Biosimilars Deals 2021

Janssen Pharmaceutica NV v Juno Pharmaceuticals Pty Ltd [2025] FCA 1538

Introduction

On 5 December 2025, Justice Burley of the Federal Court of Australia granted Janssen a preliminary injunction to restrain Juno Pharmaceuticals from launching generic versions of paliperidone palmitate long acting injectables (LAIs) used for the treatment of schizophrenia pending a final hearing of the matter.

Remarkably, the decision is the first preliminary injunction to be granted in a pharmaceutical patent infringement proceeding in Australia since mid-2018.  Since Justice Jagot’s landmark decision in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2018) 136 IPR 8; [2018] FCA 1556, which highlighted the “many complexities involved in compensating a generic manufacturer for a wrongly granted preliminary injunction”, the Federal Court has consistently refused such applications.  Justice Rofe’s refusal just three months earlier in Regeneron Pharmaceuticals, Inc. v Sandoz Pty Ltd [2025] FCA 1067 (Regeneron v Sandoz), which we reported on here, appeared to confirm this trend.  Justice Burley’s decision, however, demonstrates that in the right circumstances, the Federal Court will grant preliminary injunctions in favour of pharmaceutical patentees.

Background

The dispute concerns Australian patent no. AU2008340101 (the Patent), entitled “Dosing regimen associated with long acting injectable paliperidone esters”.  The Patent outlines a dosing regimen for injectable paliperidone palmitate, based on research demonstrating that the drug exhibits “flip-flop kinetics” and achieves better results with injections into the deltoid muscles.  Claim 1 of the Patent claimed a regimen involving two initial deltoid injections on day one and between days 6-10 (loading doses of 150 mg-eq and then 100 mg-eq), followed by monthly maintenance doses of 25-150 mg-eq.

Janssen is the sponsor of pharmaceutical goods for the treatment of schizophrenia by paliperidone palmitate LAIs under the trade names INEVGA SUSTENNA (monthly), INVEGA TRINZA (three-monthly) and INVEGA HAFYERA (six-monthly) (collectively, the INVEGA Products).  Juno has been the sponsor on the ARTG since 28 February 2025 for two one-monthly generic paliperidone LAI products: PALJUNA MONTHLY and VALINO MONTHLY.

Consideration

The application for a preliminary injunction turned on two key questions: whether Janssen had established a prima facie case of infringement (including consideration of Juno’s invalidity arguments); and where the balance of convenience lay.

Strong Prima Facie Infringement

Janssen alleged that Juno would infringe the Patent pursuant to sections 117(2)(b)-(c) (infringement by supply) and section 13 of the Act (infringement by authorisation).

Janssen submitted that the infringement case was relatively straightforward for VALINO MONTHLY, as the product information (PI) was materially the same as the INVEGA SUSTENNA PI and as there were clear instructions to use VALINO MONTHLY for initiating and maintenance doses within the scope of claim 1. Accordingly,  Juno did not seek to defend the infringement case for this product on the basis that it did not authorise such use nor was a joint tortfeasor or infringer pursuant to s 117(2) of the Act. 

The more interesting question arose in relation to PALJUNA MONTHLY.  Its PI did not itself provide instructions for loading doses.  Instead, it directed practitioners that “patients needed to be initiated with another long-acting antipsychotic injection prior to progressing to maintenance dosing” and referred to INVEGA SYSTENNA being “available from another sponsor” for initiation dosing.

Juno argued that there would be no act of primary infringement because the initiating dose would be prescribed using INVEGA SUSTENNA, conduct authorised by Janssen.  Accordingly, Juno submitted it could not be said to ‘authorise’ any infringing conduct.  Juno accepted that there was novelty in this argument as no authority has dealt with the situation where elements of a method said to be infringed have been authorised by the patentee.

