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Patent term extensions in Australia: Ono “first regulatory approval” decision overturned

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  • Jun 21, 2021
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Australia’s Federal Court Decision, Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643, overturns the Patent Office Decision, Ono Pharmaceutical Co., Ltd. et al [2020] APO 43, in which the Patent Office had found that the substance with the first regulatory approval date for the purpose of the patent term extension request was a competitor product.  In a Judicial Review of the Patent Office decision, the Federal Court found instead that the substance with the first approval date was the patentee’s own, later-approved product.

Patent Term Extensions (PTEs) in Australia

Australia’s Patents Act provides patent term extensions (PTEs) to account for the delays that can occur when obtaining regulatory approval for pharmaceuticals.  A PTE 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);
  • the PTE application is made within six months after the later of (a) the date the patent was granted and (b) date of the first inclusion in the 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 PTE is equal to the period between the filing date of the patent and the date of the first regulatory approval, reduced by five years.  A patent cannot be extended more than once.

Background

Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643 concerned a request to extend the term of Australian patent 2011203119.  The patent claims encompassed two blockbuster cancer drugs: Merck Sharp & Dohme’s KEYTRUDA and the patentee’s OPDIVO, both of which received regulatory approval in Australia, but on different dates.  Thus, the question at issue was which regulatory approval date was relevant for deciding the patentee’s PTE request.

To cover all of its bases, the patentee simultaneously filed two PTE requests: one based on the competitor product, KEYTRUDA, which had received regulatory approval on 16 April 2015, and another based on its own product, OPDIVO, which had a regulatory approval date of 11 January 2016.  The PTE request based on KEYTRUDA was accompanied by a request for an extension of time. 

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). 

The Overturned Patent Office Decision

Initially, the Patent Office refused the PTE request based on OPDIVO, 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.

At the Patent Office hearing, and as previously reported, the patentee’s request for a PTE based on OPDIVO was again refused (Ono Pharmaceutical Co., Ltd. et al [2020] APO 43).

The Federal Court Decision: Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643 (11 June 2021)

Justice Beach of the Federal Court observed that PTEs are “designed to remedy the mischief of a shortened period for an effective monopoly that has been caused by delays in obtaining regulatory approval”. 

Justice Beach framed the question at issue as follows:

“… it is whether an application for an extension must be filed within 6 months of the first inclusion in the ARTG of goods containing or consisting of any pharmaceutical substance falling with the claims of the patent:

(a)          where the goods were those of the patentee (the applicants’ position); or

(b)          irrespective of whether the goods were those of the patentee, that is, they could be the goods of a third party that had nothing to do with the patentee and, moreover, might be a competitor [the position taken by the Patent Office]”

Answering this question involved consideration of the intended meaning of the relevant provisions and the history of the legislation, including the 1997 Explanatory Memorandum (EM), the second reading speech to the Bill that became the 1998 Amendment Act (the speech) and the now-repealed s 76A of the Patents Act 1990. 

Justice Beach noted that PTEs are intended to provide an effective patent life for pharmaceutical products and the reference to “product” was “clearly not that of a stranger let alone a competitor”.  His Honour rhetorically asked how the legislation would provide an effective patent life if the product on the ARTG triggering the start of the extension was not that of the patentee, but rather that of a stranger or indeed a competitor, concluding, “[t]hat would not provide an “effective life” for the patentee at all”.

Justice Beach also determined that it is for the patentee to specify the pharmaceutical substance for the purposes of requesting a PTE (which can be any pharmaceutical substance that is in substance disclosed and claimed in the patent). 

His Honour reasoned that the drug which is the subject of the PTE application is intended to be the drug of the patentee, not that of a third party.  His Honour considered that the Patent Office’s interpretation of the law would place an unreasonably onerous burden on the patentee who would need to review each and every ARTG listing to identify those that contain a pharmaceutical substance falling within the scope of the claims (to the extent possible, noting also the dearth of information provided in ARTG public summaries), and to determine whether another relevant substance was previously listed on the ARTG but later removed, as can occur in certain circumstances. 

Justice Beach acknowledged, however, that the Patent Office’s approach was understandable in light of the text being construed and that a Delegate of the Patent Office is not as free as a Judge to reject any perceived ordinary meaning of the legislation by reason of manifest absurdity or unreasonableness. 

Conclusion

Justice Beach agreed with the patentee and favoured a liberal rather than a literal construction of the legislation, commenting in summary that a liberal construction can fit within the ordinary meaning of the statutory language and is consonant with the legislative purpose.

It was therefore concluded that the term of the patent should be extended based on the regulatory approval date of the patentee’s own pharmaceutical substance, OPDIVO, even though KEYTRUDA was approved earlier. 

Implications

This decision lifts the burden for patentees of the need to monitor the ARTG for approval of third party drugs.  In circumstances where a patent covers more than one approved pharmaceutical substance, the decision implies that a PTE request does not have to be based on the substance that was approved earliest. 

Authored by Serena White, DPhil and Michael Christie, PhD