01 December 2006
Key Points:
The Federal Court has recently held that the term "first regulatory approval date" for the purposes of determining the eligibility for, application filing deadline for, and length of, a patent term extension is not limited to the date of the first registration on the ARTG of the substance on which the extension is based but includes the date of the first listing of that substance.
For pharmaceutical companies, whether innovator or generic, the issue of patent term extensions for pharmaceutical patents is a significant one. This is because, unless the validity of the patent is challenged, an extension of patent term, even by a few months, can equate to millions of dollars of additional sales for the innovator/patentee and millions of dollars of lost sales for generic competitors whose entry to the market is further delayed by the extension.
Under the Patents Act 1990 (Cth) (the "Act"), the eligibility to apply for a patent term extension, the time period within which such an application must be made and the length of any extension granted are all affected by the same single date - the "first regulatory approval date".[1]
This article will discuss a recent Federal Court of Australia decision that has clarified the meaning of "first regulatory approval date", and has done so in a way that for some patentees may lead to the loss of eligibility to apply for an extension or the shortening of the term of an extension already granted or yet to be applied for.
In a separate decision, the Federal Court has determined whether when the Register of Patents records an incorrect extension, due to the newly clarified meaning of "first regulatory approval date" or otherwise, the patentee has a right to require the record of the erroneous extension be maintained, or whether the Commissioner of Patents must correct the Register. In a related case, the Federal Court will determine next year whether an extension granted on the basis of an application that was out of time is invalid and subject to cancellation.[2]
The patent term extension process
The Act provides a regime for extending the term of a pharmaceutical patent by up to five years beyond the standard patent term. In order for a patent to qualify for an extension, it must comply with section 70(3) the Act such that:
The Act defines the "first regulatory approval date" in section 70(5) as:
Section 70(6) defines "pre-TGA marketing approval" in relation to a pharmaceutical substance as an approval (however described) by a Minister, or a Secretary to a Department, to:
The maximum length of an extension is five years. The length of the extension is calculated according to the amount of time between the date of the patent and the earliest first regulatory approval date; reduced by five years but not below zero (section 77). The earlier the first regulatory approval date, the shorter the length of the extension.
The application for extension must be made within 6 months of the latest of a) the date the patent was granted, b) the "first regulatory approval date", or c) the date of commencement of section 71.
The question of exactly what constitutes the "first regulatory approval date" is therefore of fundamental importance.
Pfizer Corp v Commissioner of Patents (No 2)
In Pfizer, the Federal Court determined for the first time that the term "first regulatory approval date" for the purpose of determining the eligibility for a patent term extension, the time for filing an application for that extension and the length of that extension of a pharmaceutical substance is not limited to the first registration date of a substance on the ARTG, that being the date of approval to market the substance in Australia, but includes the first listing date of that substance on the ARTG, even though that listing only permits the manufacture of goods for export.
Pfizer had applied for and been granted patent term extensions for patents relating to Norvasc (amlodipine), a drug to treat hypertension, and Replax (eletriptan hydrobromide), a drug to treat migraine headaches. These extensions, which had been applied for on the basis of the respective dates of first registration in the ARTG, ranged from about five months to almost five years in length.
On 12 March 2003, Arrow Pharmaceuticals Ltd filed an application seeking revocation of the Norvasc patent on the basis that Pfizer 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 regulatory approval date of Norvasc was 14 April 1992 and not 26 February 1993. Arrow provided extracts of the ARTG showing an export-only listing in the ARTG for Norvasc on 14 April 1992 to the Commissioner on 3 April 2003. The Court proceedings commenced by Arrow were subsequently discontinued.
However, the Commissioner then wrote to Pfizer stating that in her view a first regulatory approval date existed for each of the patented substances that was earlier than the date provided in support of the patent term extension application, and that she therefore intended to amend the Register under Reg. 10.7(7) to reflect the correct term of extension.
Pfizer opposed amendment of the Register, arguing that the "first regulatory approval date" referred to in the Act 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. Pfizer also argued that Reg 10.7(7) was invalid.
Following a hearing, the Deputy Commissioner held that "first regulatory approval date" includes the first listing date as well as the first registration date, that Reg 10.7(7) was not invalid and that he was therefore required to direct that the Register be amended to reflect the correct term of extension for each of the patents.
