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by Heidi Yeh - NAIP Legal Research

For both local and global pharmaceutical companies, the forthcoming amendments to the Taiwan Patent Act are of utmost importance as they will include substantial changes that will affect the biomedical industry in Taiwan. The Taiwan Intellectual Property Office (TIPO) has invested significant amounts of time in reviewing the current Patent Act and proposed amendments in an effort to bring Taiwan's patent laws in line with global trends. To hear industry opinions on the amendments, TIPO held a public hearing on February 25th, 2009.

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In the first quarter of 2009 alone, three major pharmaceutical companies announced mergers with other major pharmaceutical or biotech companies. Pfizer announced on January 26th that it will buy Wyeth for $68 billion USD in cash and stock, making this the largest merger in value to have occurred in the past decade. Merck & Co. later announced on March 9th that it agreed to acquire rival Schering-Plough Corp. in a deal worth $41.1 billion USD. Then on March 12th, Roche announced that it is buying up just less than half (44%) of Genentech for $46.8 billion USD. This is the largest merger by value in Switzerland ever. The main reason for these mega-deals? Every one of these companies, including Pfizer, is facing the same predicament: the impending expiration of patents for major drug products.

The nature of biomedical patents is such that they provide extremely strong and complete market protection for IPR holders during the patent term. Only once a patent term expires may generic versions of a product enter the market. However, the duration of a biomedical patent term is not so easily determined. Generally, time-consuming phase I-III clinical trials are required before a drug product is even authorized to enter the market. These trials can easily last several years, significantly reducing the duration of the patent term in which the IPR holder may capitalize on the patent. As a result, regulations compensate by allowing the patent term for human drugs, antibiotics, or human biological products to be extended according to the delayed regulatory review time span.

In Taiwan, regulations on the sale of generic drugs currently exist only in the Pharmaceutical Affairs Act and provide only broad guidelines regarding the issue. Therefore the promulgated revised Taiwan Patent Act will include updated and more detailed regulations on the sale of generic drugs. To help clarify these new regulations in the revised Patent Act, TIPO held a public hearing on February 25th, 2009 to discuss the changes related to biomedical patents. Below is a summary of the highlights of the discussion.

Explanations of the amendments in Taiwan Patent Act Revision Draft (02/16/2009) are as follows:

Highlights of the Revised Draft of the Taiwan Patent Act
  1. To encourage research and investment, amendments have relaxed the requirements for extension of patent term requests. Currently, applying for patent term extension under the current Patent Act requires having had a minimum two-year delay in entering the market due to government approval procedures. In keeping with the concept of using patent term extensions to compensate for lost capitalization opportunities, the minimum two-year threshold will be eliminated.

  2. *Note: other countries such as Japan, Korea, the United States, Germany and the United Kingdom have no minimum delayed time period requirement.

  3. A pharmaceutical product, i.e. a drug or an agricultural product, may often have more than one application. However, to prevent abuse of the system—by continually applying for patent term extensions for different applications—an extension of patent term may now officially only be granted once and valid only for the application specified. For example, when an invention includes two claims, as an antiseptic and as an insecticide, if the patent term of the antiseptic is granted an extension with an agricultural permit, protection for the invention’s application as an insecticide may NOT be extended.


  4. Extension of patent terms may now no longer be accepted for veterinary drugs.


  5. Research on a generic drug does not violate the patent rights of the corresponding brand-name drug's IPR holder. In addition, so-called "listing trials" are not considered a form of research and not required for approval of a market license.


  6. In order to cope with international emergencies, or to make non-profit-seeking use of a patent for enhancement of public welfare for developing countries and least developed developing countries that may not manufacture drugs within their countries, the Patent Authority may, upon an application, grant a right of compulsory licensing to the applicant to put the patented invention into practice; provided that such practicing shall be restricted mainly to the purpose of satisfying the requirements of the specific market with limited quantities.

Of the proposed amendments, one of the most controversial has been the exemption of "research" on generic drugs from the scope of patent protection. Generic drug pharmaceutical companies prefer that their products enter the market as soon as possible; the international pharmaceutical companies, on the other hand, prefer to maximize their rights in all interpretations. The amended Patent Act attempts to compromise between the two parties by permitting research on generic drugs during the patent term, but excluding steps such as listing trials from the scope of "research". Yet listing trials, though not required for a market license, are generally required by hospitals to test the efficacy of the generic drugs. This effectively blocks the generic drug maker from the market until expiration of the patent.

During the public hearing, representatives from both sides expressed their comments and concerns. But due to the aforementioned reasons, the amendments related to biomedical products, and to which extent should the government explain them, still remain under debate.


Conclusion

TIPO has clearly stated that the main purpose of the amendments to the Patent Act are the elimination of the minimum two-year threshold, the clearer interpretation of the restrictions on extension of patent terms, adding compulsory licensing provisions, and introducing the concept of exemption on research for generic drugs. Although the wordings of the amendments were criticized at the hearing and requests for another hearing on the same subject matter have been made, TIPO has not yet announce a decision.

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