Supreme Court affirms IP High Court's relaxation of the PTE system in Japan

Earlier this month The SPC Blog was delighted to host "Patent term extension in Japan: a guest post", here, by Dr Seigen Tsukuda (Ohno & Partners, Japan).  Here's a sequel, bringing some fresh news.

This is a quick notice that, on 17 November 2015, the Supreme Court rendered a decision rejecting the JPO's appeal against Intellectual Property High Court (IPHC) Grand Panel decision issued in May 2014. As a general principle, the Supreme Court decision can be outlined thuss:

In order to reject an application for a patent term extension (PTE) based on a prior authorization, in view of category and subject of patented invention(s) for which the application is submitted, a prior authorization and a new authorization shall be compared in terms of elements examined for authorization, such elements being relevant to substantial identity as a pharmaceutical product, and it must be established that the prior authorization encompasses the new authorization in terms of an authorization for production and sales of a pharmaceutical product.

The decision applied the above principle to the present facts as follows:

In the context of product patents directed to ingredients of pharmaceutical products, "elements examined for authorization relevant to substantial identicalness as a pharmaceutical product" are components, quantity, administration, dosage amount, effect and efficacy. Administration and dosage amount of the previously authorized pharmaceutical product are 

"... intravenous drip infusion of 5mg/kg (body weight) per dose or 10mg/kg (body weight) per dose ... administration interval is 2-week or longer ...", 

while those of the newly authorized pharmaceutical product are 

"... intravenous drip infusion of 7.5mg/kg (body weight) per dose ... administration interval is 3-week or longer ...". 

Further, production and sales of the subject pharmaceutical product for a combination therapy of XELOX therapy and bevacizumab therapy newly became available by such new authorization. Based on the facts described above, it is not established that the prior authorization encompasses the new authorization in terms of an authorization for production and sales of a pharmaceutical product. Therefore, the decision of appeal board of the JPO is not legitimate, and the IPHC Grand Panel decision is approved.

As can be seen from the above, it seems that the Supreme Court accepted almost the whole framework of the IPHC Grand Panel decision establishing that a PTE may be allowed based on any substantially new authorization, so long as the subject patent covers the newly authorized pharmaceutical product.

Upon the Supreme Court decision, the JPO announced on 18 November 2015 that the JPO starts revising its PTE examination guidelines and stops examinations for PTEs until a publication of the revised guidelines. It is expected that under the revised guidelines, applications for PTE shall be more easily allowed. Further, while the Supreme Court decision is silent, as IPHC Grand Panel decision mentioned in obiter dictum, scope of an extended patent may become narrower than previously expected. 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

In this respect it should be noted that, when a patentee wishes to obtain a PTE, if an authorization is not delivered by 6 months and one day before the expiration date of a subject patent, a provisional application must be submitted by that day, i.e. 6 months and one day before the expiration date (Patent Act Article 67-2-2, paragraph 1), otherwise a non-provisional application must be submitted within three months from the delivery of an authorization (Patent Act Article 67-2, paragraph 2 and Implementing Regulation of Patent Act Article 3).

Further, in our previous post, it was mentioned that 

"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". 

Under the new examination guidelines, PTE may become available without filing such divisional applications.

Patent term extension in Japan: a guest post

Here's a guest post from Dr Seigen Tsukuda (Ohno & Partners, Japan, right) on patent term extensions in that important jurisdiction.  Our thanks go both to Dr Tsukuda and to Darren Smyth (EIP)) for procuring it on our behalf and giving it the benefit of his editorial scrutiny. 

  Introduction            

  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] 

  Practical suggestions            

  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. 

Japanese Patent Term Extensions II

As implied by the use of "Japanese Patent Term Extensions I", we have another recent decision from Japan to share with you. This time, the summary is supplied by the kind permission of Mr Teruo Naganuma of Asamura Patent Office in Tokyo. Mr Naganuma's executive summary is provided below and his full article can be found here.

"The Japanese Intellectual Property High Court (referred to as the IP High Court hereunder) rendered an interesting decision (Case No. Hei 22 (Gyo ke) 10178) on March 28, 2011 that a patent term extension application for a combination drug of known drugs should not be rejected on the ground that each of the known drugs has been already approved for the same medical use as that of the combination drug. Also, the IP High Court rendered the same decision on even date (Case No. Hei 22 (Goy ke) 10177). 

Thus, in Japan, a patent term extension for the patented combination drug of known drugs would be granted even when the approved medical use of the combination drug is the same as those of each of the known drugs , unlike in the USA where an AstraZeneca patent term extension application for a combination drug was rejected by the USPTO in June, 2008 (Patent Term Extension Application of USP No. 5,674,860). 

Therefore, this decision would be extremely beneficial to new drug makers developing and marketing a combination drug of a blockbuster drug with other drugs after the expiration of the original patent term of the blockbuster drug."

Japanese Patent Term Extensions I

While not a staple territory around these parts, we thought that some recent developments on Japanese case law concerning pharmaceutical patent term extensions may be of general interest to our readers.

The following case summary is derived from the May 2011 Newsletter of Anderson Mori & Tomotsune, which was passed to us by Hugh Goodfellow of Carpmaels and Ransford.

