Pfizer Research and Development Company, N.V/S.A
[2005] APO 41
•23 September 2005
ABSTRACTS OF DECISIONS
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Patents: No. 540769 in the name of Pfizer Corp.
No. 573123 in the name of Pfizer Ltd
No. 651637 in the name of Pfizer Inc.
No. 691005 in the name of Pfizer Research and Development Company, N.V/S.A
Titles : Dihydropyridine Derivatives
Amlodipine benzene sulphonate and pharmaceutical compositions thereof
Indole Derivatives
Salts of an anti-migraine indole derivative
Action: Objection to the Commissioner’s proposal pursuant to sub-regulation 10.7(7) to amend relevant entries in the Register to insert the correct extension of the term of the patents.
Decision: Issued 23 September 2005.
Abstract
The patentees’ objections relate firstly to the interpretation of “first inclusion in the Australian Register of Therapeutic Goods” in subsection 70(5) of the Act and secondly to the validity of subregulation 10.7(7) which requires the Commissioner to amend the register where she becomes aware that the first regulatory approval date in relation to a substance is earlier than the date of first inclusion supplied with the application for the extension of term.
Found as a matter of construction that “first regulatory approval date” in section 77 means, where no pre-TGA marketing approval is given, the date of first inclusion in the ARTG; that in this context “inclusion” takes its meaning from the ARTG and consequently the TGA and encompasses listed goods as well as registered goods; and that the Commissioner should proceed in that event on the assumption that subregulation 10.7(7) is valid.
Direction given that the Register be amended to insert the correct extension of term of the patents but not before 28 days from the date of the decision or, in the event that the Commissioner is served in that period with a notice of appeal and an application for a stay of the decision, until the stay application is determined by the Court.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Numbers 540769 in the name of Pfizer Corp.
573123 in the name of Pfizer Ltd
651637 in the name of Pfizer Inc.
691005 in the name of Pfizer Research and Development Company, N.V/S.A, and
Objection to the Commissioner’s proposal, pursuant to sub-regulation 10.7(7), to amend relevant entries in the Register to insert the correct extension of the term of the patents.
BACKGROUND
The subject patents have all been granted an extension of the patent term under Chapter 6, Part 3 of the Patents Act 1990 (Extension of term of standard patents relating to pharmaceutical substances).
Patent numbers 540769 and 573123 relate to Norvasc, a drug used to treat hypertension, and 651637 and 691005 to Relpax, a treatment for migraine headaches. All four patent were granted extensions based on Australian Register of Therapeutic Goods (ARTG) registrations as indicated in the following table:
| Patent | Date of the Patent | ARTG Registration | 20 year Term Expires | Register Entry for Extension |
| 540769 | 10 Mar 1983 | 26 Feb 1993 | 10 Mar 2003 | 26 Feb 2008 |
| 573123 | 3 April 1987 | 26 Feb 1993 | 3 April 2007 | 26 Feb 2008 |
| 651637 | 8 Oct 1991 | 13 Oct 2000 | 8 Oct 2011 | 13 Oct 2015 |
| 691005 | 17 May 1995 | 13 Oct 2000 | 17 May 2015 | 13 Oct 2015 |
I will refer to the patentees collectively as “Pfizer”.
On 12 March 2003 Arrow Pharmaceuticals Ltd filed an application with the Federal Court (N299/2003) seeking revocation of patent 540769 on the basis that the patentee had obtained the patent extension on the basis of fraud, false suggestion or misrepresentation in that, inter alia, it had failed to disclose to the Commissioner that the first date of regulatory approval of Norvasc was 14 April 1992 and not 26 February 1993. Extracts of the ARTG showing an export only listing in the ARTG for Norvasc on 14 April 1992 were provided by Arrow to the Commissioner on 3 April 2003. The court proceedings were discontinued however Pfizer’s views on the listings were sought and on 11 November 2003 wrote to the Commissioner indicating that:
“.. our client is also of the opinion that, having regard to the policy and intent of the relevant legislation the subject of Part 3 of Chapter 6 of the Patents Act1990 (and, in particular, Sections 70(5) and (6)), the “first regulatory approval date” for the purpose of Section 70(3)(b) is limited to the first such date for the purpose of marketing in or importing into Australia for general marketing and does not include the regulatory approval date for export purposes only”
Amendments were made to Regulation 10.7 of the Patent Regulations on 23 March 2005 with effect on both new and existing entries on the Patent Register. These provided that the Commissioner must amend the Register where he or she becomes aware that the first regulatory approval date was earlier than the date supplied with the application for term extension.