However, his Honour’s preliminary view was that by way of the instructions in the PALJUNA MONTHLY PI, “Juno is sanctioning, approving or countenancing the use of PALJUNA MONTHLY as part of a course of treatment that includes the provision of ongoing maintenance doses as part of a dosing regimen (or method) that includes the provision of initiating or maintenance doses”.

Janssen relied on various authorities which demonstrated that where a party supplies parts of a patented product together with instructions to supply a missing integer from another source, the claim will nevertheless be infringed.  Justice Burley also referred to the Full Court’s observations in Ramset[1], that:

[w]here a vendor sets out to make a profit by the supply of that which is patented, but omitting some link the customer can easily furnish, particularly if the customer is actually told how to furnish it and how to use the product in accordance with the patent, the court may find the vendor has ‘made himself a party to the [ultimate] act of infringement.

Juno also submitted that a proportion of patients would use the Juno products in a manner not falling within claim 1, including psychiatrists who do not prescribe in accordance with the PI; patients who fail to take their medicine as prescribed; patients with mild renal impairment who are prescribed doses outside the range claimed; patients switching from different LAI antipsychotics; and missed dose scenarios.  His Honour accepted that these represented “a small but non-trivial cohort” whose use would not amount to infringement, but noted that “the vast majority of uses of the Juno products would fall within the scope of the claims”.  Accordingly, his Honour’s preliminary view was that the prima facie case for infringement was strong.

Invalidity arguments

Juno relied on two grounds of invalidity; lack of inventive step and false suggestion.  Neither was determinative of the application.

Inventive step: Juno contended that the asserted claims lacked an inventive step having regard to the common general knowledge and the disclosure in Revill et al (2006) and three clinical trials referenced in that article.  His Honour found that Juno had “an arguable or prima facie case” that the asserted claims lacked an inventive step and that Janssen’s counterarguments, at least on a preliminary basis, did not demonstrate that the lack of inventive step case was “particularly weak”.  However, Justice Burley observed that a challenge based on lack of inventive step “involves a complex process of fact finding and legal analysis” and that “the ground of invalidity is ill suited to the objective that Juno seeks to attain, which is to demonstrate weakness in the prima facie case of infringement asserted against it”.

False Suggestion: Juno argued that the specification falsely represented that administering loading doses in the deltoid muscle leading to a faster rise of initial blood plasma concentrations was a “discovery” and that the identification of flip-flop kinetics was a “discovery”.  On the submissions available to him, his Honour found these grounds to be “arguable” but did not express a view on their strength, noting conflicts in the expert evidence and that materiality of the representations would turn on construction of the specification as a whole.

Justice Burley concluded that, while Juno had an arguable invalidity case, it did not “rise to the level that it diminishes the strength of the infringement arguments”.

Balance of Convenience

Turning to the balance of convenience analysis, Justice Burley considered a range of factors, including:

• the PBS price disclosure regime and likely price reductions;
• potential entry by other generic competitors;
• Juno’s first mover advantage; and
• difficulties associated with the calculation of the parties’ losses should an injunction be granted or denied.

PBS Price Reductions: Unlike cases involving the mandatory 25% price drop triggered by the first PBS listing of a generic product, the INVEGA products had already undergone automatic anniversary price cuts, including a 26.1% cut on 1 April 2023 in accordance with the 15^th anniversary of listing on the F1 formulary.  However, price disclosure obligations would still apply upon generic entry, resulting in the move of the INVEGA products to the F2 formulary, potentially triggering further reductions.

Justice Burley noted that any statutory price disclosure reduction would not come into effect until at least 12 months after generic entry, with the Patent expiring in December 2028.  His Honour expressed scepticism about Janssen’s claims that mandatory reductions would occur before expiry, finding there was “a real prospect that the first 12 months of competitive trade will not result in a difference between the [Approved Ex-Manufacturer Price] and [Weighted Average Disclosed Price] of greater than 10%”.

