The Supreme Court's ruling, centered on the interpretation of "specific use" under Article 95 of the Patent Act, brought a long and contentious dispute to a close regarding the scope of valid patent rights during a patent term extension (PTE), while firmly establishing the relevant legal principles.
This case involved a dispute over the scope of valid rights extended for a substance patent (Korean Patent No. 1088247, Patentee: RaQualia Pharma Inc.) covering the blockbuster new drug K CAB® (active ingredient: tegoprazan), which was developed by the Korean pharmaceutical company HK inno.N Corporation. The Patent Court was the first to declare the legal principle that the scope of an extended patent right is not limited to the first approved indication under the Pharmaceutical Affairs Act, thereby rejecting the generic companies’ arguments. On appeal, the Supreme Court issued a summary dismissal of all eight cases filed by the generic companies, rendering the Patent Court’s decision final and conclusive.
Article 95 of the Patent Act limits the scope of an extended patent right to a "specific use," an interpretation that has long been the subject of debate and litigation within the industry. In court, we emphasized that limiting the "specific use" to the first approved indication under the Pharmaceutical Affairs Act is at odds with the purpose of the patent term extension system and fails to reflect the realities and practices of new drug development. We submitted the legal argument that a determination should be made on a case by case basis by comprehensively considering the technical significance of the patented invention and the disclosures in its specification.
The Patent Court fully accepted our arguments and ruled that the first approved indication and subsequently approved indications possess substantially identical therapeutic effects and medical uses. It further ruled that the extended patent right therefore applies even to those subsequent approved indications as well. This holding was ultimately upheld by the Supreme Court’s decision to dismiss the appeals without deliberation.
This decision represents a significant victory for new drug developers in terms of protecting their rights and considerable investments against the generic companies' ability to easily circumvent an extended patent by omitting the first approved indication (the basis for the patent term extension) and obtaining an approval only for subsequently approved indications.
Notably, this case involved staggering 213 trials filed at the Intellectual Property Trial and Appeal Board (IPTAB) and 47 appeals filed with the Patent Court, an unprecedented scale in the history of domestic pharmaceutical disputes. It was not only a massive lawsuit involving a significant number of Korean generic companies, but also a landmark decision that determined the fate of a potential early launch of generic versions of the global blockbuster drug K CAB®, with domestic annual sales of 158 billion KRW and keys to global market success hanging in the balance.
In the past, the Patent Court had handled large-scale litigations by assigning a special panel to take the lead, after which other panels would rule in accordance with that decision. In contrast, five different divisions of the Patent Court separately heard the appeals in this case, resulting in rulings with the same conclusion but based on slightly different reasoning—an unprecedented approach in the history of the Patent Court.
Drawing on our extensive experience in handling large-scale litigations, we managed the cases efficiently and systematically. Despite subtle differences in the opposing parties' arguments in each case, we successfully navigated the extraordinary number of cases by maintaining comprehensive and consistent arguments throughout, resulting in complete victory. This important decision will also help foster an environment that encourages research and development investments and growth in the domestic pharmaceutical industry by ensuring rightful compensation and strong protection for innovative new drugs developed in Korea.
