Comparative Analysis of Issues on Patent Laws for
Medical Invention on Recent Drug Development between
Japan and Europe (*)
Overseas Researcher: Ryoko OSHIKAMO (**)
Recent drug development is expected to develop new drugs at low cost. Universities,
venture companies, etc. increasingly carry out exploring drug candidate substances instead ofpharmaceutical companies in order to reduce the cost. Drug repositioning (DR), finding new
effects on existing approved drugs and developing them as new therapeutic agents for otherdiseases is expected as a promising drug discovery system with low cost. For drug development,monopolizing the market by acquiring patents is important as an incentive. However, in DR
development, patent issues may arise between the new drug and a patented drug. This is because
the scope of the patent right of the drug with a new indication of an already patented substance isunclear and the effect obtained by the patent right differs among countries. Therefore, in DR
development, problems and differences of the current patent system between Japan and Europe arefound by comparative analysis of the impact of patent systems and legislations to DR development
and comparative analysis of patent laws and legislations relating to technology transfer.
Moreover, the possibility of introducing the necessity of international harmonization of patent law
in order to promote DR development is analyzed. If the international harmonization is necessary to
be introduced, a new system suitable therefor is also analyzed.

I. Introduction
In recent years, a new approach to drug development and improving the productivity of drug
research and development1 are desired. As measures, technology transfer by industry-university
collaboration and drug repositioning (DR), effectively utilizing existing drugs and so on,2 areincluded.
Patent law is deeply involved in pharmaceutical development as well as pharmaceuticallegislation, but neither patent law nor pharmaceutical legislation is internationally unified.
In this research, comparative analysis between Japan and Europe is carried out on issues ofpatent laws relating to medical patents and technology transfer for DR development. Based on theanalysis, the possibility of introducing a new system or the necessity of international harmonization(*) This is a summary of the report published under the 2017 Industrial Property Research Promotion Project entrusted by the Japan
Patent Office.
(**) LL.M (IP & Competition), at Max Planck Institute for Innovation and Competition, over a period of approximately 10 months
from June 7, 2017 through March 16, 2018, as Overseas Researcher under the Program for the Fiscal Year 2017.
1 Pharmaceutical Industry Policy Institute ‘Current Status and Issues Surrounding the Pharmaceutical Industry - To Deliver Better
Medicines to the World - Part 1 Innovation and New Drug Creation’ Industrial Report No.5, (December 2014) p.26
2 Reuters, Thomson ‘The Changing Role of Chemistry in Drug Discovery,' International Year of Chemistry, (2011); Sleigh, Sara H.,
and Cheryl L. Barton ‘Repurposing Strategies for Therapeutics,' Pharmaceutical Medicine, vol.24, no.3 (2010) p.151-159;‘Current Status and Issues Surrounding the Pharmaceutical Industry,’ p.28-30; Reuters, Thomson ‘Knowledge-Based Drug
Repositioning to Drive R&D Productivity,' White Paper (2012)i

of patent law is examined in order to promote DR development.

II. Current Situation of Drug Development
The impact of the patent system on the pharmaceutical industry is enormous in Japan. The
impact of the patent system on drug development is therefore discussed finding problems in thecurrent pharmaceutical industry. Understanding a historical approach based of the pharmaceuticalindustry in Japan improves the discussion.
1. Historical Approach
From the Meiji era to the present, several national policies were introduced in thepharmaceutical industry and the patent system triggered the development. Under World War I,
patent rights of the opponent countries were withdrawn and domestic companies could manufacture
medicines thereof. After World War II, overseas technology for manufacturing drugs wasintroduced to Japan, and the introduction of the medical substance patent system dramatically
improved the technology for developing new drugs3. In this way, the Japanese pharmaceuticalindustry has been developed by introducing different kinds of patent systems according to thedegree of maturity of industry.
2. Current Topics of Pharmaceutical Industry
Conventional pharmaceutical development had problems such as a regularized drug pricereduction, and an increase of the burden of clinical trials necessary for approval, thereby increasing
the cost of drug development. In order to overcome these problems, pharmaceutical companies
shifted the product development strategy from modifying existing drugs to innovative new drugs4.
Among innovative new drugs, the development of "blockbusters" with international
competitiveness was one pharmaceutical business model in the 1990s5. However, recent problems
3

