The decision in Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643 is notable for several reasons.

The ever-pragmatic Justice Beach presided over an appeal of a patent term extension (PTE) decision by the Commissioner of Patents. The first point to note is that the heart of the case turns on statutory construction of the patent term extension provisions in the Patents Act 1990 and whether the construction advanced by the Commissioner is correct. The second noteworthy point is the language used by Justice Beach in his conclusion. This article will not delve into the detailed statutory construction of the relevant provision.

The Commissioner refused to grant a PTE of Australian Patent No. 2011203119 (the Patent) titled “Human monoclonal antibodies to programmed death 1 (PD-1) and methods for treating cancer using anti-PD-1 antibodies alone or in combination with other immunotherapeutics.” The non-extended expiry date of the Patent is 2 May 2026.

Two PTE applications were made by the Applicants. The first PTE was sought based on a pharmaceutical product marketed under the name OPDIVO on the basis that the active pharmaceutic ingredient (API) is one or more pharmaceutical substances, is disclosed in the complete specification of the Patent and in substance falls within claim/s of the Patent specification. The API is a fully human anti-PD-1 monoclonal antibody of the IgG4 isotype and fulfils the requirement of falling within the scope of at least claim 3 of the Patent.

In a development that seems confusing without context, the Applicants applied for a second PTE based on a pharmaceutical product termed KEYTRUDA marketed by a competitor, Merck Sharp & Dohme (Australia) Pty Ltd, under the name KEYTRUDA. Like OPDIVO, the API of KEYTRUDA is a humanised anti-PD-1 monoclonal antibody of the IgG4 isotype and falls within the scope of the Patent. This application sought to trigger an alternative basis for an extension if the OPDIVO argument failed.

The PTE based on OPDIVO was the Applicant’s preferred application and had precedence at trial. The Commissioner refused the OPVIDO-based PTE on the grounds that the application had not been made on the basis of the good on the Australian Register of Therapeutic Goods (ARTG) with the first regulatory approval date. According to the Commissioner, the relevant good to fulfil this criterion was KEYTRUDA. The Commissioner held that the good with the earliest regulatory approval date that contained or consisted of a pharmaceutical substance that fell within the scope of claim 3 of the Patent was KEYTRUDA. As a result, it was found that the statutory requirements were not satisfied for the OPDIVO application.

To reiterate, it was the Commissioner’s view that the PTE for a product falling within the scope of the Patent should have been based on the ARTG-listing of a product marketed by the Applicant’s competitor and not on the basis of the Patentee’s product. The statutory construction came down to whether the first relevant inclusion of goods in the ARTG containing or consisting of the substance as required by the statutory regime was the first inclusion of OPDIVO or KEYTRUDA.

The Applicants’ contention is that the term of the extension is calculated by reference to the earliest first regulatory approval date of any pharmaceutical substance that is disclosed and claimed in the Patent, being the substance that the Patentee nominates in its application for an extension of term.

In contrast, the Commissioner argued that the statutory regime compelled that a PTE application must be filed within 6 months of the first inclusion in the ARTG of a good containing or consisting of any pharmaceutical substance falling with the claims of the patent, regardless of whether the good was that of the patentee, and thus is inclusive of a situation where the goods may be that of an unrelated third party such as a direct competitor.

To any practical person reading the immediate paragraph, such a construction seems like a nonsense and difficult to reconcile upon first reading. At paragraph 28, Justice Beach had this to say:

I should say now that apart from seeking to sell me a literal form of textualism, the Commissioner’s statutory construction has little to commend it. Indeed, the following questions would arise on the Commissioner’s construction. Is it suggested that a patentee would then need to strictly monitor the regulatory approvals for third party products? And how else could it ensure that its own or future extension application is not contaminated or stymied by the registration on the ARTG of a third party product earlier in time? And how could it tell if the third party product fell within the scope of the claim(s) of the patent or confidently work out whether it fell outside? That is not a simplistic desktop analysis based upon a superficial read of an ARTG public summary. And if the third party product fell within, what is the patentee to do? Is it compelled to file an extension based on the third party product? Indeed, should the patentee seek to amend the claims of the patent to define away the third party product thereby preserving its future right to extend based upon its own product?

Justice Beach held that the statutory language does not compel such a construction and set aside the original decision by the Commissioner with his usual flare at paragraph 182:

The construction applied by the delegate and persisted with by the Commissioner is not the preferable one. If it was dictated by the ordinary meaning conveyed by the text, and I do not say that it was, it leads to manifest absurdity or unreasonableness. Contrastingly, the applicants’ approach has the virtue of avoiding such vices.

This begs the question of how the Commissioner arrived at their construction that was pursued with such vigour on appeal. The original decision relied upon Pfizer Corporation v Commissioner of Patents (No 2) (2006) 69 IPR 525, which interpreted the meaning of “first inclusion in the ARTG” to mean “the entry, first time, in a part of the ARTG. In the present case that is the first entry as listed goods.” Since there is nothing in Pfizer to suggest that her honour was talking about anything other than Pfizer’s goods at all times, Justice Beach did not feel compelled to follow the approach taken in Pfizer.

The decision of the Commissioner was set aside and if the matter is not appealed, the patent term extension of the Patent based on the OPDIVO product should be granted to 11 January 2031. Consequently, the PTE application based on Merck’s KEYVURDA product fell away.