Australia’s Federal Court Decision, Merck Sharp & Dohme Corp. v Sandoz Pty Ltd  FCA 947, concerns a patent claiming two pharmaceutical substances having different first regulatory approval dates; one less than 5 years after the patent filing date and one more than 5 years after the patent filing date. The decision considers whether the first regulatory approval more than 5 years after the filing date can be considered the first approval for PTE-eligibility purposes.
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 (see s70-79A of Patents Act 1990). 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.
Merck Sharp & Dohme Corp. v Sandoz Pty Ltd  FCA 947 concerns the patent term extension granted in connection with Australian patent 2002320303, which covers two pharmaceutical substances for the treatment of diabetes: sitagliptin and a composition containing sitagliptin and metformin. The patent was filed on 5 July 2002 and its ordinary term was therefore set to expire on 5 July 2022.
Sitagliptin was first included in the ARTG on 16 November 2006, i.e. less than five years after the filing date.
The composition containing sitagliptin and metformin, however, was first included in the ARTG on 27 November 2008, six years, four months and 22 days after the filing date of the patent. The patentee, Merck Sharp Dohme (MSD), applied for a PTE based on the regulatory approval of the sitagliptin/metformin composition and the term of the patent was extended until 27 November 2023.
Sandoz contended that the extension of term was invalid and sought rectification of the register to reflect a patent expiry date of 5 July 2022.
Reliance on the Ono decision
This decision relies heavily on the recent decision, Ono Pharmaceutical Co, Ltd v Commissioner of Patents  FCA 643.
As recently reported here. Ono addressed the issue of “earliest first regulatory approval” in the context of a patent covering two blockbuster cancer drugs; the patentee’s drug and a competitor’s drug. The competitor’s drug received regulatory approval before the patentee’s drug and the issue was therefore which regulatory approval date was relevant for deciding the patentee’s PTE request.
In Ono, Justice Beach noted that PTEs are intended to provide an effective patent life for pharmaceutical products. 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 also commented that it is for the patentee to nominate 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).
Justice Beach concluded that the patentee’s own first regulatory approval (rather than the competitor’s earlier first regulatory approval) could form the basis of the request.
The “earliest first regulatory approval date”
In the present case, MSD argued that “the earliest first regulatory approval date” means either:
(a) the earliest first regulatory approval date of any substance claimed by the patent which is included on the ARTG and which received regulatory approval at least 5 years after the patent’s filing date (MSD’s primary construction), as nominated by the patentee (based on Ono), or
(b) the earliest first regulatory approval date of all substances claimed by the patent which are included on the ARTG and which received regulatory approval at least 5 years after the patent’s filing date (MSD’s alternative construction).
That is, MSD’s construction required any regulatory approvals for pharmaceutical substances less than 5 years after the patent filing date to be disregarded for the purpose of assessing PTE eligibility.
If MSD’s construction were to be followed, the ARTG approval of sitagliptin could be ignored (being less than 5 years after the patent’s filing date) and PTE eligibility could be determined based on the date of inclusion in the ARTG of the combination of sitagliptin and metformin (i.e. the first regulatory approval which is at least 5 years after the patent’s filing date).
Sandoz contended that “the earliest first regulatory approval date” means the earliest regulatory approval date of any pharmaceutical substance in the patent – this corresponds to the date of inclusion in the ARTG of sitagliptin. Following this line of argument, if regulatory approval is secured for any pharmaceutical product claimed by the patent less than 5 years after the patent filing date, no patent term extension can be obtained.
Reasoning and discussion
MSD submitted that all of the factors which Beach J considered relevant in Ono are equally relevant to the present case. Justice Jagot disagreed.
Her Honour took the view that the absurdity identified in Ono was the fact that a patentee could be granted an extension of term of zero merely because the earliest first regulatory approval date would be that of an unrelated company relating to the same substance. In the present case, however, it was the patentee who had obtained regulatory approval for both substances covered by the patent.
Her Honour noted:
“It is one thing to conclude that it is absurd for a patentee to be denied any term of an extension due to an earlier regulatory approval by another unrelated party of which the patentee may not have known and over which the patentee would have had no control. … It is another to conclude that it would be absurd for a patentee to be denied any term of an extension due to an earlier regulatory approval by the patentee or its agent of which the patentee must have known and over which the patentee had control. In such a case, the patentee, by definition, will not have been delayed in obtaining regulatory approval for a substance or the substance in its patent for at least five years.”
Justice Jagot also commented on the crucial presence of the word “earliest” in s77(1) of Patents Act 1990, which sets out how to calculate of an extension of term.
Her Honour was of the opinion that it is clear that the legislature considered a delay of less than five years after a patent filing date for obtaining regulatory approval for a pharmaceutical substance covered by the patent was acceptable and did not require a capacity for an extension of term of the patent, commenting:
“There is no reason to infer that the legislature intended that a patentee with a patent disclosing and claiming more than one pharmaceutical substance intended that there could be an extension of term if the patentee obtained inclusion of one or more pharmaceutical substances in the ARTG within five years of the date of the patent but then also obtained inclusion of one or more pharmaceutical substances in the ARTG five years or more after the date of the patent. Provided one pharmaceutical substance has been included in the ARTG within five years of the date of the patent, the patentee has had the benefit of the monopoly afforded by s 13 of the Patents Act within the period of delay the legislature considered acceptable.”
Justice Jagot agreed with Sandoz, taking the view that the regulatory approval date of sitagliptin (less than 5 years after the patent filing date) was to be used in calculating the length of the PTE. Her Honour thus concluded that the extension of term of MSD’s patent is zero and ordered that the Register be rectified as sought by Sandoz.
This decision confirms that, if a patent covers more than one pharmaceutical substance for which the patentee has obtained regulatory approval, the calculation of the extension of term must be based on the substance that was approved first. If the approval date of that substance is within five years of the filing date of the patent, no extension of term will be granted.
Patent Applicants should therefore consider separating substances that have received (or are expected to receive) regulatory approval into multiple patents, for example by pursuing each substance in its own divisional patent application. This will ensure that each patent is able to enjoy the maximum extension of term that is available to it based on the substance that it covers.