Scintilla – a flash, a spark, an iota. Shorthand for creativity and an indicator of inventiveness under Australian law.






Thursday, November 6, 2014

Just in time: High Court confirms time for applying to extend term of pharmaceutical patent is capable of extension

By Linda Govenlock, Managing Associate

In a 3:2 majority decision handed down yesterday, the High Court of Australia has found that the remedial provisions available under section 223(2) of the Patents Act 1990 (Cth), which extend the time for completing a relevant act, are available in relation to applications for patent term extension (PTE), provided that the PTE application is filed before the expiration of the patent. This decision will bring a sigh of relief to patent owners and brings an end to this chapter of a nine-year, hard-fought battle between the Danish patentee, Lundbeck A-S, and its generic competitors, spearheaded by Alphapharm Pty Ltd.

The background to this dispute was summarised in our Scintilla post earlier this year. To recap:
  • Lundbeck originally applied for, and was granted, PTE of patent No 623144 on the basis of listing on the Australian Register of Therapeutic Goods (ARTG) of its product, LEXAPRO, which contained only the (+)-enantiomer of the anti-depressant drug citalopram.
  • Alphapharm challenged the validity of the PTE on the basis that PTE application should have been sought based on Lundbeck's earlier listed product, CIPRAMIL, which contained a racemic (50:50) mixture of the (+)-enantiomer and (-)-enantiomer of citalopram. The deadline for applying for PTE based on CIPRAMIL had long-since passed.
  • The Full Court agreed with Alphapharm and found the PTE application based on LEXAPRO to be void ab initio. The Register of Patents was duly rectified to cancel the PTE, and the patent was set to expire at the end of its standard 20-year term on 13 June 2009.
  • One day before the expiry – and just in time – Lundbeck filed a PTE application based on the ARTG listing of CIPRAMIL, together with an application under s 223(2) of the Act for an extension of time of nearly 10 years.
  • Lundbeck's extension of time application was opposed by Alphapharm and several other generic companies, each of which had launched generic products containing (+) citalopram in mid-June 2009, after the assumed expiration date of 13 June 2009. The opposition was a two-pronged attack: first, that the extension of time provisions of s 223(2) were not available to PTE; and second, that in any event there was no relevant error or omission that could enliven the extension of time provisions if those provisions were available for PTE.
  • The Commissioner of Patents dismissed the oppositions and subsequent appeals from that decision were subsequently upheld by the Administrative Appeals Tribunal and the Full Federal Court, respectively.
  • On 11 April 2014 the High Court of Australia granted special leave for Alphapharm to appeal from the decision of the Full Federal Court.

The question on appeal

 
The High Court appeal was limited to the sole question of whether the Full Court erred in finding s 223(2)(a) of the Act conferred power on the Commissioner to extend the time within which a patentee could apply to extend the term of a patent, having regard to Regulation 22.11(4)(b) of the Patents Regulations 1991 (Cth). Interestingly, and perhaps foreshadowing their views as to whether the lower tribunals had got it right, leave to appeal was granted by the two justices who gave the joint dissenting judgement (Kiefel and Keane JJ).
 
Ultimately, the decision turned on a matter of construction of the relevant provisions.
 

The statutory landscape


PTE is governed by s 70. Section 70(1) provides:
 
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.
 
Section 71(2) prescribes the timing in respect of an application for PTE under s 70(1) and provides (our emphasis):
 
(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.
 
The majority of the High Court (Crennan, Bell and Gaegler JJ) referred to the requirement that a PTE application under s 70(1) be made 'during the term of the patent' as the first time requirement, and the requirement that the application be made 'within six months' of the relevant date as the second time requirement. This characterisation of two timing requirements sets up the basis for the majority's conclusion.
 
General extensions of time may be granted at the discretion of the Commissioner and are governed by s 223. Section 223(2) relevantly provides (our emphasis):
 
(2) Where, because of:
(a) an error or omission by the person concerned or by his or her agent or attorney; or
(b) circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.
(11) In this section:
relevant act means an action (other than a prescribed action) in relation to a patent...


