Supreme People’s Court’s First Drug Patent Linkage Cases of Determining Generic Drug Falling into Protection Scopes of Composition Patents

Tag：intellectual property-intellectual property dispute resolution,patents

Dapagliflozin Tablets of Sichuan Gowell Finally Determined to Fall within Protection Scope of Two Composition Patents of AstraZeneca

Recently, the Supreme People’s Court issued final judgments on three cases in connection with the disputes about whether the generic drug falls into the protection scope of the respective patents between the appellant Sichuan Gowell Pharmaceutical Co., Ltd. (hereinafter referred to as “Sichuan Gowell”) and the appellee AstraZeneca AB (hereinafter referred to as “AstraZeneca”). Specifically, the Supreme People’s Court upholds the first-Instance judgments for two cases, and revokes the first-instance judgement and dismiss the case for one case.

As the final judgments for the three cases relate to disputes over generic drug of Dapagliflozin, the final judgements have attracted a lot of attention and aroused discussion in the industry since their publication.  From the perspectives of drug marketing approval rules and the Chinese Patent Law, the authors provide here some reflections on the judgments about the three cases, and also expect further discussion and communication.

I. History of the three patent linkage cases involving Dapagliflozin

1. Final judgments of the three cases

On June 14, 2023, the Supreme People’s Court made the final judgments as to the three patent linkage cases between AstraZeneca and Sichuan Gowell, the outcomes are as follows:

It is worth noting that, for the third patent (200780024135.X), the Supreme People’s Court only holds that a patent linkage lawsuit shall not be filed based on a crystalline form patent. That is, the dispute about whether a generic drug falls within the protection scope of the innovator drug crystalline form patent cannot be resolved through the patent linkage system at the generic drug approval phase, but should be resolved through normal infringement litigation after the generic drug is approved for marketing. For this case, the first-instance court has determined that the generic drug of Sichuan Gowell falls into the protection scope of said crystalline form patent.  The Supreme People’s Court holds “the facts ascertained by the first-instance court are true, which are confirmed by this court.”

2. Cause of the disputes in the three cases

Dapagliflozin is an SGLT2 inhibitor. In 2012, Dapagliflozin was launched in Europe as the first sodium-glucose cotransporter 2 inhibitor in the world.  Since then, the drug has been approved for marketing in other countries and regions, including the United States.

In 2017, Dapagliflozin was approved for marketing in China (trade name: FORXIGA®) and included in the 19th batch of Reference Listed Drug for Generic Drugs. At the end of 2019, Dapagliflozin Tablets was included in the National Catalogue for Basic Medical Insurance. Since its launch, Dapagliflozin has offered help to about 170 million patients suffering from Type II diabetes worldwide.

In order to protect the R&D and innovation achievements of Dapagliflozin, AstraZeneca filed corresponding patent applications in China.  In 2021, in accordance with the Implementing Measures for Early Resolution Mechanism of Drug Patent Disputes (for Trial Implementation) (hereinafter referred to as Implementing Measures), AstraZeneca registered the relevant patents on the China Patent Information Platform for Marketed Drugs (hereinafter referred to as the Platform). The public information on the Platform shows that AstraZeneca currently has multiple invention patents related to Dapagliflozin in China.

On November 30, 2021, Sichuan Gowell filed an application for marketing of Category 4 generic drugs of Dapagliflozin with the China National Medical Products Administration (acceptance number: CYHS2102104 Guo) and made the following declarations with regard to the registered patents as mentioned above:

In accordance with Article 6 of the Implementing Measures, the Category 4.1 declaration refers to that the patent rights related to the generic drugs included in the China Patent Information Platform for Marketed Drugs should be declared invalid. The above declaration demonstrates that Sichuan Gowell believes the aforesaid three invention patents of AstraZeneca registered on the Platform should be declared invalid[1].

On April 2, 2022, in accordance with Article 76 of the Patent Law of the People’s Republic of China (hereinafter referred to as the Chinese Patent Law), AstraZeneca filed three patent linkage lawsuits with the Beijing Intellectual Property Court against the generic drug of Dapagliflozin by Sichuan Gowell.

