Editors Note: This article has been updated following the Full Court’s decision in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161. That decision significantly narrows the scope of pharmaceutical patent term extensions (PTEs) under section 70 of the Patents Act 1990 (Cth), and overrules the approach taken in earlier first instance decisions, including Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 and Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44, to the extent those cases treated formulation claims as eligible for a patent term extension. However, in June 2026, the High Court of Australia heard an appeal of the Full Court's decision, which should ultimately determine whether or not formulation patents are eligible for PTE's in Australia.

Pharmaceutical Patent Term Extensions in Australia

In the pharmaceutical industry, patents are crucial for recouping the significant investment involved in research, development, and gaining regulatory approval for new medicines. While standard patents last for 20 years from the effective filing date under the Patents Act 1990 (Cth) (the Act), the regulatory approval process can significantly delay commercialisation.

To compensate for the time lost due to delays in the regulatory approval process during which the patent cannot be commercially exploited, the Australian patent system allows for a patent term extension (PTE) of up to 5 years for eligible pharmaceutical patents.

Eligibility

According to section 70 of the Act, a patent is eligible for a PTE if it satisfies the following criteria:

1. the patent is a standard patent (s 70(1));

2. either one or more pharmaceutical substances per se or 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 claims (s 70(2))

3. goods containing or consisting the pharmaceutical 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 (s 70(3));

4. the term of the patent must not have been previously extended (s 70(4)).

Timing of a PTE application

As set out in section 71(2), an application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates:

(a) the date the patent was granted;

(b) 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 subsection70(3), as worked out under subsection 70(5A) (if applicable);

(c) the date of commencement of this section.

If an application for a PTE has not been made within the required six-month timeframe, in certain cases, the time for filing a PTE application can be extended under section 223 of the Act, which allows for extensions due to an error or omission or circumstances beyond the control of the applicant or their agent.

Relevantly, reg 22.11(4)(b) of the Patents Regulations 1991 confirms that filing a PTE application is a “relevant act” for the purposes of section 223, but only if the application is made during the term of the patent. That is, if the request for a PTE is filed during the patent term but outside the six-month timeframe, an extension of time may be available under section 223.[1] However, if the request is filed after the patent has expired, an extension of time is not possible.[2]

Calculation of term of extension

Section 77 provides that the maximum term of the extension is 5 years and the term of the extension is calculated by subtracting 5 years from the period beginning on the date of the patent and ending on the earliest first regulatory approval date in relation to any of the pharmaceutical substances referred to in subsection 70(2).

Relevantly, section 65 defines that the date of a patent is the date of filing of the relevant complete specification; or where the regulations provide for the determination of a different date as the date of a patent--the date determined under the regulations.

For example, where the period between the date of the patent (usually the filing date) and the first regulatory approval date

- 5 years or less, the patent will not be eligible for an extension of term

- between 5 and 10 years, the PTE will be between 0 and 5 years;

- 10 or more years, the PTE will be 5 years.

Recent Federal Court Guidance on PTE requirements

Several recent Federal Court decisions have examined the above requirements for PTE in Australia. Below is a summary of guidance provided by the decisions in interpreting the PTE requirements:

Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161 – an appeal from the first instance decision in Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44, both of which we previously discussed here and here

In Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161, the Full Court of the Federal Court significantly narrowed the scope of claims eligible for a PTE.

The appeal concerned whether claims directed to pharmaceutical formulations qualify as a “pharmaceutical substance per se” for the purposes of section 70(2)(a).

At first instance in Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44, the Court had held that formulation claims containing an active pharmaceutical ingredient together with excipients are eligible for a PTE, following the reasoning in another first instance decision in Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 (discussed here). On appeal, the Full Court unanimously overturned that finding.

