Ono Pharmaceutical Co., Ltd. et al
[2020] APO 43
•16 September 2020
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Ono Pharmaceutical Co., Ltd. et al [2020] APO 43
Patent Application: 2011203119
Title:Human monoclonal antibodies to programmed death 1 (PD-1) and methods for treating cancer using anti-PD-1 antibodies alone or in combination with other immunotherapeutics
Patent Applicant: Ono Pharmaceutical Co., Ltd. and E. R. Squibb & Sons, L.L.C.
Delegate:Greg Powell
Decision Date: 16 September 2020
Hearing Date: 16 October 2019, in Melbourne
Catchwords: PATENTS – application for extension of term of patent – first regulatory approval date – regulatory approval for a person other than the patentee –G. D. Searle [2008] APO 31 considered – scheme agnostic to ownership question – extension refused
Representation: Counsel for the applicant: Bruce Cain SC, assisted by Marcus Fleming of counsel
Solicitors for the applicant: Mr Wayne McMaster, Ms Rebecca Pereira and Mr James Webster, of MinterEllison
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2011203119
Title:Human monoclonal antibodies to programmed death 1 (PD-1) and methods for treating cancer using anti-PD-1 antibodies alone or in combination with other immunotherapeutics
Patent Applicant: Ono Pharmaceutical Co., Ltd. and E. R. Squibb & Sons, L.L.C.
Date of Decision: 16 September 2020
DECISION
The application for an extension of term on the basis of OPDIVO is refused. This decision represents the reasons for refusal as required under subsection 74(4).
REASONS FOR DECISION
Background
This matter concerns a request for an extension of the term of patent number 2011203119 in the name of Ono Pharmaceutical Co., Ltd. and E. R. Squibb & Sons, L.L.C. (the patentee). The date of the patent is 2 May 2006 and, accordingly, the normal term of the patent expires on 2 May 2026. An application for extension of the term of the patent under section 70 of the Patents Act 1990 (the Act) was filed on 11 July 2016.
The basis for the request for an extension of term was double-barrelled. The patentee believed that there were two alternative interpretations of the requirements imposed by section 70 of the Act and had filed two requests.
The first request, and the patentee’s preferred option, was an application for extension of term based on the inclusion in the Australian Register of Therapeutic Goods (ARTG) of their own product OPDIVO, which has an ARTG start date of 11 January 2016. In the alternative, the patentee based their application for extension of term based on the inclusion in the ARTG of KEYTRUDA (a product of Merck Sharp & Dohme), which has an ARTG start date of 16 April 2015. As is clear, if KEYTRUDA was to be relied upon, the request for an extension of term should have been filed on 16 October 2015. Consequently, accompanying this request was a request under s223(2)(a) of the Act for an extension of time of 9 months.
Consistent with the practice of the Commissioner, the patent was re-examined. The first report, based upon a set of amended claims filed after the requests for extension of term were filed, noted a lack of novelty and inventive step. These objections were overcome, and re-examination concluded. The amendments to the claims were subsequently allowed.
In each request, the patentee relied upon the assertion that the pharmaceutical substance per se in substance falls within the scope of the claims because of at least amended claim 3. Claim 3 is as follows:
3. A monoclonal antibody, or an antigen-binding portion thereof, for use in treating a human subject which cross-competes for binding to human PD-1 with a reference antibody or reference antigen-binding portion thereof comprising:
a) a heavy chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 1; and a light chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 8;
b) a heavy chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 2; and a light chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 9;
c) a heavy chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 3; and a light chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 1 O; or
d) a heavy chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 6; and a light chain variable region comprising amino acids having the sequence set forth in SEQ ID NO: 13; and
wherein the antibody, or antigen-binding portion thereof, binds to human PD-1 with a Ko of 1x10-7 M or less, wherein the Ko is measured by surface plasmon resonance (Biacore) analysis.
In addition, the request under s223(2)(a) was considered. It was noted by the delegate that the extension of time would only be necessary if it was accepted that KEYTRUDA was the relevant good on which the extension of term must be based. The delegate noted that it was not apparent whether KEYTRUDA did, in fact, fall within the scope of the claims – the scope of the claims having changed since the application for extension of term had been filed. As such, as the Commissioner should not exercise discretion to grant an extension which would serve no useful purpose, the delegate requested that the issue be addressed.