On 7 April 2005 a Deputy Commissioner of Patents wrote to the Pfizer in relation to the patents indicating that, in the Commissioner’s view, a first regulatory approval date existed for each of them that was earlier than the date provided in support of the extension of term application. Consequently under subregulation 10.7(7) the Commissioner intended to amend the register to reflect a new date as the date to which the term of the patent had been extended. The relevant dates are shown in the following table:
| Patent | ARTG Registration | Earlier ARTG Entry Cited | Current Register Entry | Proposed Register Entry |
| 540769 | 26 Feb 1993 | 14 Apr 1992 | 26 Feb 2008 | 14 Apr 2007 |
| 573123 | 26 Feb 1993 | 14 Apr 1992 | 26 Feb 2008 | 14 Apr 2007 |
| 651637 | 13 Oct 2000 | 10 Sep 1999 | 13 Oct 2015 | 10 Sep 2014 |
| 691005 | 13 Oct 2000 | 10 Sep 1999 | 13 Oct 2015 | 17 May 2015* |
*This is the normal 20 Year expiry date
Pfizer filed submissions and declaratory evidence in response to the Deputy Commissioner’s letters including statutory declarations by John David O’Connor, a registered patent attorney, relating to the history of the legislation, and Douglas Kentwell, a regulatory affairs advisor, particularly concerning the nature of the ARTG. The matter came to hearing in Canberra on 6 September 2005. Pfizer was represented by Ms Katrina Howard and Ms Rhonda Bell of Counsel and were instructed by Ms Shahnaz Irani and Mr John O’Connor, patent attorneys of Spruson & Ferguson, Sydney.
I agreed at the hearing that further evidence in relation to pre-TGA export arrangements could be provided and in this regard a further declaration by Douglas Kentwell was filed on 14 September.
LEGISLATION
The provisions of Part 3 of Chapter 6 of the Act in relation to pharmaceutical extensions of time, as well as provisions in relation to the Register of Patents, are central to the present matter. While they should not be considered in isolation from other elements of the scheme, Sections 70 and 77 and to a lesser extent section 71 and section 74 to 76 are particularly pertinent and read:
“Part 3—Extension of term of standard patents relating to pharmaceutical substances
70Applications 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 to 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.
(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.
71Form and timing of an application
Form 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.
….
74Acceptance or refusal of application
Acceptance
(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 that the requirements of sections 70 and 71 are satisfied in relation to the application.
(2)If the Commissioner accepts the application, the Commissioner must:
(a)notify the applicant in writing of the acceptance; and
(b)publish a notice of the acceptance in the Official Journal.
Refusal
(3)The Commissioner must refuse to accept the application if the Commissioner is not satisfied that the requirements of sections 70 and 71 are satisfied in relation to the application.
(4)If the Commissioner refuses to accept the application, the Commissioner must:
(a)notify the applicant in writing of the reasons for the refusal; and
(b)publish a notice of the refusal in the Official Journal.
75Opposition to grant of extension
(1)The Minister or any other person may, in accordance with the regulations, oppose the grant of an extension of the term of a standard patent on the ground that one or more of the requirements of sections 70 and 71 are not satisfied in relation to the application for the extension. The Minister or other person may not oppose the grant of the extension on any other ground.
(2)If the grant of an extension of the term of a standard patent is opposed, the Commissioner must decide the case in accordance with the regulations.
(3)The Commissioner must give the applicant and the opponent a reasonable opportunity to be heard before deciding a case.
(4)The applicant, and any opponent, may appeal to the Federal Court against a decision of the Commissioner under this section.
76Grant 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.
(2)If the Commissioner grants an extension, the Commissioner must notify the applicant in writing of the grant and publish a notice of the grant in the Official Journal.
…
77Calculation 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.
….”
