Excipients Welcome: Federal Court Upholds Formulation Patent Extensions

Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414

Highlight

In a comprehensive Federal Court judgment, Justice Perram has ruled that pharmaceutical formulations can constitute a “pharmaceutical substance per se” under the Patents Act 1990 (Cth) (the Act), dismissing Cipla’s attempt to invalidate Novo Nordisk’s patent term extension (PTE) for its liraglutide formulations patent.  The decision maintains Novo Nordisk’s patent protection until 26 August 2025, preventing Cipla from launching its generic product in January 2025 as initially planned.

Background

The case concerned Australian Patent AU2004290862 (the Patent), which claims formulations of liraglutide, a peptide used to treat type 2 diabetes.  The Patent was originally set to expire on 18 November 2024, however, following a successful PTE application by Novo Nordisk in February 2011, the expiry date was extended to 26 August 2025.

Cipla proposed to launch a liraglutide product in January 2025.  Cipla commenced proceedings seeking rectification of the Patent Register under section 192(1) of the Act to restore the original expiry date, arguing the extension was granted without sufficient cause.  Novo Nordisk cross-claimed for injunctive relief to prevent Cipla’s product launch before the Patent’s expiry.

Key Issues 

Under the Act, a patentee can apply for a PTE only if at least one “pharmaceutical substance per se” is disclosed and claimed in the patent.  The Patent claims two formulations of liraglutide: one containing liraglutide with two excipients (disodium phosphate dihydrate and propylene glycol), and another adding phenol as a third excipient.

Two key issues arose for determination:

1. Whether the definition of a “pharmaceutical substance” in the Act includes formulations; and

2. If so, whether the excipients must have therapeutic uses distinct from the active ingredient, and, if so, whether the excipients in this case met that requirement.

Justice Perram noted that it was not in dispute that, if the Patent included a claim for a pharmaceutical substance, it also disclosed a pharmaceutical substance per se.  The definition of “pharmaceutical substance” is set out in Schedule 1 of the Act as follows:

pharmaceutical substance means a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves:

(a) a chemical interaction, or physico‑chemical interaction, with a human physiological system; or

(b) action on an infectious agent, or on a toxin or other poison, in a human body; but does not include a substance that is solely for use in in vitro diagnosis or in vitro testing.

Ultimately, whether the formulation claims of the Patent met this definition was a question of statutory construction.

Cipla presented five key arguments as follows:

1. Two appellate decisions bound the court to find that formulations could not be pharmaceutical substances: H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 (Alphapharm (FC)) and Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42 (Alphapharm (HC)).

2. If the Court was not bound by those decisions, the ordinary meaning of a “pharmaceutical substance” excluded formulations.

3. The legislative history and secondary materials relating to the PTE provisions and definition of “pharmaceutical substance” showed formulations were excluded.  In particular, Cipla submitted that the terms of section 119A introduced in 2006 (the Springboarding Provisions), which permits generic drug companies to take steps to obtain registration of a generic product prior to expiry of the originator patent, were inconsistent with the proposition that a formulation may be a pharmaceutical substance.

4. The policy underlying the PTE provisions supported this construction.

5. While two earlier first instance Federal Court decisions in Pharmacia Italia SpA v Mayne Pharma Pty Ltd [2006] FCA 305 (Pharmacia) and Spirit Pharmaceuticals Pty Ltd v Mundipharma Pty Ltd [2013] FCA 658 (Spirit) had found formulations could be pharmaceutical substances, these were decided before the High Court’s judgment in Alphapharm (HC) and considered versions of the Act which pre-dated the introduction of section 119A, and were therefore distinguishable (or alternatively, wrongly decided).

Legislative History and Policy of the Extension Provisions

Justice Perram began by analysing the legislative evolution of the concept of a pharmaceutical substance, starting with the introduction of the definition of “pharmaceutical substance” by the Patents Amendment Act 1989 (Cth) through to the introduction of the concept of a “pharmaceutical substance per se” by the Intellectual Property Laws Amendment Act 1998 (Cth).  Notably, his Honour found that the introduction of the concept of a “pharmaceutical substance per se” did not narrow the existing definition to exclude formulations.  Justice Perram rejected Cipla’s argument that statements in the explanatory materials suggested otherwise, noting that implied amendments must be found in the terms of the amending provisions, not the explanatory materials alone.

Justice Perram then considered the introduction of the Springboarding Provisions by the Intellectual Property Laws Amendment Act 2006 (Cth).  Justice Perram carefully analysed the “interpretive choices” available in light of the fact that section 119A(3) distinguished between a patent claiming a “pharmaceutical substance” and a patent claiming a “product relating to a pharmaceutical substance”.  Ultimately, his Honour found that the Intellectual Property Laws Amendment Act 2006 did not amend the definition of pharmaceutical substance and that a patent claiming a formulation continued to be eligible for an extension.

Ordinary Meaning

Justice Perram examined Cipla’s three main textual arguments about why formulations did not fall within the meaning of a “pharmaceutical substance”:

1. Cipla argued that the requirement that a pharmaceutical substance be “for therapeutic use” confined the definition to active ingredients only.  Justice Perram rejected this submission, noting it raised a broader question about whether therapeutic use must be found in each component of the formulation or as a homogenous mixture.

2. Cipla claimed that references in the Explanatory Memorandum for the Intellectual Property Laws Amendment Act 1998 to mixtures and compounds within the definition of “pharmaceutical substance” reflected an intention to only include combinations of active ingredients each of which were themselves pharmaceutical substances.  Justice Perram, however, considered that the Explanatory Memorandum was not “a firm basis to divine an intention to exclude formulations”.