The patentee responded and noted that an extension of term of the patent based on OPDIVO would result in a longer extended term (an additional 8 months, 26 days). However, the patentee also noted that the view of the Commissioner was that the decision in G.D. Searle LLC [2008] APO 31 (Searle) applied and, on this view, an application for extension of term must be made on the basis of the earliest first inclusion in the ARTG of goods containing, or consisting of, a pharmaceutical substance which in substance falls within the scope of the claims, irrespective of the sponsor of the goods. The patentee conceded that, if this view was correct, the extension of term had to be based on the ARTG listing date for KEYTRUDA. The patentee asked that the request for an extension of term on the basis of OPDIVO be considered first and, if they were unsuccessful, the continue processing the s223(2)(a) request. The Commissioner agreed to stay consideration of the s223 request and the KEYTRUDA section 70 application.
A delegate of the Commissioner issued a deficiency notice explaining that he considered that the application did not meet the requirements of the Act, noting that the pharmaceutical substance of KEYTRUDA, per se, fell within the scope of the claims of the patent because it was a monoclonal antibody that cross-competed with the antibody as defined in claim 3 and had a KD of 1x10-7 M or less. The delegate noted that evidence provided by the applicant indicated that the monoclonal antibody KEYTRUDA cross-competed for binding to human PD-1 with the antibodies of claim 3 and that KEYTURDA bound to human PD-1 with a KD of 1x10-7 M or less. The delegate noted that there was an admission by Merck Sharpe & Dohme Corp during Federal Court proceedings that each of the claimed antibodies 17D8, 2D3, 4H1 and 7D3 would compete with the antibody KEYTRUDA for binding to human PD-1. As such, the request for an extension of term had not been filed within the period calculated from the date of first inclusion of KEYTRUDA on the ARTG. The patentee requested to be heard on 18 July 2019.
The statutory framework
Part 3 of Chapter 6 of the Act provides a statutory framework for the extension of the term of standard patents relating to pharmaceutical substances. Section 70 relevantly provides:
“(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.
(4)The term of the patent must not have been previously extended under this Part.
Meaning of first regulatory approval date
(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.”
If an extension of term is granted section 77 provides for the term of the 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.”
There is no dispute about whether the claimed invention is a pharmaceutical substance per se or not (which is often the issue in hearings on extensions of term). Instead, this dispute is around whether, even if the requirements of section 70 may have been satisfied at an earlier point in time in relation to another substance, an application for an extension of term can be made at a later point in time by another pharmaceutical substance satisfying the requirements of section 70.
As noted by the patentee in their applications, the Commissioner’s position was that such an application could not be made. This position was based upon the conclusion reached in Searle, which was a decision in relation to a case where (as here) there were two substances within the scope of the patent had been included in the ARTG at different times. The delegate in Searle concluded that such an extension had to be based upon the earliest included good on the ARTG.
As such, the Commissioner’s position was that the inclusion of KEYTRUDA was the relevant ARTG entry, notwithstanding that it was not the patentee’s product. The patentee disputed this. Specifically, the patentee submits that the “first regulatory approval date” that should be used for the purposes of subsection 70(3), should be the approval date of on their own product, OPDIVO (that date being 11 January 2016).
The patentee’s submissions
The patentee submitted that the purposive approach to statutory construction required determining the underlying purpose, or object, that the legislation intended to achieve. The patentee referred to Project Blue Sky v Australian Broadcasting Authority [1998] FCA 28; 194 CLR 355, at [69] (citations omitted):
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.”
In this regard the patentee referred me to the Explanatory Memorandum and the Second Reading Speech of the Intellectual Property Laws Amendment Act 1998 (Cth), which introduced the current extension of term scheme in the Act. The patentee submitted that, from these documents, the purpose of the extension of term provisions was to restore the time lost to patentees prior to gaining marketing approval, and compensate the patentee for the additional time, expense and difficulty in developing and commercialising a “new drug”. The patentee submitted that OPDIVO was such a new drug.