Also relevant to this scheme are the definitions in schedule 1 of the Act including for pharmaceutical substance and therapeutic use. However for the present matter the following is particularly significant:
Australian Register of Therapeutic Goods means the register maintained under section 17 of the Therapeutic Goods Act 1989.
The Register of Patents is established and maintained under Chapter 19 of the Act. Sections 186, 187, 192 and 195 relevantly provide:
186Register of Patents
(1)A Register of Patents is to be kept at the Patent Office. The Register is to contain 2 parts as follows:
(a)a part dealing with standard patents; and
(b)a part dealing with innovation patents.
(2)The Register may be kept wholly or partly by use of a computer.
(3)If the Register is kept wholly or partly by use of a computer:
(a)references in this Act to an entry in the Register are to be read as including references to a record of particulars kept by use of the computer and comprising the Register or part of the Register; and
(b)references in this Act to particulars being registered, or entered in the Register, are to be read as including references to the keeping of a record of those particulars as part of the Register by use of the computer; and
(c)references in this Act to the rectification of the Register are to be read as including references to the rectification of the record of particulars kept by use of the computer and comprising the Register or part of the Register.
187Registration of particulars of patents etc.
(1)Particulars of standards patents in force, and other prescribed particulars relating to standard patents (if any), must be registered in that part of the Register dealing with standard patents.
(2)Particulars of innovation patents in force, and other prescribed particulars relating to innovation patents (if any), must be registered in that part of the Register dealing with innovation patents.
192Orders for rectification of Register
(1)A person aggrieved by:
(a)the omission of an entry from the Register; or
(b)an entry made in the Register without sufficient cause; or
(c)an entry wrongly existing in the Register; or
(d)an error or defect in an entry in the Register;
may apply to a prescribed court for an order to rectify the Register.
(2)On hearing an application, the court may:
(a)decide any question which it is necessary or expedient to decide in connection with the rectification of the Register; and
(b)make any order it thinks fit for the rectification of the Register.
(3)The Commissioner:
(a)must be given notice of an application; and
(b)may appear and be heard in the proceedings; and
(c)must appear if directed to do so by the court.
(4)An office copy of an order must be served on the Commissioner by the Registrar or other appropriate officer of the court.
(5)On receiving an office copy of an order, the Commissioner must rectify the Register accordingly.
195Evidence—the Register
(1)The Register is prima facie evidence of any particulars registered in it.
(2)If the Register is wholly or partly kept by use of a computer, a document signed by the Commissioner reproducing in writing all or any of the particulars comprising the Register, or that part of it, is admissible in any proceedings as prima facie evidence of those particulars.
Particulars to be registered for the purpose of section 187 are provided by subregulation 19.1
19.1Particulars to be registered
(1)For subsections 187 (1) and (2) of the Act, the following particulars are prescribed, that is, particulars of:
(a)an entitlement as mortgagee, licensee or otherwise to an interest in a patent;
(b)a transfer of an entitlement to a patent or licence, or to a share in a patent or licence;
(c)an extension of the term of a patent;
(d)a restoration of a patent;
(e)an order of a court a copy of which is filed under subsection 105 (5) of the Act;
(f)an order of a prescribed court that has been served on the Commissioner under section 140 of the Act;
(g)an order of a prescribed court made on appeal in relation to a patent, being an order of which an office copy has been served on the Commissioner;
(h)a decision of the Commissioner to revoke a patent under Chapter 9 of the Act;
(i)the acquisition of a patent by the Commonwealth under Part 3 of Chapter 17 of the Act;
(j)the cessation of a patent.
Amendment of the Register by the Commissioner is provided for under regulation 10.7 in certain circumstances. Pfizer contends that this regulation is invalid:
10.7 Correction of Register or patent
(1)The Commissioner may, on a request being made in the approved form, amend:
(a)an entry in the Register for the purposes of:
(i)correcting a clerical error or an obvious mistake; or
(ii)if a name or an address entered in the Register has been changed — changing the name or address; or
(b)a patent for the purposes of correcting a clerical error or an obvious mistake.
(2)The Commissioner may, if he or she proposes to amend a patent or an entry in the Register, give notice to a person whose name is entered in the Register as having an interest in the patent.
