Recently, the Intellectual Property Court of the Supreme People's Court concluded a reconsideration case concerning an application for pre-litigation conduct preservation, clarifying that where a generic drug applicant, when filing its drug marketing authorization application, made a Type-3 declaration undertaking that the generic drug applied for would not be marketed before the expiration of the corresponding patent right, and thereafter carried out marketing-related acts, it shall bear the corresponding legal consequences.

The patent in question is an invention patent entitled "Composition for Oral Administration of Corticosteroids." The patentees, Company B and Company C, registered the patent against the originator drug "Budesonide Enteric Capsules" on the China Marketed Drug Patent Information Registration Platform. When filing the marketing authorization application for the generic drug in question, Company A made a Type-3 declaration with respect to the patent, undertaking that the generic drug would not be marketed before the expiration of the patent term. After the generic drug was approved for marketing, Company A applied for listing on the centralized drug procurement platforms of Guangdong Province, Hainan Province, Tianjin Municipality and Qinghai Province, and distributed promotional materials. Company B and Company C contended that Company A's acts of applying for platform listing and distributing promotional materials constituted offers for sale that infringed their patent right, and filed an application for pre-litigation conduct preservation with the Guangzhou Intellectual Property Court, requesting the court to order Company A to cease the above acts.

Upon examination, the Guangzhou Intellectual Property Court held that, based on the parties' opinions and the existing evidence, and taking into account the Type-3 declaration made by Company A when applying for marketing of the accused infringing product, there was a relatively high likelihood that the accused technical solution fell within the scope of protection of claim 1 of the patent in question. The application by Company B and Company C also met the other conditions set out in the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Examination of Conduct Preservation Cases in Intellectual Property Disputes (the "IP Conduct Preservation Provisions"). The court therefore ordered Company A to immediately withdraw its platform-listing applications and cease distributing promotional materials until the judgment in the case took effect. Dissatisfied, Company A applied to the Supreme People's Court for reconsideration.

Upon examination, the Supreme People's Court held that Company A's conduct clearly failed to comply with the relevant provisions of the Implementation Measures for the Early Resolution Mechanism for Drug Patent Disputes (Trial) (the "Implementation Measures"), and that its conduct showed a failure to treat, in good faith and with prudence, the patent rights related to the drug for which registration was sought and the disputes arising therefrom. Its conduct should be found to violate the principle of good faith and should first be expressly censured. However, the early resolution mechanism for drug patent disputes does not resolve issues concerning civil liability for patent infringement, including cessation of infringement. The Type-3 declaration made by a generic drug applicant in the early resolution procedure is an undertaking made on the basis of its understanding of the relationship between the generic drug and the registered patent, risk avoidance and business choices. Although the declaration must be notified to the marketing authorization holder, such notification is merely procedural. Nor is a Type-3 declaration premised on the generic applicant's confirmation that the generic drug's technical solution falls within the scope of patent protection. Therefore, violation of a Type-3 declaration does not automatically give rise to the legal consequence of cessation of patent infringement. The fact that a generic applicant once made a Type-3 declaration may serve as preliminary evidence for finding infringement; however, where the applicant has submitted new rebuttal evidence in judicial proceedings, the conduct preservation application must still be examined on the basis of all evidence on file, applying the Civil Procedure Law and the IP Conduct Preservation Provisions.

In this case, Company A submitted the claims, description and examination file of the patent in question to explain the scope of protection of the patent claims, and submitted the approved package insert of the accused infringing product, the "Chemical Preparation Manufacturing Process Information Form" in the filing materials, the Chinese Pharmacopoeia and other evidence to prove the content of the accused technical solution and that certain technical features therein were neither identical nor equivalent to the corresponding technical features in the patent claims. Based on all the evidence on file, it was difficult to find that the fact to be proven — that the accused technical solution fell within the scope of the patent — had reached the standard of preponderance of evidence. Accordingly, the existing evidence was insufficient to establish a factual and legal basis for conduct preservation in this case. Based on the new facts and new evidence, the conduct preservation ruling should be revoked. Although Company A's violation of its Type-3 declaration may not involve liability for patent infringement, it must still bear corresponding legal consequences. First, Company A's administrative liability for violating the Implementation Measures shall be determined and handled by the drug regulatory authorities; the Supreme People's Court referred the leads on Company A's suspected violations in this case to the national drug regulatory authority. Second, if Company B and Company C consider that Company A's violation of the Type-3 declaration caused them economic losses, they may separately file an action for damages. Third, if patent infringement is established upon substantive trial, Company A's violation of the Type-3 declaration may be considered as willful infringement or as an aggravating circumstance. Fourth, since the pre-litigation conduct preservation dispute arose from Company A's filing of and violation of the Type-3 declaration, the application fee for conduct preservation shall be borne by Company A.

There is currently no clear provision on the legal consequences a generic drug applicant should bear for making untruthful or inaccurate declarations. While clarifying that violation of a Type-3 declaration does not automatically result in cessation of patent infringement, this case expressly censured the dishonest conduct and provided guidance on the legal consequences generic applicants should bear for violating Type-3 declarations, fully demonstrating the people's courts' judicial philosophy of protecting good faith, helping to regulate the conduct of drug manufacturers and promoting the sound development of the early resolution mechanism for drug patent disputes.

Source: Intellectual Property Court of the Supreme People's Court. Authors: Cui Ning, Liu Yanan. Date of original: August 6, 2026. Original link: https://ipc.court.gov.cn/zh-cn/news/view-5991.html