On November 18, 2022, through examination, the Beijing Intellectual Property Court made first-instance judgments on the three cases, holding that the technical solutions of the generic drug of Dapagliflozin of Sichuan Gowell fall into the protection scopes of three different patents. Specifically:

Being unsatisfied with the above judgments, Sichuan Gowell appealed to the Supreme People’s Court. On June 14, 2023, through examination, the Supreme People’s Court finally upheld the first-instance judgments for two cases, and revoke the first-instance judgement for one case.

3. Focuses of dispute of the three cases

The focuses of dispute for the two patent linkage cases involving composition patents are the same, both of which are focused on whether the “immediate release” in claim 1 is a functional feature. Sichuan Gowell alleged that “immediate release” as recited in claim 1 is a functional feature, and the interpretation of the technical feature should be determined in conjunction with the specific embodiments of the function or effect, and the equivalent embodiments thereof, as described in the description and figures of the subject patents; the technical solution of the subject generic drug is neither the same nor equivalent to the preparation prescription according to the embodiments of the subject patents, and thus does not fall under the protection scopes of claim 1 of the subject patents.

The Supreme People’s Court holds that a functional feature refers to a technical feature limits a structure, a component, a step, a condition or a relationship therebetween through a function or effect thereof in an invention-creation, rather than directly specifying the structure, the component, the step, the condition or the relationship therebetween of the technical solution of the invention. It is to be clarified that not all the technical features expressed in terms of function or effect are functional features, and if those skilled in the art could determine directly and clearly the specific embodiments fulfilling the function or effect only by reading the claims, or if a meaning of a technical feature expressing a function or effect is clearly defined in the claims or description, such feature should not be identified as a functional feature limiting the protection scopes of the patents.  The description of the subject patent with the composition patent No. ZL201210201489.X at paragraph [0040] describes “term as used herein ‘immediate release’ and ‘immediate release drug formulations’ mean the pharmaceutical preparation of the present invention is not prepared using the excipient which can interfere the absorption of active ingredients (as dapagliflozin and dapagliflozin propylene glycol hydrate) when administered to mammal or people.” From the aforementioned content from the description, those skilled in the art could learn that “immediate release” as recited in the claims of the subject patents refers to “is not prepared using the excipient which can interfere the absorption of active ingredients when administered to mammal or people” i.e., additives for sustained release applications are not used in the technical solution of claim 1 of the subject patents. The term conveys a definite meaning, and claim 1 is clear in protection scope. As such, Sichuan Gowell’s allegation that the “immediate release” as recited in the claims of the subject patents is a functional feature lacks a factual and legal basis and should not be supported. The technical solution of the subject generic drug falls within the protection scopes of claims 1-3 and 7-9 of the subject patent with the composition patent No. ZL201210201489.X.

The above determination of the Supreme Peoples’ Court is fully compliant with the provisions of Interpretation of the Supreme People’s Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases. Article 3.1 thereof provides: “the people’s court may interpret a claim based on the specification and drawings, relevant claims in the claims, and patent examination documents. If the description defines any particular wording of a claim, such particular definition shall apply. If the meaning of a claim cannot be clarified even by the approaches above, the claim may be interpreted according to reference books, textbooks and other public literatures and the common understanding on the part of regular technicians in the same field.” That is, it is an “internal evidence first” claim interpretation rule, the substance of which is to place priority on meaning of a technical feature provided by a patentee in a patent document or in the patent grant or patent right confirmation procedure, and explain the technical feature based on the same. The Supreme People’s Court has adopted this interpretation rule in many cases, so there is no problem at all in the interpretation of the claims of the two composition patents.

The focus of dispute in another patent linkage case is whether the subject patent is a non-registrable crystalline form patent. For this dispute, not only AstraZeneca and Sichuan Gowell disagree with each other, but also the CNIPA and the Beijing Intellectual Property Court have different opinions.  The discrepancy is so great to arouse extensive discussions in the industry.  Detailed discussion on this issue will be provided below in Part III.