3. Most significantly, Cipla argued that the reference to “application” in the definition of “pharmaceutical substance” meant the “application of the pharmaceutical substance to the biological target” (here, the GLP-1 receptor).  If correct, it would follow that only the active pharmaceutical ingredient in a formulation (in this case, liraglutide which binds to the GLP-1 receptor) may be a “pharmaceutical substance”.  In reply, Novo Nordisk argued that “application” means, in effect, “use”.  Justice Perram ultimately rejected Cipla’s argument for several reasons, concluding that “application” simply meant “use”, which avoided the problems in Cipla’s construction and better aligned with both ordinary language and the legislative history.

Whether Meaning Affected by Other Provisions of the Act

Justice Perram examined several provisions of the Act that Cipla argued supported excluding formulations from the definition of “pharmaceutical substance”.  Cipla’s main argument focused on section 70(3)(a), which distinguished between registered therapeutic goods that “contain” versus “consist of” a pharmaceutical substance.  Cipla argued that the distinction would be meaningless if formulations were pharmaceutical substances, since a formulation (already having excipients) would typically constitute the entire good rather than be contained within it.  Justice Perram rejected the significance of this distinction, noting that therapeutic goods could include components beyond excipients (like capsules) and that formulations could themselves be further formulated, as shown by the Patent itself.

Justice Perram found other arguments raised by Cipla repetitive or underdeveloped, concluding that none of the Act’s provisions required or supported excluding formulations from the definition of “pharmaceutical substance”.

Case Law Concerning the Meaning of Pharmaceutical Substance

Justice Perram examined several key cases concerning the meaning of “pharmaceutical substance”, including:

1. Boehringer Ingelheim International v Commissioner for Patents [2000] FCA 1918, Boehringer Ingelheim International GmbH v Commissioner of Patents [2001] FCA 647, Prejay Holdings Ltd v Commissioner of Patents [2003] FCAFC 77.  These cases focused on whether method claims could be “pharmaceutical substances per se”, but did not address whether formulations qualified as pharmaceutical substances.

2. Pharmacia and Spirit which directly supported including formulations as pharmaceutical substances.

3. Alphapharm (FC) and Alphapharm (HC) which Cipla argued supported its position that formulations were excluded.  However, Justice Perram found these cases did not address the issue.  Although some statements by Bennet J in Alphapharm (FC) provided limited support for excluding formulations, his Honour considered that these statements were obiter and potentially contradictory.  Justice Perram also considered that Cipla’s reliance on a footnote in the Alphapharm (HC) decision which mentioned that “tablets” did not fall within the PTE scheme was misplaced.  Justice Perram considered that Cipla misunderstood the footnote, which in his view “exhibit[ed] a conclusion that a patent for a tablet discloses a pharmaceutical method of delivery”, and is therefore not a pharmaceutical substance per se.

Considering the authorities in their entirety, Justice Perram concluded that nothing in the case law required him to depart from his conclusions based on legislative history and textual analysis that formulations could be pharmaceutical substances.  However, his Honour acknowledged that, if the footnote in Alphapharm (HC) was “not read as an illustration of a method”, this would be inconsistent with his interpretation.  However, Justice Perram stated that, if it was not merely an illustration of a method claim, he would respectfully, although hesitantly, decline to follow it.

Cipla’s Alternative Case

Justice Perram addressed Cipla’s alternative argument that, even if formulations could be “pharmaceutical substances”, these particular formulations were not because their excipients lacked therapeutic use.  Justice Perram concluded that this argument essentially repeated Cipla’s primary case that a formulation can never be a pharmaceutical substance, and thus should be rejected for the same reasons.  His Honour noted that Rares J’s judgment in Spirit merely served to demonstrate that every element of the formulation in that case (including the excipients) happened to have a therapeutic effect, not that this was a necessary requirement to fall within the definition of a “pharmaceutical substance”.

Despite his rejection of Cipla’s alternative case, Justice Perram went on to consider whether the excipients in the relevant formulations had a therapeutic use.  Notably, Justice Perram held that “therapeutic use” must be determined objectively from the patent specification itself, and not from later-discovered effects.  This follows from the statutory definition’s focus on the “purpose” of the therapeutic use, and the practical need to know at grant whether a PTE applies.  His Honour considered that allowing later evidence of therapeutic effects would create uncertainty in the PTE regime by potentially transforming non-pharmaceutical substance patents into pharmaceutical substance patents post-grant.  This led Justice Perram to reject Novo Nordisk’s expert evidence about additional therapeutic effects of the relevant excipients, as these were not disclosed in the specification.

While the relevant excipients generally prevented adverse effects, Justice Perram found that they did not actively influence physiological processes as required by the definition in the Act.  For example, the use of a buffer (disodium phosphate dihydrate) kept the pH of the formulation between 5 and 8, as formulations outside of this range might cause pain to the patient.  Thus, the buffer did “not act upon the physiological process by which the pain is generated but rather simply avoid[ed] the circumstances which would provoke the pain response in the first place”.

Outcome

Having found that formulations can be pharmaceutical substances, Justice Perram ruled that Cipla’s rectification suit must fail.  Accordingly, Justice Perram dismissed Cipla’s application and upheld Novo Nordisk’s infringement cross-claim.  His Honour also took the opportunity to comment on Cipla’s unexplained delay in not commencing proceedings until near the Patent’s expiry, which required expedition and thus disadvantaged other pending cases before the Court.  His Honour observed that such delay might provide a basis for refusing rectification, which is a discretionary remedy.

Implications

Justice Perram has delivered a comprehensive decision explaining clearly why patents for pharmaceutical formulations are eligible for PTEs.  Following a thorough analysis of the Act’s text, history and context, his Honour has confirmed that formulations can qualify as “pharmaceutical substances”, and thus qualify under the PTE regime.  It remains to be seen whether Cipla will appeal Justice Perram’s judgment to a Full Bench of the Federal Court.

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