(3)If a proposed amendment would materially alter the meaning or scope of an entry in the Register or a patent, the Commissioner must publish in the Official Journal a notice of the request to amend the entry or the patent.
(4)If a notice is published, a person may oppose the making of the amendment.
(5)If the Commissioner publishes a notice of the request to amend, he or she must amend the patent or the entry in the Register:
(a)where a person has not opposed allowance of the amendments; or
(b)subject to the terms of any decision of a prescribed court, the Tribunal or the Commissioner in respect of the opposition.
(6)The Commissioner may, of his or her own motion, amend a patent or an entry in the Register to correct a clerical error or an obvious mistake.
(7)If:
(a)an extension of the term of a standard patent for a pharmaceutical substance has been granted under section 76 of the Act; and
(b)the Commissioner becomes aware that the first regulatory approval date in relation to the pharmaceutical substance is earlier than:
(i)the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods that was supplied, under subregulation 6.9 (2), with the application for the extension of the term; or
(ii)the date of the first approval that was supplied, under subregulation 6.10 (2), with the application for the extension of the term;
the Commissioner must amend the relevant entry in the Register to insert the correct extension of the term of the patent.
Note 1 Under section 77 of the Act, the term of the extension must be 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 of the Act) in relation to the pharmaceutical substance;
reduced (but not below zero) by:
(b)5 years.
The extension of the term of a patent is one of the particulars included in the Register under paragraph 19.1 (1) (c). If the earliest first regulatory approval date is earlier than the date that was used in calculating the term of the extension under section 77 of the Act, then the entry in the Register will be incorrect.
Note 2 Subregulation 6.9 (2) refers to the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, a pharmaceutical substance. The date is supplied with an application for the extension of the term of a patent if pre-TGA marketing approval has not been given.
Subregulation 6.10 (2) refers to the date of the first approval of a pharmaceutical substance. The date is supplied with an application for the extension of the term of a patent if pre-TGA marketing approval has been given.
(8)If the Commissioner proposes to amend an entry in the Register under subregulation (7), the Commissioner must:
(a)give notice to that effect to the patentee; and
(b)act in accordance with regulations 22.22 to 22.24 as if those regulations applied to a decision to amend an entry.
Note Regulations 22.22 to 22.24 apply to discretionary decisions made by the Commissioner. However, the procedures in those regulations will be used to allow the Commissioner to establish whether the grounds for a decision under subregulation (7) exist.
(9)An appeal lies to the Federal Court against a decision of the Commissioner to amend the Register under subregulation (7).
The Governor-General’s powers to make regulations under the Act are provided by section 228. Subsection 228(1) and paragraph 228(2)(e) provide:
(1)The Governor‑General may make regulations, not inconsistent with this Act:
(a)prescribing matters required or permitted by this Act to be prescribed; and
(b)prescribing matters necessary or convenient to be prescribed for carrying out or giving effect to this Act; and
(c)prescribing matters necessary or convenient to be prescribed for the conduct of any business relating to the Patent Office; and
(d)for the purpose of carrying out or giving effect to the Budapest Treaty; and
(e)for the purpose of carrying out or giving effect to the PCT, whether in relation to PCT applications or otherwise.
(2)Without limiting subsection (1), that subsection includes the power to make regulations:
…
(e)making provision for and in relation to the amendment of an entry in the Register to correct a clerical error or an obvious mistake, or for any other purpose; and
…
DECISION
According to the Revised Explanatory Memorandum, the Intellectual Property Laws Amendment Act1998 (including Chapter 6 Part 3) was enacted to give effect, inter alia, to the government’s decision to provide for an extension of term scheme for pharmaceutical patents. It goes on to state that:
“An extension of up to five years will be available for a standard patent relating to a pharmaceutical substance that is the subject of a first inclusion on the Australian Register of Therapeutic Goods.”
Page 4 of the memorandum includes the following section:
“Specification of the desired objective(s)
The objective of this proposal 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. It is also intended to provide a patent system which is competitive with other developed nations.”
Then at page 9, the Implementation and review part indicates that the extension of term scheme will have a number of features including:
“Extensions of up to five years for standard patents in relation to a pharmaceutical substance that is the subject of first registration as a therapeutic good on the Therapeutic Goods Act 1989” [sic].
