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

The Australian Federal Court has confirmed in Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947 that, when a patent covers two pharmaceutical substances of the patentee, a patent term extension (PTE) application must be based on the pharmaceutical substance having the earliest regulatory approval date. This decision has crucial implications for applicants and patentees of pharmaceutical patents, particularly in relation to the breadth of claims and the timing of PTE applications.

Background

Australian patent law permits an extension of term, of up to five years, on patents that cover approved pharmaceutical substances.  Under the relevant provisions, an extension of term application must be made 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.  Notwithstanding, in June 2021, Pearce IP reported on an Australian Federal Court decision which held that, regardless of whether the claims of a patent cover a competitor product with an earlier regulatory approval date, a patentee can validly choose to submit a PTE application based on their own first registered pharmaceutical product. In the Sandoz case, the Federal Court considered the legitimacy of a PTE on a patent covering two patentee approved pharmaceutical products.”

Patent-in-suit

Australian patent No. 2002320303, in the name of Merck Sharp & Dohme Corp (Merck), relates to the treatment and prevention of diabetes and claims:

• sitagliptin, which was approved as Januvia® in Australia on 16 November 2006; and
• a composition containing a combination of sitagliptin and metformin, approved as Janumet® in Australia on 27 November 2008.

Since less than five years had elapsed between the date of the patent and regulatory approval of sitagliptin, a PTE application was submitted and ultimately granted based on the regulatory approval of the combination product of sitagliptin and metformin.  However, Sandoz challenged the PTE because it contended that it was not based on the pharmaceutical substance covered by the patent with the first regulatory approval date.

Issues considered

Merck submitted that term “earliest first approval date” in the context of the relevant PTE provisions, which it said did not cover sitagliptin alone because at least five years had not elapsed between the date of the patent and its regulatory approval.  Merck’s position was that the regulatory approval of the combination product of sitagliptin and metformin qualified as the earliest first approval date.  In contrast, Sandoz submitted that the “earliest first approval date” related to any pharmaceutical substances covered by the patent regardless of whether it rendered the patent ineligible for a term extension.  Under this interpretation, the regulatory approval of sitagliptin would be considered the earliest first approval date, making the patent ineligible for a term extension.

Ultimately, the Court agreed with Sandoz and reasoned that 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” (at [87]).

Practical implications

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 the review of issues relating to the PTE be undertaken well before the PTE deadline to allow for appropriate amendment of the claims, if necessary, in order 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 ensure that term extensions on relevant competitor patents are based on the first regulatory approval of all approved products covered by the claims

Concluding remarks

It is uncertain at this stage whether Merck will seek to appeal this decision to the Full Court of the Federal Court.  As an alternative, Merck could request an extension of time (of approximately 16 years) in which to file a divisional application exclusively claiming the combination product of sitagliptin and metformin.  If successful, once the divisional application is granted, Merck could validly submit a new PTE application based on the sitagliptin and metformin composition covered in the new divisional patent.  Pearce IP will keep you promptly informed of developments.