Section 70
The patentee submitted that section 70(2)(a) makes it clear that an application for an extension of term can be made on one or more pharmaceutical substances. They also submitted that section 70(3), requiring that certain conditions must be satisfied “in relation to at least one of those pharmaceutical substances”, does not impose any conditions or restrictions on which of the “at least one” pharmaceutical substances must be used to satisfy the requirements of section 70(3); there could be more than one substance that underpinned the application. The patentee submitted that the use of “the substance” in the conditions set out in subsections 70(3)(a) and 70(3)(b) was a reference to the “at least one” pharmaceutical substance that was specified by the patentee to be the subject of the application.
The patentee submitted that, having identified the substance, the first of two “filters” then operated under subsection 70(5). The operation of the filter depended upon that fact that subsection 70(5)(a) required the identification of “the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance”. The use of “the”, in the patentee’s submission, clearly referred to the substance which was the subject of the extension of term application. The reference to “first” was important in the situation where there were multiple ARTG approval dates for the same substance, because, for example, there were different delivery forms (e.g. capsules, gel capsules, tablets, slow-release, different amounts, etc) that manifested in different ARTG registrations. In that situation, the dates that were not the first regulatory approval date for something consisting of, or containing, the substance were “filtered out” and could not be relied upon to satisfy the preconditions that were set out for applications for extensions of term.
Section 71
The patentee then submitted that section 71, which sets out the time within which an application for an extension of term has to be made, was consistent with this concept in that it required an application to be made within 6 months from the first regulatory approval date (I accept that the reference to “the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods” in s71(2)(b) is an equivalent expression for “first regulatory approval date” used elsewhere). In addition, the references to “any of the pharmaceutical substances” does not impose any conditions or restrictions on which of the “any” pharmaceutical substances must be used for the purposes of the filing of the application beyond those referred to in subsections 70(3)(a) and 70 (3)(b) (to which s71(2)(b) refers).
The patentee submitted that this simply underscored 2 things – (i) there can be multiple substances and (ii) as a matter of logic, the substance that the application is based upon was the subject to be considered when deciding whether the timing provisions were satisfied and for calculation of the extension of term under s77, instead of substances that might already be existing on the ARTG.
Section 77
The patentee submitted that s77 contained a second “filter” to be applied when calculating the actual extension that is to be applied to the patent once it had been accepted that an extension of term was appropriate. That patentee noted that s77 referred to “the earliest first regulatory approval date” and submitted that s77 grafted onto the earlier phrase “first regulatory approval date” the precondition that the date to be considered had to be the earliest first regulatory approval date. Consequently, in the patentee’s submission, the filter operated when there were different substances (as opposed to different approval dates for the same substance) that were disclosed and claimed by the patentee and which had their own approval dates. In that situation, that date that had to be used to determine the actual extension was the earliest of the first approval dates of the (possibly) multiple substances disclosed and claimed by the patentee in the patent.
The patentee provided a flowchart example of the operation of the extension of term provisions. It was:
As is clear, in the patentee’s submission, where there are two different claimed substances, Ab1 and Ab2, and each has multiple dates of inclusion in the ARTG of goods that contain, or consist of, the substance, then, for each of Ab1 and Ab2, the earliest date of inclusion is identified and then the earliest of these earliest dates is used to determine the length of the extension.
The patentee submitted that this operation was not inconsistent with the intent of the legislation. As noted above, it was the patentee’s submission that the Explanatory Memorandum and the Second Reading Speech of the Intellectual Property Laws Amendment Act 1998 (Cth) clearly showed the purpose of the extension of term provisions was to confer the benefit of an extended term on patentees to compensate for the circumstances surrounding the development of a new drug.
It was the patentee’s position that, even if the requirements of section 70 may have been satisfied at an earlier point in time in relation to another substance owned by a 3rd party, an application for an extension of term could be made by the patentee at a later point in time on the basis of another pharmaceutical substance satisfying the requirements of section 70 which had been developed by the patentee. To conclude otherwise, in the patentee’s opinion, would be a result that was manifestly absurd or unreasonable. The patentee submitted that it was only logical, given that the regime is beneficial and remedial, that it can only be about rewarding patentees for their work (and, by implication not the work of others), noting IW v The City of Perth (1997) 191 CLR 1 at 12; 146 ALR 696 at 702 (citations omitted):
“Beneficial and remedial legislation…is to be given a liberal construction. It is to be given a ‘fair, large and liberal interpretation’ rather than one which is ‘literal and technical’.”
