Patent systems differ from nation to nation, and the practice relating to patent term extension (PTE) shows an extreme example of such variation. The Japanese PTE system is quite distinct from those of Europe and United States. Significant features of the present Japanese PTE procedure are as follows.
(1) Although it is required that an authorized pharmaceutical product falls within the scope of a claim of the patent, it is NOT required that the claim recites (specifies) any active ingredient. Thus, patents relating to drug delivery systems (DDS), for example, can be extended in principle.
(2) Multiple extensions are available for a single patent (but the term of extension may not exceed 5 years).
(3) Multiple patents belonging to the same patentee can be extended based on a single authorization.
The idiosyncrasy of the Japanese system has increased even further recently. In order to elucidate the current situation, let us look briefly into the Patent Act provisions and the history of Japanese PTE practice.
Relevant provisions of Japanese Patent Act
Article 67 paragraph 2 provides conditions for PTE, mentioning "Where there is a period during which the patented invention is unable to be worked because ... disposition [authorization] ... is necessary to obtain for the working of the patented invention, the duration of the patent right may be extended ..., by a period not exceeding 5 years."
Art 68-2 provides effects of PTE, i.e. "Where the duration of a patent right is extended ..., such patent right shall not be effective against any act other than the working of the patented invention for the product which was the subject of the disposition [authorization] ... which constituted the reason for the registration of extension (where the specific usage of the product is prescribed by the disposition [authorization], the product used for that usage)." [Japanese Patent Act]
PTE examination practice at JPO until 2011
Conventionally, the JPO assumed that "product" and "usage" recited in Article 68-2 should be interpreted as "active ingredient(s)" and "effect and efficacy" respectively. Based on this assumption, the JPO further interpreted Article 67 paragraph 2 as meaning that a PTE can only be based on an authorization that is "new" in terms of a combination of "active ingredient(s)" and "effect and efficacy". For example, let us assume a case where an authorization is obtained for a pharmaceutical product using a new DDS technology, and the DDS technology is protected by a patent. In this case, according to the JPO practice, the patent could NOT be extended so long as there is a previous authorization corresponding to a pharmaceutical product whose active ingredient, effect and efficacy are the same for those of the newly authorized pharmaceutical product. It is not relevant whether the previously authorized pharmaceutical product falls within or outside the claims of the subject patent (situation was similar to MIT case [C-431/04]).
According to Article 67 paragraph 2, a PTE may be allowed "when there is a period during which the patented invention is unable to be worked". Under the Japanese Pharmaceutical Affairs Act, it is not permitted to market a pharmaceutical product of new formulation or new dosage until a new corresponding authorization is obtained, even if a previously authorized pharmaceutical product contained the same active ingredient and was authorized for the same effect and efficacy. It could thus be argued that there is "a period during which the patented invention is unable to be worked". Accordingly, since late 1990s, new-drug developers have been struggling in courts arguing that the above JPO's practice is not legitimate.
Supreme Court decision in April 2011
Finally, on 28 April 2011, the Supreme Court gave a decision determining that the above JPO practice is not legitimate [H21(Gyo-hi)326: Takeda v Commissioner of Patents]. According to the decision, an application for a PTE cannot be rejected based on a previous authorization if a pharmaceutical product authorized by the previous authorization does not fall within the scope of any of the claims of the subject patent for which PTE is applied. The decision opened a door for PTE of a patent protecting a new formulation, such as DDS drugs. [H21(Gyo-hi)326]
Revised examination guidelines in December 2011
Forced by the Supreme Court decision, the JPO revised its examination guidelines for PTE in December 2011. The revised guidelines are fairly complicated, but could be summarized as follows. An application for a PTE based on a new authorization for a new pharmaceutical product cannot be rejected if an old pharmaceutical product authorized by a previous authorization falls outside the scope of all of the claims of the subject patent. On the other hand, if the old pharmaceutical product falls within the scope of a broadest claim of the subject patent, the application for PTE must be rejected so long as the old and new pharmaceutical products do not differ in term of the elements described in the broadest claim of the subject patent.
