FEDERAL COURT OF AUSTRALIA
Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2022] FCAFC 40
Appeal from: Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947 File number: VID 517 of 2021 Judgment of: ALLSOP CJ, YATES AND BURLEY JJ Date of judgment: 18 March 2022 Catchwords: INTELLECTUAL PROPERTY – patents – whether extension of term of patent valid – construction of ss 71(2)(b) and 77 of the Patents Act 1990 (Cth) (Patents Act) – consideration of history and purpose of Pt 3 of Ch 6 of the Patents Act - challenge to construction of s 70(5) in Pfizer Corp – appeal dismissed Legislation: Acts Interpretation Act 1901 (Cth) s 15AA
Patents Act 1990 (Cth) ss 2A, 13, 67, 70, 71, 72, 73, 74, 75, 76, 77, 78, 119A(1)(a)(ii), 133(2)(b), 192, 223, Sch 1
Therapeutic Goods Act 1989 (Cth) ss 9A, 17, 19B, 25, 26
Patents Regulations 1991 (Cth) reg 6.8
Therapeutic Goods Regulations 1990 (Cth) reg 10
Cases cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27
Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559; 76 IPR 618
Alphapharm Pty Ltd v Lundbeck A/S [2014] HCA 42; 254 CLR 247
Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; 177 CLR 485
Commissioner of Patents v Ono Pharmaceutical Co. Ltd [2022] FCAFC 39
Director of Public Prosecutions v Leys [2012] VSCA 304; 44 VR 1
IW v City of Perth [1997] HCA 30; 191 CLR 1
Linkhill Pty Ltd v Director, Office of the Fair Work Building Inspectorate [2015] FCAFC 99; 240 FCR 578
Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947; 162 IPR 409
Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643
Pfizer Corp v Commissioner of Patents [2006] FCAFC 190; 155 FCR 578
R v A2 [2019] HCA 35; 269 CLR 507
Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; 253 CLR 531
Division: General Division Registry: Victoria National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 115 Date of hearing: 5 November 2021 Counsel for the Appellants: Mr D Shavin QC with Mr B Kremer and Ms C Cunliffe Solicitor for the Appellants: Jones Day Counsel for the Respondent: Mr C Dimitriadis SC with Ms M Evetts Solicitor for the Respondent: MinterEllison Counsel for the Commissioner of Patents: Mr C Moore SC with Ms F Roughley Solicitor for the Commissioner of Patents: Australian Government Solicitor ORDERS
VID 517 of 2021 BETWEEN: MERCK SHARP & DOHME CORP.
First Appellant
MERCK SHARP & DOHME (AUSTRALIA) PTY LTD
Second Appellant
AND: SANDOZ PTY LTD
Respondent
ORDER MADE BY:
ALLSOP CJ, YATES AND BURLEY JJ
DATE OF ORDER:
18 MARCH 2022
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.Subject…
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Details
- Case
- [2022] FCAFC 40
- Decision Date
CaseChat Overview and Summary
Merck Sharp & Dohme Corp. (MSD) appealed against the decision of the Full Court of the Federal Court of Australia (Full Court) in respect of the extension of the term of a patent. MSD argued that the Full Court had erred in its construction of sections 71(2)(b) and 77 of the Patents Act 1990 (Cth) (Patents Act). The dispute arose from the patent for the pharmaceutical substance sitagliptin/metformin, which MSD claimed was validly extended under the Patents Act. Sandoz Pty Ltd (Sandoz) and the Commissioner of Patents contested the validity of the extension, arguing that the term of the patent should not be extended beyond the original expiry date of 5 July 2022.
The central legal issue was the correct interpretation of sections 71(2)(b) and 77 of the Patents Act in relation to the extension of the term of the patent. MSD contended that the term of the patent should be extended based on the inclusion of sitagliptin/metformin in the Australian Register of Therapeutic Goods (ARTG), while Sandoz argued that the term should instead be calculated based on the earlier inclusion of sitagliptin in the ARTG. The court had to determine which interpretation of the statutory provisions was correct.