The Full Court held that the definition of “pharmaceutical substance” as required by s 70 is limited to active substances and that formulations do not fall within the scope of the definition. In reaching this conclusion, the Full Court referred to the definition of “pharmaceutical substance” in Schedule 1 of the Patents Act, which requires “a chemical interaction, or physico-chemical interaction, with a human physiological system; or action on an infectious agent, or on a toxin or other poison, in a human body”. The Court reasoned that it is only the active ingredient, not the excipients, that gives rise to the required interaction or action, and as such, the definition of “pharmaceutical substance” has always been intended to be limited to substances that are active.

The decision overturns the reasoning adopted in Cipla and supersedes the earlier first instance decision in Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44 to the extent that those decisions held that formulation claims qualify for a PTE.

On 12 March 2026, Australia's High Court has granted special leave to appeal the Full Court decision. In June 2026, the High Court of Australia heard the appeal and reserved its judgment. We will update this note when the judgement issues, hopefully later in 2026.

Novartis AG v Pharmacor Pty Limited [2025] FCAFC 33 - an appeal from the first instance decision in Novartis AG v Pharmacor Pty Limited (No 3) [2024]FCA 1307 , both of which we previously discussed here and here

Under sections 70(2) and 70(3), in order for a PTE to be obtained on the basis of a pharmaceutical substance claimed and disclosed in the patent, it is necessary that goods which are included in the ARTG contain or consist the pharmaceutical substance. However, to be eligible for a PTE, there must be identity between the pharmaceutical substance disclosed and claimed in the patent and the substance contained in the goods registered in the ARTG.

In Novartis AG v Pharmacor Pty Limited [2025] FCAFC 33, the Full Court upheld the first instance decision to revoke a PTE, due to the pharmaceutical substance contained in the goods registered in the ARTG not being the same as the pharmaceutical substance claimed and disclosed in the patent. In this particular case, the pharmaceutical substance claimed and disclosed in the patent is a combination of two components A and B, whereas the goods listed in the ARTG contained a complex of A and B.

Ultimately, whether there was identity between the pharmaceutical substance as registered and as disclosed and claimed in the patent, came down to a matter of construction of the patent.

Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 14, discussed here

In Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 14, the Federal Court confirmed that claims to a formulation, which includes an active ingredient and non-active ingredients or excipients, are pharmaceutical substances per se under section 70 of the Act and are therefore eligible for a PTE.

However, as explained above, the more recent judgment of the Full Federal Court of Australia in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161 has decided that formulation patents are not eligible for PTE, and unless overturned by the High Court, will remain ineleigble.

‍Commissioner of Patents v Ono Pharmaceutical Co. Ltd [2022] FCAFC3, discussed here

In Commissioner of Patents v Ono Pharmaceutical Co. Ltd [2022] FCAFC 39, the Full Court considered the proper construction of sections 70(3) and 71(2)(b) of the Act. The Full Court held that “s 70(3) simply looks to the state of the ARTG” and “[i]t does not discriminate between the goods that contain, or consist of, the one or more pharmaceutical substances” (at [131]).Furthermore, that s 71(2)(b) “simply looks to the set of pharmaceutical substances satisfying the conditions of s 70(3) and fixes, as the relevant date, the date of commencement of the first inclusion of goods that contain, or consist of, any of the substances” (at [129]). That is, the correct approach in identifying the timing requirement for seeking a PTE under s71(2)(b) is to identify the first goods included on the ARTG that contain or consist of any pharmaceutical substance per se disclosed and claimed in the patent, irrespective of whether the sponsor of the ARTG goods is the patentee or a third party.

‍Merck Sharp & Dohme Corp. v Sandoz PtyLtd [2022] FCAFC 40,previously covered here

The decision in ‍Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2022] FCAFC 40 confirmed that if a patent claims and discloses more than one pharmaceutical substance per se which are separately listed in the ARTG, an application for a PTE may be filed based on any of the ARTG listings, but the term extension will be always be calculated under section 77 from the earliest of the regulatory approval dates.

For more information on the requirements for PTE in Australia, please contact Daniel McKinley or Catrina Olivera.

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[1] Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42.

[2] Boehringer Ingelheim InternationalGmbH [1999] APO 60.

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