Extending Patent Terms in Japan for Pharmaceuticals: A Guide for U.S. Life Science Companies

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read

For U.S. life science companies and other innovators in the pharmaceutical and agrochemical sectors, the effective patent term is a critical determinant of return on investment. The lengthy and rigorous regulatory approval processes required before these products can be marketed often significantly erode the practical duration of patent protection. Japan, like many other major jurisdictions, offers a system for Patent Term Extension (PTE) to compensate for such regulatory delays. Understanding the intricacies of Japan's PTE system, including its eligibility criteria, procedural aspects, and the evolving landscape of its case law, is essential for maximizing the value of patent assets in this key market.

The Foundation: Why Patent Term Extension?

The core purpose of Japan's PTE system, established by a 1987 amendment and primarily governed by Article 67(2) of the Patent Act, is to restore a portion of the patent term that is effectively lost while awaiting mandatory government approvals for pharmaceuticals and agrochemicals. These approvals, such as those required under Japan's Pharmaceutical and Medical Device Act (Act No. 145 of 1960, often referred to as the Yakki-hō, which replaced the former Pharmaceutical Affairs Act or Yakuji-hō), are necessary to ensure the safety and efficacy of products before they can be sold. Without a mechanism like PTE, the substantial time consumed by these pre-market regulatory reviews would leave patentees with an unacceptably short period of effective market exclusivity, thereby diminishing the incentives for costly and high-risk research and development in these vital fields.

Basics of the Japanese PTE System

Eligibility and Maximum Extension

  • Eligible Inventions: The PTE system in Japan is primarily applicable to patented inventions concerning pharmaceutical products (for human or animal use) and agrochemical products that require marketing approval under specific regulatory laws.
  • Maximum Extension: The patent term can be extended for a period of up to five years.

Calculating the Extension Period

The extension is granted for the "period during which the patented invention could not be worked" due to the time taken to obtain the necessary regulatory approval. The Supreme Court of Japan, in a judgment dated October 22, 1999 (often referred to as the "Terminal Hypertrophy Treatment Drug case"), clarified how this period is calculated. It runs from the later of:
a) The date on which clinical trials or other necessary tests commenced to obtain the regulatory approval; or
b) The date of patent registration.
...until the day immediately preceding the date on which the regulatory approval (the "disposition") was officially received by the applicant (i.e., the disposition became effective).

Procedural Aspects

An application for PTE must be filed with the Director General of the Japanese Patent Office (JPO) (Patent Act, Articles 67(2) and 67-2(1)). This application is then subject to examination by the JPO (Article 67-3). If the patent is jointly owned, all co-owners must jointly file the PTE application (Article 67-2(4)). There are strict statutory deadlines for filing a PTE application, typically within a certain period (e.g., three months) from the date the marketing approval is received, and no later than six months before the original patent term expires.

The Scope of Rights Under an Extended Patent Term: A Critical Limitation

A crucial aspect of Japan's PTE system, and one that has been the subject of considerable judicial interpretation, is the scope of the patent right during the extended period. According to Article 68-2 of the Patent Act, the effect of the extended patent right is limited to the working (e.g., manufacturing, using, selling) of the patented invention with respect to:

  1. The specific "product" (物 - mono) that was the subject of the regulatory disposition (i.e., the approved drug or agrochemical, often identified by its active ingredient(s)).
  2. The specific "use" (用途 - yōto) of that product as specified in that regulatory disposition (i.e., the approved indications, dosage, and administration method for a pharmaceutical).

This means that the extended term does not revive the full scope of the original patent claims for all potential embodiments or uses. Instead, it provides a focused period of exclusivity tailored to the specific product and use that underwent the regulatory review and for which the term was lost.

The application of PTE principles becomes particularly complex when a single patented invention (e.g., a new chemical compound) subsequently becomes the subject of multiple regulatory approvals over time. For instance, an initial approval might be for a specific formulation and indication, and later approvals might cover new formulations, different dosages, new administration routes, or even new therapeutic indications for the same active ingredient. This raises the question: can each new approval form the basis for a new or additional patent term extension for the same patent?

Early JPO Practice and Case Law

Historically, the JPO and courts were generally restrictive in granting multiple or sequential PTEs for the same patent based on subsequent approvals, especially if the core "active ingredient" and "indication/effect" remained the same. The rationale was often that once the patented invention (e.g., the active ingredient for a particular therapeutic purpose) could be worked based on an initial approval, the patentee was no longer "unable to work" the invention in that fundamental sense, even if a new formulation or dosage required its own separate regulatory clearance. The Tokyo High Court's decision on March 5, 1998 (the "Fumaric Acid Ketotifen case") reflected this stricter approach, aiming to prevent "evergreening" of patent protection through minor modifications.

The Supreme Court's Shift: The Pashyfu Capsule 30mg case

A significant development occurred with the Supreme Court's judgment on April 28, 2011 (the Pashyfu Capsule 30mg case). The Court clarified an important principle: even if a prior regulatory approval existed for a drug containing the same active ingredient for the same general indication, a new regulatory approval could still form the basis for a PTE if the patented invention for which the PTE was being sought was not actually embodied or covered by the product that was the subject of the prior approval.

For example, if a patent specifically claims a novel formulation of active ingredient X, and a prior approval existed for active ingredient X in a different, unpatented formulation, then a new approval for the patented novel formulation could be a valid basis for PTE. In such a scenario, the patentee was indeed unable to work their specific patented formulation invention until the new approval for that formulation was obtained. Following this decision, the JPO revised its examination guidelines, though complexities remained regarding subsequent approvals for products arguably falling within the scope of an already extended patent.