The patentee would not receive the full extension of term for their product.
Consideration
I disagree with the patentee. The scheme of the Act does not limit consideration to only those substances developed by the patentee and this position is not manifestly unreasonable.
Which substance – Consideration
While the patentee’s position as to consideration of substance is superficially attractive, it is not directly supported by the words of the Act or prior caselaw. I accept that there is some ambiguity in the words of the Act insofar as they do not say one way or the other whether the pharmaceutical substance that is to be considered for an extension of term application is only that belonging to the patentee, or whether it includes other, equivalent substances owned by 3rd parties. While the patentee says it is only logical, given that the regime is beneficial and remedial, that it can only be about rewarding patentees for their work, this does not mean that the system must work in the way they desire.
Indeed, it was this ambiguity that was considered in Searle. In that decision is was stated at [8]–[10]:
“A patentee may apply for an extension of term within six months of the date of commencement of the first inclusion in the ARTG of relevant goods (see subsection 71(2)). The application must be accepted by the Commissioner if satisfied that the requirements of sections 70 and 71 have been met (subsection 74(1)). The application is then advertised in the Official Journal, and a person may oppose the extension of term (subsection 75(1)). If the Commissioner grants the extension of term, the term of the extension is calculated according to section 77. In Pfizer Corp v Commissioner of Patents (No 2) [2006] FCA 1176 at [34], (2006) 69 IPR 525 at 530 (Pfizer No 2), the Federal Court stated that section 77 is based on the earliest of the first regulatory approval dates that apply to the patent:
“Section 77 refers to the ‘earliest first regulatory approval date’ (emphasis added). This recognises that the patent may cover more than one pharmaceutical substance and provides that the term of the extension is based on the earliest of the approval dates that apply to the patent.”
The patentee pointed out that this would operate unfairly when the earliest of the first regulatory approval dates relates to goods sponsored by another party, as the patentee would not receive the full extension of term for their product. Ms Irani referred me to the Explanatory Memorandum at page 4 to show that the intention of the extension of term scheme was
“to provide ‘an effective patent life’ - or period after marketing approval is obtained, during which companies are earning a return on their investment - more in line with that available to inventions in other fields of technology”
Ms Irani submitted that this would not be achieved if the term of the extension was reckoned using a product sponsored by a competitor. Specifically, an extension based on AGENERASE would be approximately two years shorter than an extension based on PREZISTA. In this regard I also note the comment by Lindgren J in Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559 at [23], 76 IPR 618 at 630 (Alphapharm):
“This provision reflects the view that, ordinarily, ARTG registration should mark the beginning of exploitation.”
While I understand Ms Irani’s concern about detriment to the patentee, Pfizer (No 2) is clear on the point and the term of the extension is based on the earliest inclusion, regardless of the identity of the sponsor. It is not open to the Commissioner to calculate the term of the extension only on the basis of goods sponsored by the patentee.”
The delegate concluded at [16] and [18] (emphasis in original):
“16The scheme envisages that an application for extension of term is made within 6 months of first inclusion in the ARTG. The application is then dealt with and entered on the Register. The short window provided by the Act ensures that recording an extension of the term of a patent closely follows inclusion in the ARTG, giving certainty in the marketplace. If an application for extension of term could be made using the timing of the inclusion in the ARTG of each relevant goods, the patentee would be able to sit on its hands until a later window opened. This is inconsistent with the existence of a limited window for making an application under section 71(2).”
“18Based on the structure of the Act, I conclude that the intention of the Act is that an application for extension of term is to be made within 6 months of the earliest first inclusion in the ARTG. Consistent with this intention, when subsection 71(2) refers to the date of first inclusion of any pharmaceutical substance, it must be construed as a reference to the earliest first inclusion date. The Act does not intend an application for extension to be made on the basis of one inclusion, and the term of the extension calculated on the basis of another.”
