What does Phase 1 of the US-China Trade Agreement mean for the Pharma industry


A major contention between the two superpowers was the need for China to recognize and strengthen the protection of IP rights held by US companies in China. The first chapter of the phase agreement is of particular importance to pharmaceutical companies as it contains a broad range of measures, that if implemented into law could have a beneficial effect of IP rights owners in China.
In the Agreement, China recognises “the importance of establishing and implementing a comprehensive legal system of intellectual property protection and enforcement” This is positive for all industries that have a strong reliance on their IP portfolios.
Trade Secrets
The agreement makes strides towards protection of trade secrets and confidential business information. With the scope of the definition being broad and an outline for significant liability being provide if anyone has been found to have misappropriated trade secrets or confidential business information.
Practical measures have also been taken such as amendments to the China Anti-Unfair Competition Law last year. This now means that a person accused of misappropriating trade secrets would have to provide evidence that they were not guilty of the accusation if the holder of the trade secret has produced evidence of misappropriation.
Of particular importance to industries that involve regulatory review such as the life science industry, the Agreement draws up proposals that Government Authorities must follow, to protect the trade secrets filed during regulatory submission.
Pharmaceutical Related IP
Part of the first chapter of the agreement contains information related to Pharmaceutical Related IP.
China has been brought in line with other jurisdictions by the implementation of a Supplementary Protection Certificates (SPC). SPCs compensate for the time taken to obtain regulatory approval and adds an extension of up to 5 years for the patent.
A big area for improvement has been the push towards the definition and acceptance of ‘supplemental data’  with a more definitive definition provided  to support sufficiency and inventiveness claims during patent review/invalidation proceedings. With this more definitive definition it presents the likely outcome of more patents being upheld in China.

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