Reg 22.11(4)(b) provides guidance on 'prescribed actions' that are excluded from the 'remedial' provisions of s 223 and states:

(4) For the definition of relevant act in subsection 223(11) of the Act, the following are prescribed:
(b) filing, during the term of a standard patent under subsection 71(2) of the Act, an application under subsection 70(1) of the Act for an extension of the term of the patent;


The issue


The crucial issue in the appeal came down to the competing constructions of reg 22.11(4)(b) put forward by Lundbeck and Alphapharm and primarily, whether the reference to 'filing, during the term of a standard patent under subsection 71(2) of the Act' implicated only the 'first time requirement' or the 'first' and 'second' time requirements.

Alphapharm submitted that the power of the Commissioner to extend time under the general remedial provision of s 223 was 'specifically excluded' by reg 22.11(4)(b) in respect of an application for PTE under s 70(1). Under Alphapharm's construction, the 'relevant act' referred to reg 22.11(4)(b) is the single act of filing a PTE application which encompasses both the 'first' and 'second' time requirements.

The majority rejected this construction as falling into the temptation of giving meaning to isolated terms, then combining those meanings to give the composite expression a meaning that was at odds with the meaning achieved when the text, syntax and immediate context of reg 22(11)(4)(b) are considered as a whole.

Lundbeck submitted that s 71(2) involved two separate and independent time requirements and that reg 22.11(4)(b) only applies to the first time requirement. That is, the PTE application must be filed during the term of the standard patent and that time period cannot be extended by s 223(2), however, the second time requirement is capable of being extended.

The majority, like the Patent Office, the AAT and the Full Court before it, preferred Lundbeck's construction that the second time requirement, namely, that a PTE application be filed within 6 months of the latest relevant date listed in s71(2), is capable of being extended under s 223(2). Thus, the only time requirement which is excluded by reg 22.11(4)(b) from the general remedial power to extend time in s 223(2)(a) is the 'first time requirement'. In other words, an application for PTE must be filed before the standard term of the patent expires and that period for filing such PTE application cannot be extended beyond the patent term. In arriving at this view, the majority noted at [71] that:
Had it been the legislature's intention to exclude the second time requirement in s 71(2) from the general remedial power in s 223(2)(a), that would have been simple to accomplish.
In their dissenting judgement, Kiefel and Keane JJ observed that what is prescribed under s 223(1) and by reg 22.11(4)(b) is a 'relevant act' and those provisions cannot reasonably be read as referring to two separate and distinct actions as proposed by Lundbeck. In rejecting Lundbeck's approach (and somewhat ironically in view of the contrary views adopted in all preceding decisions and also by the majority of the High Court) the minority considered the language and effect of reg 22.11(4)(b) 'could hardly be clearer', namely, that the Commissioner's power to grant an extension of time does not apply to PTE applications.


Conclusion


The majority of the High Court has ultimately adopted a pragmatic approach in construing the remedial provisions of s 223 which will be pleasing to owners of pharmaceutical patents – especially those patentees that have relied on an extension of time to file their PTE applications. (Interestingly, in addition to Lundbeck, we are aware that since 2000, 37 other PTE applications have been granted with an extension of time under s 223(2) - 22 of which concern patents that are still in force - and the impact would therefore have been far-reaching had the High Court decided differently).

Whilst some may argue that this decision could result in uncertainty in relation to when competitors may exploit a pharmaceutical patent at the end of its patent term, this decision has clarified that any patentee seeking to extend the term of a patent must apply to do so before the expiration of the standard patent term. This decision has therefore brought a measure of certainty regarding commercial risks and has settled a vexing question plaguing patent term extensions.

As a final footnote, this is not the end of the dispute between these combatants. Various claims of Lundbeck's patent were found to be valid. Now that the PTE issue has been settled in Lundbeck's favour, it will be open to Lundbeck to pursue damages arising from infringement by those generic companies that launched competing products during the PTE period.

No comments:

Post a Comment