The notes included for subsections 70(5) and 70(6) at page 18, paragraph 13, provide:
“Subsections 70(5) and 70(6) define the term “first regulatory approval date”. For pharmaceutical substances that had not received marketing approval, or approval to be imported into Australia for general marketing, prior to being included in the Australian Register of Therapeutic Goods the first regulatory approval date is the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods. For pharmaceutical substances that had already received marketing approval, or approval to import into Australia for general marketing, prior to inclusion in the Australian Register of Therapeutic Goods the first regulatory approval date is the date of such first approval.”
After tabling the revised explanatory memorandum Senator Campbell obtained leave for the incorporation of the second reading speech which included the following statement:
“ …
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.The long development time, combined with the considerable regulatory process to register and market a new product, means that companies usually have considerably fewer years under patent in which to gain a return for their investment.
This becomes significant to the industry as companies rely heavily on patents to generate the substantial cash flow necessary to finance the development of new drugs.
A country’s patent system is also an important factor in investment decisions. A strong patent system contributes significantly to a positive investment climate and sens a signal that Australia values an innovative pharmaceutical industry.
The object of this part of the bill is to provide an ‘effective patent life’ more in line with that available to inventions in other fields of technology. It will also create a patent regime for pharmaceuticals which is in line with our competitors.
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.
The scheme will apply to all existing 20 year patents, as well as those patents granted after the commencement of the scheme. An extension is not however, automatic. Companies will need to apply within six months of the inclusion of the product on the ARTG or within six months of the date the patent is granted, which ever is later.
…”
This provides background to the implementation of the extension of term scheme for pharmaceuticals and also to Pfizer’s first contention which is that, as a matter of statutory interpretation, the words "first inclusion" in subsection 70(5), read in the context of section 77, can only mean the first marketing approval or registration included on the ARTG and cannot refer to an export only listing.
To understand this contention it is also necessary to appreciate the nature of the ARTG. As indicated above Schedule 1 of the Patents Act provides that the Australian Register of Therapeutic Goods means the register maintained under section 17 of the Therapeutic Goods Act 1989. The Therapeutic Goods Act 1989 (TGA) was however amended by the Therapeutic Goods Amendment (Medical Devices) Act 2002 and, as a result of that amendment, section 9A of the TGA now provides for the maintenance of the ARTG. However it is substantially equivalent to section 17 as repealed which provided that:
“(1)The Secretary is to cause to be maintained a register, to be known as the Australian Register of Therapeutic Goods, for the purpose of compiling information in relation to, and providing for evaluation of, therapeutic goods for use in humans.
(2)Subject to subsection (3), the Register is to be kept in such form as the Secretary determines.
(3)The Register is to contain 2 parts, one relating to goods to be known as registered goods and the other relating to goods to be known as listed goods.
(4)The regulations may:
(a) prescribe the therapeutic goods, or the classes of therapeutic goods, that are required to be included in each part of the Register; and
(b) prescribe the ways in which goods that are included in one part of the Register may be transferred, or may be required to be transferred, to the other part of the Register.”
Section 3 of the Act provides for the interpretation of certain words and phrases including that:
"listed goods" means therapeutic goods that are included in the part of the Register for goods known as listed goods;
and
"registered goods" means therapeutic goods included in the part of the Register for goods known as registered goods;
Thus it is clear that at all relevant times goods included on the ARTG have encompassed at least registered goods and listed goods. Mr Kentwell’s declaration indicates that the main difference between registered and listed goods is the higher level of risk associated with the former and consequently the level of regulatory evaluation required before those products can be supplied in Australia. “listings” apparently are divided into “listed” medicinal products and “export only” medicinal products. The first category is said to be all unscheduled medicines which are tested for quality and safety and may be supplied in Australia. “Export only” listings are required to meet certain standards but on Mr Kentwell’s evidence the requirements including the costs and time required to achieve listing is far less than required for registration.
In seeking to interpret sections 70 and 77 of the Patents Act I am principally instructed by the provisions of the Acts Interpretation Act 1901. Section 15AA and subsection 15AB(1) provide:
“15AA Regard to be had to purpose or object of Act
(1)In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.
15AB Use of extrinsic material in the interpretation of an Act
(1)Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i)the provision is ambiguous or obscure; or
(ii)the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.”
