Australian patent term extension in favour of patentees

Summary:

  • Ono Pharmaceutical Co, Ltd’s (Ono) Australian patent No. 2011203119 concerns two cancer drugs: third party’s KEYTRUDA and the patentee’s own OPDIVO.
  • Both KEYTRUDA and OPDIVO received regulatory approval in Australia, but the third party’s KEYTRUDA was approved earlier than the patentee’s own OPDIVO.
  • To cover all its bases, Ono applied for a patent term extension (PTE) based on the two products, but its preferred option was to acquire the PTE based on OPDIVO’s approval to obtain the maximum term of the PTE.
  • However, the Commissioner of Patents granted the PTE based on KEYTRUDA because KEYTRUDA was approved first and therefore should form the basis of the request.
  • Ono challenged the decision in the Federal Court of Australia, which overturned the Commissioner’s decision, finding that a PTE must be granted based on the regulatory approval date of a patentee’s own pharmaceutical product.

The regulatory examination of a new pharmaceutical product is the apex for research, development and commercialisation within the pharmaceutical industry. For this reason, developing and receiving regulatory approval for pharmaceutical products takes a lengthy time. Recognising the time required between when a patent is filed and when regulatory approval is acquired, the Australian Patents Act 1990 (Act) allows applicants to apply for a patent term extension up to five years in addition to the statutory term of twenty years. 

For a patent to be eligible for a term extension, the following criteria must be satisfied:

  • a pharmaceutical substance must be disclosed in the patent and must fall within the scope of a claim;
  • products containing or consisting of that pharmaceutical substance must be included in the Australian Register of Therapeutic Goods (ARTG); and
  • there must be at least five years between the date of the patent and the date of the first regulatory approval for the substance.

Background

Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643 concerned Ono’s Australian patent No. 2011203119 on monoclonal antibodies that bind to PD-1. The substance of those antibodies were disclosed in its competitor’s product, namely KEYTRUDA, and Ono’s own product, OPDIVO.

Both KEYTRUDA and OPDIVO were approved by ARTG, but on different dates (KEYTRUDA first and 9 months later OPDIVO).  Ono simultaneously filed two PTE requests: one based on KEYTRUDA, which received ARTG approval on 16 April 2015 and another based on OPDIVO, which received approval on 11 January 2016. The PTE request based on KEYTRUDA was accompanied by a request for an extension of time.

Although the patentee filed two requests, its preferred option was to acquire the PTE on OPDIVO’s regulatory approval date, as it would have resulted in a longer extended term for them (almost 9 months). Thus, the question at issue was which regulatory approval date was relevant for deciding the patentee’s PTE request.

The Australian Patent Office found that because KEYTRUDA was the first pharmaceutical product to fall within the scope of the claims, the PTE should be granted on the date of KEYTRUDA’s approval even though it was produced by a third party.

Federal Court of Australia’s decision

Ono disagreed and appealed the Commissioner’s decision in the Federal Court of Australia. The appeal was heard by Justice Beach, who overturned the Deputy’s Commissioner’s decision on 11 June 2021. His Honour reached this conclusion by analysing s 70, 71, and s 77 of the Act, claiming that the Commissioner’s interpretation of the Act was ‘dictated by strict textualism.’

Justice Beach queried, ‘The extension of term regime is beneficial and remedial. It is designed to compensate a patentee of a pharmaceutical substance for the loss in time before exploiting its invention. It is designed to remedy the mischief of a shortened period for an effective monopoly that has been caused by delays in obtaining a regulatory approval. Accordingly, a liberal rather than a literal construction is to be preferred.’ [135].

For this reason, Justice Beach agreed with Ono that interpreting the Act in such a way that approval of a PTE application being based on a product held by an unrelated third party rather than a product developed by the patentee is ‘manifestly absurd and/or unreasonable’ because a patentee would be denied compensation for the time lost in securing marketing approval for its product, which will be contrary to the legislative intention.

His Honour added that it was not open to the Commissioner to calculate the term of the extension solely based on products sponsored by the patentee. Instead, that the patentee’s interpretation of the statutory language should be consistent with the legislative objective.

Accordingly, the Court found that Ono’s patent should be extended on the basis of the date of the regulatory approval of its own product.

Implications

The fundamental implication is that the six-month timeframe for filing a PTE application begins when the patentee’s own products are first included on the ARTG, not when they are first included on the ARTG of a third party. Consequently, this decision will now be the blueprint that sets out that patentees will no longer be burdened with the task of monitoring product listings on the ARTG to avoid situations in which their PTE request is forced to be based on a third-party product.

Ultimately, this approach simplifies the extension regime and enables patentees to maximise their term extension. This adaptation is much more workable, bringing Australia into conformity with other key markets like the USA.

In contrast, explicit discussions such as licensee or sponsors of the patentee have not been discussed. It appears that the PTE rules are meant to capture such ‘friendly’ arrangements in which the patentee has a commercial interest in the product listed on the ARTG by its commercial partners, as Justice Beach’s reasoning implies.

Further, 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 if the earliest product was produced by a third party.

Noting that the Federal Court’s approach is contrary to longstanding practice of the Commissioner, the Patents Office has appealed the decision so there will be more news to come.


If you have any questions or require any assistance in seeking extensions, please contact us.

Disclaimer: The contents of this publication are general in nature and do not constitute legal advice. The information may have been obtained from external sources and we do not guarantee the accuracy or currency of the information at the date of publication or in the future. Please obtain legal advice specific to your circumstances before taking any action on matters discussed in this publication.

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