Other Generic Entrants:  Teva and Amdipharm had obtained ARTG listings for paliperidone LAIs but neither had applied for PBS listing.  In responses to letters written by Janssen, Teva indicated it had “no present intention” to launch before expiry of the Patent but would not provide the requested undertakings if Juno was not restrained.  Similarly, correspondence from Amdipharm indicated that it would take the outcome of the preliminary injunction application into account in deciding upon its launch plans, but undertook not to supply its products to the Australian market prior to 1 May 2026.  His Honour concluded that it was “a possibility” that additional generics would enter before patent expiry, but on the submissions before him, it could not be “regarded as a probability”.

First Mover Advantage: Justice Burley accepted that the first generic supplier “is likely to have competitive advantages over later generic entrants”, which was characterised by Juno’s witness as “enormous”.  However, the assessment of the value and duration of that advantage was “speculative”, which, in his Honour’s view, favoured Juno on the balance of convenience given the uncertainty of the assessment.  In his assessment of the balance of convenience, his Honour also considered it relevant that, to counter the effect on Juno losing its first mover advantage, Janssen offered an undertaking that if Juno is restrained, Janssen would notify and take steps to enjoin any other generic seeking to list the PBS, and would not itself launch an authorised generic.

Calculating Damages: His Honour rejected Janssen’s submission that calculating damages would be equally difficult in both scenarios.  In a non-restraint scenario where Janssen succeeds at trial, damages may be calculated against Janssen’s “lengthy period of exclusivity” which provides “a ready benchmark against which disruption of the market may be calculated”.  In contrast, calculating damages on the undertaking involved “many uncertainties”, including unknown countermeasures by Janssen in terms of pricing, whether other generics would enter the market, and the duration of Juno’s first mover advantage.  His Honour concluded that “the inherent difficulty in calculating a fair assessment of damages to Juno on the undertaking as to damages on the restraint scenario is greater than calculating damages to Janssen consequent of any finding of infringement in the non-restraint scenario”.

Outcome and implications

Justice Burley granted the interlocutory injunction, with the costs of the application to be costs in the proceeding.  His Honour was ultimately satisfied that a preliminary injunction was appropriate, taking into account both the strength of Janssen’s infringement case, which was not diminished by Juno’s invalidity arguments, and each of the balance of convenience considerations.

His Honour’s decision breaks the trend of Australian courts since mid-2018 refusing preliminary injunction applications in pharmaceutical patent cases.  The key distinguishing feature from recent unsuccessful applications is the strength of Janssen’s infringement case, which contrasts with Justice Rofe’s finding in Regeneron v Sandoz, where her Honour found a “real prospect” that use in accordance with the PI would not infringe due to the difference between “weeks” (as claimed) and “months” (as instructed in the PI).

[1] Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd [1999] FCA 898; 164 ALR 239

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2025] HCA 50

Highlight

The High Court, in a key decision for all brand owners, has clarified how factors relevant to misleading and deceptive conduct allegations under the Australian Consumer Law should be considered and applied, particularly in contrast to trade mark infringement allegations.

Background

Global Retails Brands Australia Pty Ltd (GRBA) began to use the trade mark (HOUSE B&B mark).

Global Retails Brands Australia Pty Ltd (GRBA) began to use the trade mark shown in the image on the left (HOUSE B&B mark) in Australia in May 2021 in connection with soft homewares stores.  Bed Bath ‘N’ Table Pty Ltd (BBNT), owner of a range of trade marks that included the “BED BATH ‘N’ TABLE” mark, which are also used and registered in connection with soft homeware stores in Australia, took issue with GRBA’s adoption of the HOUSE B&B mark and alleged that use of the HOUSE B&B mark constituted trade mark infringement and misleading and deceptive conduct in breach of section 18 of the Australian Consumer Law (ACL).  BBNT’s misleading and deceptive conduct case relied on its extensive use of, and reputation in, the BED BATH ‘N’ TABLE mark in connection with soft homewares in Australia since 1976.

