Patent term extension alert: Australian Patent Office scorched by the Federal Court!

Common sense prevails in new interpretation of pharmaceutical extension of term legislation

In September 2020, Pearce IP reported on a significant Australian Patent Office decision, which held that a patent term extension (PTE) request must be based on the first regulatory approval of a product covered by the claims, even if that product is a competitor product. In an emphatic rebuke to the Patent Office, the Federal Court has now overturned that decision and, in doing so, has confirmed that regardless of whether the claims of a patent cover a competitor product with an earlier regulatory approval date, a patentee can validly submit a PTE request based on their own pharmaceutical product.

Extension of term regime

Under Australian law, patents that cover pharmaceutical inventions are eligible for an extension of term of up to five years. The legal requirements for obtaining a granted PTE are set out in section 70 of the Australian Patents Act 1990, and include sub-section 70(2), which states:

Either or both of the following conditions must be satisfied:

  • one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification; and
  • one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification.

Further, sub-section 70(3) states that the following conditions must be satisfied in relation to at least one of those pharmaceutical substances:

  • goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods (ARTG); and
  • the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years.

Crucial to the determination in this case were the timing requirements for submitting a PTE application, set out in sub-section 71(2)(b) which states that an application for an extension of the term must be made during the term of the patent and within 6 months after the latest of the following dates:

  • the date the patent was granted;
  • the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3).

Patent-in-suit

Australian Patent No. 2011203119 covers antibodies that bind the immune checkpoint inhibitor PD-1 and includes claims directed to game-changing, blockbuster cancer drugs OPDIVO® (patentees’ product) and KEYTRUDA® (competitor’s product).  Regulatory approval for OPDIVO® and KEYTRUDA® in Australia was obtained on 11 January 2016 and 16 April 2015, respectively.  In the first instance the Patent Office found that the pharmaceutical product with the earliest regulatory approval date covered by the claims of the patent was KEYTRUDA® and, as such, the patentees’ PTE request based on OPDIVO® was refused.

Issues considered

The patentees submitted that when each of the relevant PTE provisions are considered, they may be satisfied by any one of the pharmaceutical substances that are disclosed and claimed in the patent.

Specifically, sub-sections 70(2)(a) and (b) recognise that there may be “one or more pharmaceutical substances” which are in substance disclosed in the complete specification and in substance fall within the scope of the claims.  Further, s70(3) requires that certain conditions be satisfied “in relation to at least one of those pharmaceutical substances”.  The patentees argued that by using the phrase “at least one”, s70(3) recognises that the conditions in ss70(3)(a) and (b) may be satisfied by one or more of the pharmaceutical substances that are disclosed and claimed.  The patentees therefore concluded that the relevant “first regulatory approval date” is that of the good containing the pharmaceutical substance specified in the application for the extension of term, which in the present case was OPDIVO®, the patentees’ product.

In her submissions, the Commissioner of Patents said that none of the relevant PTE provisions impose a requirement that there be any relationship between the patentee seeking the extension and the entity that holds the regulatory approval of the product.  Further, the Commissioner argued that s71(2)(b) does not operate by reference to whichever substance an applicant for an extension of term choses to nominate in an application form, much less by reference to the patentee’s “good” or “goods”.  Rather, s71(2)(b) operates by reference to the “first inclusion” in the Australian Register of Therapeutic Goods that contains “any of the pharmaceutical substances referred to in subsection 70(3)”.

Analysis

The Court anchored its analysis to the purpose of the PTE provisions, which it said were “designed to compensate a patentee of a pharmaceutical substance for the loss in time before which it can exploit its invention.  It is designed to remedy the mischief of a shortened period for an effective monopoly that has been caused by delays in obtaining regulatory approval.  Accordingly, a liberal rather than a literal construction is to be preferred”.

Specifically, the Court stated that “if one looks at s70(3), it refers to ‘the substance’. But ‘the substance’ is that chosen from ‘at least one of those pharmaceutical substances’, that is, the ‘one or more pharmaceutical substances’ referred to in ss70(2)(a) or (b).  So, the word ‘any’ in s71(2)(b) reflects that it may be substance chosen, which then becomes “the substance” under s70(3)”.

The Court continued that it is for the patentee under s71(2)(b) to stipulate the pharmaceutical substance, which is consistent with “the evident purpose of the extension of term provisions, to provide the patentee with an effective patent life by restoring the time lost by the patentee prior to gaining market approval, thereby compensating the patentee for the additional time, expense and difficulty in commercialising its new product”.

In support of the patentees’ position, the Court referred to the requirements of the now repealed s76A that “the drug which was the subject of the application” was intended to be the drug of the patentee, not that of a third party.

Based on the above, the Court found that the patentees’ construction of the PTE provisions “fit within the ordinary meaning of the statutory language and is consonant with the legislative purpose”.

Notwithstanding, the Court considered the circumstances if its position was wrong and if the Commissioner’s construction was to be accepted.  In this case, the Court identified many serious practical problems which it described as “questions of absurdity or unreasonableness” if the Commissioner’s position was to be accepted, including:

  • the patentee would need to review and monitor regulatory approvals granted to third party products in order to determine if a particular pharmaceutical substance fell within the scope of one or more claims;
  • a lack of detail in the ARTG public summary would not allow a determination as to whether the product falls within the scope of a patent;
  • determining whether a product falls within the claims of a patent may also require information which can only be provided by the competitor;
  • since the TGA may remove products from the ARTG, the ARTG is not necessarily a complete database of all the possible “first regulatory approval dates” in existence; and
  • even if the patentee conducts comprehensive searches using reasonable care and skill, there is a risk that third party products will simply not be picked up by such searches.

For the above reasons, the Court overturned the Patent Office decision and ordered that the PTE for Australian patent no. 2011203119 based on OPDIVO® be granted.  Thus, the term of the patent will be extended from 2 May 2026 to 11 January 2031.

Practical Implications

This Federal Court decision gives greater certainty to patentees in relation to obtaining PTEs based on the patentee’s own product, without the need to consider broad claims that may also cover a competitor product having an earlier ARTG approval date.  Moreover, as this decision confirms that a patentee may choose one pharmaceutical product, to form the basis of a PTE request, from a number that may be disclosed and claimed in a patent, this decision may also apply to a situation in which multiple related patentee products are covered in a broad claim of a patent.  Irrespective, it is important for patentees to review their patent portfolios to identify any patents that might now be eligible for a PTE in light of the new interpretation of the legislation.

Concluding remarks

It is uncertain, at this stage, whether the Commissioner of Patents will seek to appeal this decision to the Full Court of the Federal Court. However, Pearce IP will keep you promptly informed of developments.

Grant Shoebridge PhD

Grant Shoebridge PhD

Special Counsel, Patent Attorney

Grant has over 15 years experience providing pharma, biopharma and biotech intellectual property services, and is renowned in his field. Grant is listed in IAM Patent 1000 as a world leading prosecution stand-out.

Grant specialises in providing strategic intellectual property services for pharma, biopharma, biotech and life sciences clients.

Jennifer Enmon PhD, JD

Jennifer Enmon PhD, JD

Special Counsel Patent Attorney (Registered in US, AU & NZ; EU Qualified) Trade Mark Attorney, AU & NZ

Jennifer has been advising clients on life sciences related patent matters for over 15 years.

Jennifer is a registered Patent Attorney in Australia, New Zealand and the United States and is a qualified Patent Attorney in Europe. She is also a registered Trade Mark Attorney in Australia and New Zealand.

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