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Monday, May 12, 2014

Watch this space! High Court grants special leave in the Alphapharm v H Lundbeck patent extension saga

By Suzy Muller, Senior Associate

At the heart of this case is the rights of Lundbeck, patentee of Australian patent no. 623144 (Patent), to obtain an extension of the term of the Patent under the Patents Act. Such extension would extend Lundbeck's monopoly for its escitalopram product LEXAPRO to 9 December 2012. As the Patent has been held valid and infringed and generic escitalopram products entered the market in June 2009, Lundbeck would then be entitled to damages for the period of the extension.

On 11 April 2014, the High Court granted special leave to appeal the decision of the Full Federal Court of Australia in Aspen Pharma Pty Ltd v H Lundbeck A/S [2013] FCAFC 129.

Alphapharm sought leave to appeal on the following grounds:
  1. Does s223(2) of the Patents Act 1990 (Cth) confer power to extend time for seeking an extension of term of a patent under s70(1) of the Patents Act, having regard to the provisions of s223(11) of the Patents Act and reg 22.11(4)(b) of the Patents Regulations 1991 (Cth)?
  2. If so, what are the principles that govern the exercise of the discretion to extend time under s223(2), having regard to the scope and purpose of the Patents Act, and do the circumstances justify the exercise of the discretion in favour of granting the extension?
The High Court has granted special leave in relation to ground (1) above and denied special leave in relation to ground (2). The focus of this blog is therefore on ground (1).

The quandary in question: construing the Patents Act and Patents Regulations

The question to be determined by the High Court, is whether a 'prescribed action' is
  • the action of filing an application for extension of patent term per se;
  • the narrower action of filing such application within the term of the patent.
If the former, as Alphapharm would have it, the time limitations for a s70(1) application cannot be extended by operation of s223. If the latter, as Lundbeck would have it, provided the application is made during the term of the patent, an extension can be granted by operation of s223 to the time limitations for a s70(1) application. So far, the Commissioner, the AAT and the Full Federal Court have all agreed with Lundbeck.

The statutory landscape

Section 223(2) states (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 may1, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

"relevant act" means an action (other than a prescribed action) in relation to a patent...

What then, is a 'prescribed action'? Reg 22.11(4)(b) 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;

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.

Relevantly, s71(2) sets out the time limitation for such 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.

To apply these time restraints to the facts here, the Patent was granted on 31 August 1993, the CIPRAMIL ARTG date of commencement was 9 December 1997, the section commenced on 27 January 1999 (Intellectual Property Laws Amendment Act 1998). The Patent expired on 13 June 2009. So, for Lundbeck to have made its application to extend the Patent within he statutory requirements (ie without seeking an extension), it would need to have done so on or before 26 July 1999.

Background facts and dates
  • Claim 1 of the Patent claimed the (+)-enantiomer of citalopram, which is useful in the treatment of depression. The 20 year term of the patent is 13 June 1989 to 13 June 2009.
  • On 9 December 1997, Lundbeck's Australian subsidiary obtained registration of CIPRAMIL on the Australian Register of Therapeutic Goods (ARTG), which contains citalopram in racemic form, ie the (+)-enantiomer and the (-)-enantiomer of citalopram in equal proportions.
  • On 16 September 2003, Lundbeck's Australian subsidiary obtained ARTG registration of LEXAPRO, which contains only the (+)-enantiomer of citalopram (or 'escitalopram').
  • On 22 December 2003, Lundbeck applied to extend the term of the Patent under s70(1) of the Patents Act. The Commissioner granted the extension based on the LEXAPRO ARTG listing, extending the term by 5 years to 13 June 2014.
  • In 2005, Alphapharm commenced a proceeding seeking revocation of the Patent and removal of the entry in the Register recording the extension of term. Alphapharm also notified the Commissioner of the CIPRAMIL ARTG listing.
  • On 19 May 2006, the Commissioner issued a decision confirming that the extension of term should have been based on the CIPRAMIL ARTG listing and adjusted the term of the extension to 9 December 2012. Lundbeck and Alphapharm appealed that decision to the Federal Court.
  • In 2008, Lindgren J delivered a judgment finding that CIPRAMIL contained (+)-citalopram, the application for extension of term had not been made within six months of first inclusion in ARTG of CIPRAMIL as required by s71 of the Patents Act, in the circumstances the Commissioner lacked power to grant any extension to the term of the Patent, and therefore 'the Register should be rectified by the omission from it of any reference to an extension of the term of the Patent.' Lundbeck appealed this aspect of the decision. On 11 June 2009 the decision in relation to the extension was upheld by the Full Federal Court. Special leave to appeal to the High Court was refused on 11 December 2009.
  • On 12 June 2009, Lundbeck applied to the Commissioner under s223(2) of the Patents Act for an extension of time within which to file an application to extend the term of the Patent based on the CIPRAMIL ARTG registration. The extension of time sought was nearly 10 years (26 July 1999 to 12 June 2009). Alphapharm, Aspen, Sandoz and Apotex opposed the extension of time application.
  • In mid-June 2009, Alphapharm, Aspen, Sandoz and Apotex launched generic pharmaceutical products containing escitalopram.
More detail on the decisions below

On 1 June 2011, the Commissioner granted the extension of time application. The Commissioner (by her delegate), after considering various authorities and principles of statutory construction, found as follows (at [91]):
Regulation 22.11(4)(b) does not exclude section 70 applications from the provisions of section 223 provided these are filed within the term of the patent as required by section 71(2). In the current case, the section 70 application was filed one day before the original term of the patent had expired and therefore section 223 is generally available as a remedy to extend the time set out in section 71(2)(c) provided the requirements of section 223 are fulfilled.

On 4 December 2012, the Administrative Appeals Tribunal affirmed the Commissioner's decision, finding at [43] that "the correct approach is that advanced by Lundbeck because it accords with the plain language of the Regulation. The Regulation in its terms operates on only one of the two time limits referred to in section 71(2)."

On 18 November 2013, the Full Federal Court dismissed an appeal from the decision of the AAT, finding at [59] that 'the Tribunal was correct to conclude that power existed under s 223(2) to extend the six-month time limit in relation to the applicable date under s 71(2)(a) to (c).' This finding was based on the various reasons including the following (see [49] to [58]).
  • Alphapharm's reasoning effectively ignored the words 'during the term of a standard patent' in reg 22.11(4)(b).
  • A s70(1) application is governed by two time limits: the application must be made “during the term of the patent” and within six months of the applicable date in s 71(2)(a) to (c).
  • There is nothing in s 223(2) of the Act that would deny the Commissioner the power to extend either or both time limits, other than the meaning to be given to 'relevant act' in s 223(11). Properly understood, reg 22.11(4)(b) distinguishes between separate actions and prescribes one, not the other. The result is that the action of filing the application under s 70(1) during the term of the patent is prescribed and cannot, therefore, be a relevant act to which s 223(2) refers. On the other hand, the action of filing the application within six months of the applicable date is not prescribed and is taken to be a relevant act to which s 223(2) can respond.
The High Court was obviously not persuaded. What next? According to the High Court website, the parties are required to file submissions in May and June respectively. Based on the High Court sitting dates, the earliest the matter could be heard is August 2014.

1 Note, it was this "may" that formed the basis of Alphapharm's ground (2).

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