It all adds up:
how a term extension can be
impacted if a patent covers more
than one pharmaceutical substance
Inspire December 2021
A recent Federal Court decision 1 has further considered Australia’s
patent term extension (PTE) provisions. Merck Sharp & Dohme
(MSD) is the registered proprietor of Australian patent 2002320303,
which relates to the treatment or prevention of diabetes.

10 The date of the patent is 5 July 2002
and the original term of the patent
was for 20 years, until 5 July 2022.

MSD successfully applied for PTE in
2009 and the term of the patent was
extended until 27 November 2023.

MSD contended that the respondent
(Sandoz) threatened to infringe the
patent. Sandoz had undertaken not
to exploit the patented invention
before the end of the original term
(5 July 2022) but refused to provide
any such undertaking during the
extended term, as they contended
that the PTE was invalid.

Legislative Background
S 70 of the Patents Act specifies
that to be eligible for an extension
of term, a patent must meet the
following requirements:
1 (2) The patent must both claim
and disclose one or more
pharmaceutical substances
per se (and/or one or more
pharmaceutical substances
when produced by a process that
involves the use of recombinant
DNA technology);
(3)(a) goods containing, or consisting
of, at least one of those
pharmaceutical substances must
be included in the Australian
Register of Therapeutic Goods
(ARTG); (3)(b) the period beginning on the
date of the patent and ending on
the first regulatory approval date
for the substance must be at least
5 years; and
(4) the term of the patent must not
have been previously extended.

Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947
S 71(2) outlines the deadline for filing
a PTE request, which is the latter of
either: (a) 6 months from the date the
patent was granted; or
(b) 6 months from the date of
commencement of the first
inclusion in the ARTG of goods
that contain, or consist of, any of
the pharmaceutical substances
referred to in subsection 70(3).

S 77 provides that term of the
extension is equal to the period
beginning on the date of the patent
and ending on the earliest first
regulatory approval date in relation
to any of the pharmaceutical
substances referred to in s 70(2);
reduced (but not below zero) by 5
years, up to a maximum of 5 years.




MSD has appealed
the decision but,
as it stands, it is
significant for
pharmaceutical patentees.

The patent in suit disclosed and
claimed each of (i) sitagliptin,
and (ii) a composition containing
sitagliptin and metformin (sitagliptin/
metformin). Sitagliptin and
sitagliptin/metformin are both
considered a ‘pharmaceutical
substance’ and, further, are different
pharmaceutical substances from
one another.

Goods containing or consisting
of sitagliptin were included in the
ARTG on 16 November 2006. The
period beginning on the date of the
patent (5 July 2002) and ending on
the date of commencement of the
first inclusion in the ARTG of goods
that contain or consist of sitagliptin
(16 November 2006) is 4 years, 4
months and 11 days.

Goods containing or consisting
of the composition of sitagliptin/
metformin were included in the
ARTG on 27 November 2008. The
period beginning on the date of the
patent (5 July 2002) and ending on
the date of commencement of the
first inclusion in the ARTG of goods
that contain or consist of sitagliptin/
metformin (27 November 2008) is 6
years, 4 months and 22 days.

Only the sitagliptin/metformin
product satisfies the s 70(3)
requirement outlined above. The
sitagliptin product does not satisfy
s 70(3) because the period between
the date of the patent and the first
regulatory approval date for the
substance was not at least 5 years.

Federal Court Decision
MSD referred to the recent decision
in Ono 2 , (previously reported on
here), as basis for the position that
the patentee may nominate the
pharmaceutical substance for the
purpose of applying for PTE.

MSD also argued that when
calculating the length of extension
using s 77(1), the earliest first
regulatory approval date “ in relation
2 to any of the pharmaceutical
substances referred to in subsection
70(2)” means either:
> The earliest first regulatory
approval date of any substance
satisfying s 70(3); or
> the earliest first regulatory
approval date of all substances
satisfying s 70(3).

On both of MSD’s constructions,
the earliest first regulatory approval
date of any and all pharmaceutical
substances in the patent satisfying
s 70(3), was the date of inclusion in
the ARTG of sitagliptin/metformin
(27 November 2008).

Sandoz contended that the earliest
first regulatory approval date “ in
relation to any of the pharmaceutical
substances referred to in subsection
70(2)” in s 77(1) means what it says.

On this construction, the earliest
first regulatory approval date of any
pharmaceutical substances in the
patent as referred to in s 70(2) is
the date of inclusion in the ARTG
of sitagliptin (16 November 2006).

When considering the legislative
framework, the Court agreed
with Sandoz’s interpretation.

Jagot J noted that s 77(1) refers
to s 70(2) and not s 70(3), whereas
s 71(2)(b) refers to s 70(3). On this
basis, the Court found that when
calculating the length of PTE,
earliest first regulatory approval date
relates to any of the one or more
pharmaceutical substances which
may be claimed and disclosed in the
patent. Therefore, while it may be
possible to fulfil the requirements
of s 70 with a later-registered
product, the relevant earliest
regulatory approval date for s 71
may result in an extension of zero.

Jagot J distinguished the present
facts from Ono on the basis that,
in Ono, Beach J was considering
a case where the earliest first
regulatory approval on which the
Commissioner relied to refuse the
grant of an extension of term was
Ono Pharmaceutical Co. Ltd v Commissioner of Patents [2021] FCA 643
that of a third party competitor of
the patentee. The Court held that
an unconnected third party’s ARTG
listing will not provide the relevant
“earliest first regulatory approval
date” and the PTE request must be
based on the earliest included good
of the patentee.

Conclusions MSD has appealed the decision
but, as it stands, it is significant
for pharmaceutical patentees. This
decision confirms that when a patent
covers two or more pharmaceutical
substances that are also included
on the ARTG by the patentee, or
with their consent, the relevant
date for calculating the length of
extension available is the earliest
regulatory approval date of any of the
substances. If this earliest regulatory
approval date is within 5 years of the
date of the patent, then the extension
of term available will be zero.

This decision also confirms that if
the earlier approved product belongs
to a third party then an extension
of term may still be available to
the patentee based on their own
product, providing that their own
product was approved more than 5
years after the date of the patent.

Consideration should be given to
strategies which might allow a
pharmaceutical patentee to maximise
the lifetime of their patents such as
planning regulatory approval for after
the 5-year threshold and separately
claiming different pharmaceutical
products in divisional applications.

Inspire December 2021
Relevant Facts
11 Dr Annabella Newton | Senior Associate
MChem(Hons) MCommrclLaw PhD AMRSC MRACI GAICD
annabella.newton@pof.com.au