Within the premises of Bayer (China) Co., Ltd. in Beijing's Chaoyang District, a vintage advertisement featuring 1930s film star Ruan Lingyu holding an aspirin tablet stands as a testament to Bayer's long history in the Chinese market.
"Bayer first entered China in 1882 and has witnessed the establishment and continuous improvement of its intellectual property right (IPR) system since the founding of the People's Republic of China," said Liu Hongqiang, Vice President of Intellectual Property at Bayer China. "The progress of China's IPR industry is evident. We are not only witnesses, but also beneficiaries."
Growing together with China's IPR system
Bayer's relationship with China's IPR system began in 1985. On April 1 of that year, the day China's Patent Law took effect, Bayer filed its first patent application in the country, which was granted in April 1989.
The research and development (R&D) of new drugs demands high levels of scientific research and substantial, long-term investments. "The average R&D cost for a new drug is around $2.6 billion, meaning the 'first pill' costs $2.6 billion to produce, while subsequent pills cost mere cents. Therefore, IPR protection is crucial for pharmaceutical companies. In markets lacking strong IPR protection, companies may opt out, hindering cost recovery, profitability, and patient access to medicines," Liu explained.
"From the enactment of China's Patent Law in 1984, to the extension of patent protection on drugs in 1992, and the 2021 amendments introducing drug patent term compensation, the patent linkage system, and punitive damages, Bayer has witnessed China's determination to safeguard IPRs and has correspondingly intensified its investments in the country. China is now a key hub in Bayer's global IPR strategy and second-largest individual market worldwide," Liu noted. After introducing innovative products, Bayer promptly secures patent protection in China through mechanisms like the Paris Convention for the Protection of Industrial Property and the Patent Cooperation Treaty (PCT), ensuring swift market entry.
In practice, Bayer's robust IPR strategy in China has effectively safeguarded its lawful interests. In one instance, a patent infringement dispute over a disposable syringe product led to a 2018 court ruling awarding Bayer 1.32 million yuan in damages, including attorney fees. This dispute aroused wide concern. When infringing activities continued, Bayer initiated a second lawsuit in 2019. Finally, under the active mediation of the court, the infringing company paid Bayer a settlement amount of 24.3 million yuan.
"Currently, Bayer has about 1,600 patent grants and applications in China. In the 2023 fiscal year, Bayer employed nearly 8,000 people in China, generating sales of 3.524 billion euros. As of February, 19 of Bayer's innovative drugs had entered the Chinese market, with 36 new indications or formulations approved," Liu stated.
Accelerating development through IPR protection
China has consistently emphasized IPR protection, offering robust support for innovators to safeguard their rights. "China's administrative IPR protection mechanism is notably efficient and mature. It is characterized by fast speed and low costs. In some provinces, the market size is comparable to that of entire countries, and swift administrative enforcement can help companies mitigate substantial economic losses," said Liu.
This perspective stems from Bayer's active use of administrative protection mechanisms. In a previous case, Bayer discovered that some companies were offering infringing products for sale online. Without a drug patent linkage system in place at the time, relying on judicial processes could have caused delays. Once suspected infringing products are launched, they will cause significant market losses. Bayer quickly assessed the situation and sought administrative protection from IPR authorities in provinces with substantial sales shares. Prompt and effective responses prevented further losses and protected Bayer's rights.
Bayer's successful application of administrative IPR protection has set a positive example for China's pharmaceutical industry. Several of its cases have been recognized as top ten cases of the year regarding patent administrative protection.
"We hope China continues to enhance its pharmaceutical patent term compensation system and early resolution mechanisms for pharmaceutical patent disputes to further strengthen pharmaceutical companies' confidence in investing in China," Liu said. "Bayer will continue to explore the potential of China's market, drive innovation and collaboration, and leverage its strengths in healthcare and agricultural technology to contribute to building a Healthy China and advancing rural revitalization."