PTEs in Australia – hard lessons for patentees from the Federal Court

Date: 12 August 2021
Court:  Federal Court of Australia
Judge: Jagot J

Background

Under Australian law, a patent term extension (PTE) must be based on the “first regulatory approval date” of a pharmaceutical substance covered by the patent, and at least five years must have elapsed between the effective filing date of the patent application and the first regulatory approval date. Once granted, a PTE will apply to all pharmaceutical substances covered by the patent claims.

Australian Patent 2002320303 (Patent), in the name of Merck Sharp & Dohme Corp (Merck), is directed to the treatment and prevention of diabetes. Its claims cover: sitagliptin, approved in Australia on 16 November 2006; and a composition containing a combination of sitagliptin and metformin, approved in Australia on 27 November 2008. A PTE application was submitted and ultimately granted based on the regulatory approval of the combination product of sitagliptin and metformin (the sitaglipin alone product was clearly not eligible for a PTE since less than five years elapsed between the patent date and regulatory approval). Sandoz Pty Ltd (Sandoz) challenged the PTE on the basis that it was not based on the pharmaceutical substance covered by the Patent with the first regulatory approval date

Key Issues

Merck put forward interpretations of the term “first regulatory approval date” as used in the relevant PTE provisions, which it said did not cover sitagliptin alone. Under its interpretation the first approval date could not relate to an approval obtained within five years of the date of the Patent. Therefore, Merck’s position was that the regulatory approval of the combination product of sitagliptin and metformin qualified as the first approval date. In contrast, Sandoz submitted that the “first regulatory approval date” related to any pharmaceutical substances covered by the Patent regardless of whether such approval was eligible for a term extension in itself. Under this interpretation, the regulatory approval of sitagliptin would be considered the earliest first approval date, making the Patent ineligible for a term extension.

Outcome

Jagot J rejected Merck’s interpretation of the PTE provisions on the basis that it required the Court to proceed as if there were a drafting error in the legislation, finding that there was no basis on which the court should assume that there were such an error. Furthermore, if Merck’s interpretation was valid, it could obtain “a monopoly over sitagliptin for more than 20 years in circumstances where it never suffered an unacceptable delay in its capacity to exploit sitagliptin”.

For this reason, Jagot J found that the PTE on Merck’s Patent was invalid.

Implications

As a result of Jagot J’s interpretation of the PTE provisions, no PTE will be available on a patent, where any pharmaceutical substance falling within its claims is approved within five years of the relevant patent date. In some cases, this may mean that later pharmaceutical products covered by the patent cannot benefit from an extended patent term.

This decision has crucial practical implications for patentees of pharmaceutical patents, particularly in relation to the breadth of the claims and the timing of PTE applications. It is essential that patentees are aware of all the pharmaceutical substances covered by their claims and the relevant regulatory approval dates of these pharmaceutical substances. It is also critical that a PTE review be undertaken well before the PTE deadline to allow for appropriate amendment of the claims, if necessary, to exclude (generally by a narrow proviso) products that might jeopardise the request, and to pursue additional pharmaceutical substances in one or more divisional applications. This will ensure that PTE requests are based on the relevant pharmaceutical substance and that the PTE request is filed within the required time.

This decision is equally important for other stakeholders such as generics and biosimilars manufacturers, who should carefully consider the validity of PTE claims and possible strategies for early launch where such PTEs are not properly based.

This decision is now the subject of an appeal to the Full Court, which heard the appeal in November 2021. A decision is expected in coming months.