New Type of Declaratory Judgment Proposed to be Introduced into Taiwan’s Patent Linkage System

In a bid to accede to the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),” Taiwan has introduced a patent linkage system which was implemented from August 20, 2019.  See our news alerts here and here

Under this system which is set forth in the Pharmaceutical Affairs Act, a patentee (or exclusive licensee) of a patent for a new drug can prevent the Taiwan FDA (TFDA) from issuing a drug approval of an equivalent generic drug for a period of up to 12 months, if (1) information relating to the patent has been listed in an information communication system run by the Taiwan FDA; and (2) the patentee (or exclusive licensee) has filed an infringement lawsuit within 45 days after receipt of a mandatory notification from the generic drug applicant that it has duly declared with the TFDA that it believes the patent is either invalid or not infringed. 

However, the Pharmaceutical Affairs Act does not clarify the nature and scope of remedies available in such a litigation, since this part is deemed to fall within the realm of the Patent Act.  Neither is it clear whether this system accords any proactive remedies to a generic drug company when the patentee does not take any legal action within the said 45-day period but is likely to launch a surprise attack after the generic drug is circulated in the market.

To clarify these issues, a Draft Amendment to the Patent Law was proposed by the Taiwan IP Office (TIPO) on January 30, 2020, including the following key points:

  1. The remedies available for a patentee (or exclusive licensee) in the said infringement litigation are injunctive relieves, namely, court decrees that order a defendant generic drug company or distributor to “stop infringement or prevent infringement from taking place.”
  2. According to TIPO’s Explanatory Notes issued along with the draft amendment, such a lawsuit can be filed in reliance upon a patent listed in the information communication system along with a non-listed patent (listable patents include invention patents for compounds, compositions or formulations, as well as medical uses; method patents are not listable.) 
  3. In a case where the patentee (and exclusive licensee) does not file a lawsuit within the above-mentioned 45-day period, the applicant for the generic drug approval is allowed to file a declaratory judgment (DJ) lawsuit for non-infringement. 
  4. According to TIPO’s Explanatory Notes, such a DJ action can be filed (1) against any listed patent for the new drug; or (2) against a listed patent along with a non-listed but related patent, e.g. a patent on the method of manufacturing the drug.  In a case where multiple patents are listed for a new drug and only some of the listed patents (or patent claims) are asserted in the lawsuit filed by the patentee, the DJ action can be filed against the other listed patents (or patent claims). 

The Draft Amendment is now published for public comment which should be submitted by February 7, 2020.  Afterwards, the bill will be sent via the Government to the Congress for deliberation. 

However, there are still some issues that are left to be clarified, for example: 

(1) whether a patentee or an exclusive licensee is allowed to prevent the issuance of a generic drug approval by filing a legal action proactively after knowing the existence of a pending application for the generic drug approval (namely, before receiving the generic drug company’s notice); and
(2) what legal measure(s) does the system provide to a patentee (or an exclusive licensee) after the expiry of the 12-month suspension period, besides the option of filing a preliminary injunction action.