FEDERAL COURT OF AUSTRALIA
Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947
File number(s): VID 63 of 2021 Judgment of: JAGOT J Date of judgment: 12 August 2021 Catchwords: PATENTS – patent for treatment of diabetes – alleged threat of infringement – validity of extension of term of patent – pharmaceutical substance – construction of ss 71(2)(b) and 77 of the Patents Act 1990 (Cth) – patent extension invalid – application dismissed – cross-claim allowed. Legislation: Acts Interpretation Act 1901 (Cth) s 15AA
Patents Act 1990 (Cth) ss 3, 13, 70, 71, 74, 76, 77, 78, 192
Explanatory Memorandum, Intellectual Property Laws Amendments Bill 1997 (Cth) Cases cited: Director of Public Prosecutions v Leys [2012] VSCA 304; (2012) 44 VR 1
Inco Europe Ltd v First Choice Distribution [2000] UKHL 15; [2000] 1 WLR 586
Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643
Pfizer Corp v Commissioner of Patents [2006] FCAFC 190; (2006) 155 FCR 578
R v A2 [2019] HCA 35; (2019) ALR 214
R v Young [1999] NSWCA 166; (1999) 46 NSWLR 681
Taylor v Owners – Strata Plan No 11564 [2013] NSWCCA 55; (2013) 83 NSWLR 1
Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 531
Wentworth Securities Ltd v Jones [1980] AC 74; [1917] 1 All ER 286Division: General Division Registry: Victoria National Practice Area: Intellectual Property National Practice Sub Area: Patents and Associated Statutes Number of paragraphs: 96 Date of hearing: 26 - 27 July 2021 Counsel for the Applicants and Cross-Respondents: Mr D Shavin QC with Ms C Cunliffe Solicitor for the Applicants and Cross-Respondents: Jones Day Counsel for the Respondent and Cross-Claimant: Mr C Dimitriadis SC with Ms M Evetts Solicitor for the Respondent and Cross-Claimant: Minter Ellison Lawyers Counsel for the Commissioner of Patents: Ms F Roughley Solicitor for the Commissioner of Patents: Australian Government Solicitor ORDERS
VID 63 of 2021 BETWEEN: MERCK SHARP & DOHME CORP.
First Applicant
MERCK SHARP & DOHME (AUSTRALIA) PTY LTD
Second Applicant
AND: SANDOZ PTY LTD
Respondent
AND BETWEEN: SANDOZ PTY LTD
Cross-Claimant
AND: MERCK SHARP & DOHME CORP.
First Cross-Respondent
MERCK SHARP & DOHME (AUSTRALIA) PTY LTD
Second Cross-Respondent
AND: COMMISSIONER OF PATENTS
Intervener
ORDER MADE BY:
JAGOT J
DATE OF ORDER:
12 AUGUST 2021
THE COURT ORDERS THAT:
1.The originating application be dismissed.
2.The cross-claim be allowed.
3.Pursuant to s 192(2)(b) of the Patents Act 1990 (Cth) the Register of Patents be amended so as to:
(a)remove all reference to the term of Australian patent 2002320303 (the patent) having being extended to 27 November 2023, or at all; and
(b)record that the term of the patent will expire on 5 July 2022.
4.The applicants pay the respondent’s costs of and in connection with the originating application and the cross-claim as agreed or taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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Details
- Case
- [2021] FCA 947
- Decision Date
CaseChat Overview and Summary
Merck Sharp & Dohme Corp. (MSD) filed an action against Sandoz Pty Ltd, alleging that Sandoz threatened to infringe MSD's patent for a treatment of diabetes. The dispute centred on the validity of an extension of the patent term under sections 71(2)(b) and 77 of the Patents Act 1990 (Cth). The court had to determine whether the statutory provisions correctly applied to the extension of the patent term and whether the patent term should be amended as sought by Sandoz. The court also needed to decide if MSD's claim of threatened infringement by Sandoz was valid.
The court examined the statutory provisions and the definitions within the Patents Act, particularly focusing on the definition of "pharmaceutical substance" and the conditions for patent term extension. The court concluded that the term of the patent extension should be calculated based on the earlier of the regulatory approval dates for the listed pharmaceutical substances. The court found that the term of the extension was zero, as the regulatory approval date for one of the substances was earlier than the date specified in the patent register. Consequently, the court held that the patent term should expire on 5 July 2022, not 27 November 2023. The court further determined that the patent term extension was invalid and ordered rectification of the Register accordingly. MSD's claim for threatened infringement was dismissed, and costs were awarded in favour of Sandoz.
The court's final orders included dismissing MSD's originating application, allowing Sandoz's cross-claim, and amending the Register of Patents to reflect the correct expiration date of the patent. MSD was ordered to pay Sandoz's costs associated with the proceedings.
The court examined the statutory provisions and the definitions within the Patents Act, particularly focusing on the definition of "pharmaceutical substance" and the conditions for patent term extension. The court concluded that the term of the patent extension should be calculated based on the earlier of the regulatory approval dates for the listed pharmaceutical substances. The court found that the term of the extension was zero, as the regulatory approval date for one of the substances was earlier than the date specified in the patent register. Consequently, the court held that the patent term should expire on 5 July 2022, not 27 November 2023. The court further determined that the patent term extension was invalid and ordered rectification of the Register accordingly. MSD's claim for threatened infringement was dismissed, and costs were awarded in favour of Sandoz.