Hara, Hiroshi ‘European and American Pharmaceutical Companies in Japan: Historical Overview,’ National Economic Journal
vol.196, no.1 (2007) p.91-107
4 Endo, Hisao; Tanaka Shinro Tanaka ‘Present state and possibility of international competitiveness of our pharmaceutical industry,’
Medical and Society vol.7, no.1 (1997) p.46-71; Pharmaceutical Industry Policy Research Institute ‘Toward Strengthening
Competitiveness as "Place of Drug Discovery"- Current status and problems of the pharmaceutical industry,’ (November 2005)
p.25-42
5 ‘Toward Strengthening Competitiveness,’ p.55-60; Tomita, Kenji ‘Outline of New Drug Development from Business Viewpoint(77th Celebration of Professor Tetsuo Ukai),’ Doshisha Commercial Science, Vol.65, no.6 (2014) p.978-994; Cuatrecasas, P.‘Drug
Discovery in Jeopardy,' The Journal of Clinical Investigation, vol.116, no.11 (2006) p.2837-2842; Jorgensen, W. L. 'The Many
Roles of Computation in Drug Discovery,' Science (New York, N.Y.) vol.303, no.5665 (2004) p.1813-1818

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are the decrease in the number of blockbusters and drastic sales reduction thereof after the
expiration of the blockbuster's patent period6.
In order to promote drug discovery cycles, pharmaceutical companies tend to shift targets ofdrug discovery to drugs in new areas where therapeutic drugs are strongly desired7.
Among them, recently, attention has been drawn to drag repositioning (DR), effectively
utilizing existing drugs, having already been approved for production, or medicinal active
ingredients whose development has been discontinued.
3. Drug Repositioning
In DR development, reliable safety has been already obtained because the efficacy and safety ofcandidates for pharmaceutical active substances have already been proved. Moreover, since theresults of clinical trials necessary for obtaining the approval have already been obtained,
implementation of these tests can be omitted and the period and cost of drug development can be
reduced8.
Drug re-profiling is the recent trend of DR, finding a new indication of a known pharmaceuticalactive substance by comprehensively analyzing the functions using the latest science technology9.
However, when the pharmaceutical active substance applied in DR has already been patented,
problems may occur against the existing patent right.

III. Pharmaceutical Patent System
As an incentive for drug development, monopolization of the market by patent acquisition isimportant. In this chapter, the patentability, patent right, and patent protection, etc. of drug
inventions completed by DR development is determined.

1．Medical Use Invention by DR Development
An invention relating to a novel effect of a known substance is referred to as a medicinal use
invention in Japan and as a second medicinal use invention in Europe. For obtaining a patent for a6

Alazraki M. ‘The 10 biggest-selling drugs that are about to lose their patent,’ DailyFinance, 27.2.2011
www.dailyfinance.com/2011/02/27/top-selling-drugs-are-about-to-lose-patent-protection-ready/ retrieved on 16.8.2017
7 Tomita p.978-994; ‘Current Status and Issues Surrounding the Pharmaceutical Industry,’ p.1-42
8 Mizushima p.47-98
9 Mizushima, Tohru ‘Crisis of Drug Development,’ Kodansha (2015) p.99-140

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medical use invention, the medical use invention has to satisfy novelty and inventive step as
requirements of patentability. In both Japan and Europe, a DR medicinal use invention satisfies
novelty when the indication is novel even if the substance is known and satisfies inventive stepwhen a person skilled in the art could not achieve the new indication from known prior arts10.
2．Scope of Patent Right of DR Medical Use Invention by Development
In Japan, patentability is examined within the scope of the medical use specified by the claim of
the medicinal use invention during the examination for granting patent. On the other hand, since thescope of patent right is practically decided in patent infringement litigation11, the scope of thepatent right of the medical use invention is not yet clear. Therefore, the scope of patent examination
does not necessarily correspond with the scope of patent right.
Under the European Patent Convention (EPC), Article 69 stipulates the extent of the protection
conferred by a European patent, or that a European patent application shall be determined by theclaims and the description and drawings shall be used to interpret the claims. However, the scope of
patent right is left to the judgment of each country. For example, in Germany, the scope of thepatent right of a second medicinal use invention covers the whole of the claimed substance whereas
the scope is limited to the claimed medical use in the UK. The scope of patent right of a second
medicinal use invention is not therefore unified among countries12.
3．Other Protections of Patent Right of DR Medical Use Invention
During the preparation period of the application for obtaining approval necessary for launchinga new drug to market, a patented invention cannot be carried out and each country takes measures
for recovering this eroded ‘period which patented invention cannot be carried out.’(1) Extension of Patent Protection Period
The extension system of the duration of patent protection was introduced for the first time in
the US Hatch Waxman Act in 1984, which was a legislation combining recovery of eroded patent
periods and simplification of application for approval of generic drugs. In 1987, the same system
10