The case made its way through the Federal Court[1], where the primary judge, Justice Rofe, found that use of the HOUSE B&B mark did not infringe the BED BATH ‘N’ TABLE mark but GRBA’s activities in using the HOUSE B&B mark did constitute misleading and deceptive conduct in breach of the ACL.  Her Honour reasoned that, while the marks were not substantially identical or deceptively similar (ie no trade mark infringement), the ordinary and reasonable consumer being aware of BBNT’s reputation in the BED BATH ‘N’ TABLE mark would see the HOUSE B&B mark and be likely to be misled into thinking that there was some connection between the HOUSE B&B stores and BBNT.

GRBA appealed Justice Rofe’s decision regarding misleading and deceptive conduct to the Full Court of the Federal Court[2], where Justices Nicholas, Katzmann and Downes reversed Justice Rofe’s decision on that point.  Their Honours were of the view that Justice Rofe had erred in concluding that consumers were likely to be misled or deceived by the use of the HOUSE B&B mark when her Honour did not consider the HOUSE B&B mark to be deceptively similar to the BED BATH ‘N’ TABLE mark.  Their Honours were not persuaded that BBNT’s substantial reputation in the BED BATH ‘N’ TABLE mark could account for the different findings given that deceptive similarity (for infringement) requires a likelihood of consumer confusion between two or more marks.

BBNT appealed the Full Court’s decision, asking the High Court to confirm which method of assessing misleading and deceptive conduct was correct.

Outcome

The High Court agreed with Justice Rofe and her assessment of misleading and deceptive conduct, making the following important points:

• The Full Court had conflated the relevant inquiries for trade mark infringement and misleading and deceptive conduct by unduly focusing its analysis for misleading and deceptive conduct on whether the marks were deceptively similar.
• The answer to a trade mark infringement case is not necessarily the answer to a misleading and deceptive conduct case. “The scope and function of the Trade Marks Act is different from the scope and function of the Australian Consumer Law, and the interests the former Act protects are different and have, in any event, changed over time.”[3]
• For misleading and deceptive conduct, the use of the marks must be considered in context; to decontextualise the marks from the parties’ conduct runs the risk of conflating the trade mark concept of “distinctiveness” with “the broader concept of conduct in its immediate and broader context applicable to s18(1) of the Australian Consumer Law”.[4]
• Justice Rofe’s finding that GRBA’s use of the HOUSE B&B mark constituted misleading and deceptive conduct did not, and does not, give BBNT a monopoly in the words “bed” and “bath”. Rather, Justice Rofe’s assessment was simply that GRBA’s conduct satisfied the statutory requirements for misleading and deceptive conduct; a different manner of use of the words “bed” and “bath” may not result in the same finding.
• Australian Woollen Mills v F S Walton & Co Ltd (1937) 58 CLR 641 at 658 is good authority that “if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse”. This principle does not require dishonest intention. The High Court stated that a person can be “scrupulously honest and yet by conduct contravene [the ACL]”[5]. In this case, there was sufficient evidence to indicate that GRBA was aware of BBNT’s reputation in the BED BATH ‘N’ TABLE mark and had decided to take part of that mark to incorporate into its own HOUSE B&B mark in order to achieve a certain end (ie to take part of BBNT’s trade).

The High Court allowed BBNT’s appeal, setting aside the Full Court’s decision and reinstating the primary judge’s decision.

Implications

Trade mark infringement and misleading and deceptive conduct actions are often pleaded together in brand litigation. They are, however, two very different beasts, even if on the surface they appear to share some similar elements.  Because of the different considerations involved, it is important to plead both actions (as well as the tort of passing off) where they are available on the facts as different outcomes can result.

Traders should also be careful not to sail too close to the wind when adopting a new trade mark.  The High Court has clarified in this decision that adopting elements of an earlier well-known brand for the purpose of also taking some of that brand’s market share can be sufficient to support a finding of misleading and deceptive conduct.