II. Regarding whether generic drugs of Dapagliflozin can be approved for marketing

For the three cases, the Supreme People’s Court ruled to reject the appeals of Sichuan Gowell in two cases and upheld the related first-instance judgements, while revoked the first-instance judgment of the remaining one case. Under such circumstance, there is a further question about whether generic drug of Dapagliflozin of Sichuan Gowell can be approved for marketing.

From the perspective of the Chinese Patent Law, it is generally difficult to obtain approval for marketing. In accordance with Article 9 of the Implementing Measures, if it is determined that a patent falls within protection scope of a relevant patent, related chemical generic drug marketing approval applications can be transferred to the administrative examination and approval procedure only when the patent right is about to expire.

As stated above, in the (2023) Zui Gao Fa Zhi Min Zhong Judgments No. 5 and 6, the Supreme People’s Court clearly determines that the generic drugs of Dapgliflozi of Sichuan Gowell fall into the protection scopes of the two composition patents of AstraZeneca. On the basis, the China National Medical Products Administration can transfer the registration applications to the administrative examination and approval procedure only when the two composition patents are to expire. In other words, the marketing approval applications of the generic drugs of Dapgliflozi of Sichuan Gowell will be transferred to the administrative examination and approval procedure approximately on around March 21, 2028.

Take one step back, if Sichuan Gowell obtains the approval for generic drugs of Dapagliflozin in advance, can it participate in the nationwide and local centralized procurement and list its generic drug? Considering the legal practice of the Supreme People’s Court and the CNIPA, and the current patent status of Dapagliflozin, we believe an answer in negative.

In February of 2023, in the Zui Gao Fa Zhi Min Zhong Judgement No.1158 about the invention patent infringement dispute case between the appellant Sandoz (China) Pharmaceutical Co., Ltd. (hereinafter referred to as “Sandoz”) and the appellee Jiangsu Hansoh Pharmaceutical Group Go., Ltd. (hereinafter referred to as “Hansoh”), the Supreme People’s Court for the first time clarified that the behavior of submitting enterprise and drug qualification certification materials to the relevant local drug centralized procurement department through the local centralized drug procurement platform during the patent term of the innovator drug by the generic drug company constituted an act of offering for sale in the sense of the Chinese Patent Law, and it shall bear infringement liabilities according to the law.

The Supreme People’s Court holds that offering for sale is an independent infringement act as clearly provided in the Chinese Patent Law.  The types of acts of offering for sale have the characteristics of openness, diversity and flexibility. Therefore, the act of offering for sale according to Article 11 of the Chinese Patent Law should be read from both the subjective and objective perspectives. Specifically, from the objective perspective, the act of offering for sale is not limited to the three examples, i.e. “advertising,” “displaying in a shop window” and “exhibiting at a trade fair” according to the provisions for resolving patent disputes, and any oral, written, physical demonstration, web page display or any other perceivable way may be deemed as an act of offering for sale as long as it is an expression of intention for preparation of putting the product into circulation and realizing commercialization of the product. From the subjective perspective, the act of offering for sale refers to that the party has an intention to sell products to any specified or unspecified person. The behavior of submitting enterprise and drug qualification certification materials to the relevant local drug centralized procurement department through the local centralized drug procurement platform during the patent term of the innovator drug, which is conducted by a generic drug company, should be determined as an act of offering for sale. On one aspect, the relevant declaring behavior is an expression of intention to prepare for the subsequent commercial circulation and commercialization of related generic drugs on the side of the company; on the other aspect, the relevant declaring behavior indicates that the company has clearly expressed its willingness to supply its own generic drugs to unspecified persons (for example, competitors, relevant departments organizing centralized drug procurement, and public medical institutions as opposing parties of the potential transactions). As for whether administrative approval is required after application, and whether the drug applied can be successfully listed on the network on the centralized drug procurement platform, should not have a substantive impact[2] on the aforementioned conclusion.

As the presiding judge of the case said, through the examination of the case, pursuant to the pertinent provisions, it is determined that the act of submitting application materials for participating in centralized drug procurement activities, which is conducted by the generic drug company, constitutes an act of offering for sale in the sense of the Chinese Patent Law, and it shall bear corresponding infringement liabilities, which further clarifies the behavior boundaries of generic drug companies in the field of centralized drug product procurement. It is of positive meaning[3] with regard to protect the patents of innovator drugs, standardize the centralized drug procurement market, and promote the high-quality development of the pharmaceutical industry.

