CHINA Law and Practice Contributed by: Binxin Li, Guangzhen Shang, Yue He and Lesley Wang, LeanWill Law Firm
9. Alternative Dispute Resolution 9.1 ADR Options Disputes can be resolved through mediation, arbitra ‑ tion, administrative adjudication or negotiation. Mediation includes commercial mediation, court mediation and administrative mediation. A neutral facilitator helps the parties reach a settlement. China is starting to introduce pre-lawsuit mediation to judi ‑ cial practice. Chinese courts may encourage recourse to mediation but cannot compel the parties to par ‑ ticipate. Mediation and arbitration offer a confidential, par ‑ ty-driven alternative: the parties can jointly appoint arbitrators with specialised life sciences expertise, ensuring both technical accuracy and the protection of proprietary data. Patentees may also seek an administrative ruling from the local patent office; this route is attractive to parties that need a quick injunction. When pharmaceutical companies enter into settle ‑ ment agreements, they must be mindful of antitrust scrutiny (eg, pay for delay term – see AZ v Ask (2021 SPC Civil IP Final No 388)). Such an arrangement with ‑ out justification may constitute a horizontal monopoly agreement, which is prohibited by Article 17 of the Anti-Monopoly Law. The following factors are typically considered: • whether the consideration paid or promised to the generic company markedly exceeds the litigation costs of the underlying patent dispute and is inca ‑ pable of reasonable justification; and • whether the agreement materially extends the patentee’s period of market exclusivity or impedes, delays or otherwise influences the generic’s entry. 10. Settlement/Antitrust 10.1 Considerations and Scrutiny
11. Collective Redress 11.1 Group Claims
There are class actions under the Civil Procedure Law, but they are rare in the life sciences/pharma sector in China. A class action can be filed if the subject matter of the action for each party is the same or is of the same kind. Rights and Obligations Where the parties in the class action have common rights and obligations regarding the subject matter, the conduct of anyone in the same group could bind the remaining group members upon their recognition. Representative Where there is a significant number of members on one side of a group claim, such group may recom ‑ mend one representative or several representatives to participate in the litigation. The conduct of such representatives shall bind the whole group. However, such representatives must obtain consent from all members of the group in order to modify or relinquish any claims, admit any claims of the opposing party or reach a settlement. Drug Safety For a class action related to food and drug safety, an authority or relevant organisation as prescribed by law may institute a class action in a court. If the authority or organisation does not file a lawsuit, the procurator ‑ ate office may file a lawsuit instead.
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