[1] Bed Bath N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd (2023) 182 IPR 393

[2] Global Retail Brands Australia Pty Ltd v Bed Bath N’ Table Pty Ltd (2024) 183 IPR 123

[3] Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2025] HCA 50 at [40]

[4] Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2025] HCA 50 at [41]

[5] Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2025] HCA 50 at [54]

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161

Introduction

In a landmark decision that fundamentally reshapes Australia’s patent term extension (PTE) landscape, the Full Court of the Federal Court has unanimously held that pharmaceutical formulation patents are ineligible for PTE under the Patents Act 1990 (Cth) (the Act).  In a victory for Sun Pharma over Otsuka regarding Sun Pharma’s generic aripiprazole, the Full Court found that a pharmaceutical substance is limited to active pharmaceutical ingredients and does not extend to formulations combining those ingredients with excipients.

While the Full Court also overturned the primary judge’s findings that the asserted claims were invalid for lack of clarity and lack of definition, this small win for Otsuka was rendered moot by the finding that the PTE was invalid.

Unless and until there is a High Court appeal to the contrary, patentees will no longer be able to extend the term of pharmaceutical formulation patents, and their existing patent term extensions for pharmaceutical formulation patents will now be vulnerable to challenge by a simple (and inexpensive process) in the patent office.  Patentees will be urgently reviewing their patent portfolios and revisiting their loss of exclusivity dates in Australia as they prepare for the inevitable rectification applications from generic/biosimilar applicants.  Biosimilar and generic applicants will be inducing their market entry dates, and preparing to file low-cost rectification applications in the patent office, where the originator’s exclusivity was (previously) underpinned by a formulation patent.

Background

The dispute related to Otsuka Japan’s Australian Patent No. 2004285448, entitled “Controlled release sterile injectable aripiprazole formulation and method” (the Patent).  The Patent described and claimed controlled release formulations which contain aripiprazole as the active pharmaceutical ingredient (API).  Aripiprazole molecules bind to receptors (primarily D2 receptors) in the brain, which is useful in treating schizophrenia and bipolar I disorder.

Sun Pharma commenced proceedings against Otsuka seeking to “clear the way” ahead of their Australian launch on 1 April 2025 of their generic version of the ABILIFY MAINTENA (400 mg) powder and solvent for injection.

At first instance, Justice Downes found in Sun Pharma’s favour, holding that the PTE claims were invalid because the majority of the asserted pharmaceutical substances did not “fall within the scope of” the relevant claims.  Her Honour also held that the PTE claims were invalid for lack of clarity and lack of definition.

Notably, Justice Downes rejected Sun Pharma’s argument that formulations could not constitute “pharmaceutical substances” under the Act.  Following Justice Perram’s decision in Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 (see our report on this judgment here), her Honour held that the definition of a “pharmaceutical substance” included formulations.

Otsuka appealed Justice Downes’ findings on the validity of the claims and the PTE.  Sun Pharma filed a Notice of Contention seeking to uphold her Honour’s orders on alternative grounds, including, critically, that formulations do not constitute “pharmaceutical substances” in the context of the statutory PTE regime.

PTE Statutory Regime

In Australia, section 70 of the Act sets out specific conditions which must be met to obtain a PTE for a pharmaceutical patent, including that:

• one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim(s) of that specification; and
• goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods.

The term “pharmaceutical substance” is defined in Schedule 1 to the Act to mean:

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;

Consideration

The Full Court began by tracing the legislative history of the definition.  The terms “pharmaceutical substance” and “therapeutic use” first appeared in the Patents Amendment Act 1989 (Cth).  The Explanatory Memorandum to that Act stated that the new extension scheme would be available for “therapeutic substances” in the terms of the Customs (Prohibited Imports) Regulations (the Customs Regulations), subject to three added limitations.

The term “therapeutic substance” was defined in the Customs Regulations to mean:

a substance, including a mixture or compound of substances, that has a therapeutic use and includes a surgical ligature, suture or dressing, but does not include a vaccine prepared from microscopic organisms from the body of a person or animal for use in the treatment of that person or animal only.

