Australia's patent term extension (PTE) provisions are rarely out of the judicial spotlight. March 2022 has been no exception, with the courts issuing three important decisions clarifying which product must form the basis for PTE where there are multiple products listed on the Australian Register of Therapeutic Goods (ARTG) that fall within the scope of the claims and who can bring an infringement action during the extension period. Those decisions confirm:

  • the product on which PTE is based can be a third party product (Commissioner of Patents v Ono Pharmaceutical Co. Ltd [2022] FCAFC 39);
  • where a patent covers two or more different pharmaceutical substances PTE must be based on the first product within the scope of the claims to be included in the ARTG, regardless of the type of inclusion (listing or registration), or whether it has subsequently been removed (Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2022] FCAFC 40); and
  • where PTE is requested before expiry of the initial 20 year patent term but is granted after that expiry, only the patentee can commence infringement proceedings in respect of actions taken during the intervening period ( Lundbeck A/S v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd [2022] HCA 4).

The relevant provisions

PTE eligibility

Under Australia's PTE regime, certain patents may be extended by up to 5 years where a pharmaceutical substance per se or a pharmaceutical substance when produced by a process involving recombinant DNA technology is in substance disclosed in the specification and falls within the scope of one or more of the claims of a patent.1

For such a patent to be eligible for PTE, goods containing (or consisting of) the relevant pharmaceutical substance must be included in the ARTG and more than 5 years must have elapsed between the date of the patent and the "first regulatory approval date" of such goods. Further, a PTE application must be filed within 6 months from the date of grant of the patent or within 6 months from the date of first inclusion of goods containing the relevant pharmaceutical substance in the ARTG, whichever is later.2

Duration of extensions

In accordance with section 77 of the Patents Act 1990 (Cth) (the Act), the term of any extension granted will be equal to the period beginning on the date of the patent (the effective filing date of the application from which the patent is derived) and ending on the "earliest first regulatory approval date" of any relevant pharmaceutical substance, reduced (but not below zero) by 5 years. In Pfizer Corp v Commissioner of Patents (No 2) [2006] FCA 1176 (Pfizer) the Federal Court stated that the reference to the "earliest first regulatory approval date":

...recognises that the patent may cover more than one pharmaceutical substance and provides that the term of the extension is based on the earliest of the approval dates that apply to the patent.

The term "first regulatory approval date" is defined in the Act as "the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance" (or, where pre-TGA marketing approval was given, the date of first approval). In Pfizer, the Court found that reference to "first regulatory approval date" meant any inclusion of goods in the ARTG, including an export only listing.

Who can bring infringement proceedings?

Generally, patentees and exclusive licensees have a statutory right to bring patent infringement proceedings.3 However, section 79 of the Act relates to a special circumstance where a patentee applies for PTE before expiry of the initial 20 year patent term but the PTE is not granted until after the initial expiry date. In that case, section 79 provides that the patentee has the same right to start proceeding in respects of an act done during the intervening period as if the extension had been granted at the time when the act was done.4 Notably, there is no mention of exclusive licensees in section 79.

The relevant decisions

Commissioner v Ono Pharmaceutical– PTE agnostic of patent ownership

We previously discussed the primary judge's decision,5 which concerned whether a PTE application could be based on the third party product. Beach J considered such an outcome to be "manifestly absurd or unreasonable", reading a limitation into the Act that PTE can only be based on the "goods of the patentee", i.e., products listed on the ARTG by or with the consent of the patentee.

In accordance with our analysis of that decision as being inconsistent with the actual wording of the Act and the ambiguities it introduced, the Full Federal Court (Alsop CJ, Yates and Burley JJ) overturned the primary judge's decision. In particular, the Full Court agreed with the Commissioner that the wording of the act was chosen with a view to balancing a range of competing interests (not just those of the patentee), and that reading of the concept of "goods of the patentee" into the Act introduces unnecessary ambiguity and indeterminacy.

