Background

Australia's Patents Act provides a patent term extension (PTE) to account for the delays that can occur when obtaining regulatory approval for a pharmaceutical substance. The extension can last for up to five years and is available when the following requirements are met:

  • the patent, in substance, discloses and claims a pharmaceutical substance per se, or a pharmaceutical substance when produced by recombinant DNA technology;
  • goods containing or consisting of the pharmaceutical substance are included in the Australian Register of Therapeutic Goods (ARTG); and
  • the first regulatory approval for the pharmaceutical substance occurred more than five years after the filing date of the patent.

The length of a patent term extension is equal to the period between the filing date of the patent and the date of the earliest first regulatory approval, reduced by five years.

The decision

Ono Pharmaceutical Co., Ltd. et al [2020] APO 43 concerned a request to extend the term of a patent covering anti-PD-1 antibodies. The patent included claims for two blockbuster drugs; Merck Sharp & Dohme's KEYTRUDA and the patentee's OPDIVO, both of which received regulatory approval in Australia, but on different dates. The question at issue, then, was which regulatory approval date was relevant for deciding the patentee's PTE request.

The patentee hedged its bet, filing two PTE requests; one based on KEYTRUDA, which received regulatory approval on 16 April 2015, and another based on OPDIVO, which received regulatory approval on 11 January 2016. From the patentee's perspective, the request based on OPDIVO was preferred as it would result in a longer extended term (an additional 8 months, 26 days). However, the Patent Office refused that request, finding that KEYTRUDA was included on the ARTG first and therefore should form the basis of the request. The patentee disagreed and requested to be heard.

In the hearing, the patentee submitted that the “first regulatory approval date” should be the approval date of their own product, OPDIVO. This, they argued, was consistent the purpose of the extension of term provisions, that being to restore the time lost by patentees in gaining marketing approval, and to compensate the patentee for the additional time, expense and difficulty in developing and commercialising a new drug.

The patentee argued that the reference to “first” regulatory approval in the Act was only important when multiple regulatory approval dates existed for the same substance, such as for different delivery forms (e.g. capsules, gel capsules, tablets, slow-release, different amounts, etc) that manifested in different ARTG registrations. According to the patentee, it was only logical, given that the regime is intended to be beneficial and remedial, that it can only be about rewarding patentees for their work and, by implication, not the work of others. If not, the patentee would not receive the full extension of term for their product.

The Delegate accepted that the PTE regime was designed to encourage the development of new drugs, but rejected the patentee's broader purposive construction of the Act. Such a construction, the Delegate noted, would encourage companies to develop a substance that is not new and seek regulatory approval as late as possible, secure in the knowledge that a PTE will be granted for the (not new) substance. According to the Delegate, this type of scheme would not incentivise new drugs. Rather, it would incentivise new extension applications.

The Delegate acknowledged that there is some ambiguity in the words of the Act insofar as they do not say one way or the other whether the relevant pharmaceutical substance is only that belonging to the patentee, or whether it includes other, equivalent substances owned by third parties. But the Delegate also noted that this ambiguity had been dealt with previously by the Patent Office in G.D. Searle LLC [2008] APO 31. In that case, the Patent Office held that an application for PTE must be based on the earliest inclusion on the ARTG of a pharmaceutical substance falling within the scope of the claims, irrespective of the sponsor of the goods. Moreover, in Pfizer Corp v Commissioner of Patents (No 2) [2006] FCA 1176, the Federal Court of Appeals held that “the term of the extension is based on the earliest inclusion, regardless of the identity of the sponsor. It is not open to the Commissioner to calculate the term of the extension only on the basis of goods sponsored by the Patentee.”

The Delegate therefore found that the substance with the earliest regulatory approval date for the purpose of the PTE request was KEYTRUDA, not OPDIVO. As such, the patentee's request for a PTE based on OPDIVO was refused.

Conclusion

In circumstances where a patent claims more than one registered pharmaceutical substance, this decision confirms that the earliest registered substance will be used to determine eligibility for a PTE and to calculate the length of the extension, irrespective of whether the registered substance is owned by the patentee or by a third party. Patentees should therefore be aware of all pharmaceutical substances covered by their claims, not just those they are seeking to commercialise. If a patent application covers more than one pharmaceutical substance, an applicant may be well-advised to file one or more divisional applications to ensure that each registered substance is quarantined within its own patent, thus enabling maximum extensions to be sought for each patent separately.

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