Data Exclusivity (DE) Protection in Korea

In pharmaceutical industry, data exclusivity (DE) protection is an important IP right. DE is to protect the value of extensive pre-clinical and clinical data that establish a drug’s safety and efficacy, clinical indications and uses.

KFDA provides such DE through PMS (Post Marketing Surveillance) system. Before the expiry of PMS period, no generic drug is allowed to market. During PMS period, third parties cannot obtain approval for generic versions of the same product unless they can submit data that are (1) different from the data submitted for the first approval; and (2) equivalent to or exceeds the scope of data submitted for the first approval. There is no real case to obtain before expiry of PMS in Korea so far. Therefore, such PMS system has played an effective Data Exclusivity for drug developers.

Two categories of DE exist in Korea as follows:

1. New Drug (NCE) – 6 years from marketing approval
   1. New Chemical Entity (NCE)
   2. Ethical Drugs different from already licensed drugs in terms of active ingredients or mixture ratios
   3. Ethical Drugs different from already licensed ones in the route of administration, while containing the same active ingredients
       
2. Improvement Drug (NCI) – 4 years from marketing approval
   1. Ethical drugs which are identical to already licensed drugs in terms of active ingredients and route of administration but distinctively different in added indications.
   2. Ethical drugs which are modification of the structure, formulation, or indication of existing drugs. It is generally an improved version of the original drug in terms of safety, efficacy or convenience.

Patent Term Extension (PTE) in Korea

1. Background
    
   The patent term extension system was first introduced in Korea on July 1, 1987. Under the 1987 Act, a petition for patent term extension may be filed only during the last three (3) years of the original term of the patent. Under the new 1990 Act, however, a petition for patent term extension may be filed within three (3) months from the date of the approval and six (6) months prior to the expiration date. The current law is basically the same as that of 1990.
    
   Some Changes to the current patent term extension system went into effect on April 3, 2013. The key change to the current system is limiting the number of PTE instances from multiple available chances to only one. Under the current PTE system in Korea, PTE may be available only to the "first" regulatory approval for "a new chemical entity."
    
2. Subject Patent and Procedures for PTE
    
   A patent is eligible for term extension if the patent is related to an approved medicinal or agricultural product, if the patent was unable to be practiced after grant due to pharmaceutical or agricultural regulatory approval requirements. Such a patent should claim a compound, composition indicating use, formulation for (1) an invention relating to a drug which requires a product approval under the Pharmaceutical Affairs Act ("PAA"); or (2) an invention relating to an agrochemical which must be registered under the Agrochemical Management Act ("AMA").
    
   Only registered patentee may apply for patent term extension to KIPO. If the patent right is jointly owned, all the patentees must jointly apply for an extension of the term.
    
   An application for PTE must be submitted within three months from the date of the approval under the PAA or from the date of the registration under the AMA. The application, however, may not be submitted less than six months prior to the expiration of the original patent term. Also, a petition for patent term extension may not be filed after the expiration of the patent term. An application for patent term extension should be supported with evidence to show the reason for the extension.
    
3. Period of Patent Term Extensions
    
   The term of a patent can be extended only once. In case a product approval (or registration) is sought for multiple patents, the term is extended for each patent. However, in case multiple product approvals (or registrations) are sought for a single patent, the term is extended only for the first approval (or registration).
    
   Under the old law, even an approval for a combination product whose components had been previously approved by KFDA could be the basis for PTE. In addition, the approval for a second use of an approved drug could also be the basis for PTE, since the approval was regarded as the "first" approval for the new use. Further, in some cases, even an approval for a new formulation comprising an approved active ingredient could be the basis for PTE, if the new formulation was not simply different in the dose of the active ingredient but was a different administration form compared to the previously approved drug (e.g., injection vs. tablet).
    
   However, under the current law and regulation, PTE may be available only once to the "first" regulatory approval for "a new chemical entity."
    
   The period of PTE shall be the total length of non-working time to obtain authorization or registration under provisions of the PAA or AMA to work a patented invention. For example, for drugs, the period commencing from either the approval of a protocol for clinical testing from the government authority after obtaining a conditional approval to manufacture for clinical testing or the date the patent is registered, whichever is later; to the date that the final approval to market.
    
   The maximum patent term extension obtainable is five (5) years regardless of whether the actual period of non-working caused by the statutory requirements under the relevant Act exceeds five years. 
    
4. Appeal to the IPTAB and the Patent Court
    
   If an examiner of KIPO rejects the petition or application for patent term extension, the applicant or petitioner may appeal to the IPTAB of KIPO. The appeal must be filed within thirty days from the date a certified copy of the rejection is served to the applicant or his agent. On the other hand, a 3rd party may challenge PTE through Invalidation Trial at the IPT of KIPO. If a losing party in the IPT proceedings wants to appeal against the decision of IPT, the party may bring a lawsuit to revoke the IPT decision to the Patent Court within thirty days from the date of receiving the decision.
    

Appeal Procedure to KFTC’s Decision and Order to the Seoul High Court

KFTC’s decision or order does not become effective until the formal written decision and order has been issued. Following receipt of the KFTC’s written order, the respondent party may appeal as followings:

1. Filing an Request for re-hearing & suspension of enforcement

A respondent who is dissatisfied with the decision may file a request for re-hearing to the KFTC within 30 days from the receipt of the written decision.

The KFTC may hold a new hearing and make a decision within 60 days, but it can extend the decision-making period up to 30 days.

2. Filing a lawsuit for appeal to the Seoul High Court

The respondent party may appeal the KFTC’s decision to the Seoul High Court. In addition, the party may file a petition for a stay of the enforcement of order to the Seoul High Court, too.

The party shall file a lawsuit to the Seoul High Court within 30 days from the receipt of a written decision or re-hearing result.

3. Final Appeal to the Supreme Court

A losing party at the Seoul High Court may appeal to the Supreme Court within 14 days from the receipt of the decision.

 

Seoul High Court Denied Qualcomm’s Appeal for Stay on September 5, 2017

The Seoul High Court denied the Qualcomm’s petition to stay the order of the Korea Fair Trade Commission (KFTC). The court found that company’s business wouldn’t suffer irreparable harm while the company appeals. Irreparable harm typically is the legal threshold that courts use when determining whether to grant a stay.

Qualcomm announced it would appeal the Seoul High Court’s decision to the Korea Supreme Court. Link: Qualcomm press release

The case is an intermediary process and the court’s decision to deny the petition to stay does not impact Qualcomm’s appeal of the KFTC decision and order. The main lawsuit is pending before the Seoul High Court.

Further, the KFTC’s order reviewed by the Court does not invalidate any existing license agreements, does not prohibit Qualcomm from entering into licenses for its standard essential patents (SEPs) and other patents at the device level and does not limit the royalties Qualcomm can seek or collect for SEPs under its current or future licenses as long the license agreements are consistent with Qualcomm’s FRAND commitments.

The Korea Fair Trade Commission (KFTC) Rendered Full Decision and Order Against Qualcomm on January 20, 2017

The Korea Fair Trade Commission (KFTC) rendered its full decision and findings of the investigation into Qualcomm’s market power and anti-competitive business practices.

 

Click here to read the full KFTC decision in English.