Australian Patent Term Extensions Under the Microscope

Introduction

Australia’s Patent Term Extension (PTE) regime permits eligible pharmaceutical patents to extend their 20-year term by up to five additional years to compensate for time lost during product development and regulatory approval.

In light of the recent Full Federal court decision in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161, and Otsuka’s subsequent application for special leave to appeal this decision to the High Court, it is timely to revisit the requirements (as they stand) for a valid PTE and recent decisions in Australia addressing these issues.  

Patent Eligibility

A patent may be eligible for a patent term extension (PTE) if it satisfies the requirements set out primarily in s70 and 71of the Act.

Firstly, the patent must disclose and claim a pharmaceutical substance per se; or a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology. It is noted that a “pharmaceutical substance” is defined by the Act as:

‘… a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves:

a.       a chemical interaction, or physico‑chemical interaction, with a human physiological system; or
b.       action on an infectious agent, or on a toxin or other poison, in a human body;

However, the Act provides no definition or guidance for a pharmaceutical substance per se.

To be eligible for a PTE the patent specification must include claims directed to the substance itself, rather than to methods of treatment, methods of manufacture, or uses of the substance.

Next, the goods containing or consisting of the pharmaceutical substance must be included on the Australian Register of Therapeutic Goods (ARTG). The relevant ARTG entry must relate to therapeutic goods approved for supply in Australia and must fall within the scope of the patent claims.

Further, the patentee must apply for the extension within six months of the later of:

1. the patent grant date or
2. the first ARTG inclusion date of the relevant goods

Finally, only one term extension may be granted per patent.

Satisfaction of these requirements is essential, as an incorrectly granted extension may later be reduced or revoked by the Commissioner or the Court.

Two recent decisions which address the issues of eligibility for PTE are summarised below:

Novartis AG v Pharmacor Pty Limited [2025] FCAFC 33

Australian Patent No. 2003206738 to Novartis claims a pharmaceutical composition combining two active ingredients — valsartan and a neutral endopeptidase (NEP) inhibitor (sacubitril or sacubitrilat) with a pharmaceutically acceptable carrier. Novartis obtained a PTE until January 2028, based on regulatory approval of the hypertension drug Entresto, being a single crystalline complex of valsartan and sacubitril (for a detailed analysis of this decision see my colleagues’ article here).

The Court maintained the PTE was invalid because the pharmaceutical substance claimed and disclosed in the patent, being:

…a pharmaceutical composition comprising:

1. the AT 1-antagonist valsartan or a pharmaceutically acceptable salt thereof; (valsartan) and
2. the NEP inhibitor N-(3-carboxy-1-oxopropyl)-(4S)-p-phenylphenylmethyl)-4amino-2R-methylbutanoic acid ethyl ester or (2R,4S)-5-Bipheny-4-y-4-(3carboxypropionylamino)-2-methyl-pentanoic acid or pharmaceutically acceptable salts thereof; (sacubitril or sacubitrilat)
3. and a pharmaceutically acceptable carrier (emphasis added)

did not match the substance in the ARTG-listed goods (Entresto) used to justify the extension.

This decision reinforces that whilst salts are valid subject matter for PTE, if the substance claimed is not construed to be the same as the ARTG approved goods, then an extension cannot properly be based on those goods.

Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161

Australian Patent No. 2004285448 to Otsuka claims a controlled release formulation of aripiprazole used for the treatment of retinopathy and macular degeneration. In this appeal, the Full Court was asked to determine whether patents claiming pharmaceutical formulations (active ingredient plus excipients) are eligible for PTE under Australia’s PTE regime (for a detailed analysis of this decision see my colleagues’ article here).

Key requirements identified by the Court for PTE eligibility include:

• The term “pharmaceutical substance” is restricted to the active pharmaceutical ingredient (API) alone and does not extend to formulations that merely combine the API with excipients or other delivery mechanisms; (at [261])
• PTEs should be restricted to substances interacting chemical or physiochemically with the human, noting the Court identified:

 ‘The relevant pharmaceutical substance is aripiprazole. That substance was first listed on the ARTG in May 2003. The Patent claims an improved delivery of aripiprazole (the controlled release Formulations), a substance already listed on the ARTG“. (at [129]) [emphasis added]

• The relevant ARTG goods must contain or consist of the claimed “pharmaceutical substance”. In this case, a controlled release formulation listed on the ARTG being a kit of a vial of freeze-dried powder, and a separate vial of water were not the same as the injectable liquid formulation claimed in the patent; (at [284] and [285]) and
• The formulations (freeze-dried or reconstituted liquid) are not to a pharmaceutical substance per se, because the claims each included process integers (including the injection of the claimed formulation), and therefore are not claims to a pharmaceutical substance in and of itself. (at [292] to [294])

Underpinning these findings, the Court identified the purpose of the extension regime being to compensate for the lengthy development and approval of new APIs, not new dosage forms or formulation inventions which are comparatively less time consuming and less costly to develop.