Given those paragraphs, it is difficult to see how the present application on the basis of OPDIVO could succeed. However, the patentee challenged the correctness of the conclusion reached by the delegate in Searle as to what Pfizer (No 2) stood for.
As noted above, the delegate based his conclusion on [34] of Pfizer (No 2), which states:
“Section 77 refers to the ‘earliest first regulatory approval date’ (emphasis added). This recognises that the patent may cover more than one pharmaceutical substance and provides that the term of the extension is based on the earliest of the approval dates that apply to the patent.”
It was submitted by the patentee that, at [34] of Pfizer (No 2), her honour was reciting little more than the statute. However, this is not correct. Quite clearly, the words are conclusory. Specifically:
“This recognises that the patent may cover more than one pharmaceutical substance and provides that the term of the extension is based on the earliest of the approval dates that apply to the patent.” (my emphasis – I will note in passing that, when referring to this sentence in their oral submissions, the patentee did not recite the underlined words)
Clearly, Bennett J is saying that, if there are a number of approval dates that apply to the substance described in the patent, then the earliest one is used. While it is true that [34] of Pfizer (No 2) does not refer to the substance being from a 3rd party, it also does not refer to the substance being from the patentee. It is agnostic. The patentee submitted that this begged the question of whether it was a pharmaceutical substance of the patentee, or a pharmaceutical substance of a 3rd party. The patentee submitted that Bennet J shed no useful light on it at all and there was no detailed analysis.
The patentee’s assertion that the lack of any detailed analysis does not mean, on balance, that her honour’s observations, and the conclusion drawn by the delegate in Searle that s77 should be construed to include the substance of a 3rd party, is incorrect. I do not see how it is to the point to say that Bennett J was not required to construe the meaning of section 77. While the fact situation in Pfizer (No 2) may be different to this present matter, the fact remains that those words are present in [34] of Pfizer (No 2) and have force. I cannot see how I can ignore them. I am not aware of, and the patentee did not draw my attention to, any decision in which those words were found to not stand for the interpretation given to them by the delegate in Searle.
While the patentee submitted that there was no detailed analysis that contradicted their position, it is also the case that there is nothing that contradicts the conclusion the delegate arrived at; that is, that it was not open to the Commissioner to calculate the term of the extension only on the basis of goods sponsored by the patentee. It is just as likely that Bennett J found the position so self-evident, that nothing more needed to be said.
Manifestly unreasonable – Submissions
The patentee submitted that a conclusion that an application for an extension of term did not have to be limited to consideration of the approval date of the pharmaceutical substance that was the subject of the patentee’s application, would be a result that was manifestly absurd or unreasonable as the patentee would not receive the full extension of term for their product.
They submitted that such a position would place an onerous burden on the patentee and the Commissioner as regards to monitoring regulatory approvals. In this regard, the patentee provided a list of potential burdens on the patentee and the Commissioner. That list is reproduced in Annex A to this decision. Noting what is in that list, the patentee submitted that such a burden would create an unacceptable risk that extensions would be wrongly granted based on imperfect information.
In the patentee’s submission, to take into account whether a 3rd party’s substance is disclosed and claimed in its patent, would necessitate a forensic enquiry such that the extension of term regime would become practically unworkable. The patentee pointed to some of the points listed in Annex A. The patentee contended that, in order to construe the Act in a way that was contended for in Searle (following, in the delegate’s view, the correct interpretation of Pfizer (No 2)), it would have to be accepted that the legislature was aware of these points, which, in the patentee’s submission, would ultimately lead to the facts placed before the Commissioner being, at best, imperfect. In the patentee’s submission, it could never be concluded that the legislature intended to expose the risk that the Commissioner would be asked to make a decision to grant or withhold patent rights on imperfect information. That would, according to the patentee, be the antithesis of maintaining the “purity” of the Register.
The patentee submitted that an example of a consequence of this “impurity” would be a situation where a patentee filed an application for an extension of term, unaware of the earlier existence of a 3rd party substance on the ARTG that might change the outcome of the extension application. Having gained their extension of term, they then, at later date, decide to sue the 3rd party whose product was on the ARTG earlier. The patentee submitted that, then, at the 11th hour, the infringement claim would fail.
