approval.
	Based on these standards, the Patent Court rejected all of the generics' proposed PTE term calculation methods, and held that the PTEs as granted by KIPO were valid.
	Supreme Court's decisions
	The Supreme Court upheld the Patent Court's rulings that the PTEs as granted by KIPO were valid. With respect to calculation of PTE terms, the Supreme Court held:
	Since each departmental examination in the MFDS is simply a way of dividing labor, and given that approval is granted only after all examinations are completed, the approval procedure should be treated as a single process. Therefore, even if there is a supplementation during one department's examination, if the other departments' examinations are continuing at the same time, it cannot be concluded that there is delay attributable to Patentee. Accordingly, the Patent Court's finding that the PTE terms as calculated are valid is legal and proper.
	With respect to the license registration issue, as expected, the Supreme Court confirmed that there was no violation of Article 134(1)(ii) of the Patent Act, on the basis that this provision merely requires that the registration take place before the PTE grant, and was not intended to require registration specifically at the time of the regulatory approval.
	Implications of the Supreme Court's decisions
	For the most part, the Supreme Court simply affirmed the validity of PTEs granted under KIPO's current practices. Thus, it is expected that PTE practice will continue to remain substantially the same as before, and that generics will have difficulty challenging other PTE terms that have been granted by KIPO.
	However, even before the Supreme Court's decisions, KIPO recently announced plans to review the entire current PTE system, and to consider whether KIPO's PTE regulations need further revision in light of practices in other PTE jurisdictions. Thus, although KIPO's proposed revisions should obviously reflect the Supreme Court and Patent Court's rulings regarding the principles for determining the starting and end dates of the Non-Working Period and the time period attributable to the patentee, there may be revisions to KIPO's PTE practice to clarify areas that were not specifically addressed by the Supreme Court (such as foreign clinical trial periods, or the time between completion of domestic clinical trials and the actual filing of the drug approval application). This may be an opportunity for patentees to try to obtain additional PTE for such periods through requests to KIPO.
	On the other hand, given the lack of specific guidance in the Supreme Court's decisions regarding such periods, and since we expect KIPO will take a relatively conservative approach to any revisions, it is likely that there will not be any substantial changes to the length of PTE terms that are granted going forward, unless a further court challenge is filed to expressly clarify the inclusion of such periods in PTE.
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	If you have any questions regarding this article, please contact:
	Duck-Soon CHANG ducksoon.chang@kimchang.com Tae Min KIM tmkim@kimchang.com Inchan Andrew KWON ickwon@kimchang.com
	For more information, please visit our website: www.ip.kimchang.com