Extension of Term for Pharmaceutical Patents in Australia – Overview and Recent Developments

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The Australian Patents Act (the Act) has provisions for extending the term of standard patents which relate to pharmaceutical substances. These provisions are based on the premise that a significant portion of the term of a pharmaceutical patent available to the patentee is used up in the process of obtaining regulatory or marketing approval before sales of the related drug (pharmaceutical substance) can commence. As such, pharmaceutical patentees could be unfairly prejudiced against in having a shorter effective term of patent protection in which they are able to recoup the initial substantial R&D dollar investment it took to develop that drug.

What Types of Patents are Eligible for Extension of Term?

Section 70 of the Act sets out that to benefit from the extension of term provisions a patent must disclose and claim 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. Further, goods containing, or consisting of, the pharmaceutical substance must be included in the Australian Register of Therapeutic Goods which is administered by the Therapeutic Goods Administration (the TGA). The TGA is Australia’s governmental body responsible for regulating therapeutic goods, including medicines. Finally, the time between the filing date of the patent and the date on which the first regulatory approval for the pharmaceutical substance is issued, must be at least 5 years. If all of these conditions can be met, then an extension of term is possible.

When Should an Application for Extension of Term be Made?

An application for an extension of the term must be made prior to the expiry of the term of the patent and within 6 months of the later of (i) the date of grant of the patent; (ii) the date of first regulatory approval of any goods containing the relevant pharmaceutical substance.

How is the Extension of Term Calculated?

The Act allows for an extension of term which is equal to the time period between the filing date of the patent and the date of first regulatory approval minus 5 years. The extension of term period is capped at a maximum of 5 years. Should an extension of term be granted, it will be advertised for opposition purposes.

What are the Rights of the Patentee During the Extension Term?

It is important to understand that the rights afforded to the patentee during the extension period are somewhat limited in that it is not considered an infringement to exploit the pharmaceutical substance for any purpose other than a therapeutic use or to exploit any form of the invention other than the pharmaceutical substance per se.

Any Special Considerations for Extension of Term Applications in Australia?

There has been considerable debate within the courts regarding the meaning which should be afforded to the term “pharmaceutical substance per se” and whether that meaning should be restricted to the active substance only or interpreted more broadly to include mixtures of substances, delivery systems comprising the active and the like.

Reference to “goods containing, or consisting of, the substance” in the Section 70(3)(a) of Act has been interpreted in a narrow sense in that even inclusion of minor amounts of the relevant substance, even as an impurity within the main active substance registration, may be sufficient to start the clock ticking on the application for extension deadline.

Given these and other significant nuances of Australian practice, it is wise to seek advice on extending the term of your pharmaceutical patent early in the piece in advance of grant. Notwithstanding this, two recent developments have provided some clarity for patentees in this space.

Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129 (Commissioner v AbbVie)

As noted above, the provisions of Section 70 of the Act allow for extension of term for pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology. More particularly, Section 70(2)(b) provides that an application for extension of term may be made where “one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology [are] disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification”.

In Commissioner v AbbVie, the Full Federal Court assessed whether extensions of patent terms are available for ‘Swiss-type’ claims involving pharmaceuticals produced using recombinant DNA technology. The general form of a Swiss-type claim can be exemplified as “Use of substance X in the manufacture of a medicament for the treatment of condition Y”. Swiss-type claims are interpreted as use-limited under Australian practice, such that a Swiss-type claim involving the use of a known “substance X” will be considered novel if the treatment of “condition Y” with the known substance has not been previously described.

Prior to Commissioner v AbbVie, the Deputy Commissioner of Patents had refused applications from AbbVie Biotechnology Ltd (AbbVie) to extend patent term on the basis of Swiss-type claims involving the therapeutic agent adalimumab, notwithstanding that adalimumab is typically produced by recombinant DNA technology (although this production method was not recited in the Swiss-type claims). On Appeal to the Administrative Appeals Tribunal of Australia (the Tribunal), the Tribunal reversed this refusal, stating that the Swiss-type claims could allow for an extension of term.

