The Patent Act provides for Patent Term Extensions (“PTEs”) to compensate for delays in the ability to practice certain patented inventions until the required regulatory approval is obtained, such as patents on pharmaceutical products. However, in practice, the Korean Intellectual Property Office (the “KIPO”) has not fully compensated for all periods of delays relating to obtaining required regulatory approvals of pharmaceutical products, since the KIPO only counts domestically-conducted clinical trials as PTE-eligible delay, and also omits from PTEs any period taken by an applicant to respond to a request for supplementation from the Ministry of Food and Drug Safety (the “MFDS”) as delay attributable to the applicant, not the regulatory approval requirement.

However, on July 5, 2023, Kim & Chang, representing patentee Novartis, successfully obtained from the Intellectual Property High Court (the “IP High Court,” formerly the Patent Court) an important decision clarifying that the calculation of PTEs should include foreign as well as domestic clinical trial periods relating to the approval application on which the PTE is based, and should not automatically deduct from a PTE the time taken by an applicant for drug approval to respond to a supplementation request made by the MFDS. The IP High Court once again issued a decision suggesting that KIPO’s PTE practice is narrow, following an earlier decision in 2020 that reached a similar conclusion.

Novartis, the holder of a patent covering “vildagliptin,” the active ingredient of the Galvus® diabetes treatment drug, was granted 24 months and 23 days of PTE as a result of the time taken to obtain regulatory approval. Subsequently, several Korean companies filed invalidation actions challenging the validity of the PTE, claiming that the PTE included time that should not have been compensated. The challenged periods included 132 days taken to conduct foreign clinical trials (“Period 1”) and 55 days taken to respond to supplementation requests made by the MFDS (“Period 2”).

The Intellectual Property Trial and Appeal Board (the “IPTAB”) initially ruled that the PTEs granted for Periods 1 and 2 were indeed invalid, but on appeal, the IP High Court reversed the IPTAB’s decision, finding that only the PTE for Period 1 (but not for Period 2) was valid. Novartis further appealed to the Supreme Court regarding the invalidation of Period 2, but the Supreme Court dismissed Novartis’ appeal as moot since the IP High Court already revoked the IPTAB’s decision. The case was remanded to the IPTAB, but this time the IPTAB ruled that the PTEs for both Periods 1 and 2 were valid, which was subsequently affirmed by the IP High Court.

The IP High Court ruled that there is no reason to exclude Period 1 from the PTE because: (i) the Pharmaceutical Affairs Act and other applicable laws only require the submission of “test reports on safety and efficacy” in order to obtain approval for the import of pharmaceuticals, and clinical trials for such purposes are not limited to domestic clinical trials, so there is no reasonable basis to treat domestic clinical trial data and foreign clinical trial data differently, and (ii) as the results of foreign clinical trials were actually reflected in the approval of the drug in this case, it was reasonable to deem that the period required for foreign clinical trials was time required to obtain the approval of the drug.

The IP High Court further ruled that there was no reason to automatically exclude Period 2 from the PTE because: (i) no statute provides that periods of supplementation automatically count as delays attributable to the applicant and there is no reason to assume that all time spent preparing a response to a request for supplementation from the MFDS is the applicant’s fault, (ii) the applicant does not have the duty of care to ensure that all materials that could possibly be requested by the MFDS during the approval process be submitted with the initial application for approval; and (iii) the MFDS does not simply grant approval because materials meeting formality requirements are submitted, but issues approvals on a discretionary basis after conducting an expert review, so there is no reasonable way for an applicant to exclude all possibility in a given case that the MFDS may request supplementation of additional information or materials for its review.

The IP High Court’s decision is clearly contrary to the KIPO’s practice of excluding foreign clinical trial periods and periods of supplementation by applicants from the calculation of PTEs. As the IP High Court’s decision has been appealed, there may yet be further legal developments in relation to this case.