The court examined the language and purpose of the relevant provisions of the Patents Act. It considered the history and context of the legislation, including the reasoning in Pfizer Corp, to understand the legislative intent. The court found that the primary judge correctly interpreted the provisions to mean that the term of the extension should be calculated based on the earliest first regulatory approval date of any pharmaceutical substance satisfying the conditions in section 70(3) of the Patents Act. This led to the conclusion that the patent term was validly extended until 27 November 2023. The appeal was dismissed, and MSD was ordered to pay Sandoz’s costs of the appeal, subject to potential variation on further written submissions.
The central legal issue was the correct interpretation of sections 71(2)(b) and 77 of the Patents Act in relation to the extension of the term of the patent. MSD contended that the term of the patent should be extended based on the inclusion of sitagliptin/metformin in the Australian Register of Therapeutic Goods (ARTG), while Sandoz argued that the term should instead be calculated based on the earlier inclusion of sitagliptin in the ARTG. The court had to determine which interpretation of the statutory provisions was correct.
The court examined the language and purpose of the relevant provisions of the Patents Act. It considered the history and context of the legislation, including the reasoning in Pfizer Corp, to understand the legislative intent. The court found that the primary judge correctly interpreted the provisions to mean that the term of the extension should be calculated based on the earliest first regulatory approval date of any pharmaceutical substance satisfying the conditions in section 70(3) of the Patents Act. This led to the conclusion that the patent term was validly extended until 27 November 2023. The appeal was dismissed, and MSD was ordered to pay Sandoz’s costs of the appeal, subject to potential variation on further written submissions.
Orders
Orders of the court
1. The appeal be dismissed.
2. Subject to order 3 below, the appellants pay the respondent’s costs of the appeal as agreed or taxed.
3. Any party wishing to vary order 2 may, within 7 days, file and serve written submissions not exceeding three pages identifying the costs order sought and the reasons in support. If any such submission is filed the other party may, within 7 days thereafter, file and serve written submissions in answer not exceeding three pages identifying the costs order sought and the reasons in support, whereupon the question of costs will be determined on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
For the reasons set out below, we dismiss the appeal. 1.2 Agreed facts – construction of s 77 of the Patents Act The following agreed facts are material to the consideration of the issues in dispute arising under s 77 of the Patents Act:(1)The “date of the patent” is 5 July 2002; s 65;(2)Unless extended or revoked, the term of the patent expires 20 years from the date of the patent, being on 5 July 2022; s 67; (3)On 19 November 2009, the term of the patent was extended by the Commissioner until 27 November 2023, pursuant to Pt 3 of Ch 6;(4)Sitagliptin is a “pharmaceutical substance” pursuant to Sch 1 of the Patents Act;(5)The composition sitagliptin/metformin is a different “pharmaceutical substance” to sitagliptin, pursuant to Sch 1;(6)The patent discloses and claims each of sitagliptin and sitagliptin/metformin;(7)On about 16 November 2006, goods containing or consisting of sitagliptin were included in the Australian Register of Therapeutic Goods (ARTG) as an “export only listing”;(8)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 four years, four months and 11 days;(9)On about 27 November 2008, goods containing or consisting of the composition of sitagliptin/metformin were first included in the ARTG as an “export only listing”;(10)The period beginning on the date of the patent 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 six years, four months and 22 days. 1.3 Agreed facts – challenge to Pfizer Corp The following additional agreed facts are material to the consideration of the challenge based on the alleged error of the Full Court in Pfizer Corp:(1)On 14 January 2008, goods containing or consisting of sitagliptin were included on the ARTG under the brand name JANUVIA, which is five years, six months and nine days from the date of the patent;(2)On 30 April 2009, goods containing or consisting of sitagliptin/metformin were included on the ARTG under the brand name JANUMET, which is six years, nine months and 25 days from the date of the patent;(3)On 27 May 2009, MSD applied to extend the term of the patent based on the JANUMET listing of sitagliptin/metformin.2. LEGISLATION The relevant statutory provisions of the Patents Act were as follows:3 (Sch 1 – Dictionary)pharmaceutical substance means 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; but does not include a substance that is solely for use in in vitro diagnosis or in vitro testing.