February 12, 2016

Patent News

Supreme Court Overturns JPO Rules on Patent Term Extension for Drugs and Adopts a More Flexible Standard

In a judgment issued on November 17, 2015, the Supreme Court of Japan adopted a new standard on when a patent term extension shall be granted for drugs. The Japan Patent Office (JPO) initially ruled that, since a drug that has a certain active ingredient was previously approved for marketing, delay in approval of another drug that has the same active ingredient cannot be asserted as a basis for patent term extension, even if other elements such as dosage and administration are different from the first drug. However, the Supreme Court overturned the JPO decision and opened a room for granting patent term extension in such cases. (Supreme Court Case No. 2014 (gyo-hi) 356.)

The Patent Act of Japan grants to patentee an exclusive right to manufacture and sell the patented products until the patent term expires, which occurs 20 years after the filing date. However, in case of drugs, one must separately obtain a marketing approval before he can actually start manufacturing and selling the drugs in Japan. As a result, the patentee might not be able to enjoy the full benefit of the patent term due to late grant of the approval.
In order to address this issue, the Patent Act allows the patentee to seek from the JPO an extension of the patent term for up to five years, on the condition that the patentee was not able to practice the patented invention due to delay of such approval.

On the other hand, the Patent Act provides that the JPO shall deny the patent term extension, if the approval is deemed as "not necessary for the practice of the patented invention."

This becomes an issue especially when the patentee already owns an approval (first approval) of a drug that is covered by the patent, and then tries to obtain patent term extension on the basis that it was not able to practice the patent due to delay of another approval (second approval) of a different drug but is covered by the same patent.

The JPO's previous view was that, the JPO should extract the elements covered by the patent claim from the first and the second approval, and compare the two approvals just by focusing on the extracted elements. If there is no difference between the two approvals from this viewpoint, the second approval would be deemed as "not necessary for the practice of the patented invention."

This is how the JPO initially decided in the current case. In the current case, the patentee Genentech Inc. ("Genentech") owned a patent that covered an active ingredient called bevacizumab, which is used for treatment of cancer. In 2005, Genentech obtained the first marketing approval, under which bevacizumab was to be infused at a dose of 5 mg/kg at an administration interval of at least two weeks. In 2009, Genentech obtained the second marketing approval, under which bevacizumab was to be infused at a dose of 7.5 mg/kg at an administration interval of at least three weeks. The JPO decided that the second approval was "not necessary for the practice of the patented invention," since the patent claim covered the active ingredient bevacizumab to be used for treatment of cancer, and the two approvals were the same in terms of active ingredients to be used for treatment of certain disease.

Genentech appealed the JPO decision to the Intellectual Property High Court ("IP High Court"), which vacated the JPO decision. The JPO appealed to the Supreme Court.

The Supreme Court held that, when deciding whether the second approval was "not necessary for the practice of the patented invention," the JPO should not just compare the elements covered by the patent claim, but rather compare all elements that "directly relate to the substantial identicalness of the drugs." In the current case, the elements that "directly related to the substantial identicalness of the drugs" included not only active ingredients, but also dosage and administration of the drugs. The second approval was different from the first approval in terms of dosage and administration, which allowed the drug to be prescribed in a different way (namely, in combination with another therapy). Thus, the Supreme Court concluded that the second approval is not deemed as "not necessary for the practice of the patented invention."

As a conclusion, the Supreme Court affirmed the IP High Court judgment to vacate the JPO decision.

On November 18, 2015, the day following the Supreme Court judgment, the JPO announced that it will revise its Examination Guidelines on the patent term examination by spring 2016.

As a result of the Supreme Court judgment, pharmaceutical companies will be given more opportunities to seek patent term extension, especially when a company develops a new method of administration of an active ingredient covered by an existing marketing approval.

On the other hand, there is also an issue of how broad the scope of protection of an extended patent is. The Patent Act provides that an extended patent is enforceable only against products that are subjects of the marketing approval that became the basis for the patent term extension. However, it is unclear whether the scope of protection of an extended patent is limited to the scope of ban on manufacture and sale that was lifted by the marketing approval, or the scope of protection is broader. The IP High Court held that the scope of protection of an extended patent might not necessarily match with the scope of ban lifted by the approval, but the Supreme Court judgment remained silent on this issue. Thus, this issue is yet to be resolved, and we would have to wait for further developments in case law.

(Written by Ms. Noriko Shintani (Patent Attorney))