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AstraZeneca Withdraws Suits After SPC Conducts First Antitrust Investigation on “Reverse Payment Agreement for Drug Patent”

Mon, 11 Apr 2022
Categories: China Legal Trends

On 17 Dec. 2021, the Intellectual Property Court of China’s Supreme People’s Court (SPC) concluded a case of invention patent infringement dispute, where the appellant applies withdrawal of its appeal against infringement of its drug invention patent (AstraZeneca AB v. Jiangsu Aosaikang Pharmaceutical Co. Ltd. , (2021) Zui Gao Fa Zhi Min Zhong No. 388 ((2021)最高法知民终388号) ).

In this case, the SPC for the first time made a preliminary review on the “reverse payment agreement for drug patent”, also known as the ‘pay-for-delay agreement’, under the Anti-Monopoly Law (AML) in non-AML litigation.

“Reverse payment agreement for drug patent” is an agreement by which the drug patentee promises to compensate the generic drug applicant with direct or indirect benefits (including disguised compensation such as reduction of the generic drug applicant’s detriment) in exchange for the generic drug applicant’s promise not to challenge the validity of the drug-related patents or to delay its entry into the relevant market of the patented drug.

Such agreements are generally arranged in a special and hidden manner, which may have the effect of eliminating or restricting competition and may constitute monopoly agreements under the AML.

The SPC stated that in drug patent cases involving drug patentees and generic drug applicants, courts should, to some extent, review whether the involved agreements or settlement agreements with the appearance of the so-called “reverse payment agreements for drug patents” violate the AML.

Specifically, in this case, in the process of reviewing the patentee’s application for withdrawal of an appeal on the ground of settlement, the SPC found that although the Settlement Agreement concerned had the appearance of a “reverse payment agreement for drug patent”, relevant violation of AML no longer existed in view of the expiration of its protection period.

 

 

Cover Photo by yue su on Unsplash

Contributors: CJO Staff Contributors Team

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