…70 Applications for extension of patent(1)The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied. (2)Either or both of the following conditions must be satisfied: (a)one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification; (b)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 the claim or claims of that specification. (3)Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances: (a)goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods; (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. Note: Section 65 sets out the date of a patent.(4)The term of the patent must not have been previously extended under this Part. (5)For the purposes of this section, the first regulatory approval date, in relation to a pharmaceutical substance, is: (a)if no pre-TGA marketing approval was given in relation to the substance—the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance; or (b)if pre-TGA marketing approval was given in relation to the substance—the date of the first approval. (6)For the purposes of this section, pre-TGA marketing approval, in relation to a pharmaceutical substance, is an approval (however described) by a Minister, or a Secretary of a Department, to: (a)market the substance, or a product containing the substance, in Australia; or (b)import into Australia, for general marketing, the substance or a product containing the substance.71 Form and timing of an applicationForm of application(1)An application for an extension of the term of a standard patent must: (a)be in the approved form; and (b)be accompanied by such documents (if any) as are ascertained in accordance with the regulations; and (c)be accompanied by such information (if any) as is ascertained in accordance with the regulations. For this purpose, document includes a copy of a document.Timing of application(2)An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates: (a)the date the patent was granted; (b)the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3); (c)the date of commencement of this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Regulation 6.8 provides: (1)This regulation applies to an application under section 70 of the Act for an extension of the term of a standard patent for a pharmaceutical substance.(2)For paragraph 71(1)(c) of the Act, the application must be accompanied by information showing that goods containing, or consisting of, the substance are currently included in the Australian Register of Therapeutic Goods.(3)The application must also be accompanied by information identifying the substance, as it occurs in those goods, in the same way (as far as possible) as the substance is identified in the complete specification of the patent.3. THE DECISION OF THE PRIMARY JUDGE There was no dispute before the primary judge (or on appeal) concerning the operation of s 70 of the Patents Act. The primary judge found that s 70(2) was satisfied in respect of MSD’s application for an extension of term in that both sitagliptin and sitagliptin/metformin are pharmaceutical substances per se disclosed and are claimed in the patent. Only sitagliptin/metformin also satisfied s 70(3), because goods containing or consisting of sitagliptin/metformin were included in the ARTG on 27 November 2008, which is more than five years (in fact six years, four months and 22 days) from the date of the patent. The term of the patent had not been previously extended as provided for in s 70(4). Before the primary judge the fact that the inclusion of the goods in the ARTG was for “export only” was immaterial, having regard to the reasoning of the Full Court in Pfizer Corp. Accordingly, there was no dispute as to the “first regulatory approval date” identified in s 70(3)(b) and defined in s 70(5). The dispute before the primary judge centred primarily on the construction of the following words in s 77(1)(a): “the earliest first regulatory approval date (as defined by section 70) in relation to any of the pharmaceutical substances referred to in subsection 70(2)”. Two constructions were advanced by MSD. Its primary construction was that those words mean the earliest first regulatory approval date of any substance satisfying s 70(3). In its alternative construction, those words were said to mean the earliest first regulatory approval date of all substances satisfying s 70(3). The primary judge noted that on both constructions the earliest first regulatory approval date of any and all pharmaceutical substances in the patent satisfying s 70(3) was 27 November 2008, which was when sitagliptin/metformin was included in the ARTG. On this basis, the term of the extension under s 77 must equal the period beginning on 5 July 2002 and ending on 27 November 2008 reduced by five years. This gives a term of the patent expiring on 27 November 2023, as was granted by the Commissioner. The argument advanced by Sandoz and the Commissioner was that the relevant words in s 77(1) mean what they say: the earliest first regulatory approval date in relation to any of the pharmaceutical substances in the patent as referred to in s 70(2) is 16 November 2006, being the date of inclusion in the ARTG of sitagliptin. On this basis, the primary judge noted that the term of the extension must equal the period beginning on 5 July 2002 and ending on 16 November 2006 reduced by five years but not below zero. This gives a term extension of zero, with the patent expiring on 5 July 2022.
Ratio Decidendi
Legal Principle Established
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