Legal Insights

Patent term extensions – Which product?

By Stephen Rohl, Ben Miller

• 02 December 2021 • 5 min read
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We compare two recent decisions of the Federal Court regarding the relevant goods when applying for a patent term extension

In brief

  • Two recent decisions of the Federal Court have considered what goods on the Australian Register of Therapeutic Goods (ARTG) can form the basis for an application to extend the term of a patent.
  • In Ono v Commissioner of Patents, the Court found that only the patentee’s products are relevant when determining an extension of term. That is, a patentee will not be precluded from obtaining an extension of term where a competitor’s product (that is disclosed and claimed in the patent) was earlier included in the ARTG.
  • In Merck v Sandoz, the Court found that where the patentee is the sponsor of two products disclosed and claimed in the patent, only the first of these products included in the ARTG can be relied upon for a term extension.
  • These decisions have been appealed and heard by the same bench of the Full Court in November 2021, with judgment reserved.

Extension of term under the Patents Act

Section 70 of the Patents Act 1990 (Cth) provides that a patentee may apply for an extension of term for a standard patent if the following requirements are satisfied:

  • one or more pharmaceutical substances per se are in substance disclosed in the complete specification and in substance fall within the scope of the claims
  • goods containing, or consisting of, the substance are included in the ARTG
  • the period from the date of the patent to the first regulatory approval date is at least five years
  • the term of the patent has not been extended previously.

The ‘first regulatory approval date’ is defined as the date of commencement of the first inclusion in the ARTG of goods that contain or consist of the substance.

Two recent decisions of the Federal Court of Australia have considered what goods on the ARTG can form the basis for an application to extend the term of a patent in Australia.

Ono Pharmaceuticals Co. Ltd v Commissioner of Patents [2021] FCA 643

The claims of Ono’s patent encompass not only its anti-PD-1 antibody product (Opdivo) but also a competitor’s product (Keytruda).

Ono applied for an extension of term based on Opdivo, which was included in the ARTG on 11 January 2016. The Commissioner refused Ono’s application on the basis that any extension of term would need to have been based on Keytruda, which was earlier included in the ARTG on 16 April 2015.

On appeal, Justice Beach overturned the Commissioner’s decision, finding that an extension of term must be based on a patentee’s own product, despite that qualification not appearing in the words of s 70 of the Patents Act. His Honour reasoned that because the purpose of the term extension regime is to compensate a patentee for the time lost in securing marketing approval for its product, it would be ‘manifestly unreasonable’ for a patentee to be denied this compensation due to another party obtaining earlier marketing approval for a different product.

Further, his Honour reasoned that if an extension of term could be based on a competitor’s product, then a patentee would need to conduct comprehensive searches of regulatory approvals to identify any relevant products before applying for an extension of term. These searches might fail to capture potentially relevant products. In addition, the information obtained through such searches may be insufficient to determine whether or not the product(s) fall within the scope of the claims.

The Commissioner’s appeal was heard on 4 November 2021, with judgment reserved.

Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947

The claims of Merck’s patent encompass two of its products included in the ARTG, one comprising sitagliptin and the other comprising both sitagliptin and metformin.

Merck filed the application for the patent on 5 July 2002 and applied for an extension of term on 27 May 2009, which was granted on 19 November 2009. In doing so, Merck relied upon its ARTG listing of sitagliptin and metformin dated 27 November 2008, more than five years after the date of the patent.

Sandoz challenged the validity of the extension of term on the basis that an extension must be based on the first goods included in the ARTG that are disclosed and claimed in the patent. As Merck had an earlier ARTG listing of sitagliptin alone (dated 16 November 2006 and, hence, less than five years after the date of the patent), there could be no extension of term.

In finding that the extension of term was granted in error, Justice Jagot had regard to the Explanatory Memorandum introducing the regime, the stated purpose of which was to extend the patent life where the patentee has been unable to exploit the patent within a period of five years from the date of the patent. Her Honour considered that a patentee ought not be allowed to extend its monopoly simply because a second pharmaceutical substance is later included in the ARTG.

Merck’s appeal was heard on 5 November 2021, with judgment reserved.

Key takeaways

In Merck, Justice Jagot adopted essentially a plain reading of the extension of term provisions, which was supported by the Explanatory Memorandum. In Ono, Justice Beach referred to the same part of the Explanatory Memorandum to support a more liberal construction of the regime in favour of patentees.

Ono overturns the long-standing practice of the Commissioner of Patents, whereby if the claims of a patent were broad enough to cover a competitor’s earlier approved product, this could scuttle a patentee’s extension of term application. While this was not typically a concern for patents to small molecules, with the rise of biologics there are many instances of two or more competitors developing structurally different antibodies for the same target. These different products can be captured by broad claims to antibodies to a particular target comprising (but not limited to) certain amino acid sequences.

The two appeals were heard by the same panel of judges, which provides a welcome opportunity for clarity in this highly contentious space.

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