In Commissioner v AbbVie, the patents in question clearly disclosed a therapeutic substance (adalimumab) produced by a process that involves recombinant technology (albeit known technology). The patents also included Swiss-type claims that could arguably be considered to have scope encompassing this substance. However, it is generally accepted that the provisions of paragraph 70(2)(b) of the Act are designed to incentivise the development of new DNA technologies for producing pharmaceuticals. In contrast, Swiss-type claims offer protection for new medical uses of known substances. Accordingly, an underlying question addressed by the Full Federal Court’s decision was whether Swiss-type claims could be used to activate extension provisions, even where conventional recombinant methods where used for the production of a known pharmaceutical substance.

The Full Federal Court reversed the Tribunal’s decision, reverting to the original finding of the Commissioner of Patents. In arriving at this decision, upon review of the Section 70 provisions, the Court stated that to activate these provisions “the matter claimed must be the pharmaceutical substance or substances so produced, not other methods or processes involving those substances”. Then, with apparent approval of the recent decision in Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634, the Court held that “[t]he first and critical matter to note about Swiss type claims is that they are not claims to pharmaceutical substances at all. They are method or process claims which, in this connection, exhibit a dual character. First, they are directed to a method or process in which a substance is used to produce a medicament. Secondly, they have an additional method or process element constituted by a specific purpose to which the medication is to be used.” On this basis, it was held that “the scope of Swiss type claims is fundamentally different to the scope of the claims addressed by s 70(2) of the Patents Act”.

Given the precedent set by Commissioner v AbbVie, it is clear that Swiss-type claims (whether the substances recited are produced using recombinant DNA technology, as in this case, or not) cannot be relied upon to obtain a pharmaceutical extension of term. Furthermore, the Court’s stated position is that extensions of term must relate to claims to pharmaceutical substances, rather than related method claims. Accordingly, it would seem clear that method or process-type claims generally, be they Swiss-type claims or other claims such as claims to methods of treatment or methods of manufacture, cannot be relied on for extensions of term under Section 70. It is notable that this effectively rules out obtaining a pharmaceutical extension of term in Australia on the basis of a new use of a known therapeutic substance.

Repeal of Section 76A of the Act

Previously, Section 76A of the Act required that, after grant of an extension of term, a return was to be lodged to the Secretary of Health and Family Services, setting out:

(a) details of the amount and origin of any Commonwealth (of Australia) funds spent in the research and development of the drug which was the subject of the application; and

(b) the name of any body:

(i) with which the applicant for the extension of term has a contractual agreement; and

(ii) which is in receipt of Commonwealth funds; and

(c) the total amount spent (in Australia) on each type of research and development, including pre-clinical research and clinical trials, in respect of the drug which was subject of the application.

The wording of the above section frequently caused confusion for patentees as to the specific nature of the financial details that were required.

Recently, the Australian Productivity Commission undertook a public inquiry into Australia’s intellectual property system. As part of this inquiry, the Section 76A provisions were assessed, and the Commission’s 2016 Report revealed inter alia that only around half of applicants for extension of term submitted details under Section 76A.

In response to the Productivity Commission’s findings, the Government noted that no convincing rationale had been provided for imposing the substantial regulatory burden of Section 76A on patentees. Subsequently, the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018, which commenced on 25 August 2018, has repealed Section 76A, removing these reporting requirements.

Conclusions

Term extensions for pharmaceutical inventions can be extremely valuable, offering up to a further five years of market exclusivity in Australia. Although there are certain complexities associated with these provisions, the Full Federal Court decision in Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129 has gone some way to clarifying the type of claims that can be used to activate the extension provisions. Additionally, the recent repeal of Section 76A of the Patents Act 1990 has removed a burdensome reporting requirement that was previously applicable upon grant of an extension.

Please don’t hesitate to contact us if you have any questions on the above.

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