JPO Examination Guideline Division ‘Examination Guideline of Life Science etc.,’ (2017.1)
Japan Patent Law Articles 68, 70; IIP 2004 Report p.90-104
12 EPC Article 69; AIPPI Law Series
11ivwas introduced in Japan. In response to this movement of Japan and the United States, the demand
for the establishment of the same system increased in Europe due to concern that research bases
would move to non-MSs with greater protection. Since it is difficult to revise the EPC, theEuropean Commission set a supplementary protection certificate (SPC)13 separately from the EPC
and introduced the extension system14.
The Japan Patent Law Article 67-2 stipulates that the period during which the patented invention
could not be implemented because of preparation of clinical trial data for obtaining approvals definedby the Pharmaceutical Affairs Law shall be extended by a period not exceeding 5 years.
The ‘description of the disposition designated by Cabinet Order’ should be submitted on filing arequest for the registration of extension of the duration15. When one patent has plural approvaldispositions, since the implementation period and the extent of the extended patent right differ foreach disposal, the extension registration can be applied for each disposition16. This means, anapproval disposition of a patented invention for a DR new indication can be filed for extension
registration separately from approval disposition of patented invention of already approved
medicine. The application for extension registration is examined in terms of whether it is necessary
to obtain approval for the implementation of the patented invention17. "Implementation of patented
invention" is an activity of manufacturing, etc. of a medicinal product specified by "subjective
matters of the invention" described in the approval document, it is decided by comparing thepresent disposition with a cited disposition directly relevant to examination matters on thesubstantial identity as a medicinal product of the patented invention18 and determining whether the
medicine receiving the disposition falls within the scope of the patented invention19. DR drug
patents relating to new indications of the same ingredient can receive a disposition at this point.
In Europe, the extension period during which the patented invention could not be implemented
because of preparation of clinical trial data for obtaining approvals can be obtained by a period notexceeding 5 years within 15 years from the date on which the initial approval is obtained. "First
approval" is examined on the basis of the ingredients of the approved medicinal products and theindication is not taken into consideration20. The problem is whether the extension period of thepatent right of second medicinal use invention can be allowed or not. When the patent right of the
13

REGULATION No 469/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 6 May 2009 concerning the
supplementary protection certificate for medicinal products
14 IIP ‘Research on Extension Registration System of the Duration of Patent Rights of Pharmaceuticals, etc. and Its Implementation,’
IV. Extension System of Overseas Patent Rights and Related System (March, 2015) p.91-120
15 Japan Patent Law Article 67-2
16 Yoshifuji et al., p.552-561
17 Japan Patent Law Article 67-3 para.1 no.1
18 H26 (Gyo-Hi) 356
19 H21 (Gyo-Ke) 10092
20 CJEU C-202/05

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original medicine does not fall within the scope of the patent right of the second medicinal use
invention, the patent right of the second medicinal use invention can be protected by SPC21. Inother words, the patent period of a DR second medicinal use invention can be extended.
Both Japanese and European legislations share the following common features: the purpose of
the institution; the maximum period of the extension is 5 years; and the extension of the patent rightof the DR medical use invention can be allowed separately from the basic patent right. In
conclusion, this system has been harmonized in some degree between Japan and Europe.
(2) Data Exclusivity
Pharmaceutical companies desire to protect the data submitted to obtain approval. On the other
hand, the implementation of the same clinical tests imposes a huge economic cost if genericcompanies have to carry them out22. Clinical data necessary for approval is therefore protected for acertain period. The TRIPS Agreement includes a provision on data protection at the international
level23; however, since no internationally unified rule is defined, the provision of data protection
varies among Contracting States.
The fundamental difference of data protection systems between Japan and Europe is that theJapanese system aims at "reaffirming safety and effectiveness" while the European system aims at"clinical trial data protection to monopolize new drug markets." However, even in Japan, a drug forwhich clinical data has been submitted can be exclusively sold before the reexamination period
expires. Therefore, the data protection period is substantially the monopolization period of sales ofthe drug both in Japan and Europe.
Regarding the data protection period of DR medicines, although the method of calculation of
the protection period is different between Japan and Europe, both protection periods approved areabout 11-12 years.