The Full Court stated that it was clear from this definition that “therapeutic substance” included formulations, and that this conclusion was further reinforced by regulation 2(2)(b) which provided that:

• (a) each form of a therapeutic substance shall be taken to be a separate and distinct therapeutic substance;
• (b) if a therapeutic substance is manufactured according to two or more formulations – the substance manufactured according to a particular formulation shall be taken to be a different therapeutic substance from the substance manufactured according to the other or each other formulation; and
• (c) a therapeutic substance having a particular strength shall be taken to be a different therapeutic substance from the substance having a different strength.

The question was then whether the ‘added limitations’ in the Act’s definition operated to exclude formulations from its scope.

The Full Court found that they did.  The crucial limitation was the statutory requirement that a pharmaceutical substance’s application must involve “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”.  Their Honours reasoned that this requirement “immediately and naturally puts the focus on the substance which itself produces the therapeutic effect, as distinct from any excipients present in a given formulation”.  Excipients, by definition, are not therapeutically active – they are the non-therapeutic ingredients of dosage forms.  It followed, the Court held, that “it is only the active ingredient that can have a chemical or physico-chemical interaction with a human physiological system, or that can act on an infectious agent, or on a toxin, or other poison, in a human body”.  In this way, the limitation confines the otherwise broad concept borrowed from the Customs Regulations to substances that are “active”.

The Full Court found that this construction was supported by the extrinsic materials accompanying later amendments.  The Revised Explanatory Memorandum to the 1998 Amendment Act (REM) stated that a pharmaceutical substance “may comprise combinations of active ingredients or single active ingredients” and notes that an “extension of term will not be available for claims to new processes of making pharmaceutical substances or new methods of using pharmaceutical substances where the substances themselves are already known”.  In the same section, the REM further stated:

… This has the effect of enabling a generic manufacturer to produce a generic pharmaceutical formulation containing the patented pharmaceutical substance solely for the purpose of obtaining regulatory approval while the patent is still in force. It therefore prevents a patentee from ending up with a further de facto extension of term which would occur if a generic producer could not commence any work on the patented pharmaceutical substance to meet these requirements until the extended term expired.

(Emphasis added)

The subsequent Explanatory Memorandum to the 2006 Amendment Act distinguished between four types of pharmaceutical patents:

… There are broadly four types of pharmaceutical patent: those on the active pharmaceutical ingredient (API); the formulation of the medication; the process for making the API; and methods of use of the medication. Only patents which claim a pharmaceutical substance (ie API) are currently eligible for patent extension in Australia. Pharmaceutical products are frequently the subject of multiple patents which cover different aspects of the product. These patents are potentially of different types, some of which may not be eligible for extension. In some cases the most important (or ‘blocking’) patent may not be extended and thus the most important springboarding work cannot be done until this patent expires in Australia.

(Emphasis added)

The Full Court found this “express clarification of the distinction between an API and a formulation, and the express recognition that an API is the relevant ‘pharmaceutical substance’, is entirely consistent with what [they] regard as the correct construction”.

The Court also held that its construction accorded with the purpose of the PTE regime.  The purpose, as explained in the 1998 REM and cited by the High Court in Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; 254 CLR at [58], was to provide an effective patent life for newly discovered drugs that had taken extended effort and time to achieve regulatory approval.  The Court observed that “allowing extensions of term for improved or modified dosage forms of known drugs already registered on the ARTG [Australian Register of Therapeutic Goods] is inconsistent or contrary to that object”.

Turning to earlier decisions which had considered the PTE regime, the Full Court noted that there had been three first instance judgments, none of which had been the subject of appellate review, which had held that formulations fell within the scope of the definition of “pharmaceutical substance”.[1] Importantly, the Full Court considered that, although there had been a number of Full Court authorities which had considered various aspects of Australia’s PTE regimes, none of these Full Court decisions had directly and authoritatively settled the meaning of “pharmaceutical substance”. This meant that there was no prior Full Court decision the ratio of which determined any contested issue in these proceedings. Secondly, it meant that there was no decision of a Full Court to which regard might be had for the purpose of construing the term “pharmaceutical substance”.