Calculating a PTE

When calculating the term extension, the two reference points are the patent filing date, and the earliest first regulatory approval date of any therapeutic goods that contain or consist of the pharmaceutical substance disclosed and claimed in the patent and that are included on the Australian Register of Therapeutic Goods (ARTG).

The earliest regulatory date may be the approval of the patentee’s own product, or a third-party product, provided it falls within the scope of the patent claims.

The extension term is calculated by subtracting five years from the period between the patent filing date and the earliest ARTG approval date:

Extension period = (ARTG approval date – filing date) – 5 years

If the resulting period is zero or negative, no extension is available, with the extension period being capped at a maximum of five years.

An error in identifying the earliest ARTG date can lead to the extension being reduced or revoked.

Two recent decision which address the issues of calculating PTEs are summarised below:

Merck Sharp & Dohme Corp v Sandoz Pty Ltd [2021] FCA 947

The Federal Court considered whether a PTE should be granted to Merck Sharp & Dohme’s patent 2002320303, wherein the patent claimed two pharmaceutical substances, sitagliptin and a combination of sitagliptin/metformin, each having their own ARTG listing. The key question addressed by the court was which product’s ARTG date should be used to calculate the extension.

In this decision Jagot J held that the PTE should be based on the earliest first regulatory approval of any product covered by the patent claims. Because Merck’s single sitagliptin product was first registered on the ARTG before the combination product, the earlier date set the relevant reference for the combination product. It was found that with the earliest listed product being registered less than five years after the patent priority date, the resulting extension should be zero. This finding resulted in rectification of the Patents Register and removal of the PTE. 

Commissioner of Patents v Ono Pharmaceutical Co. Ltd [2022] FCAFC 39

The Full Federal Court considered an application for PTE to Ono’s patent 2011203119 describing antibody products including Ono’s own product pembrolizumab (Keytruda). Also falling within the scope of this patent was nivolumab (Opdivo) a product to Bristol-Myers Squibb. Being key to this matter, the Opdivo product was registered with the ARTG 15 months prior to the Keytruda product.

The court held that the date of registration of goods with the ARTG, being the first inclusion of goods that contain, or consist of, any of the substances, sets the relevant date for calculating a PTE. (at [128] and [129])

While the Court agreed that earlier third party ARTG listings might not automatically deprive a patentee of an available extension, it held that a PTE’s calculation involves the earliest first regulatory approval date of any pharmaceutical substance that is both disclosed and claimed in the patent. That is to say, the goods upon which a PTE application is based are not restricted to any particular person. (at [120] to [124])

Accordingly, the appeal was successful with the application for PTE being rejected on the basis that the earlier date of the Keytruda product should be the date upon which a calculation for PTE be based.

Summary

In light of these decisions, the following are key points to consider when determining if a patent is suitably eligible for a PTE:

• The patent claims an appropriate pharmaceutical substance (i.e. an API, salt, crystalline form or other substance/form) having a chemical/physicochemical interaction, with a human physiological system, or action on an infectious agent in a human body.  
• The patent claims a pharmaceutical substance which is identical to the ARTG product upon which the PTE is based.
• An application for PTE be based on the earliest first regulatory approval date of any pharmaceutical substance that is both disclosed and claimed in the patent.

The Australian PTE regime remains in flux, particularly as we await the outcome of Otsuka’s application for leave to appeal to the High Court. Further to this, at the time of writing, we note IP Australia has paused processing of PTE applications to consider the Full Federal Court decision on this issue.

In the meantime, patentees and generic pharmaceutical providers alike must plan their portfolios and market entry strategies accordingly. If you fall into one of these groups and require advice on patent term extensions, MBIP’s friendly patents team would be happy to help. Reach out via our book a meeting form today.