ANALYSIS OF THE PROPOSED TPP-RELATED PATENT LINKAGE SYSTEM IN TAIWAN.

• Author: Chen, Ping-Hsun
• Position: Trans-Pacific Partnership Agreement, 2015

1. INTRODUCTION 57 II. TPP IP CHAPTER AND PATENT LINKAGE CLAUSE 60 A. Prerequisite of Patent Linkage 60 B. Patent Linkage System 62 1. Notification Requirement 62 2. Timing Requirement 63 3. "Procedure and Remedy" Requirement 63 C. Alternative to the Patent Linkage System 65 D. Summary 66 III. DRUG PERMIT APPLICATION UNDER THE PHARMACEUTICAL AFFAIRS ACT 67 A. DRUG PERMIT 67 B. Submission of Test Data for a New Drug 68 C. Disclosure of Patent Information 70 D. Test Data Protection 70 E. "Generic Drug Permit" Application 71 IV. TAIWAN'S PROPOSED PATENT LINKAGE SYSTEM 71 A. Patent Information Submission 71 B. Notification Made by a Generic Drug Permit Applicant 74 C. Stay of Issuance of a Drug Permit to a GDP Applicant 75 D. Exclusive Sales Period 76 E. Anti-Competition Provision 78 V. CONCLUSION 79 I. INTRODUCTION

   The Trans-Pacific Partnership ("TPP") Agreement was signed on February 4, 2016 in Auckland, New Zealand. (1) Twelve countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, were involved in this multilateral free trade agreement ("FTA"). (2)

   Like many FTAs, (3) the TPP Agreement has an intellectual property chapter which is Chapter 18. (4) Chapter 18 includes many provisions collectively setting a standard beyond the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement"). (5) Article 18.53 of the TPP Agreement is a highly-criticized provision that relates to "patent linkage." (6) "Patent linkage" originates from the Hatch-Waxman Act of 1984. (7) The Hatch-Waxman Act established the Abbreviated New Drug Application ("ANDA") system which allows a pharmaceutical company to apply for a marketing approval of a generic version of a previously-approved drug without going through a full-scale experiment concerning the safety and efficacy of the generic drug. (8) But, to compromise with the benefits of pioneer drug companies, the Hatch-Waxman Act created a cause of action for pioneer drug companies to sue those generic drug companies for patent infringement simply because of the filing of an ANDA. (9) Australia, Canada, and Singapore also have a patent linkage system. (10)

   While the TPP Agreement is under the national approval proceeding in each member state, Taiwan is eager to join the TPP Agreement. (11) Among other things, the Executive Yuan (12) announced a proposed amendment of the Pharmaceutical Affairs Act (13) ("PAA") on August 4, 2016. (14) The Proposed Amendment adds Chapter 4-1 governing a patent linkage system for generic drug permit ("GDP") applications. (15) The Proposed Amendment has been submitted to the Legislative Yuan. (16) The proposed patent linkage system forces a generic drug company to confront with patent law suits brought by a pioneer drug company. To do so, the Executive Yuan also introduced an amendment of the Patent Act. (17) The Patent Act Amendment provides a cause of action for a pioneer company to sue a generic drug company if the latter company files a GDP application. (18)

   This article is intended to explore the Proposed Amendment to figure out whether the Proposed Amendment follows Article 18.53 of the TPP Agreement or goes beyond the minimal protection on pioneer drug companies. To answer that question, it is necessary to interpret Article 18.53 to figure out the scope of protection. In this paper, Part II critically reviews Article 18.53 in light of the international law principles of treaty interpretation under Article 31(1) of the Vienna convention on the Law of Treaties ("VCLT"). Then, Part III introduces the current Pharmaceutical Affairs Act with respect to new drug applications and generic drug applications. The topics cover test data submission, patent information submission, and test data protection. Finally, Part IV analyzes the Proposed Amendment. The analysis covers the new system of patent information submission, notification mechanism, administrative action, and anti-competition.