MSD v Sandoz PTE must be based on the earliest listed product within the scope of the claims

The same three Full Court judges also dismissed an appeal against a first instance decision that the duration of any PTE granted must be calculated from the date on which regulatory approval was first secured for any product covered by the patent. That decision concerned the extension of an MSD patent based on the product Janumet® (sitagliptin/metformin), where there had been an earlier export only listing of another product within the scope of the claims, Januvia® (sitagliptin), which had since been cancelled.

The Full Court upheld the decision by the primary judge that section 77 of the Act should not be read down to encompass only registered goods (as opposed to any listed goods, including export only listings) and considered there was no reason to depart from the decision in Pfizer in that regard. The Full Court also agreed with the primary judge that because the duration of any PTE based on the earliest listed product Januvia® would be zero, the Patent Register should be amended to remove any reference to the term of the patent being extended.

Lundbeck v Sandoz – Exclusive licensees cannot bring infringement proceedings during extended term

In a long-running dispute between the parties, H Lundbeck A/S applied for extension of its Lexapro® (escitalopram) patent before the initial 20 year term expired, but the PTE was granted some time after the initial patent term expired (in circumstances we previously discussed). The Full Federal Court6 previously overturned first instance decisions7 that the patentee's local subsidiary, Lundbeck Australia, had a right to bring infringement proceedings under section 79 of the Act against Sandoz for selling generic escitalopram during the intervening period.

While the full extent of the issues before the High Court on appeal will be discussed in more detail in a forthcoming article, in relation to section 79 the High Court considered the words chosen by Parliament to be unambiguous and could not justify reading the term "patentee" to include exclusive licensees. Thus, Lundbeck Australia had no right to commence proceedings against Sandoz in respect of acts carried out after expiry of the initial patent term and before grant of the PTE (which in this case was the majority of the extension period) and the matter has been remitted to the primary judge to re-assess the previous award of damages to Lundbeck Australia.

Concluding remarks

The Full Court's decision in Commissioner v Ono Pharmaceutical restores the status quo in relation to the process for applying for PTE in Australia and the Patent Office will no longer require patentees to declare that a product was registered with their consent when filing PTE applications. However, patentees will accordingly be faced with a renewed burden in relation to monitoring the ARTG for third party product listings on the ARTG – and even cancelled listings – as a potential trigger of the deadline to apply for PTE. In that regard, it is hoped the Patent Office will continue to take a lenient stance when it comes to granting extensions of time to apply for PTE based on third party products, in view of that particular burden.

As always, pharmaceutical patentees should continue to be aware when formulating their patent strategy that covering more than one ARTG-listed product in the claims of a single patent can be problematic. Therefore, it is recommended that a divisional application is obtained (or rights maintained via one or more divisionals) to pursue different commercial products in separate applications. It should be noted that narrowing post-grant amendments are permitted in Australia and can be used as a last resort, if necessary and appropriate, to limit the claims to cover only a single product – to render a patent eligible for PTE.

Patentees and exclusive licensees should also be aware that where there is delay between the initial patent term expiring and grant of a PTE, only the patentee can bring an infringement action in respect of actions taken during that delay. In those circumstances, the patentee can only commence infringement proceedings once the PTE has been granted. While the circumstances contemplated by the decision are relatively rare, the impact on the amount of damages available where they do arise could be significant where damage is suffered primarily by an exclusive licensee.

Footnotes

1 Patents Act 1990 (Cth), s 70(2)
2 Patents Act 1990 (Cth), s 70(3)
3 Patents Act 1990 (Cth), s 120
4 Notably, the exclusive rights of a patentee are limited during the extension period to claimed pharmaceutical substances per se or pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology insofar as they are used therapeutically.
5 Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643
6 Sandoz Pty Ltd v H Lundbeck A/S (2020) 384 ALR 35; Sandoz Pty Ltd v H Lundbeck A/S [No 2] [2021] FCAFC 47
7 Sandoz Pty Ltd v H Lundbeck A/S (2020) 384 ALR 35; Sandoz Pty Ltd v H Lundbeck A/S [No 2] [2021] FCAFC 47

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.