Not only does the Supreme People’s Court determine that participation of generic drug companies in centralized procurement and online listing constitutes the act of offering for sale, the CNIPA also makes the same decision on such behaviors, which directly relates to the generic drugs of Dapagliflozin.

Before the implementation of the patent linkage system, Beijing Foyou Pharmaceutical Co., Ltd. (hereinafter referred to as Beijing Foyou) had submitted an application for the generic drug of Dapagliflozin and obtained the marketing approval, and subsequently, the generic drug was successfully listed online in Jiangsu Province. For this, AstraZeneca filed a complaint with the Nanjing Intellectual Property Office. On November 28, 2022, the Nanjing Intellectual Property Office issued an Administrative Ruling determining that the generic drug of Dapagliflozin by Beijing Foyou falls within the protection scope of the composition patent No. ZL201210201489.X, and its behavior of online listing on the local drug procurement platform constitutes patent infringement; Beijing Foyou was ordered to immediately stop the behavior of patent infringement. It can be seen that, even if the marketing approval is obtained, there can still be patent infringement issues when the generic drug is officially launched for sale.

From the above-mentioned judgements/rulings of the Supreme People’s Court, Beijing Intellectual Property Court and Nanjing Intellectual Property Office, it can be learned that, although the AstraZeneca filed infringement/patent linkage lawsuits for composition patents not drawing much attention, the Courts and the Intellectual Property Office still determine that the generic drugs fall within the protection scopes of the patents. The above facts show that the protection of composition patents is not inferior to compound patents, namely the so-called “core patents.”  Therefore, as long as composition patents and use patents are properly applied, these so-called “secondary patents” are as important to the protection of pharmaceutical intellectual property rights as compound patents.

In fact, the division of “core patent” and “secondary patent” is based on the difficulty of being circumvented, but the two have no fundamental difference in terms of patent linkage cases and patent infringement determination. In the sense of the Chinese Patent Law, the two are protected at the same level. Moreover, as China attaches great importance to innovation and strengthens the patent protection policies, the so-called “secondary patents” have also started to be valued and respected. In other words, the non-compound patents, as invention patents, can provide the same level of protection as compound patents, and non-compound patents can still provide stable protection for drugs. In the process of R&D, generic drug companies need to pay attention to avoiding possible infringement upon both compound patents and non-compound patents.

III. The prospect of crystalline form patents under the patent linkage system

The greatest dispute of the three cases is about whether claim 9 of the invention patent No. 200780024135.X belongs to a crystalline form patent, which is also the reason for the divergence between the determinations of the first and second instance courts.

Respecting the effective ruling made by the Supreme People’s Court, the authors have no intention to discuss the determination criteria of crystalline form patents, but focus on the prospect of crystalline form patents under the patent linkage system.

In the industry, there are also many debates on whether crystalline form patents should be covered by the patent linkage system. Some opinions[4] believe that the crystalline form patents should be permitted to be registered on the patent information registration platform. Instead of entangled in the dispute about whether the crystalline form patent conforms to or does not comply with the registration rules, resulting in contradictory ruling results, which reduces the predictability and certainty of the judgment results of such cases, those opinions suggest including the crystalline form patents into the registrable patents, to resolve possible infringement disputes between innovator drug companies and generic drug companies on crystalline form patents before generic drugs are approved for marketing.

Although the above-mentioned ruling of the Supreme People’s Court has “conclusively concluded” that crystalline form patents should not be registered, it does not prevent us from further discussion in terms of legal theory and industry practice. It is proposed herein that, under the current circumstances, it is necessary to incorporate crystalline form patents into the patent linkage system.