Turning to earlier first instance authorities, the Full Court considered the reasoning in Pharmacia, Spirit and Cipla, declining to follow them.

In Pharmacia, Justice Weinberg had held that a ready-to-use injectable solution of epirubicin hydrochloride was a “pharmaceutical substance” capable of supporting an extension of term.  His Honour, citing Justice Heerey in Boehringer Ingelheim International v Commissioner of Patents [2000] FCA 1918; (2001) AIPC 91-670, observed that Justice Heerey did not distinguish between the “active ingredients” in a compound and other components of that compound.  The Full Court, however, preferred the reasoning of Justice Bennet in the Full Court decision in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 177 FCR 151 at [242] over that of Justice Weinberg in Pharmacia, noting that Justice Bennett had recognised that an active ingredient is seldom administered on its own without excipients but that this did not displace the fact that a “pharmaceutical substance” is limited to the active ingredients.

In Spirit, Justice Rares had found that the controlled release formulation OxyContin achieved a “therapeutic use” via two chemical interactions “in the human physiological system” (emphasis added):  the first being the disintegration of the matrix in the GI tract, and the second being the interaction of oxycodone with nerve cell receptors.  The Full Court identified this as an error.  The disintegration of a dose form to release the active ingredient is not an interaction with a human physiological system in the relevant sense – it is merely the breakdown of excipients to release the drug in the human physiological system.  The only chemical or physico-chemical interaction relevant to the definition is the interaction of the active ingredient (oxycodone) with the nerve cell receptors

In Cipla, at [58], Justice Perram stated that he saw nothing in the 1989 amendments that supported the exclusion of formulations from the definition of “pharmaceutical substance”.  The Full Court disagreed, noting that a pharmaceutical substance is a sub-class of a “therapeutic substance” as defined in the Customs Regulations, and that the express requirement that pharmaceutical substances have a chemical or physico-chemical interaction with a human physiological system explains they do not include a formulation.  The Full Court also noted that Justice Perram, at [186], accepted that if the High Court’s reference to “tablet” in footnote 40 of Alphapharm was not read as an illustration of a method, it was inconsistent with the construction that his Honour had reached.  The Full Court considered that the High Court used “tablet” in the footnote “as an example of what is not a pharmaceutical substance per se” – claims to a dosage form containing an active ingredient, rather than the pharmaceutical substance or active ingredient itself.

Applying this reasoning to the present case, the Full Court held that the formulations claimed in the Patent were not pharmaceutical substances for the purposes of the PTE regime.  The relevant pharmaceutical substance was aripiprazole – a substance that had been on the ARTG since May 2003, before the Patent’s priority date.

Alternative Grounds

The Full Court also upheld Sun Pharma’s alternative contentions: the Freeze-dried Formulations did not satisfy the definition of “pharmaceutical substance” because they cease to exist after reconstitution; the ARTG Goods did not “contain or consist of” the Controlled Release Injectable Formulations; and the claims were not to pharmaceutical substances “per se” because they included process features and limitations on use.

Validity

The Full Court addressed Otsuka’s appeal on claim validity.  The Court upheld the finding that the claims were limited by result, but found that the primary judge erred in concluding the claims were invalid for lack of clarity and lack of definition.

In overturning the primary judge’s lack of clarity and lack of definition finding, the Full Court enumerated a number of principles which it considered to have resonated throughout Australian patent law, including that:

• the mere fact that knowledge, skill and even some experimental tests may be necessary in putting a patented invention into practice is not sufficient to invalidate the patent if the nature of the invention is adequately described;
• the duty of the patentee is to state clearly and distinctly, either in direct words or by clear and distinct reference, the nature and limits of what it claims. If using language that is avoidably obscure or ambiguous, the patent is invalid; and
• it is not the duty of the inventor to define the scope of its claim so as to ensure that it can never be difficult to decide the question of infringement, but only to enable the court to formulate the question which a skilled addressee, wishing to avoid infringement, should ask itself. However, that is not on the basis of any hypothetical infringer. The test is more practical.

