On October 29, 2020, the Korean Patent Court rendered an important decision related to patent term extension (PTE) that the time spent on "foreign" clinical trials were eligible for PTE. This decision resulted from actions filed by Korean generic companies challenging the PTE periods of Novartis AG's compound patent covering Galvus®, a type 2 diabetes treatment drug. It is the first case in Korea where the court actually held that PTE of pharmaceutical patents should include foreign clinical trial periods.
 
The Korean Patent Act stipulates that the term of a patent covering a drug (or agrochemical product) may be extended if the patent cannot be practiced after grant due to the time required for testing during the drug approval process (e.g. efficacy/toxicity testing). However, it also states that any delay period attributable to the patentee cannot be included in the extension period. The calculation of the PTE period in Korea has been complicated because of the fact that the Korean Intellectual Property Office (KIPO) has changed its practice on more than one occasion since the KIPO PTE Guidelines were first implemented in 1995. However, after KIPO issued its Guidelines in 2005, it has been calculating PTE by including (i) the "domestic" clinical trial periods and (ii) the period taken for regulatory approval review, while subtracting (iii) any delays attributable to the patentee. This was a change from earlier KIPO Guidelines, since KIPO previously allowed including the "foreign" clinical trial periods in the PTE calculation, and it is presumed this was done largely in consideration of protecting the domestic pharmaceutical industry. Further, because of KIPO's strict all-or-nothing rule related to PTE term calculation where KIPO either accepts or rejects the applicant's calculation of PTE during examination in its entirety, it has been very difficult for originator companies to challenge KIPO's practice of excluding foreign clinical trials from PTE calculations. Therefore, applicants were usually forced during examination to comply with the current KIPO practice and exclude the foreign clinical trial period in order not to risk losing the entire PTE. 
 
In Novartis' Galvus® case, the Patent Court ruled that there was no legal basis to exclude foreign clinical trial periods as the time spent to conduct the testing required for the approval process. Although the Novartis case involved a PTE granted under the 2000 KIPO PTE Guidelines which did not exclude foreign clinical trial periods, the Patent Court's decision was the first ruling from a Korean court that the relevant Korean statutes do not provide a basis to exclude foreign clinical trials from PTE. In reaching this holding, the court cited the Korean Pharmaceutical Affairs Act and subordinate regulations as not excluding foreign clinical trial data, and that the Korean Patent Act did not limit clinical trials to only domestic trials. Novartis further argued that foreign clinical trials were an integral part of obtaining approval for Galvus® in Korea, and the court agreed that the foreign trials should be included in the extension term.

This case is significant because the Patent Court, by suggesting that the current KIPO PTE Guidelines have no legal basis to specifically exclude foreign clinical trial periods from PTE and contradicting KIPO's current practice, may have indicated that KIPO's practice needs to change. Despite this, the current KIPO PTE Guidelines that exclude foreign clinical trial periods may not change immediately, since this case is now being reviewed among other issues by the Supreme Court. However, if the Supreme Court finally confirms the Patent Court's decision that foreign clinical trial periods are eligible for PTE, we expect this should lead KIPO into changing its current PTE Guidelines and applying it to future applications.