For example, assume a case in which a new pharmaceutical product is a new formulation including active ingredient A and excipient polymers B and C2, where the old pharmaceutical product was a formulation including active ingredient A and excipient polymers B and C1. In this case, a PTE will not be allowed if an independent claim of the subject patent simply recites active ingredient A, or a combination of active ingredient A and excipient polymer B. On the other hand, a PTE may be allowed if the independent claim of the subject patent recites a combination of active ingredient A and excipient C (C1 and C2 are examples of C).
There remained a question of whether such revised guidelines (to refuse a PTE if the independent claim only recites active ingredient A, or a combination of active ingredient A and excipient polymer B) are in accordance with Article 67 paragraph 2, because marketing of the new pharmaceutical product (A+B+C2) is not allowed under authorization for the old pharmaceutical product (A+B+C1). It may be possible to argue that "there is a period during which the patented invention is unable to be worked" in respect of the pharmaceutical product (A+B+C2) until a new authorization is obtained for the new pharmaceutical product (A+B+C2), even though the patented invention was able to be worked in respect of the old pharmaceutical product (A+B+C1). New-drug developers again fought in courts questioning whether JPO's revised practice is legitimate or not. [Revised Guidelines]
Intellectual Property High Court (IPHC) Grand Panel decision in May 2014
On 30 May 2014, the Grand Panel of IPHC rendered a decision determining that the revised examination guidelines are not legitimate [2013(Gyo-Ke)10195: Genentech v Commissioner of Patents]. According to the decision, if an authorization is new in terms of a combination of components (not only active ingredients), quantity, administration, dosage amount, effect and efficacy, the application for a PTE shall not be refused based on a prior authorization. This means that a PTE may be allowed based on any substantially new authorization, so long as the subject patent covers the newly authorized pharmaceutical product.
The decision also mentioned in obiter dictum that, during the extended period, the patent will cover only a drug within both the scope of claim of the patent and the scope of the authorized pharmaceutical product in respect of “components (not only active ingredients), administration, dosage amount, effect and efficacy”, and equivalents or substantially identical products thereof. Since the PTE system was established in 1988 in Japan, there has been no legal precedent determined in ratio decidendi what is the claim scope of an extended patent. [2013(Gyo-Ke)10195]
As mentioned above, under the current examination guidelines, a PTE is allowed on a patent-by-patent basis, and examination will be performed based on the broadest claim of a patent. In a case where a prior authorized pharmaceutical product falls within the broadest claim and there is a reason for rejection with respect to the broadest claim, a PTE is not allowed even if the old pharmaceutical product falls outside a narrower dependent claim (and the new pharmaceutical product falls within the dependent claim). However, if a divisional application including the dependent claim is filed to separate the claim from the independent broadest claim of the parent, and a secondary patent is obtained, a PTE may be allowed for such secondary patent under the current examination guidelines, based on the authorization for the new pharmaceutical product. If the patentee may wish to obtain a PTE corresponding to a dependent claim in the future, it is recommended to file a divisional application to establish a patent specifically directed to the invention of the dependent claim, describing the invention as an independent claim.
It should also be kept in mind that the current examination guidelines have been disapproved by the Grand Panel decision and the situation is quite unstable. The JPO appealed against the Grand Panel decision, and the case is still pending at the Supreme Court. It is expected that a decision will be given within a few years. The JPO's practice has not substantially been changed since December 2011, but it is quite possible the guidelines will be revised again after a new Supreme Court decision. If the Supreme Court affirms the Grand Panel decision, then a PTE will become more easily allowed, but the scope of protection provided by an extended patent will become more restricted. In 2011, the Supreme Court decision stopped all PTE examination at the JPO until the examination guidelines were revised and fixed. It is therefore recommended that, whenever a new pharmaceutical product is authorized in Japan, an application for a PTE shall be considered for any patent covering the new pharmaceutical product, even if the PTE might appear unallowable based on the present guidelines.