Further Refinement: The Avastin case and "Substantial Sameness" of the Drug

The Supreme Court provided further crucial guidance in its judgment on November 17, 2015 (the Avastin case). This case directly addressed the allowability of granting further PTEs for the same patent when subsequent regulatory approvals were obtained, for instance, for different dosages or methods of administration of the same active pharmaceutical ingredient for the same general therapeutic indication.

The Court held that PTE should not automatically be granted for every new regulatory approval. The critical test became whether the drug product and its use, as defined by the new regulatory approval, were "substantially the same" (jisshitsu-teki dōitsu-sei) as the drug product and its use covered by a previous regulatory approval that had already served as the basis for a PTE for that same patent.

The Court indicated that "substantial sameness" of a drug product, particularly for a patent covering the drug's ingredients, should be assessed by comparing the key elements defined in the regulatory approval. These typically include:

  • Active ingredient(s)
  • Quantity/Dosage
  • Administration/Method of use
  • Indications (therapeutic uses)
  • Effects

If the new regulatory approval covers a drug product/use combination that is not substantially the same as that covered by the prior approval (e.g., a different dosage regimen leading to a clinically distinct therapeutic profile, or a truly distinct method of administration targeting a different patient sub-population, even if the active ingredient and broad indication appear similar), then a further PTE based on this new, distinct approval could be permissible. This decision opened the door more clearly to the possibility of multiple, or "piecemeal," PTEs for the same patent, each linked to a distinct regulatory approval and each potentially extending the term for up to five years for that specific approved product/use. The JPO again updated its guidelines in response.

Defining the Scope of Extended Rights: The Oxaliplatin case

With the Avastin decision potentially allowing for multiple PTEs based on different specific approvals, the question of the precise scope of the extended right under Article 68-2 became even more critical. If a PTE is granted based on an approval for, say, a 50mg tablet for indication A, does the extended right only cover that exact 50mg tablet for indication A, or can it cover closely related variations?

The IP High Court, in a Grand Panel decision on January 20, 2017 (the Oxaliplatin case), addressed this. The Court affirmed that the extended patent right is, in principle, limited by the specific "product" and "use" as defined in the regulatory approval that formed the basis for the extension (i.e., by its approved ingredients, dosage, administration route, indications, and effects). However, the Grand Panel also held that the extended right can reach beyond the exact letter of that approval to cover other products or uses if the differences from the specifically approved product/use are merely "minor or formal overall," such that these other products/uses are considered "substantially the same as a pharmaceutical product" (iyakuhin toshite jisshitsu dōitsu na mono) as the one that was approved.

The Court stressed that this "substantial sameness" for determining the scope of the extended right must be judged in light of the content of the patented invention itself and how it relates to the approved drug product. This means that while the regulatory approval defines the starting point, the ultimate reach of the extended right involves a patent law analysis of substantial similarity, considering the invention's technical contribution. The precise boundaries of "substantial sameness" in this context continue to be an area of active discussion and potential litigation.

Invalidation of Granted Patent Term Extensions

It is important to note that a granted PTE is not unassailable. Interested parties can file a request for an invalidation trial (Patent Act, Article 125-2) to challenge the validity of the extension. Grounds for invalidation include, for example, that the extension was granted for a period longer than that for which the invention could not be worked, that the approval was not one that could form the basis for an extension, or that the applicant was not the patentee or otherwise entitled to the extension.

Practical Considerations for U.S. Life Science Companies

The Japanese PTE system offers a valuable opportunity to recoup patent term lost to regulatory delays, but it requires careful strategic management:

  1. Strategic Patent Claiming: When initially drafting patent applications, consider how different aspects of a pharmaceutical invention (e.g., the active compound, specific formulations, methods of use for particular indications or patient populations, dosage regimens) are claimed. A well-structured patent portfolio might provide more opportunities for leveraging the PTE system in light of later, specific regulatory approvals.
  2. Monitor Regulatory Approval Timelines: Meticulously track all relevant regulatory approval processes in Japan for your company's products.
  3. Adherence to PTE Application Deadlines: The deadlines for filing PTE applications are strict and typically tied to the date of receiving marketing approval. Missing these deadlines can result in a complete loss of PTE rights.
  4. Understanding "Substantial Sameness": This evolving legal concept is central to both obtaining PTEs (especially multiple extensions for the same patent) and to understanding the effective scope of those extensions. Legal counsel should be consulted to assess how current JPO guidelines and case law apply to specific product scenarios.
  5. Comprehensive Record-Keeping: Maintain detailed records of the entire R&D process, including the commencement and duration of clinical trials and other tests necessary for regulatory approval, as well as patent registration dates. This documentation is crucial for accurately calculating the extendable period and supporting the PTE application.
  6. Coordination of Global Strategy: For products marketed internationally, coordinate the PTE strategy in Japan with those in other key jurisdictions like the U.S. (Hatch-Waxman extensions) and Europe (Supplementary Protection Certificates - SPCs), as the rules and outcomes can differ.

Conclusion

Japan's Patent Term Extension system provides a vital mechanism for pharmaceutical and agrochemical innovators to recover valuable patent term lost during the regulatory approval phase. However, it is a complex system characterized by specific eligibility requirements, strict procedural deadlines, and an evolving body of case law, particularly concerning the patentability of multiple extensions based on different regulatory approvals and the precise scope of the extended rights. The principles of "substantial sameness" as articulated by the Supreme Court and the IP High Court now play a central role. For U.S. life science companies, proactive and informed strategic planning, coupled with a thorough understanding of these legal nuances, is essential to effectively utilize the Japanese PTE system and maximize the commercial lifespan of their patented innovations in this important market.