IV. Industry-Academia Collaboration and Technology Transfer in Drug
Development
Technology transfer as a means of improving drug development efficiency will be discussed
21

CJEU C-130/11
Ramlall, Vishva, ‘Data Protection in the Pharmaceutical Industry: Comparative Study between Japan and Canada,’ 2003 (IIP
2004) p.4
23 TRIPS Article 39
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from the viewpoint of DR development. Technology transfer has developed separately in Japan andEurope, and is diverse within European countries. In this chapter, the historical approach oftechnology transfer and national policy in each country and the legal framework relating totechnology transfer are examined and comparison thereof is carried out to confirm the necessity of
institutional harmonization and institution building.
1. Historical Approach and National Strategy of Technology Transfer
For the analysis of technology transfer in Japan, analysis of the United States, which Japan has
followed as, a developed country of technology transfer, is indispensable. The United States had
declined in international competitiveness and introduced the pro-patent policy proposed in the"Young Report" in the 1980’s. The Bayh-Dole Act24 enacted in 1980 stipulated that patent rights
acquired by universities which are obtained by government funds belong to universities, and byFederal Technology Transfer Law enacted in 1986, the joint research and development system wasestablished by intellectual property right, etc for the first time. provided by universities andindustry25. It functions as a major mechanism in technology transfer in the United States.
The Japanese Bayh-Dole Act, the ‘Act on Special Measures for Industrial Revitalization26’ wasenacted in 1999, about 20 years after the establishment of the Bayh-Dole Act, and patent rights
which are the result of national research expenses belong to researchers of universities and theuniversities support the operation of their patent rights27. Furthermore, national universities wereturned into independent agencies in 2004, and the university system changed. Since then,inventions completed by the researchers of national universities are owned by Technology
Licensing Organizations (TLO) which are responsible for technology transfer of university
inventions.
Regarding technology transfer in Europe, universities also own intellectual property rights
completed by researchers of universities. However, the situation of technology transfer has
diversified under the influence of national innovation policies and science and technology policies
of each country.
24

Patent and Trademark Act Amendments of 1980
Cooperative Research and Development Agreement; Ministry of Internal Affairs and Communications ‘Technology transfer
policy in the US,’ 11.12 2009 http://www.soumu.go.jp/main_content/000048596.pdf retrieved on 17.1.2018; Ministry of Economy,
Trade and Industry ‘Efforts of past industrial technology policy in the US,’
http://www.meti.go.jp/policy/innovation_policy/powerpoint/hpn/gikankyokukosein/genjotokadain/tsld010.htm retrieved on
17.1.2018
26 It was transferred to the Industrial Technology Enhancement Law in August 2007; Hanawa, Hiroyuki, ‘Changing Japanese
Bayh-Dole Act,’ Industry-Academia-Government Collaboration Journal December 2007https://sangakukan.jp/journal/journal_contents/2007/12/articles/0712-07/0712-07_article.html retrieved on 24.1.2017
27 Takahashi, Nobuo, et al., ‘Approach to technology transfer-For universities and researchers belonging to universities,’ Akamon
Management Review - 2 vol. 10 (October 2003)
25

