The Intellectual Property Laws Amendment Act 1998 amended the Patents Act 1990 (Cth) (the Act) to provide a scheme allowing for patentees of eligible standard patents claiming pharmaceutical substances to apply for a term extension of up to 5 years.
Pharmaceutical patent term extensions are governed by s 70 of the Act which permits a patent term extension of up to 5 years for a patent disclosing and claiming a pharmaceutical substance that is registered in the Australian Register of Therapeutic Goods (ARTG).
The rationale of the scheme is to “…balance the competing interests of a patentee of a pharmaceutical substance whose exploitation of monopoly has been delayed (because of regulatory delay) and the public interest in the unrestricted use of pharmaceutical invention after the expiration of the monopoly…” .
Practically applying the scheme is difficult, particularly when there are two or more pharmaceutical substances disclosed in a patent. Where more than one substance is disclosed and claimed in a patent and there are multiple regulatory approvals for goods that contain or consist of those substances, the length of the patent term extension is to be calculated from the earliest first inclusion in the ARTG of goods relating to any of those substances.
The patent term extension provisions of the Australian Patents Act 1990 were considered in two recent decisions of the Australian courts.
In this article we outline a decision of the Full Federal Court in Commissioner of Patents v Ono Pharmaceutical Co. Ltd  FCAFC 39. In this case, the Court had to interpret s 71(2)(b) in order to determine whether reference to “first inclusion“ in the ARTG of goods that contain, or consist of, any of the patent pharmaceutical substances involves a consideration only of the patentee’s goods or includes goods registered by a third party.
In a follow up article, we will outline another decision of the Full Federal Court in Merck Sharp & Dohme Corp. v Sandoz Pty Ltd  FCAFC 40. In that case the Court had to consider a patent claiming two pharmaceutical substances and whether a patentee may base an extension of term application on a later registration of one of the substances in the ARTG either: a) as a matter of choice by the patentee; or b) by default if the earlier registration occurred less than 5 years from the date of the patent and would thus not qualify for an extension.
Commissioner of Patents v Ono Pharmaceutical Co. Ltd  FCAFC 39
This case considered an application filed by Ono Pharmaceutical Co. and E.R. Squibb (the Patentee) pursuant to s 70 to extend the term of a patent for a cancer treating monoclonal antibody that targets the PD-1 receptor.
Two extension of patent term applications were filed by the Patentee on 11 July2016 based on registration in the Australian Register of Therapeutic Goods (ARTG) of two different pharmaceuticals disclosed and claimed in the patent.
The first ARTG registration dated 16 April 2015 was for a product called KEYTRUDA which contained the active pharmaceutical ingredient pembrolizumab. The registration was not sponsored by the patentee but rather was sponsored by a third party competitor.
The second and later ARTG registration on 11 January 2016 was for the product OPDIVO which contained the active pharmaceutical ingredient nivolumab. This registration was sponsored by a related entity of the patentee.
In its patent term extension application, the patentee indicated the later OPDIVO registration as their “preferred option” that, if successful, would result in a longer extended term.
Commissioner’s Decision -“first regulatory approval date” Includes Third Party Approval
The Commissioner of Patents refused to consider the patentee’s preferred option and determined that the term extension must be calculated based on the earlier ARTG registration for KEYTRUDA, even though the registration was obtained by the patentee’s competitor MSD Australia.
In applying s 71(2)(b) the Commissioner of Patents relied on an earlier Patent Office decision in G D Searle LLC  APO 31 in which it was held that an extension of term application must be made on the basis of the first inclusion in the ARTG of goods that contain, or consist of, the pharmaceutical substance which falls within the scope of the claims of the specification, irrespective of the sponsor of the goods.
Furthermore, the Commissioner determined that conversion of the extension of time application to be based on KEYTRUDA would be out of time so it would be necessary for the patentee to request an extension of time for the KEYTRUDA application.
Court Appeal Against Commissioner’s Decision Successful, at least initially
The patentee appealed the Commissioner’s decision to reject its preferred extension of term application based on the later registration for OPDIVO.
The patentee contended that, when s 71(2)(b) refers to the first inclusion in the ARTG of goods that contain, or consist of, “any of the pharmaceutical substances referred to in s 70(3), it is directing attention only to the first inclusion in the ARTG of the patentee’s goods containing one of the patented pharmaceutical substances.
The Court at first instance agreed with the respondents’ interpretation and that their preferred application based on the later registered OPVIDO should be successful.
The primary judge concluded that it would be unfair on a patentee for a third party ARTG registration to determine the “first regulatory approval date” for the purposes of s 70. The judge reasoned that it would require the patentee to monitor and review every ARTG approval and this could not have been the intention of the legislature. Furthermore, it is a complex task to determine whether a competitor’s product registered on the ARTG falls within the claims of a patent and may require a Court order for discovery.
Full Court Appeal – Commissioner’s Initial Decision Upheld
The Commissioner appealed to the Full Federal Court arguing that the proper interpretation of s 71 is that for the purposes of s 70, the first ARTG registration may be that of the patentee or a third party.
Practical Difficulties “Overblown”?
The Commissioner argued that there was no evidence its interpretation would provide any practical difficulties. On the contrary the patentee had taken infringement action in relation to KEYTRUDA. Furthermore, if the patentee was unaware of an ARTG registration such that an extension of term application is filed late then it is possible to request an extension of time to file a patent term extension application, as they had done in this case.
Full Court Decision
The Full Court agreed with the Commissioner and overturned the decision of the primary judge. The Full Court determined that the proper interpretation of s 71(2)(b) is that the deadline to file a patent term extension should be calculated from the date of the first registration on the ARTG, by the patentee or by anyone else, of any pharmaceutical substance disclosed and claimed in the patent specification.
The Full Court reasoned that in balancing the competing interests of the patentee and the public “It can betaken that the legislature saw the correct balance as being achieved by the very words it chose to implement that regime”.
Take Home Points
The decision confirms that any request for a patent term extension must be based on the first ARTG registration of any pharmaceutical substances that is disclosed and claimed in the patent by the patentee or an unrelated third party. Accordingly, patentees should undertake due diligence to determine whether a patented pharmaceutical has been registered by any third parties. If a patent term extension request is filed out of time because the patentee was not aware of an earlier third party ARTG registration then it may be possible to obtain an extension of time to validly file and obtain a patent term extension.
Alphapharm Pty Ltd v H Lundbeck A/S  HCA 42