On appeal to the Federal Court, the question of the validity of Reg 10.7(7) was again raised but all parties accepted that, for the purposes of the appeal, the regulation would be valid in accordance with the decision in Lundbeck II prior to any determination to the contrary by the Full Court.
The main point argued by Pfizer was that the first regulatory approval date for the purposes of determining the length of extensions was limited to the date of registration in the ARTG on the basis that the "pre-TGA marketing approval" as defined by section 70(5)(b) as the date of the "first approval", refers to approval for marketing in Australia and thus to Registered Goods.
The Court held that the provisions were not so limited and that if "the intention were to define 'first regulatory approval date' as the date of approval to market in Australia or the date of entry in the ARTG as Registered Goods, it would have been easy to do."
In reaching this conclusion, the Court noted that inclusion in the ARTG of a patented pharmaceutical substance as either a Listed Good or a Registered Good allows the patentee to exploit the substance. While Pfizer contended that the process of registering goods is the more extensive of the two, ultimately leading to a greater commercial exploitation of the substance, the Court was of the opinion that these differences were not determinative of the issue.
The Court also had regard to extrinsic materials which Pfizer argued evidenced a clear legislative intention to grant the patentee at least 15 years of "unfettered exploitation rights". It was contended that such materials should be relied upon to interpret the relevant provision of the Act. However, the Court held that as the words in question ("first inclusion in the ARTG") were not ambiguous or obscure and the ordinary meaning conveyed by those words did not lead to a manifestly absurd or unreasonable result, there was no need to consult the extrinsic materials.
Spirit Pharmaceuticals
As set out above, the grant of a patent term extension of even a few months can mean millions of dollars of lost sales for a potential generic competitor whose launch of a competitive product is further delayed. Thus, the shortening of an extension by even a few months, allowing earlier market entry, can mean millions of dollars of additional sales for such a competitor.
Spirit Pharmaceuticals Pty Ltd wished to launch a generic amlodipine product upon expiration of Pfizer's amlodipine patents. It sought to be joined as a respondent in the Pfizer proceedings as a successful appeal by Pfizer would have resulted in Pfizer's Norvasc patent expiring 10 months later than that proposed by the Commissioner and Spirit potentially losing $5.5 million in profits.
The Court granted Spirit's application to be joined because it determined that doing so was the course most likely to achieve a just resolution of the dispute with minimum costs, delay and use of court time.
The Court accepted the Commissioner's arguments that Spirit should be joined on the basis that Spirit was able to present evidence from a commercial perspective that the Commissioner was not equipped to present. The Court also took into account the fact that if Pfizer were successful in the present appeal and Spirit were not a party to that decision, Spirit would be entitled to commence its own proceedings for rectification of the Register, which would raise the same questions of fact and law as arising on the appeal.
The Court also considered the fact that Spirit was unable to oppose the term of the extension when it was initially granted because it was not incorporated at the time, and that Spirit was unable to appear and make submissions at the hearing before the Deputy Commissioner as there was no basis under the Act or the Patent Regulations 1991 (Cth) for such an appearance.
Likely impact
Eligibility for extension requires the period between the date of the patent and the date of first regulatory approval to be at least five years. As a result, companies that have applied for both listing and registration on the basis that they will obtain the former first (which will allow them to export while waiting approval for domestic sales), may find that the listing will occur within the five years, even though the registration occurs well after resulting in a loss of eligibility for an extension.
In the short to medium term, the Pfizer decision may cause generic companies to investigate the basis for patent term extensions already granted. This would be with respect to patents covering products that they wish to market generic versions of in the hope of finding an extension that was granted on the basis of a subsequent ARTG registration, rather than a prior ARTG listing. If such an extension is found, the generic company would then be able to notify the Commissioner requesting that the Register be rectified to reflect the shorter term of the extension. It remains to be determined next year whether the discovery of an earlier first regulatory approval date than that actually used to gain the extension invalidates the granting of the extension altogether if that earlier date causes the application for extension to be out of time.
The Pfizer decision may also cause applicants to delay their listing applications, or, alternatively, not pursue them at all so as not to run the risk of loss of eligibility for an extension due to an ARTG listing occurring prior to ARTG registration and within five years of the patent date.
[1] Other dates, such as the date of the patent, affect one or more of these issues, but the first regulatory approval date is the only date that affects all three.
[2]For a discussion of these cases, see our article "Can a pharmaceutical patent term extension, once granted, be shortened or cancelled?" in this issue.
For further information, please contact Mary Still.