Manifestly unreasonable – Consideration
The patentee’s point about Pfizer (No 2) being inconsistent with the purpose of the extension of time scheme does not go anywhere. As is clear from above, the delegate was taken to the Explanatory Memorandum (as I was) and concluded that Pfizer (No 2) is clear on the point. I agree. Taking what is set out in Annex A, I do not see how it can be said that, because of these points, it must be the case that the construction advanced in Searle is wrong.
As a first point, the patentee’s submission about the infringement failing is misguided. If an extension is found to be invalid, or of shorter length, it does not follow that the infringement action fails. While I accept that suing in relation to that portion of the term that is extended may not be possible, at the very least the patentee can sue in relation to the historic term.
As to the true intent, it is always difficult to say with any certainty what was actually in the mind of the legislature when the extension of term scheme was passed. What we have, as noted by the patentee, is the extrinsic materials; being the Explanatory Memorandum (EM) and the Second Reading Speech (2RS) of the Intellectual Property Laws Amendment Act 1998 (Cth). At [29] – [31] of their written submissions, the patentee noted the following passages from those materials:
“29. In the 2RS (at page 2), Warren Truss MP said (emphasis added):
The development of a new drug is a long process. A new chemical entity, from which a pharmaceutical is derived, is patented early in the process. However, considerable research and testing is still required before the product can enter the market.
…
This becomes significant to the industry as companies rely heavily on patents to generate the substantial cash flows necessary to finance the development of new drugs.
…
An extension of up to five years will be available for a standard patent relating to a pharmaceutical substance that is the subject of first inclusion on the Australian Register of Therapeutic Goods.30. The EM states (at page 3):
Extensions of up to five years on the standard 20 year term are available for pharmaceutical patents in the United States, the European Union and Japan in recognition of the exceptionally long development time and regulatory requirements involved in developing and commercialising a new drug. The aim is to provide an ‘effective patent life’, or period after marketing approval is obtained during which companies are earning a return on their investment, more in line with that available to inventions in other fields of technology.
31. The EM further states (at page 3):
The development of a new drug is a long process, estimated to average around 12 years, which requires a new chemical entity to be patented early in the process in order to secure its intellectual property rights. However, considerable research and testing is still required before the product can enter the market. As a consequence, patentees of new drugs usually have considerably fewer years under patent in which to maximise their return.
…
It is expensive to bring a drug to market, around US$380 million, and involves considerable risk. As such, research based pharmaceutical companies rely heavily on patents to generate the substantial cash flows needed to finance the development of new drugs from the discovery stage, through the pre-clinical and clinical development phases, to eventual marketing.”Clearly, what was intended is the development of new drugs, rather than the development of a drug that is the subject of an extension of term application. Undoubtedly, if the drug that is the subject of such an application is new, then an extension of term is appropriate. However, if, as is the case here, a drug falling within the scope of the claims of the relevant patent already exists on the ARTG, how is granting an(other) extension of term for that drug meeting what was intended by the legislation? While the patentee submitted that not granting an extension had the consequence that the patentee did not get “the full extension to which it is entitled”, the question that must be asked is “But is the patentee entitled?” What they are seeking an extension for is not a new drug.
While I accept the patentee’s point that there is a risk that extensions would be wrongly granted based on imperfect information, it is clear from the structure of the Act that an “impure” Register is clearly contemplated given that the power to correct the Register has been given to the Commissioner. To put it another way, to the extent that there is a risk of wrong, incorrect or incomplete extensions being granted, that risk is managed because the Commissioner has the power to change the Register. While the patentee sought to criticise this position, saying that it was “no answer”, given the issues set out in Annex A, in my opinion the existence of these powers is a strong indication that it is the answer. The patentee (or, indeed, the Commissioner) is not obligated to search the ARTG for all possible pharmaceutical substances covered by their patent. However, the existence an earlier first regulatory approval for a drug falling within the scope of the claim(s) means that the application for an extension of term needs to be corrected.