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2. Legal framework on technology transfer of DR development in Japan and Europe
Technology transfer is carried out by the licensing of patent rights28. Licensing is subject toagreement between the parties based on the principle of freedom of contract but the content of thecontract should be competitive29. Japan and European countries have provisions on license in theirpatent laws30. Some European countries have a Licensing of Right (LOR) system, allowing the
reduction of patent fees when patent holders declare their intention to contract licenses to third
parties 31 . Germany and the UK have agreement models for industry-academia collaboration
practically indicating the contents of a contract in detail32.
Regarding anti-competitive activity, the Antitrust Act is applied in Japan and the Fair Trade
Commission is responsible for its operation. The Act defines a patent as exempt fromanti-competition; however, in certain cases the antitrust law is applied 33 . The European
Competition Law is Article 101, etc., of the European Function Treaty (TFEU), and Article 101,
paragraph 1 prohibits restrictive competition agreements, while paragraph 3 does not apply
paragraph 1 to certain categories of agreements, the so-called block exemption regulation. This
block exemption regulation is directly applied to domestic laws of the Member States34. The block
exemption regulation relating to the licensing agreement of pharmaceutical patents developed by
DR is the research and development block exemption regulation, R & DBER35. Although licensing
activities relating to pharmaceutical patents developed by DR are not basically anti-competitive
both in Japan and Europe, handling of the anti-competitive behavior of the obligation to challenge
the validity of intellectual property rights is different between Japan and Europe.

V. Conclusion
In this chapter, the possibility of introducing a new system or the necessity of international
harmonization of patent law in order to promote DR development is analyzed.
28

Ishida, Masayasu, ‘Technology Transfer and Licensing,’ (2011) p.2.
https://www.jpo.go.jp/torikumi/kokusai/kokusai2/training/textbook/pdf/Technology_Transfer_and_Licensing2011_jp.pdf
retrieved on 2.2.2018
29 Jiyoung Han, ‘Study on Intellectual Property Licensing under Antimonopoly Law in the U.S., Europe, and Japan,’ (IIP 2005)
p.1-5
30 Japan Patent Law Articles 34-2,34-3, 77, 78 etc.; Takahashi p.74
31 German Patent Law Article 23(1). UK Patent Law article 46
32 Heinz Goddar ‘University/Industry Cooperation in Europe,’ Goddar, Presentation description in LES Taipei 2017 (1.9.2017);
Interview with Prof. Dr. Goddar
33 Antitrust Act Article 21; Fair Trade Commission ‘Guidelines on the Antimonopoly Act on Utilization of Intellectual Property,’ No.
1-1 Competition Policy and Intellectual Property System; No.1-2 the Object of this Guidelines; and No. 2-1 Antitrust Law andIntellectual Property Law http://www.jftc.go.jp/dk/guideline/unyoukijun/chitekizaisan.html retrieved on 4.2.2018
34 TFEU Article 288 para.2
35 Research and Development Block Exemption Regulation No.1217/2010
http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32010R1217 retrieved on 7.2.2018

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The scope of patent right of a DR medicinal use invention differs among countries including theUnited States and this point requires harmonization. From the viewpoint of incentive for drug
development, it is preferable that the medicinal use invention is classified as a substance invention,by which sufficiently enforcement is possible. The DR medicinal use invention is clearly specified
with new indications, and the scope of the patent right is sufficient to be limited to the new
indication.
In the extension system of the patent protection period, if the examination period stipulated by
the Pharmaceutical Affairs Law differs among each country, since the period may not be able to be
fully recovered in five years, prompt examination is therefore desired. Although this is not a
problem to be solved by the patent law, it is necessary to provide a broad-ranging analysis
including the viewpoint of DR development in the future.
The data protection system can protect drugs uncovered by patent rights and drugs for which
the extension was not allowed. Since the application for approval of generic drugs cannot beallowed during the data protection period, the data protection system is valuable to complement theabovementioned patent system under the current situation that the scope of patent rights ofmedicinal use inventions is not internationally harmonized.
The LOR system is worthwhile to widely ask for licensees of patented inventions such as active
ingredients whose drug development has been discontinued as a target of LOR. Matching licensees
and patentees in technology transfer is also an important element of the promotion of DR
development. Therefore, the introduction of the LOR system is worth considering. The matching intechnology transfer is preferable to be carried out extensively and internationally. Since ‘patent
specifications attached to patent applications are expected to be used as technical literature36’, it isreasonable to willingly utilize the patent specification for matching in technology transfer.
When a complicated agreement is contracted in licensing, communication does not always
proceed smoothly between parties, especially in international agreements. It is therefore useful toprepare an international agreement model of technology transfer in order to avoid unnecessary
conflicts.

36

Yoshifuji et al., p.247-8

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