Common sense prevails in new interpretation of pharmaceutical extension of terms

Date: 11 June 2021
Court:  Federal Court of Australia
Judge: Beach J

Background

Under Australian law, patents that cover certain pharmaceutical inventions are eligible for an extension of term (PTE) of up to five years. One of the requirements for obtaining a PTE is that the application must be lodged within six months of the later of the date the patent was granted and the date of the earliest regulatory approval (listing on the Australian Register of Therapeutic Goods (ARTG)) of a product containing or consisting of a pharmaceutical substance covered by the claims of the patent.

Australian Patent 2011203119 (Patent), in the name of Ono Pharmaceutical Co Ltd and another patentee (collectively Ono) covers antibodies that bind the immune checkpoint inhibitor PD-1 and includes claims which cover Opdivo® (Ono’s product) and Keytruda® (competitor’s product), both blockbuster cancer drugs. Regulatory approval for Opdivo® and Keytruda® was obtained in Australia on 11 January 2016 and 16 April 2015 respectively. On application made by Ono for a PTE based on approval of Opdivo®, the Australian Patent Office found that the pharmaceutical product with the earliest regulatory approval date covered by relevant PTE provisions was Keytruda®. The request based on Opdivo® was refused, and the six-month period for filing a PTE based on the Keytruda® approval had already expired. Ono appealed to the Federal Court.

Key Issues

Ono argued that the PTE provisions of the Patents Act 1990 (Cth) recognise that there may be “one or more pharmaceutical substances” in substance disclosed in the complete specification and falling within the scope of the claims, and that relevant conditions must be satisfied “in relation to at least one of those pharmaceutical substances”. Ono argued that the phrase “at least one” recognises that the relevant PTE requirements may be satisfied by any one of the pharmaceutical substances disclosed and claimed. It therefore submitted that the relevant “first regulatory approval date” is that of the product specified in the application for the PTE, which in the present case was Opdivo®, Ono’s product.

The Commissioner of Patents argued that none of the relevant PTE provisions require a relationship between the patentee seeking the extension and the entity that holds the regulatory approval of the product, such that approval of a competitor product could form the basis of a PTE. Further, the Commissioner argued that the relevant PTE provisions do not operate by reference to whichever substance an applicant nominates in an application form. Rather, the relevant provisions operate by reference to the “first inclusion” in the ARTG of goods that contain any of the pharmaceutical substances covered by the claims of the patent, which in this case was the inclusion of Keytruda®.

Outcome

Beach J anchored his analysis to the purpose of the PTE provisions, which were “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 was to be preferred. A construction of the PTE provisions which required a patentee to seek a PTE on the basis of a competitor’s product was not consistent with the legislative purpose and did not fit well with other relevant provisions. Consequently, Beach J ordered that the PTE for the relevant patent be granted based on Opdivo®, extending the term of the patent from 2 May 2026 to 11 January 2031.

The decision confirms that a patentee does not need to rely on a competitor’s product for the purposes of a PTE application. However, it is unclear to what extent Beach J intended to comment on the ability of a patentee to choose between its own products for such purposes. As set out above, Ono’s arguments appear to have been cast broadly, however Beach J noted that it was not Ono’s position that a patentee should be permitted to “pick and choose” which of its products can be used for a PTE application.

Nevertheless, some of Beach J’s obiter comments could be construed as supporting such an approach. For this reason, there may be some tension between this decision and the subsequent decision of Jagot J in Merck Sharp & Dohme Corp. v Sandoz Pty Ltd,¹ which held that a patentee must base a PTE on its product with the earliest approval date covered by the claims. Both PTE decisions have been appealed and the Full Court’s decisions will be eagerly awaited.

Implications

This Federal Court decision gives greater certainty to patentees in obtaining PTEs based on their own product, without the need to consider a competitor product having an earlier ARTG approval date which may fall within the patent claims. Accordingly, 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.

1. [2021] FCA 947.