The court's final orders included dismissing MSD's originating application, allowing Sandoz's cross-claim, and amending the Register of Patents to reflect the correct expiration date of the patent. MSD was ordered to pay Sandoz's costs associated with the proceedings.
Orders
Orders of the court
1. The originating application be dismissed.
2. The cross-claim be allowed.
3. Pursuant to s 192(2)(b) of the Patents Act 1990 (Cth) the Register of Patents be amended so as to:
(a) remove all reference to the term of Australian patent 2002320303 (the patent) having being extended to 27 November 2023, or at all; and
(b) record that the term of the patent will expire on 5 July 2022.
4. The applicants pay the respondent’s costs of and in connection with the originating application and the cross-claim as agreed or taxed.
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 which follow Sandoz and the Commissioner are correct about the operation of s 77(1) of the Patents Act. Pursuant to s 192 of the Patents Act, which enables rectification of the Register on application by a person aggrieved by an entry wrongly existing in the Register or an error or defect in an entry in the Register, an order should be made for rectification of the Registrar to the effect sought by Sandoz, that the term of the patent will expire on 5 July 2022 and not 27 November 2023.2. Other facts The other facts which need to be recorded, as identified in a statement of agreed facts between the parties, are as follows. Sitagliptin is a “pharmaceutical substance” pursuant to Sch 1 of the Patents Act. Sitagliptin/metformin is a “pharmaceutical substance” pursuant to Sch 1 of the Patents Act. Sitagliptin/metformin is a different “pharmaceutical substance” (as defined in Sch 1 to the Patents Act) from sitagliptin. The patent disclosed and claimed each of sitagliptin and a composition containing sitagliptin and metformin. On or 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”. The second applicant, a related company of MSD referred to below as MSDA, was the sponsor of the export only sitagliptin products. 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. On or about 27 November 2008, goods containing or consisting of the composition of sitagliptin and metformin (sitagliptin/metformin) were first included in the ARTG as an “export only listing”. MSDA was the sponsor of the export only sitagliptin/metformin products. 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 six years, four months and 22 days.3. Statutory provisions There has been no material amendment to the statutory provisions since the making of the application for and the grant of the extension of term. The relevant statutory provisions 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.…74 Acceptance or refusal of applicationAcceptance(1)If a patentee of a standard patent makes an application for an extension of the term of the patent, the Commissioner must accept the application if the Commissioner is satisfied, on the balance of probabilities, that the requirements of sections 70 and 71 are satisfied in relation to the application.…Refusal(3)The Commissioner must refuse to accept the application if the Commissioner is not satisfied, on the balance of probabilities, that the requirements of sections 70 and 71 are satisfied in relation to the application.…76 Grant of extension(1)The Commissioner must grant an extension of the term of a standard patent if: (a) there is no opposition to the grant; or (b)in spite of opposition, the Commissioner's decision, or the decision on appeal, is that the extension should be granted.…77 Calculation of term of extension(1)If the Commissioner grants an extension of the term of a standard patent, the term of the extension is equal to: (a)the period beginning on the date of the patent and ending on 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); reduced (but not below zero) by: (b) 5 years.Note: Section 65 sets out the date of a patent.(2)However, the term of the extension cannot be longer than 5 years.78 Exclusive rights of patentee are limited if extension grantedIf the Commissioner grants an extension of the term of a standard patent, the exclusive rights of the patentee during the term of the extension are not infringed: (a)by a person exploiting: (i)a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or (ii)a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; for a purpose other than therapeutic use; or (b) by a person exploiting any form of the invention other than: (i)a pharmaceutical substance per se that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification; or (ii)a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology, that is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the claim or claims of that specification.4. Discussion4.1 Section 70
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Sandoz also raised the prospect that if MSD was right about the construction of s 77(1) (that is, it means “pharmaceutical substances referred to in subsection 70(2) and which satisfy subsection 70(3)”), then “a pharmaceutical substance” in s 78(b) should similarly be construed as “a pharmaceutical substance referred to in s 70(2) and which satisfies s 70(3)”. As Sandoz had not pleaded this as an alternative defence to MSD’s claim for infringement, I indicated that I would not deal with s 78(b) other than in respect of the issue of construction. Sandoz’s capacity to apply for leave to amend its defence, if necessary, would be preserved. The conclusions I have reached above make it unnecessary for any such application for leave to be contemplated.5. Conclusions For these reasons, by operation of s 77(1) of the Patents Act, the term of extension of the patent is zero. The entry in the Register identifying the term of the patent as expiring on 27 November 2023 is wrong and contains an error, as the patent expires on 22 July 2022. Under s 192(2)(b) I should order that the Register be rectified as sought in Sandoz’s cross-claim. It also follows that MSD’s originating application claiming threatened infringement of the patent by Sandoz must be dismissed. Costs should follow in Sandoz’s favour.
Ratio Decidendi
Legal Principle Established
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