2. TPP IP CHAPTER AND PATENT LINKAGE CLAUSE

   Part II discusses the prerequisite of patent linkage and analyzes three requirements of the patent linkage system under the TPP Agreement. The analysis follows Article 31(1) of the VCLT which provides that "[a] treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." (19) Accordingly, the TRIPS Agreement and Declaration on TRIPS and Public Health are interpretation tools. (20) On the other hand, Article 31(2) of the VCLT further provides that "[t]he context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty[,] (21) but this paper does not consider those agreements made during the negotiations for the TPP Agreement because of the lack of publicly-accessible information.

   1. Prerequisite of Patent Linkage

      Article 18.53(1) sets only one condition as to when a member state shall provide a patent linkage system. Paragraph 1 recites:

      [A] Party permits, as a condition of approving the marketing of a pharmaceutical product, persons, other than the person originally submitting the safety and efficacy information, to rely on evidence or information concerning the safety and efficacy of a product that was previously approved, such as evidence of prior marketing approval by the Party or in another territory[.] (22) The condition has three elements. First, the marketing approval law requests an applicant to submit the safety and efficacy information of a pharmaceutical product. (23) Second, an applicant may be permitted to rely on the safety and efficacy information previously submitted by other applicant. (24) Third, the previously-submitted safety and efficacy information was used for the marketing approval of such prior applicant's product. (25)

      Therefore, the patent linkage system is not required if an applicant does not rely on any previously-submitted safety and efficacy information, or if an applicant relies on the safety and efficacy information of a pharmaceutical product that is not previously approved.

      The patent linkage system under the TPP Agreement must be understood in the context of data protection. Patent linkage is applied after the term of test data protection. Under Article 18.50(1), if a previously-approved product is a new pharmaceutical product, any latter applicant is not permitted to rely on the safety and efficacy information of such previously-approved product for at least five years from the date of marketing approval of such previously-approved product. Under Article 18.52, a "new pharmaceutical product" in Article 18.50(1) means "a pharmaceutical product that does not contain a chemical entity that has been previously approved." (26) The term of test data protection for at least five years also applies to a new pharmaceutical product defined in Article 18.50(2)(b) as a pharmaceutical product that contains "a chemical entity that has not previously approved[.]" (27)

      Under Article 18.51, the term of test data protection is at least eight years for a new pharmaceutical product "that is or contains a biologic," (28) or at least five years if other measures are also taken. (29) A "biologic" is defined in Article 18.51(2) as to include "at a minimum, a product that is, or, alternatively, contains, a protein produced using biotechnology processes, for use in human beings for the prevention, treatment, or cure of a disease or condition." (30)

      After the term of test data protection, a member state may permit an applicant to rely on the safety and efficacy information of a previously-approved product. At that time, such applicant is subject to the patent linkage system. Therefore, the patent linkage system functions as an extension of data protection.

      It should be noted that Article 18.53(1) does not require "a product that was previously approved" to be a new pharmaceutical product as Articles 18.50 and 18.51 do. (31) But, in the context of generic drug applications, a person who originally submitted the safety and efficacy information that following generic drug companies rely on is more likely to be a right holder of the patents claiming the previously-approved product. (32)

   2. Patent Linkage System

      1. Notification Requirement

         Article 18.53(1) sets three requirements for a patent linkage system. First, under Article 18.53(1)(a), a member state must establish "a system to provide notice to a patent holder or to allow for a patent holder to be notified prior to the marketing of such a pharmaceutical product, that such other person is seeking to market that product during the term of an applicable patent claiming the approved product or its approved method of use[.]" (33) A member state may choose to treat a "patent holder" broadly as "a patent licensee or the authorized holder of marketing approval." (34)

         This notification requirement mandates the drug approval authority of a member state to establish a mechanism to inform a patent holder of marketing approval of a product associated with her patent. But, to be an eligible patent holder, the patent in question must claim the to-be-approved product or to-be-approved treatment. (35) In other words, the patent must be a pharmaceutical formula or a treatment through use of such pharmaceutical formula. However, in a member state which excludes from patentability "diagnostic, therapeutic and surgical methods for the treatment of humans" under Article 27(3)(a) of the TRIPS Agreement, (36) an eligible patent may only be a patent claiming a pharmaceutical formula.

         A patent claiming a pharmaceutical formula has a specific meaning. A pharmaceutical formula is a composition of active pharmaceutical ingredients and excipients. (37) "Excipients"...