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Global Business Update Looking Into Biopharma IP Protection In China C By Suzanne Elvidge, contributing editor hina is an attractive pharmaceutical market because of its large and aging population, increasing urbanization, and growing affluence. It is also an appealing location for drug R&D; and manufacturing, as labor costs are still lower than Europe and the United States. However, some companies are reluctant to work in this region because, along with India, China has had a less-than-perfect history for intellectual property protection, with a reputation for reverse engineering drugs to provide cheap copies. This is reflected by China's late entry into the international intellectual property (IP) arena. China's trademark law took effect in 1983 and its patent law in 1985, and the country became a member of the World Intellectual Property Organization in 1985. In 1986, China put legislation into place that defined IP rights in basic civil law, affirming a citizen's right of authorship (copyright) for the first time. China became a signatory to the World Trade Organization's Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) in 2001, which requires members to regulate intellectual property. CONCERN NUMBER ONE: GAINING IP PROTECTION IN CHINA IS VERY COMPLICATED Many companies are worried that creating patents in China is a long or complicated process. However, this hasn't been the experience of Nick Ede, Ph.D., executive director at the Australian drug delivery company Imugene. In May 2013, the Chinese State Intellectual Property Office granted a patent for Imugene's drug delivery technology, Linguet, for the delivery of bisphosphonates to prevent the loss of bone mass in osteoporosis and multiple myeloma. "I've found the experience incredibly efficient. Chinese examiners move through the 64 LifeScienceLeader.com process quite rapidly," says Ede. "Usually, the first report will be issued about six to nine months from requesting examination and the patent office will follow up on responses filed by applicants within about two to three months. Because of this, it's important to have all your ducks in a row before you get started." When creating IP protection in China, it's a good idea to use a two-pronged approach. For example, a patent on biotech products or processes does ensure protection but can reveal some of the technology. Adding a second layer of protection by ensuring that the cell line is a closely guarded trade secret ensures that while competitors may be able to reproduce the process, they may not be able to produce the product itself in as pure a form, or with as good a yield. "It's important to combine both physical and legal protection," says Jiwen Chen, a U.S.-based attorney educated and practicing in both China and the United States, and specializing in global IP protection, including Asia. "And the forms of these will depend on the industry sector. For example, chemicals can include a tracking compound that can be traced." CONCERN NUMBER TWO: CHINESE PARTNERS IGNORE IP LAWS AND STEAL TRADE SECRETS China has a historical reputation for not September 2013 applying IP laws and misappropriating trade secrets. According to the Office of the United States Trade Representative (USTR), enforcing IP rights in China is still a challenge, but the country is making major efforts in legal reform, including revised laws and guidelines. As Ede comments, "I've been doing business with Chinese life sciences companies for 10 years, and in my experience, they are extremely respectful of your IP and inhouse knowledge under confidentiality." However, this unfortunately isn't representative of all liaisons in China. In a 2013 survey from the American Chamber of Commerce, 26 percent of respondents reported having experienced the breach or theft of data and/ or trade secrets from their operations in China. Chinese authorities can treat tradesecret violations as commercial disputes rather than as infringements of the law, resulting in lower rates of prosecutions. Going to court over trade-secret violations may just alert rivals that there is a secret there to be protected. Because of this, prevention is better than cure. "Companies need to have good internal procedures in place to keep trade secrets confidential, and need to be able to show that they have taken reasonable precautions," says Benjamin Liu, assis-