Pfizer also referred me to a number of cases including Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 205 ALR 1 in support of the contention that the context of the legislation should be considered in the first instance rather than as a aide to the resolution of ambiguity and that this included the existing state of the law and the “mischief” the statute was intended to remedy. In relation to this Pfizer say that in light of the history and background of the legislation “first inclusion” in the section 70(5) can only mean full registration on the ARTG and that if the term of extension is calculated on the basis of export listing, this would lead to an unfair and unreasonable result because the term of the extension will be shorter than if calculated on the basis of the date of registration in the ARTG.
As a separate point Pfizer argue that “first regulatory approval” in section 77 has an ordinary meaning and hence limits the definition of it provided in section 70. In my view this contention has not been made out. Even if “regulatory approval” has an accepted meaning it is clear that the act has intended to depart from that meaning by providing and referencing the specific definition in subsection 70(5). Consequently I believe the meaning of “inclusion” in subsection 70(5)(a) remains critical to the question of what constitutes a “first regulatory approval” where pre-TGA marketing approval is not at issue. I note here also that “included” and “inclusion” are used consistently in relation to the ARTG throughout Part 3 and hence the meaning of this term has broad significance in relation to the goods that would qualify for a term extension under the Act.
Before looking to section 70(5) in detail, it is further said in relation to section 77 that the wording “earliest” in “earliest first regulatory approval date” implies a number of first regulatory approval dates in different categories for a particular substance. To my mind this does not particularly assist the case pressed by Pfizer but in any event I do not think this is the correct interpretation. The effect of subsection 70(5) seems to me to be that a pharmaceutical substance may only have only a single “first regulatory approval date” and this appears perfectly logical. What then is the purpose of prescribing the “earliest” first regulatory approval date in subsection 77(1)? This subsection provides:
(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);
The key part of this for understanding the import of “earliest” is the latter part of the paragraph, that is, “… in relation to any of the pharmaceutical substances referred to in subsection 70(2)” (my underlining). Subsection 70(2) states:
(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.
Thus it can be seen that the issue is that a patent specification may disclose and include within the scope of its claims more than one pharmaceutical substance. Under subsection 70(5) each pharmaceutical substance has only one “first regulatory approval date” so, since a patent can involve more than one substance with possibly different first regulatory approval dates, the only reasonable interpretation of subsection 77(1) is that it is intended that the term of the extension must be based on the earliest of the approval dates that may apply to the patent.
Subsection 70(5)(a) defines the first regulatory approval date for a pharmaceutical substance:
(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.
It seems to me that in the context of the Act the meaning of “first inclusion in the Australian Register of Therapeutic Goods” must take into account the plain meaning of “inclusion” or “include” (“to contain, embrace or comprise” Macquarie Dictionary) and then the nature of the ARTG and the inclusions provided for under the TGA. Pfizer object to me looking to the TGA citing the principle of in pari materia, however there are many circumstances where reference to other legislation is appropriate and in my view this is clearly such a case. The TGA is not a similar Act but it is one directly referenced by the Patents Act with which it forms part of a complementary legislative scheme, at least as applies to the pharmaceutical industry. One cannot determine what is contained in the ARTG without looking at it and by necessity at the TGA which specifies what information is and is not included. Therefore my basic assumption is that parliament has deliberately chosen to reference all goods included in the ARTG and, as provided by the TGA, this includes both registered and listed goods. If “inclusion” in section 70(5)(a) were to mean something else it would of itself create significant uncertainty as to the nature and coverage of the scheme as well as the timing of an application under section 71 and the term extension. As it is, while most extensions have been based on registered goods included in the ARTG, a small but significant number have been based on ARTG listings (including patent number 535944 which was the subject of proceedings in Merck & Co Inc v Arrow Pharmaceuticals [2003] FCA 1344) and hence one could assume that the requirements of the act are clear and the concept of inclusion on the ARTG well understood.
