The courts have been busy of late considering statutory provisions for the eligibility requirements for patentees to apply for an extension of term under the Australian Patents Act 1990 (Cth) (the Act).
Under the Act, a patentee can apply for an extension of term for up to 5 years on patents that disclose and claim one or more pharmaceutical substances per se or recombinant DNA products. The application must be based on the first regulatory approval date of the pharmaceutical substance. The Act also specifies that the length of the extended term is the period beginning on the date of the patent and ending on the first regulatory approval date of the substance minus five years.
Two recent decisions before the Australian Full Federal Court, Commissioner of Patents v Ono Pharmaceutical Co. Ltd  FCAFC 39 (the Opdivo case)1 and Merck Sharp & Dohme Corp. v Sandoz Pty Ltd  FCAFC 40 (the Sitagliptin case)2 considered questions as to which product approval should be considered for determining the first regulatory approval date.
Both decisions confirm that the registration to be considered for determining the first regulatory approval date, is just that: the first registration. This is the case regardless of whether the patentee made the registration (or a third party) or if the application results in a zero extension of term.
Whose registration is the first registration?
In the Opdivo case1 , an earlier competitor product KEYTRUDA® (pembrolizumab) , had been included on the ARTG before Ono’s product OPDIVO®(nivolumab). Both pharmaceutical substances fell within the scope of the claims of Ono’s patent AU2011203119. Ono sought an extension of term based on their own OPDIVO® registration.
The primary judge 3 found that only the patentee’s products are relevant when determining the first regulatory approval date. It was considered that it would be manifestly unreasonable for a patentee to be denied a patent term extension (PTE) due to a third party obtaining earlier marketing approval for a different product falling within the scope of the claims.
On appeal, the Full Court considered the requirements for eligibility of a patentee to apply for a PTE, specifically based on the earliest first registration of any substance falling within the scope of the patent. The Court found that it is irrelevant who obtained the first regulatory approval date in the ARTG for a product containing the pharmaceutical substance. The Court clarified that, where a patent claims multiple pharmaceutical substances, the calculation of extended term will always be based on the earliest first registration of a product containing the pharmaceutical substance. It is not open to the patentee to choose which substance would form the basis of the extension of term.
Consequently, it was confirmed that Ono could not rely on the approval of its own product OPDIVO® on the basis that it simply was not the first regulatory approval date for the pharmaceutical substance included in the ARTG. The only extension of term available for the AU2011203119 patent is based on KEYTRUDA® being the first registration containing a pharmaceutical substance falling within the scope of the claims of the patent.
Is the earliest or the latest the first registration?
As noted above, the Act provides that the length of a valid PTE is equal to the period beginning on the date of the patent and ending on the first regulatory approval date reduced (but not below zero) by 5 years, i.e. an extension of term cannot be longer than 5 years or less than zero.
In the Sitagliptin case2 , Merck’s patent encompassed two of its products that were included on the ARTG. The first one comprising sitagliptin alone (JANUVIA®) was approved less than 5 years from the relevant patent date. The second, comprising the combination of sitagliptin and metformin (JANUMET®) was approved later. Both products fell within the scope of the claims of the AU2002320303 patent.
The primary judge4 found that only the first product included in the ARTG (i.e. sitagliptin) could be relied on for the PTE. This resulted in an extension of term of zero. The submission by the patentee that they could choose between different approval dates for different products was rejected. The judge found that the patentee ought not be able to extend its monopoly on a patent simply because a second pharmaceutical substance is included in the ARTG.
This decision was affirmed on appeal by the Full Federal Court. Merck argued that it was absurd to construe the legislation as allowing a PTE to proceed only to be granted an extension of zero days and thus contrary to policy. However, the Full Court held that whilst it would be an odd result, the legislature inferred that the patentee would not make a PTE application in the first place if the extension would be zero. Nevertheless, zero extension of term is contemplated.
First means first
Existing PTEs granted based on second generation or combination products are now more vulnerable to invalidity attack, thus opening opportunities for generics and biosimilars for earlier market entry.
The recent decision by the Australian Patent Office 6 to remove the PTE of Bayer’s patent covering its YAZMIN and YAZ oral contraceptive products demonstrates that there are likely to be other invalid PTEs. In this case, the earlier registration of YASMIN was not brought to the attention of the Patent Office until a third party sought rectification of the register.
Bayer argued that the effect of the statutory language permits the patentee to nominate the product upon which to calculate an extension of term, even if it was not the first product which contained a pharmaceutical substance disclosed and claimed in the patent. The delegate rejected the argument. Based on the Full Court decision in the Sitagliptin case2 , the appeal by Bayer of this decision faces significant difficulty.
These recent decisions reiterate that the object of the PTE regime is to provide balance between the compensation to a patentee for delays due to the regulatory approval before it can exploit the invention and the public interest in the unrestricted use of the invention after patent expiry.
It is clear that the patentee cannot nominate which registration can be used to calculate an extension of term. The term is simply calculated from the earliest registration of a product which contained a pharmaceutical substance disclosed and claimed by the patent, whether by a third party or the patentee – first means first.
Going forward, patentees will need to monitor for earlier inclusion of competitor products on the ARTG and consider their filing and prosecution strategies accordingly. In particular, patentees should consider whether to file patent applications to cover each individual substance on which a PTE may be based.
1 Commissioner of Patents v Ono Pharmaceutical Co. Ltd  FCAFC 39
2 Merck Sharp & Dohme Corp. v Sandoz Pty Ltd  FCAFC 40
3 Ono Pharmaceutical Co. Ltd v Commissioner of Patents  FCA 643
4 Merck Sharp & Dohme Corp v Sandoz Pty Ltd  FCA 947
5 Bayer Pharma Aktiengesellschaft  APO 7
This article was written by Sarah Couper.
1 April 2022