AUSTRALIA Trends and Developments Contributed by: Ben Miller, Alexandra de Zwart, Fiona Deng and Emma Woelke, Maddocks
The Full Court concluded that the definition of “phar ‑ maceutical substance” refers only to active ingredi ‑ ents, and does not include formulations. The decision will have major implications in Australia, preventing originators from obtaining extended protection for secondary patents such as those claiming new for ‑ mulations of known drugs, and offering new oppor ‑ tunities for earlier generic market access for a host of products that may be covered by invalid PTEs. Otsuka’s patent covered certain controlled-release injectable and freeze-dried formulations of aripipra ‑ zole. The patent’s standard term expired in October 2024, but Otsuka obtained a PTE based on ARTG-list ‑ ed products (ABILIFY MAINTENA kits). Sun Pharma challenged the validity of the PTE, arguing that the claims of the patent did not meet statutory require ‑ ments for an extension. At first instance, the primary judge found that eight of Otsuka’s ten asserted pharmaceutical substances did not fall within the scope of any of the claims as they did not take all of the essential integers of those claims, and the claims were invalid because they failed to define the invention and lacked clarity. The Full Court dismissed Otsuka’s appeal from that decision but upheld the primary judge’s finding that the PTE was invalid on different grounds. The central issue was whether a formulation (ie, a mix ‑ ture of an active pharmaceutical ingredient (API) and excipients) falls within the definition of a “pharmaceu ‑ tical substance” eligible for a PTE. Prior to this deci ‑ sion, three decisions of single judges at first instance had held that the definition of “pharmaceutical sub ‑ stance” could include a formulation, but none of these decisions was appealed. The Full Court found that, against the legislative con ‑ text, the natural and ordinary wording of the definition of pharmaceutical substance “immediately and natu ‑ rally puts the focus on the substance which itself pro ‑ duces the therapeutic effect”, and does not extend to new formulations, delivery methods or dosage forms containing known substances. The Full Court consid ‑ ered that the legislative history and policy rationale for the current PTE regime was always intended to com ‑
pensate for regulatory delays in bringing new APIs to market, not for improvements in delivery or formula ‑ tion of known substances. The Court found that the reasoning in earlier first-instance decisions (such as Pharmacia , Spirit and Cipla ), finding that formulations could qualify, were incorrect, and preferred the con ‑ struction given in the Full Court authorities of Alphap- harm and Boehringer , which focused on the API. As a result, the patent was not eligible for a PTE. This decision narrows the scope for extending the term of patent protection in Australia, and aligns with a pol ‑ icy of rewarding primary research in new and inven ‑ tive pharmaceutical substances, rather than allow ‑ ing extensions on secondary patents or incremental improvements. The Centrality of Claim Construction for PTEs: Novartis v Pharmacor Another significant appeal decision concerned an ENTRESTO (sacubitril/valsartan) product ( Novartis AG v Pharmacor Limited [2025] FCAFC 33). The Full Court upheld Justice Yates’ decision at first instance that Pharmacor’s product, in which two APIs were com ‑ bined as a complex, did not infringe Novartis’s patent claiming a composition comprising each of the two APIs, and Novartis’s PTE had been wrongly granted. Key aspects of the Full Court’s reasons included the following. • Claim 1 is to a pharmaceutical composition com ‑ prising the “AT 1-antagonist” valsartan and the “NEP inhibitor” sacubitril, whose descriptions pro ‑ vided “adjectival clarity” to what followed. A person skilled in the art would, therefore, understand that the first integer could not be satisfied by something that also satisfies the second integer. • There was no ambiguity in claim 1 suggesting that it might cover a complex formed from valsartan and sacubitril, or a pharmaceutically acceptable salt of the complex, and to read the claim oth ‑ erwise would ignore its clear terms. The claim required both valsartan or a pharmaceutical salt thereof and sacubitril or a pharmaceutical salt thereof to be present, and to be distinct and sepa ‑ rate components in the pharmaceutical composi ‑ tion claimed.
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