Pfizer have identified the difference between paragraphs 70(5)(a) and (b) as leading to a “manifestly absurd” and unintended result because the benefit of the scheme pre-TGA is limited to marketing approvals and hence would be different to the result under the TGA. I agree that this means a different result pre-TGA but it does not seem to me to be necessarily absurd or unintended but an approach that equally could be taken expressly to deal with the situation pre-TGA where according to Mr Kentwell “… Australian controls over therapeutic goods consisted of a mix of inconsistent (and in some cases deficient) Commonwealth, State and Territory legislation” and where export-only therapeutic goods were “only regulated by way of the relevant provisions of the Customs (Prohibited Export) Regulations”. Accordingly it appears that a reasonable equivalent of ARTG export-only listing did not exist pre-TGA.
Does the interpretation of “first regulatory approval date” to encompass both registrations and listings included in the ARTG not promote the purpose or objective of the Act or produce a manifestly absurd or unreasonable result? I do not think that it does. The extrinsic materials do not specifically address export or other listings either way and while the explanatory mechanism does mention registration or marketing approval in key parts including in the “specification of desired objectives” the wording “inclusion” in the ARTG has been consistently used in describing the effect of the legislation including in the second reading speech. It therefore seems clear that the wording of subsection 70(5) has been specifically chosen to achieve the desired policy objective and, given that the TGA and the Patents Act were intended by Parliament to work together in relation to the scheme, that this extends to all types of inclusions in the ARTG not only registered goods.
Otherwise it seems that the “mischief” addressed is:
“The long development time, combined with the considerable regulatory process to register and market a new product, means that companies usually have considerably fewer years under patent in which to gain a return for their investment.”
which leads to the need to provide a longer effective patent life. This seems to apply equally whether pharmaceutical products are subject to export listing or registration because, while the former may not require the same level of regulatory testing and scrutiny in Australia, the development costs will be the same and generally foreign regulatory requirements will need to be met. It is also the case that manufacturing or importing a product for export constitutes exploitation of the patent and would be expected to generate a financial return for the patentee once export listing is achieved. Consequently the policy benefit of providing an additional “effective term” in which a return on the patented invention is achieved would appear to apply from the first regulatory approval date regardless of whether that is an export listing or registration. Therefore I do not think it can be said that an interpretation of “inclusion” that encompasses export and other listings on the ARTG is a construction that clearly would not promote the purpose or object of the legislation or leads to a result that is manifestly absurd or is unreasonable. Rather a construction that would calculate the term of an extension from a subsequent regulatory approval date rather than the first would appear to be inconsistent with the policy of providing an extension of term of only up to 5 years.
I would add that the legislative history relating to patent term extension under the old grounds of inadequate remuneration or the pharmaceutical scheme introduced by the Patents Amendment Act 1989 and subsequently repealed do not in my view assist Pfizer. There is nothing to suggest that the current extension of term scheme was intended to replicate or continue those arrangements or to achieve precisely the same result and hence that history is of very limited assistance, even if I were required to look beyond the plain meaning of the legislation. Equally I do not believe that looking to the schemes operating in the US and Europe takes the position much further since the extent of similarity or equivalence with those schemes to be achieved by the Act was not specifically addressed.
As a result I find that in each case the date of commencement of the first inclusion in the ARTG that was supplied with the application for an extension of term was later than the first regulatory approval under subsection 70(5) when the relevant export listings are taken into account. Under the terms of subregulation 10.7(7) the Commissioner in that event must amend the register to insert the correct extension of term. However, Pfizer agues that the subregulation and indeed all of regulation 10.7 is invalid because it is ultra vires and, in relation to subregulation 10.7(7), operates retrospectively.
Despite Pfizer’s submissions it would seem that while I may be permitted to form a view of the validity of delegated legislation it could only be in the most compelling case that I could act on any other basis than that subregulation 10.7(7) is valid. To do otherwise would be to override the express intention of parliament which by this subregulation requires the Commissioner to amend the Register when she becomes aware of the circumstances specified. (see for example Jonsson and Marine Council 12 AAR 323 and Dole v Commissioner of Police [1999] NSW ADT 84). However, as it is, I do not think Pfizer’s arguments for the invalidity of the regulations are sound and I will briefly explain my reasoning for this.
