Over recent years, Australian courts have heard a growing number of challenges to pharmaceutical patent term extensions (PTEs). The decisions in these cases signal an increasingly contentious landscape for PTEs and underscore the need for pharmaceutical companies to carefully develop their PTE strategies with a view to potential litigation.
Several high-profile examples provide valuable insights for patent owners and pharmaceutical innovators. Below we examine some of the key issues dealt with by the Federal Court in Novartis AG v Pharmacor Pty Limited (No 3) [2024] FCA 1307 (Novartis), Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 (Cipla), and Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44 (Sun Pharma).
Key takeaways
- Australian courts may take a stricter, more literal claim construction than the Australian Patent Office so it is important that the words of the claim precisely cover the pharmaceutical substance as registered on the ARTG.
- Patents covering formulations comprising an API and excipients can be eligible for a PTE.
- Patents claiming a pharmaceutical substance with process or result limitations can be eligible for a PTE.
- The approved pharmaceutical substance relied upon in a PTE application must embody all essential features of at least one patent claim.
PTE criteria
Australia’s Patents Act provides an extension of up to five years beyond the standard twenty-year term for certain pharmaceutical patents, provided the following criteria are met:
- one or more pharmaceutical substances per se (or one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology) is in substance disclosed in the patent specification and in substance falls within the scope of the claims
- goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods (ARTG)
- the period beginning on the effective filing date of the patent and ending on the first regulatory approval date of the pharmaceutical substance must be more than five years, and
- the term of the patent must not have been previously extended.
Novartis AG v Pharmacor Pty Limited (No 3) [2024] FCA 1307
Novartis’ blockbuster drug for treating heart failure, Entresto, was covered by a patent titled ‘Pharmaceutical compositions comprising valsartan and NEP inhibitors’. The active ingredient in Entresto is a salt complex referred to as ‘TSVH’ comprising the anionic forms of sacubitril and valsartan, sodium cations, and water molecules in a defined ratio of 1:1:3:2.5. In its PTE application, Novartis stated that the pharmaceutical substance per se (ie, Entresto) falls within the scope of the claims, for example, claim 1, which recites:
A pharmaceutical composition comprising:
- the AT 1-antagonist valsartan or a pharmaceutically acceptable salt thereof, and
- the NEP inhibitor [sacubitril] or [sacubitrilat] or pharmaceutically acceptable salts thereof; and a pharmaceutically acceptable carrier.
Novartis alleged that Pharmacor Pty Limited had threatened to infringe its patent based on its intended supply of Valtresto, which contains a complex of valsartan, sacubitril, and sodium.
Pharmacor argued that Valtresto includes only a single salt complex whereas claim 1 of Novartis’ patent required two distinct salts: one of valsartan and one of sacubitril. Pharmacor also cross-claimed for revocation of Novartis’ patent and challenged the validity of Novartis’ PTE, arguing that Entresto (a single salt complex) is not disclosed or claimed in the patent.
Justice Yates held that the pharmaceutical substance in Entresto is not simply a combination of valsartan and sacubitril, as claimed by Novartis, but a single crystalline complex ‘TSVH’ which is neither disclosed nor claimed in the patent. His Honour found Novartis’ description of the pharmaceutical substance in its PTE application to be inconsistent with the product information on the ARTG which identified Entresto as a single complex with a single molecular formula and a single molecular mass.
Novartis’ PTE was found to be invalid as the pharmaceutical substance disclosed and claimed in the patent did not match the pharmaceutical substance as registered on the ARTG.
Novartis appealed the decision in Novartis AG v Pharmacor Pty Limited [2025] FCAFC 33, arguing before the Full Federal Court that claim 1 should be construed broadly to cover any combination of valsartan and sacubitril, irrespective of form. The Full Court dismissed the appeal, upholding the primary judge’s finding that the claims did not encompass the TSVH complex.
Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414
Novo Nordisk obtained a PTE for its patent directed to formulations of liraglutide, a peptide used to treat type 2 diabetes. The extension was granted based on the ARTG listing of Victoza. Cipla, seeking to market a generic formulation of liraglutide, challenged the validity of the PTE. The main issue in this case was whether a ‘pharmaceutical substance per se’ within the meaning of the Patents Act includes formulations.
Cipla argued that a ‘pharmaceutical substance per se’ should be limited to the API alone, excluding formulations with the API and excipients. Justice Perram rejected this interpretation and held that the term ‘pharmaceutical substance’ includes formulations for therapeutic use, and that the words ‘per se’ serve only to exclude from the extension provisions patents directed to methods.
His Honour also rejected Cipla’s alternative argument that the excipients in a formulation must have (individually or together) a therapeutic use to qualify as a pharmaceutical substance.
Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44
Otsuka received a PTE for its patent covering a controlled release aripiprazole formulation. The PTE was based on the ARTG listing of Abilify Maintena, used for the treatment of schizophrenia and bipolar disorder. Sun Pharma contended that the extension was wrongly granted.
Justice Downes first addressed whether the controlled release formulation qualified as a ‘pharmaceutical substance per se’. Consistent with the reasoning in Cipla, her Honour found that a pharmaceutical substance includes not only APIs but also therapeutic formulations.
Justice Downes also considered whether the inclusion of a process feature or limitation by result in the claims precluded them from being characterised as claims to a pharmaceutical substance per se. Her Honour concluded that such features serve to further define the pharmaceutical substance but do not convert a claim into one for a method of delivery or a form of administration, which would fall outside the scope of the definition of a pharmaceutical substance per se.
However, Justice Downes rejected Otsuka’s argument that the release profile recited in the claim is an inherent property of the aripiprazole particle size. Moreover, her Honour found that the patent did not describe to a skilled person how to determine whether a formulation possessed the release profile recited in the claim. On this basis, the claims on which the PTE was based were invalidated for lack of clarity.
A shift in litigation strategy
Generics are increasingly challenging the validity of PTEs as part of their patent revocation tactics to accelerate market entry. In this environment, innovators should develop their PTE strategy early – before grant of the patent – ensuring all the nuanced requirements of the legislation are met with no inconsistencies between the approved drug and the pharmaceutical substance claimed in the patent.
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