Firstly, from the perspective of the legislative purpose of the drug patent linkage system, the Supreme People’s Court determines in the judgement, “the legislative purpose of this special mechanism is to resolve, at the phase of drug marketing examination and approval phase, patent disputes that may occur at the phase of entry into production and operation stage after the approval of generic drugs, and to empower the patentee of the original drug and the applicant of the generic drug the right to sue at the generic drug marketing examination and approval phase, so as to encourage the development of generic drugs while protecting the patent rights of the original drug, and to improve accessibility of the drugs.” Although the early resolution mechanism for drug patent disputes is not the only way to resolve drug patent disputes, under the situation that the current drug patent linkage system is working well and the caseload is not large, it is in line with the legislative purpose of the drug patent linkage system to incorporate drug patents, such as the crystalline form patents or the like, into the system, so as to enable disputes to be resolved in advance and improve drug accessibility.  In addition, in the trial phase of the patent linkage system, it would be better to have an open attitude, that is, one cannot arbitrarily make an expanded interpretation, or arbitrarily make a narrow interpretation to limit the legitimate interests of the right holder.

Secondly, from the overseas practical experience, the drug patent linkage systems of the United States allows the registration of crystalline form patents, that is, the Orange Book allow patentees to register crystalline form patents. Patent protection has global commonality despite its geographic characteristic. Therefore, considering the prior experience, the crystalline form patents may be incorporated into the patent linkage system in the proper time.

Further, from the perspective of feasibility, there is legal basis supporting the falling into protection scope determination of the crystalline form patents. On one aspect, the structure of drug crystalline form characteristics can be clearly characterized by physical parameters, such as X-ray diffraction (XRD) or powder diffraction (XRPD). On the other aspect, according to the provisions of M4: Common Technical Document (CTD) for Registration Application of Drugs for Human Use and Technical Guidelines for Preparation and Structure Determination of Chemical Pharmaceutical Raw Materials, at the marketing application phase, the generic drug applicant needs to specify the three-dimensional structure and polymorphism of the API, which should be consistent with that included in the Chinese Pharmacopoeia or marketed products, and provide specific structural determination research data and spectrums and analyze the same. As such, in terms of substantive determination, either the court or the CNIPA could directly makes comparison based on application materials retrieved from the China National Medical Products Administration, and make a determination without the need for specifically commissioning appraisal. This is not significantly different from the rules for determining whether falling into the protection scopes of compound patents and composition patents containing active pharmaceutical ingredients. Besides, in a technical solution about a drug, the crystal structure of the API usually does not change after it becomes a drug, such as the crystalline structure in this case. Therefore, the determination rules are basically the same as with other rules. For the very few crystalline structures that may change, facts could still be ascertained by appraisal. However, we believe that these are rare cases, and such low-probability events can be resolved through technical appraisal and the burden of proof rule. The purpose of the drug patent linkage system is to resolve disputes in advance, and if patents reciting crystalline features are not allowed to be registered due to the presence of the rare events, causing the majority of patents for which determination can be easily made and needing protection, to be excluded from the system, this obviously does not conform to the basic principles of institutional economics, which is absolutely undesirable.

At last, from the perspective of the development and practice of the domestic pharmaceutical industry, Chinese pharmaceutical companies are developing rapidly with regard to crystalline form drugs from the R&D of conventional crystalline forms to the independent R&D of rare crystalline forms, and gradually moving from low-end generic drugs to high-end generic drugs. In terms of patent protection, the survey says that domestic patents account for as high as 89% of patents related to crystalline drugs, demonstrating a certain leading edge in the field of crystalline drugs. As domestic generic drugs are gradually moving to innovative drugs, more domestic companies should be allowed to resolve disputes in advance, as drug marketing authorization holders or patentees, through the drug patent linkage system. In fact, lots of domestic pharmaceutical companies have registered patents containing crystalline form features on the patent information platform by far, and if the crystalline form patents are completely excluded from the system, domestic pharmaceutical companies will miss the opportunity and procedural rights to resolve patent disputes in advance, which will be detrimental to the long-term development of domestic pharmaceutical companies.

IV. Conclusion

Although the three Dapagliflozin patent linkage cases between AstraZeneca and Sichuan Gowell have come to an end, reflections on this series of cases should not end. We hope this series of cases can provide more guidance for the coordinated development of original drugs and generic drugs, the protection of composition patents, the online centralized procurement of generic drugs, and the perfection of the patent linkage system in China.

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