The key submission by Pfizer is that an amendment of the Register in these circumstances is a restriction of the Patentees rights and amounts to the Commissioner actually reducing the term of the extension. From this a number of the other contentions follow. I think however that this fails to appreciate the true nature of the patent register and the effect of section 77. Firstly, the Register is intended to inform the public concerning patent rights (section 190) and does not itself establish those rights. It is only prima facie evidence of the particulars contained in it (section 195) and is subject to rectification (section 192) and correction (regulation 10.7) as well reflecting revocation, ceasing, or other events governed by particular sections of the Act. Secondly, section 77 provides the term of the extension “if the Commissioner grants an extension of term” based on the “first regulatory approval date (as defined by section 70)”. Before granting the extension the Commissioner has to be satisfied only that the requirements of sections 70 and 71 are met. The Commissioner does not decide on or set the term of the extension but is required (regulation 19.1) to enter particulars of an extension of term on the register. Accordingly, while the Commissioner may be functus officio on the decision to grant the extension, she is not so merely in amending particulars on the register that are intended to correctly reflect the term of the extension provided for under section 77.
In this light, it appears that the argument that regulation 10.7 is beyond the regulation making powers has no force. Paragraph 228(2)(e) “ making provision for and in relation to the amendment of an entry in the Register to correct a clerical error or an obvious mistake, or for any other purpose”, seems to more than sufficiently provide the power for the making of regulation 10.7. However, to the extent that the regulation may be seen to compete with the powers granted to the Court under section 192 and to involve substantive rights rather than procedural matters, it seems clear to me that what is given to the Commissioner is responsibility in very restricted circumstances to ensure that the Register reflects the true state of affairs governed by the Act. That some limited investigation or evidence may be required to establish whether a clerical error or obvious mistake has occurred or to establish what is the term of an extension under section 77 so that it can be reflected in the Register does not appear to change the fundamental character of the regulation.
Pfizer asserts in reference to paragraphs 228(1)(b) and (c) that regulation 10.7 is beyond the regulation making power because it is neither “necessary or convenient”. However this seems to ignore the public interest in the proper maintenance of the Register and the cost that would otherwise be imposed on the public in seeking rectification of an incorrect entry by the Court under section 192. This is particularly so in circumstances where there is generally little factual contention as opposed, for example, to questions of patent ownership that are to be determined by the Court.
If the regulation is understood not to affect rights and liabilities but rather to allow rights to be correctly particularised in the Register, then I believe the question of retrospective effect is also dealt with. Again I would emphasise that the length of extension can not be altered by the Commissioner changing the date in the Register but is set by section 77 independently of the Commissioner’s actions.
As a final point Pfizer seem to have assumed in submissions that the Commissioner has made an erroneous assumption that information provided with the application for extension was incorrect and to have presumed that information given in good faith was a clerical error or obvious mistake. I can find no evidence that the Commissioner has suggested this or proposed to amend the register on the basis of a clerical error or obvious mistake under subregulation 10.7(1). Rather the Commissioner has at all times proposed to act under subregulation 10.7(7) which in my view is in no way conditional on an identified error or mistake but requires the correct extension of term to be inserted where the Commissioner becomes aware that the first regulatory approval date is earlier than that provided with the application for extension, regardless of the reason.
Consequently I do not find that Pfizer has made out a case, either that the first regulatory approval date for the purpose of section 77 excludes listed goods included on the ARTG, or that regulation 10.7, and particularly subregulation 10.7(7), is invalid.
CONCLUSION
I have found that as a matter of construction that “first regulatory approval date” in section 77 means, where no pre-TGA marketing approval is given, the date of first inclusion in the ARTG and that in this context “inclusion” takes its meaning from the ARTG and consequently the TGA. In addition I have found that I should act on the assumption that subregulation 10.7(7) is valid and therefore am required to direct that the Register be amended.
In a separate decision dated 21 September 2005 I have considered Pfizer’s request that a decision to amend the Register not be executed until the completion of the appeal period. In line with that decision I direct that the Register be amended to insert the correct extension of term of the patents (as indicated in column 5 of the table at paragraph 5 above) but not before 28 days from the date of this decision or, in the event that the Commissioner is served in that period with a notice of appeal and an application for a stay of the decision, until the stay application is determined by the Court.
Philip Spann
Deputy Commissioner of Patents
23 September 2005
Patent attorneys for the Patentees: Spruson & Ferguson, Sydney
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