Based upon the summary, it appears that it is possible in Japan to obtain a patent term extension for a new form of a previously approved medicine if the pre-approved form is not covered by the patent in question (e.g. the patent to be extended covers a tablet and not the pre-approved injectable form of the drug).

"Under the JPO practice of granting patent term extensions, an application for a patent term extension based on the later approval of a medical product ("later product") with an active ingredient and an effect, which are the same as those specified in a precedent approval of another medical product "precedent product"), is rejected since it is not acknowledged that "obtaining the approval as designated by the Cabinet Order was necessary for the working of the patented invention" as prescribed in Article. 67ter (1)(i) of the Patent Act.

In the subject case, the patentee of a patent directed to the "release control composition" (the "Patent") filed an application for a patent term extension (the "Application") based on a governmental approval (the "Approval")of the medical product "PACIF CUPSULES 30mg" (the "Medical Product") under Article 14(1) of the Pharmaceutical Affairs Act. The Examiner rejected the Application on the ground that there was a previous approval (the "Preceding Approval ") of another medical product which had the same active ingredient and effect as the Medical Product. The Board of Appeals of the JPO decided to uphold this rejection. However, the decision by the JPO was revoked on appeal before the IP High Court. The JPO filed an appeal against the IP High Court's decision before the Supreme Court. 

 The Supreme Court made a notable judgment in which it found that even where there exists a previous approval as aforementioned, if the precedent product does not fall within the scope of a patent to be extended based on a later approval, it cannot be said that obtaining the later approval was unnecessary for the working of the patented invention on the ground that there is a previous approval. Then, for the subject case, since the other medical product does not fall within the scope of any of the claims of the Patent, the Supreme Court applied the above standard, and affirmed the IP High Court decision which revoked the decision of the JPO.

 This Supreme Court's decision has clearly denied the current JPO practice of granting patent term extensions, and where, for instance, there exists a first approval for a drug in the form of an injection, a patent directed to a drug in a form of tablet may be extended based on a second approval for the tablet despite it having the same active ingredient and effect as those of the first approved injection drug."

Proposals for reform in Japan: Samurai writes

The SPC Blog has a friend in Japan who goes by the name Samurai. Writing on the extension of the patent term in Japan and proposals for change, Samurai has this to say:

"The Patent Term Extension (PTE) regime of Japan may be changed drastically according to the IP Strategic Program (IPSP) 2008 (click here for the original Japanese PDF), composed by the Intellectual Property Strategy Headquarters which is chaired by the Prime Minister of Japan.It contains some interesting proposals.

However, before going further, I would like to begin with explaining the current regime, for the convenience of those who are not familiar with Japan's unique PTE system.The guidance for PTE examination will be found here (pdf) and it basically says that the Japanese Patent Office (JPO) will examine the extension application based on whether 'product' or 'use' in the approval is the first or not. This could mean that you can file multiple extension applications whenever you get an additional Marketing Approval (MA) for the same ingredient for the different 'use' (i.e. an additional indication). Moreover, you could extend plural patents based on a single MA due to lack of such limitation in the legislation. As a result, we are enjoying tremendously generous PTEs. These are the basics of Japan's PTE.

Some entities were not satisfied by this and made a greedy attempt to accomplish the extension for the formulation-altered version of the existing drugs. They were Senju (original; English summary), Roche (original; English summary) and Takeda (original; no English summary) and they all lost their actions before the IP High Court. It has therefore been established case law that the formulation patent is not eligible for the extension. Now they seem to be changing their tactics and have utilized the Cabinet instead of courts. Below is a tentative translation of the excerpt from the IPSP 2008 mentioned above (on page 33 of the Japanese text).

Chapter 2: Protection of IPR

I. Adequate protection of intellectual property

1. Ensuring that the new technologies will be properly protected and supporting the creation of new markets

(2) Fundamental review of the Patent Term Extension system

The additional subjects, such as the allowance process in the Cartagena Protocol on Biosafety or the approval process of using biomaterials derived from iPS cells as well as the innovative drugs which differ in terms of revolutionary formulation technologies including DDS will be investigated. In addition, the comprehensive review of the requirements of the extension, the eligible numbers and frequency of patents and the scope of rights of the extended patent, including way for the overall system, also based on international trends, will be conducted. The study, to begin immediately, and reach its conclusion in fiscal 2008. (Ministry of Economy, Trade and Industry, the concerned agencies).

As you can see, it says that they may consider adding the formulation patent as eligible subject matter -- but it also states they may ban Japan's unique multiple extensions (see the phrase 'international trends') at the same time. Of course, the extension of the formulation patent would not be in line with 'international trends'.

As a concerned person, I'm closely of watching the course of action. As is stated in the IPSP, the review has just been started and the reform plan has not yet been finalized. Since the deadline set by IPSP is March 2009, the public comment procedure which will disclose the details of the reform might be expected some time in the beginning of 2009 or earlier. I will keep you updated whenever the status changes".

The SPC Blog thanks Samurai for his contribution and looks forward to hearing of future developments. The blog will also be pleased to receive comments from readers, since some of the points made by Samurai are quite contentious.