Biosimilars Deals 2021

Teva Pharma Australia Pty Ltd & Bayer Australia Limited v Cipla Limited [2026] APO 7

Introduction

Cipla has defeated Teva’s and Bayer’s oppositions to its application for an extension of time in which to pay the renewal fee on AU2003244799 for a combination of azelastine and steroids (the Cipla Patent). This combination is used in the hay fever medication Dymista®, distributed by Alphapharm/Viatris in Australia.  The Delegate’s decision provides a textbook application of the principles underpinning an application for an extension of time, with Cipla providing sufficient evidence to prove the likely errors which caused the failure to pay the renewal fee and why the Delegate should exercise his discretion to grant the requested extension of time.  Following the decision, the Cipla Patent has been reinstated as granted on the Australian Patents Register.

We will watch with interest what happens next with the Cipla Patent.  The Cipla Patent, which contains only formulation, use and method claims, is in its extended term, having been extended before the recent Full Federal Court Otsuka Pharmaceutical Co Lt v Sun Pharma ANZ Pty Ltd decision  in which the Full Court held that only patents with API claims were eligible for extension under the Australian pharmaceutical patent term extension regime.  The Full Court Otsuka decision is now the subject of a High Court appeal.

Background

The relevant background facts were as follows:

Key Issues

The Delegate was required to determine whether an extension of time application should be granted under section 223(2)(a) of the Patents Act. Section 223(2)(a) provides that:

“(2) Where, because of:

(a) an error or omission by the person concerned or by his or her agent or attorney; or

(b)…

a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.” (emphasis added)

Accordingly, the Delegate was required to determine whether:

• Cipla’s evidence proved that it had an intention to pay the renewal fees within the prescribed time and that an error or omission had contributed to its failure to do so.  Importantly, the failure to pay the renewal fee could not be the error or omission.

Previous cases had interpreted the term “error or omission” broadly to encompass accidental slips, inadvertences and errors caused by faulty reflection; an unexpected failure to exercise due diligence and/or a flaw in mental function in carrying out an intention; and a breakdown in procedure in effecting an intention.

• Cipla had given full and frank disclosure in its evidence of the relevant circumstances, justifying the exercise of the Delegate’s discretion in Cipla’s favour.  Relevantly, in Kimberly-Clark Ltd v Commissioner of Patents (No 3) (1988) 13 IPR 569 at 583-584 [17], the Court had stated that:

‘In order to make out the “proper case … justifying an extension” … an applicant would … have to go beyond a disclosure of the processes by which an agent’s errors came to be committed and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant … relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct.’

Consideration

The Delegate was satisfied that the evidence proved that Cipla had always intended to maintain the Cipla Patent and that the evidence clearly established a breakdown in procedure.  The Delegate went on to state that while there were a number of times that this breakdown could have been identified (but, somewhat surprisingly, was compounded by another error), he was satisfied that some causal error occurred resulting in the failure to pay the renewal fee within the prescribed time.

The Delegate then turned to the question of whether he should exercise his discretion in Cipla’s favour to grant the extension of time.  In answering the question of discretion, the Delegate considered the following factors:

• Whether a proper case had been made out justifying an extension.

The Delegate concluded that Cipla had fulfilled its obligation to provide an adequate basis upon which its moral claim to an indulgence may be assessed, because it had disclosed Cipla’s state of mind, the circumstances surrounding the various errors, and the relevant internal AAT processes.

• Whether there had been undue delay in seeking an extension of time.

Teva and Bayer argued that there had been a 6-month delay between the receipt of the ceasing letter of 3 January 2024 by Griffith Hack and the filing of the s223 request.  The Delegate did not consider this “delay” to be unreasonable or unnecessary in the circumstances of the case.  Griffith Hack had delayed sending the letter to AAT, and AAT had had not considered the letter immediately upon receipt.They mistakenly believed that the patent had expired.  Indeed, Cipla had filed its extension of time application the day after it had become aware of the patent ceasing.

• The interests of the parties in refusing or granting an extension.

The Delegate considered the interests of the parties to be “offsetting”.  While Cipla’s and Meda’s interests resided in the restoration of the patent monopoly, Teva’s and Bayer’s interests resided with the refusal of an extension of time as such an extension would impede their ability to produce and supply their own equivalent products within Australia.  However, to the extent that Teva or Bayer might already have taken steps to exploit the patented invention in Australia, the compensatory provisions contained in s223(9) were available to mitigate any resulting prejudice.

• The public interest.

The Delegate considered that, on balance, the public interest was neutral to the grant of the extension.  While there was a public interest in certainty as to the status of a patent and the accuracy of the Register, there was also a broad public interest in promotion of innovation through the reward of patent rights and the extension of these patent rights pursuant to the pharmaceutical patent term extension regime.

Outcome

The Delegate was satisfied that, on balance, Cipla always had an intention to maintain the Cipla Patent, some causal error occurred thwarting the patentee’s intention to maintain the patent, and that, as a result of the error, the relevant act was not done in time. The Delegate was also satisfied that he should exercise his discretion in Cipla’s favour to grant the extension of time.  Given this decision, the Delegate awarded costs against Teva and Bayer.

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