CHINA Trends and Developments Contributed by: Binxin Li, Guangzhen Shang and Sally Wang, LeanWill Law Firm
Judicial interpretation on civil antitrust action On 24 June 2024, the Supreme People’s Court of China (SPC) released a new judicial interpre - tation, Judicial Interpretation of Several Issues Concerning the Application of Law in the Trial of Civil Disputes Over Monopoly (the “New Judicial Interpretation”). This became effective on 1 July 2024 and replaced the one released in 2014. The New Judicial Interpretation mainly covers the following five aspects: • procedural matters – mainly including defini - tions, case acceptance, jurisdiction, ascer - taining of evidence, public interest action, and suspensions of proceedings; • determination of the relevant market – mainly including the principal requirements for defin - ing the relevant market, burden of proof, analytical methods and other facts to be considered; • monopoly agreements – mainly stipulating synergistic behaviour, drug patent reverse payment agreements, algorithmic agree - ments, and cross-platform most-favoured treatment in horizontal monopoly agreements; • abuse of dominant market position – mainly providing the definition of dominant market position, and the analysis and determination of various types of abuse of dominant market position behaviour; and • civil liabilities – mainly relating to civil liabili - ties, loss determination, behaviour effects and the statute of limitations. Reverse payment agreements in the pharma - ceutical industry were specifically addressed in the New Judicial Interpretation, and could lead to antitrust violations if occurring without prop - er justifications. Companies in the life sciences and pharmaceuticals sector should be aware of
more attention from healthcare companies oper - ating in China than ever before. The White Paper also indicated that the volume of trade mark-related first-instance infringement civil cases demonstrated a significant 16.82% increase in 2023 compared to 2022, reaching a total of 131,429 cases. At the same time, copy - right-related cases dropped slightly by 1.57%, while competition cases grew by 8.97%. Legislation and Regulatory Developments The IP landscape in the life sciences and phar - maceuticals sector continues to evolve, influ - enced by legislative and regulatory changes. Several noteworthy developments include the following. Patent term extensions Patent term extensions (PTEs), along with detailed implementing rules and regulations (effective as of 20 January 2024), bring extra protection to innovations in the industry. The issue around the “new drug” classification has now been clarified by a China National Intel - lectual Property Administration (CNIPA) deci - sion, in which the CNIPA ruled that a drug under Class 5.1 is not eligible for a PTE – ie, the “new drug” qualifying for a PTE refers to one that has not been approved globally, which also reflects China’s current position and intention to encour - age early entry of drugs into the Chinese market. In addition, a number of the CNIPA’s decisions rejecting the granting of a PTE owing to formal - ity issues – including no submission of a drug registration certificate and no PTE application within three months after drug market approval – highlight the need for patentees to pay atten - tion when preparing and filing proper PTE appli - cations in time, so as to utilise the mechanism.
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