The China National Intellectual Property Administration, a newly established administrative authority on patent infringement disputes, recently issued its first decisions, addressing questions many companies had on the practical availability of the administrative enforcement proceeding.
Effective on June 1, 2021, the China National Intellectual Property Administration (CNIPA) became authorized to “handle patent infringement disputes with significant influence nationwide.” This authority stems from a 2020 amendment to the Patent Law of the People’s Republic of China (China’s Patent Law), and allows the institution of a proceeding at the request of either a patentee or an interested party. See China’s Patent Law, § 70.1.
On November 5, 2021, the CNIPA accepted Boehringer Ingelheim’s two requests for administrative ruling on major patent infringement against two affiliated generic drug makers—Guangdong HEC Pharmaceutical Co., Ltd. and Yichang HEC Changjiang Pharmaceutical Co., Ltd. (collectively, HEC). Boehringer asserted Chinese Patent No. 201510299950.3 (the Asserted Patent) directed to linagliptin—a medication used to treat DPP-IV related diseases such as type 2 diabetes. HEC’s generic version of linagliptin was approved for marketing by the National Medical Products Administration in July 2020. It was offered for sale in February 2021 on many government-approved medicine-supply platforms to medical institutions, which started selling the generic linagliptin to patients in April 2021.
While the infringement cases were pending, HEC’s two invalidation proceedings against the Asserted Patent were instituted by the Patent Reexamination Board of the CNIPA. Upon HEC’s request, the CNIPA stayed the infringement cases in December 2021 pending resolution of HEC’s first patent invalidation proceeding. After HEC withdrew its first invalidation petition, the CNIPA lifted the stay in May 2022 but denied HEC’s request for stay pending its second invalidation proceeding. The CNIPA consolidated the two infringement cases for a combined oral hearing, which was held on June 22, 2022.
On July 27, 2022, the CNIPA issued its first administrative decisions in the Boehringer Ingelheim and HEC cases (the CNIPA Decisions). The decisions addressed both procedural issues of first impression in this new venue and reached the substantive conclusion that HEC infringed the Asserted Patent by making, using, selling, and/or offering to sell its generic version of linagliptin. See CNIPA Enforcement Decision Nos. 1 and 2.
Under China’s new Patent Law, the CNIPA and its branch offices became a new forum for the resolution of patent infringement disputes through an administrative proceeding, in addition to the availability of judicial proceedings in Chinese courts. However, companies have been left wondering about the practical availability of the administrative enforcement proceeding. The CNIPA decisions addressed some of these procedural questions.
As noted above, the CNIPA is only authorized to hear the patent infringement cases with “a significant influence nationwide.” See China’s Patent Law, § 70.1. Although this term is undefined in the law, the Administrative Adjudication Measures for Major Patent Infringement Disputes (2021) (Adjudication Measures) issued by the CNIPA provides an open-ended standard, including cases (1) involving significant public interests, (2) seriously affecting the development of an industry, (3) a major case across multiple provincial administrative regions, or (4) other patent infringement dispute which may produce major influence. See Adjudication Measures, §§ 2 and 3.
In the dispute between Boehringer Ingelheim and HEC, Boehringer Ingelheim alleged that HEC infringed the Asserted Patent in about 24 provinces, including Shanghai, Guangdong, Jiangxi, Hainan, Gansu, Shanxi, Henan, Fujian, and Shandong. Accordingly, the CNIPA found these cases were within its authority because the cases affected multiple provincial administrative regions.
It is a long-established rule that filing a patent infringement lawsuit before a Chinese court will remove the option of seeking a parallel administrative enforcement proceeding regarding the same dispute. See Patent Administrative Law Enforcement Measures of China (2015 Amendment), § 10.1.5. This rule is aimed to avoid inconsistency between decisions made by a Chinese court and an administrative branch and improve judicial efficiency. Similarly, the Adjudication Measures also prescribe that the CNIPA’s authority only extends to patent infringement cases where “the court has not instituted a case on the patent infringement dispute.” See Adjudication Measures, § 4.
Here, the CNIPA found that filing a patent infringement case concerning a parent patent before Shanghai IP Court would not deprive the CNIPA’s jurisdiction over a patent infringement dispute regarding a child patent.
Specifically, Boehringer Ingelheim filed a patent infringement lawsuit against HEC before the Shanghai IP court, alleging HEC’s infringement of the parent of the Asserted Patent. Thereafter, Boehringer Ingelheim brought this dispute to the CNIPA, alleging HEC’s infringement of the child Asserted Patent. HEC argued that the CNIPA has no jurisdiction over the dispute because a case regarding the same dispute was already filed before the Shanghai IP court. The CNIPA disagreed, holding that the parent and child patents have different protection scopes and the cases before the court and the CNIPA involve sufficiently different evidence, facts, and reasonings, and therefore are distinct from each other, justifying CNIPA’s jurisdiction.
The CNIPA decisions provide preliminary guidance on the jurisdictional scope of administrative enforcement proceedings. Patentees and interested parties may consider the CNIPA and its branch offices over a judicial forum when resolving patent infringement disputes. The administrative enforcement proceeding is usually much faster and cheaper than a judicial proceeding. To quickly stop patent infringement across multiple provincial administrative regions, the CNIPA may be a patentee’s best option.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers: