In Ono Pharmaceutical Co. Ltd v Commissioner of Patents  FCA 643, the Federal Court has overturned the Australian Patent Office’s decision in Ono Pharmaceutical Co. Ltd et al  APO 43, in which a pharmaceutical patent term extension (PTE) had been refused because of an earlier third party registration on the Australian Register of Therapeutics Goods (ARTG) of a pharmaceutical substance that was within the scope of the claims of the patent in question. This decision will be of great relief for developers of new pharmaceutical products.
In the original Australian Patent Office (APO) decision, Ono Pharmaceutical Co. Ltd et al  APO 43, a request for a PTE for Australian Patent No. 2011203119 based on the regulatory approval of OPDIVO (the patentee’s own pharmaceutical substance which was first registered on the ARTG on 11 January 2016) was refused by the Australian Patent Office (APO) as it was not considered to represent the first regulatory approval of a pharmaceutical substance disclosed in the complete specification, and falling within the scope of one or more of the claims of the patent. The APO considered that the first regulatory approval had been an earlier (16 April 2015) ARTG registered third-party pharmaceutical substance, KEYTRUDA.
This decision was consistent with the APO’s interpretation of the “first regulatory approval date” in a number of earlier decisions, including Iceutia Pty Ltd  APO 77, and Re: G.D. Searle LLC  APO 31, as referring to any ARTG listing of a pharmaceutical substance falling within the scope of the claims and disclosed in substance in the specification, whether or not associated with (or sponsored by) the patentee.
At issue in the Federal Court appeal of the Patent Office decision in Ono et al  APO 43, was whether a third-party regulatory approval (which is not stipulated by the Patentee as the pharmaceutical substance on which they have based their PTE application) can represent the first regulatory approval for the purpose of an application for a PTE.
Section 70, subsection (2)-(4) of the Patents Act 1990 set out the requirements for an application for a PTE, which are inter alia that:
- 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) must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of one or more claims of that specification;
- goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods; and
- the period beginning on the filing date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years.
Section 71(2) of the Patents Act 1990 sets out the deadline for applying for a PTE as the later of:
- six months after the commencement of the first inclusion on the ARTG (of any of the pharmaceutical substances referred to in Section 70(2)), and
- six months after grant of the patent.
Section 77 sets out the calculation for the term of the extension as being equal to the period beginning on the date of the patent and ending on the earliest first regulatory approval date in relation to the pharmaceutical substance, reduced (but not below zero) by 5 years, and states that the term of the extension cannot be longer than 5 years.
The first regulatory approval date is the earlier of the first inclusion on the ARTG, or the date of the first approval if pre-TGA marketing approval has been given to the substance.i
The Commissioner’s Position
The Commissioner’s position, consistent with the earlier Patent Office decisions, was that “the first regulatory approval” for a PTE application related to any ARTG listing of a pharmaceutical substance falling within the scope of the claims and disclosed in substance in the specification.
Accordingly, the Commissioner held the view that it was possible for a third-party registration (whether or not associated with (or sponsored by) the patentee) to represent the first regulatory approval (for the purpose of a PTE application), thereby having the potential to affect the term of a patentee’s extension (in some cases reducing it to zero) and the deadline for a patentee to apply for an extension.
The Patentee’s Position
The Patentee contended that the Commissioner’s position was contrary to the “beneficial and remedial”ii intention of the patent term extension legislation in compensating patentees for the additional time taken to obtain regulatory approval for pharmaceutical products, and further that it placed an undue burden on applicants to monitor the ARTG for any potential third-party registrations that could affect their PTEs.
The Patentee put forward an alternative construction of the PTE legislation, that it is the pharmaceutical substance within the scope of the claims and disclosed in substance in the specification which is stipulated by the patentee in their PTE application, that is subject to the PTE application deadline (Section 71(2)) and PTE term calculation (Section 77), rather than any substance within the scope of the claims as put forth by the Commissioner.
Justice Beach considered that the Commissioner’s construction of the PTE legislation was “a literal form of textualism”iii contrary to the intent of the legislation and summarised that if the Commissioner’s construction was to be accepted “there would be very serious practical problems which would be unduly onerous and not beneficial to any patentee”.iv
He agreed with the Patentee’s construction that it is for the patentee to stipulate the pharmaceutical substance for the purpose of a PTE application according to Section 70(2), and that the Section 71(2) application deadline and Section 77 term of extension calculation is to be applied in relation to the patentee’s stipulated pharmaceutical substance (provided that it meets the Section 70 criteria), rather than any third party ARTG registered substance that falls within the scope of the claims.v
On this basis Justice Beach ordered that the decision of the Patent Office be set aside, and the extension of term for the patent be granted on the basis of OPDIVO (Ono’s own pharmaceutical substance).
This decision represents a welcome alignment of Australia’s PTE provisions with those of other major jurisdictions in compensating developers of new pharmaceutical substances for delays in obtaining regulatory approval and will be of great relief to those developing new pharmaceutical substances.
In practical terms, the decision removes the burden on applicants/patentees to monitor the ARTG for any third-party regulatory approvals which previously had the potential to affect their PTEs, and also for the Patent Office to have to consider such approvals in assessing the allowability of PTE applications.
The decision also suggests that in situations where a patent covers more than one approved pharmaceutical substance, the patentee may be able to base their PTE application on a later approved product, rather than on the earliest registered substance within the claim scope (although Section 70(4) does not allow for more than one extension of time for a single patent).
We expect that this decision will lead to a change in the Patent Office practice in assessing PTE applications. That being said, there is the possibility that the decision could be appealed. We will keep you informed of any future developments, and if you have any questions in relation to PTE applications please contact us.
i Patents Act 1990 (Cth) s70(5).
ii Ono Pharmaceutical Co. Ltd v Commissioner of Patents  FCA 643 .
iii Ibid .
iv Ibid -.
v Ibid , .