PTE Alert (part 2): Bad Patent Term Extension Enables Generics to Avoid Preliminary Injunction in Australia

Newly appointed Justice Rofe delivered an early Christmas gift for generic and biosimilar companies in Australia in the Biogen v Pharmacor reasons delivered yesterday.  We speculated last week that the tide may be turning against patentees in relation to preliminary injunctions in Australia, and the reasons fortify this suspicion.

Until now, there have been very few cases where Australian Courts have allowed a first generic who has not “cleared the way” to avoid a preliminary injunction, and this has only occurred when the invalidity argument was novelty, and was sufficiently strong to temper or qualify the conclusion of a prima facie case of infringement.  In her first substantive patent law judgment, Rofe J accepted Pharmacor’s arguments that its case on wrongful Patent Term Extension (PTE) was sufficiently strong to qualify a prima facie finding of infringement (it being uncontested that the products otherwise fell within the scope of the claims).

We reported last week on the background to the Tecfidera® (dimethyl fumerate or DMF) dispute and the orders made by Her Honour, whilst reasons were withheld to enable redaction of the reasons for confidentiality.  The 211 claims of the patent include Swiss-style claims, EPC 2000 claims and method of treatment (MOT) claims.  The patent was extended for a full 5 years from October 2019 to October 2024, and the key challenge made by Pharmacor (which her Honour accepted as strong at a provisional level) is that – like Swiss-style and MOT claims – “EPC 2000” claims (the successor to “Swiss-style” claims) in the form of “[product x] for use in the treatment of [disease y]” are inextensible.

Key Takeaways

The standard questions were not deviated from:

1. Is there a serious question to be tried (here a prima facie case of infringement)?

• Do the relevant products fall within the scope of the claims (A: yes, Pharmacor conceded this);
• Does the invalidity position sufficiently dilute the serious question to be tried (A: yes, due to the strength of the arguments that the PTE was wrongly granted).

2. Where is the balance of convenience?

• A: Despite the market impact of the launch of Pharmacor’s DMF (including the compulsory price drop), the balance of convenience and justice did not warrant granting a preliminary injunction. A key factor here was the intended launch of a Biogen successor product which would have a profound effect on the DMF market. The strength of the assertions that the PTE was invalidly granted on the EPC 2000 claims added further weight to this conclusion.

A provisional finding that as is the case for Swiss Style claims and MOT claims, EPC 2000 claims “[product x] for use in the treatment of [disease y]” are not directed to a “pharmaceutical substance per se” given the “specified therapeutic purpose is…at least on a provisional view, an essential integer of the claim” [para 137 – 138] and are therefore likely to be inextensible.

Pharmacor’s novelty case was not sufficiently strong as to be a relevant consideration in tempering the prima facie case on infringement.

Other Takeaways

Several other nuances in the reasoning are of strategic interest:

• The specification of the patent, in particular its focus (including the claims) on methods of treatment, was relevant in assessing whether the relevant use formed an essential feature of the claims. This could leave the door open for the opposite conclusion to be argued for in other cases.
• There is no obligation to “clear the way”, although it is a factor to be weighed in the balance, particularly where other factors may be evenly balanced. In this case Pharmacor’s inactivity in this regard was not determinative.
• The “balance of convenience” arguments were “quite evenly balanced” – despite the fact that the 25% compulsory price drop would be triggered on PBS listing of Pharmacor’s DMF, and the usual price disclosure and competition driven price spiral would follow. Her Honour found the calculation of loss to Pharmacor if wrongly injuncted, and loss to Biogen if Pharmacor were wrongly not injuncted is of comparable complexity.
• Biogen Australia (the second applicant) is not an exclusive licensee. Whilst the claims of Biogen International (the patentee) were based on patent infringement, the claims of Biogen Australia were solely based on Australian Consumer Law allegations of misleading and deceptive conduct.  This is becoming a fairly routine approachin Australian pharmaceutical litigation where the Australian sponsor is not the exclusive licensee and therefore has no standing to sue for patent infringement.  Pharmacor argued that this meant that the loss which would be suffered by Biogen Australia if no injunction was granted could not be taken into account. Her Honour accepted that its potential loss could be considered at least as a third party.
• In separate proceedings commenced by Biogen against Accelagen and MSN in June 2021, the Court injuncted Accelagen and MSN in July by consent. Accelagen/MSN will likely be wishing they ran the PTE argument.
• Pharmacor had proposed to Biogen that the parties agree to an expedited final hearing in February 2022, and was prepared to be restrained until March 2022 on certain conditions. Biogen did not accept the conditions proposed by Pharmacor.  Biogen will likely be wishing it had, although the judgment indicates that the Court was not in a position to accommodate a hearing at that time.