Conclusion – Not limited to patentee’s substance and not unreasonable
As noted by the patentee, the purpose of the scheme is to encourage the development of new drugs. If a substance falling within the scope of the patentee’s claim(s), but owned by a 3rd party, already exists on the ARTG, how is permitting the granting an extension on a patent for effectively the same substance (but owned by the patentee) an encouragement to develop something new? If anything, it is an encouragement to develop something that is not new and place goods on the ARTG as late as possible, secure in the knowledge that a patent extension will be granted for the (not new) substance.
To my mind, the patentee’s position would lead to extensions based on “old” drugs being granted, simply because this is the first time the patentee raised their drug in an application. This type of scheme does not incentivise new drugs. Rather, it just incentivises new extension applications.
Conclusion
As such, the application for an extension of term does not comply with requirements as the extension request, relying as it does on OPDIVO, has not been made on the basis of the good on the ARTG with the first regulatory approval date. The good with the earliest regulatory approval date containing, or consisting of, the substance that falls within the scope of claim 3 of the patent is KEYTRUDA. Furthermore, amendment of the application to one based upon KEYTRUDA would convert the application to an application made out of time. As has already been noted, an alternative application for an extension of term on the basis of KEYTRUDA, along with the necessary request for an extension of time under section 223 has already been filed. In light of this, I consider it would be more appropriate to refuse the application made on the basis of OPDIVO pursuant to subsection 74(3).
Greg Powell
Delegate of the Commissioner of Patents
Annex A
Potential burden on patentees and the Commissioner
Set out below is a list of at least some of the matters that would confront a patentee if it was necessary to monitor regulatory approvals granted to third party products in order to determine if a pharmaceutical substance is disclosed in a patent specification and in substance falls within the scope of one or more claims of one of its patents.
1.The patentee would need to review each and every approval granted on the Australian Register of Therapeutic Goods (ARTG) which is administered by the Therapeutic Goods Administration (TGA). Even if keyword searches are conducted, an efficient search would require a detailed knowledge of competitor companies and/or the therapeutic targets of those third party products. Even those searches may fail to capture third party products that have been on the ARTG for some time.
2.Upon reviewing the ARTG Public Summary, a patentee would only find details of the active ingredient, product type, product name, sponsor, conditions applicable to the goods, indications, warnings, container information, pack size/poisoning information, dosage form, route of administration and visual identification. The ARTG Public Summary does not provide important details necessary to determine whether the product falls within the scope of a patent, for example the chemical or molecular structure of a competitor product or the therapeutic target of a competitor product.
3.The ARTG Public Summary does not indicate whether a third party product is itself protected by patent(s). Such patents would contain the detail necessary for the patentee and/or its lawyers and patent attorneys to form at least a provisional view as to whether a product falls within the scope of the patentee’s own claims (e.g. it would contain details of the chemical or molecular structure or the relevant Seq. IDs).
4.Determining whether a product falls within the claims of the patent is a complex task and requires expert legal advice. It is not feasible to conduct a comparison of the scope of the claims of the patent against a large number of products.
5.Determining whether a product falls within the claims of a patent may also require information which can only be provided by the sponsor if the Court were to order discovery of relevant documents. The Pfizer Ireland Pharmaceuticals v Samsung Bioepis proceedings in the Federal Court regarding preliminary discovery, now ongoing for three years, demonstrate how complex and difficult it may be to obtain discovery of the necessary confidential documents regarding biological medicines. See for example: Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (No 2) [2019] FCA 657.
6.The TGA may remove products from the ARTG in certain circumstances, including upon request by the sponsor. Therefore the ARTG register is not necessarily a complete database of all the possible “first regulatory approval dates” in existence (there may be products with regulatory approval dates which have since been removed from the Register and are instead recorded on separate databases of cancelled products).
7.Even if the patentee conducts comprehensive searches using reasonable care and skill, there is a risk that third party products will simply not be picked up by such searches.
8.Similarly, if the Commissioner were required to monitor regulatory approvals granted to third party products, in order to determine if a pharmaceutical substance is disclosed in a patent specification and in substance falls within the scope of one or more claims of that patent, the Commissioner would face an unduly onerous burden.
9.It is a matter of significant public interest that IP Australia may grant or withhold important patent rights based on incorrect and/or incomplete information. This could not have been the legislature’s intention.
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