[Ip-health] Patent Linkage, TPP and the First Generic Exclusivity

Heesob Nam hurips at gmail.com
Wed Feb 11 19:46:44 PST 2015

Yesterday the subcommittee of the Korean National Assembly continued
its discussion but failed to reach a conclusion.

Remaining issues include: curtail the period of automatic stay to 9
months (30 months in the US, 24 months in Canada); the scope of the
generic exclusivity; prevention of misuse or anti-competitive
activities of patentee; effect date of the generic exclusivity (March
15 or one year later); and independent review of patent validity
(e.g., review by FDA).

The next meeting is to be held 24th.


On 11 February 2015 at 22:03, Heesob Nam <hurips at gmail.com> wrote:
> Another issue is the scope of the generic exclusivity. Unlike the
> U.S., the proposal of SKG is to give the generic exclusivity for
> generic products which are not the same as a patented product (for
> instance generic having salt "B" vis-a-vis patented product having
> salt "A". This generic is found not covered by the patent and eligible
> for the generic exclusivity).
> For your reference, the statistics of Korean patent linkage as of December 2014:
> - Listed patents 1,383
> - Generic application 1,162
> - Generic applications corresponding to Para IV application 932
> Meaning huge ratio of generic application alleging listed patent are
> invalid or non-infringing (80.2%)
> Best,
> Heesob
> On 11 February 2015 at 21:47, Heesob Nam <hurips at gmail.com> wrote:
>> Thanks John for the useful information. Especially it contains
>> information on the pay-for-delay during 180-days exclusivity.
>> Today there was a discussion on the implementation of patent linkage
>> under the Korea-US FTA at the subcommittee of the Korea National
>> Assembly. There is no obligation on the generic exclusivity.
>> Nonetheless the S. Korean government, national pharmaceutical
>> industries and the members of National Assembly are likely to agree on
>> 9-months generic exclusivity. I witnessed why it is bad idea but there
>> is a challenging myth that without generic exclusivity no generic
>> company would challenge patent.
>> To defeat the myth, we need counter facts: Many patent challenges in
>> other countries having the patent linkage system without the generic
>> exclusivity such as Canada, Australia, Mexico, Singapore and China.
>> For instance, in Canada:
>> Notices of Allegation received 221, 197, 206, 163, 146 from fiscal
>> year 2009 to 2013
>> (http://www.hc-sc.gc.ca/dhp-mps/pubs/drug-medic/patmrep_mbrevrap_2013-eng.php).
>> Can anybody let me know any links or materials for other countries, please?
>> The Korea-US FTA sets the implementation date to March 15 and the SKG
>> is strongly pushing the National Assembly to pass the flawed laws.
>> Best,
>> Heesob
>> On 11 February 2015 at 12:08, John Mitchell <john at interactionlaw.com> wrote:
>>> I suspect that this Note from the U.S. to the OECD Competition Committee on 18-19 June 2014 may have had something to do with it. Although I have not read it all, I suspect that the illustration of the economic impact of "pay for delay" on page 6 captures the basic problem.
>>> http://www.ftc.gov/system/files/attachments/us-submissions-oecd-other-international-competition-fora/generics_us_oecd.pdf
>>> At first blush, the omitted text would seem to have been inconsistent with this Note.
>>> John
>>>> On Feb 10, 2015, at 9:54 PM, Sean Michael Flynn <sflynn at WCL.AMERICAN.EDU> wrote:
>>>> I don¹t have a lot of inside knowledge on the change. I do recall that in
>>>> the Melbourne round a great number of generic companies from Australia and
>>>> the region gave forceful presentations that exclusivity would not be a
>>>> good way to incentivize patent challenges because the costs of litigation
>>>> in a place like Australia is as expensive as in the US, but the benefit of
>>>> exclusivity is a mere fraction of the benefit in the US because the market
>>>> is so much smaller. You could have much longer generic exclusivity period
>>>> to compensate, but this would only increase the negatives you point to
>>>> below.
>>>> -Sean
>>>> On 2/9/15, 1:21 PM, "Heesob Nam" <hurips at GMAIL.COM> wrote:
>>>>> Apologies for the cross-posting.
>>>>> The wikileaked 2013 IP Chapter contains this provision:
>>>>> Article QQ.E.17:1(d) when a Party delays the grant of marketing
>>>>> approval consistent with subparagraph 5(b)(i), provide an effective
>>>>> reward, consistent with the provisions of this Agreement, for the
>>>>> successful challenge of the validity or applicability of the patent.
>>>>> [FN 116: A Party may comply with paragraph 5(d) by providing a period
>>>>> of marketing exclusivity in appropriate circumstances to the first
>>>>> such other person or persons to challenge a patent.]
>>>>> But in the wikileaked 2014 text, such a provision is removed.
>>>>> Was this because negotiators believed that the generic exclusivity is
>>>>> bad for generic competition? Or the U.S. dropped this provision for
>>>>> the full benefit of brand drug manufacturers?
>>>>> I'm curious about the position of public health activists on the
>>>>> generic exclusivity. Do you see that the generic exclusivity is
>>>>> necessary when importing the patent-approval linkage provisions as
>>>>> proposed by the U.S. in TPP or FTAs because it encourages patent
>>>>> challenges by generic industries and therefore is good for generic
>>>>> competition? Then why haven't Canada, Mexico, Australia, and Singapore
>>>>> introduced the generic exclusivity? Also China, the sole country
>>>>> implementing the patent linkage without FTA with the U.S., does not
>>>>> allow the generic exclusivity for successful patent challengers.
>>>>> I have many reasons why the generic exclusivity is bad:
>>>>> - Subsequent generic entry is delayed;
>>>>> - Pay-for-delay settlement between a patentee and the first challenger
>>>>> is encouraged;
>>>>> - Granting unfair and ridiculous benefit to patentee as the patentee
>>>>> can duopoly market even when its patent is found invalid;
>>>>> - Excessive reward for the first challenger (there is no such
>>>>> incentive in other industries, but we have seen for several hundreds
>>>>> years a plenty of patent challenges. And we don't call non-challenging
>>>>> competitors "free riders".); and
>>>>> - Nonsense as the successful patent challenge has nothing to do with
>>>>> intellectual creation.
>>>>> Best,
>>>>> Heesob
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