Otsuka’s victory on lack of clarity and lack of definition, however, was a pyrrhic one, given the Court’s findings on PTE validity.

Outcome and Implications

The Full Court dismissed the appeal, finding the PTE to be invalid, with Otsuka ordered to pay Sun Pharma’s costs.  The matter is now primed for Otsuka to seek special leave to the High Court.

In the meantime, the Full Court decision definitively resolves a question that has been the subject of consistent but unreviewed first instance authority.  Patents claiming formulations, whether modified release dosage forms, new delivery systems, or other combinations of known active ingredients with excipients, are not eligible for PTEs.

Unless and until there is a High Court appeal to the contrary, patentees will no longer be able to extend the term of pharmaceutical formulation patents, and their existing patent term extensions for pharmaceutical formulation patents will now be vulnerable to challenge by a simple (and inexpensive process) in the patent office.  Patentees will be urgently reviewing their patent portfolios and revisiting their loss of exclusivity dates in Australia as they prepare for the inevitable rectification applications from generic/biosimilar applicants.  Biosimilar and generic applicants will be inducing their market entry dates, and preparing to file low-cost rectification applications in the patent office, where the originator’s exclusivity was (previously) underpinned by a formulation patent.

[1] Pharmacia Italia SpA v Mayne Pharma Pty Ltd [2006] FCA 305 (Pharmacia); Spirit Pharmaceuticals Pty Ltd v Mundipharma Pty Ltd [2013] FCA 658 (Spirit); Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 (Cipla).

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.

This morning the Full Court published its decision in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161 confirming that pharmaceutical formulation patents are no longer eligible for a patent term extension in Australia.

In the fight between Otsuka and Sun Pharma over Sun Pharma’s launch of a generic version of ABILIFY MAINTENA (aripiprazole), the Full Court of the Federal Court of Australia held that only patents for active pharmaceutical substances – not pharmaceutical formulations- are eligible for a patent term extension.   The decision was handed down on 1 December, but published today.

The Full Court decision has huge ramifications for stakeholders in the Australian pharmaceutical sector.  Originator companies will no longer be able to extend the term of pharmaceutical formulation patents, and their existing patent term extensions for pharmaceutical formulation patents will now be vulnerable to challenge. Given this seismic shift in the law, we expect Otsuka to seek special leave to appeal to the High Court of Australia.

In the meantime:

• Patentees will be urgently reviewing their patent portfolios and revisiting their loss of exclusivity dates in Australia as they prepare for the inevitable rectification applications from generic/biosimilar applicants; and
• Biosimilar and generic applicants will be inducing their market entry dates, and preparing to file low-cost rectification applications in the patent office, where the originator’s exclusivity was (previously) underpinned by a formulation patent.

Our detailed blog on the Otsuka decision and its implications will follow.

Read more about the Australian patent extension regime in our free PTE eBook which can be downloaded Pharmaceutical Patent Term Extensions in Australia

About Pearce IP

Pearce IP is a specialist firm offering intellectual property specialist lawyers and attorneys with a focus on the life sciences industries.  Pearce IP and its leaders are ranked in every notable legal directory for legal, patent and trade mark excellence, including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, 5 Star IP Lawyers, among others.

In 2025, Pearce IP was recognised by Australasian Lawyer and New Zealand Lawyer’s 5 Star Employer of Choice, and is the “Standout Winner” for inclusion and culture for firms with less than 100 employees. Pearce IP was awarded “IP Team of the Year” by Lawyers Weekly at the 2021 Australian Law Awards. Pearce IP is recognised by Managing IP as the only leading ANZ IP firm with a female founder, and is certified by WEConnect International as women owned.