The Full Federal Court of Australia has determined that pharmaceutical formulations are not eligible for patent term extension in Australia. This decision overturns a longstanding position and has significant implications for the pharmaceutical sector in Australia — including originators, generics and biosimilars.
Patent term extensions
In Australia, the term of a standard patent is up to 20 years.
However, because pharmaceutical products require extensive assessment for quality, safety and efficacy, the effective lifespan of pharmaceutical patents that protect those products is often much shorter.
To offset this, pharmaceutical patentees may apply for a term extension of up to 5 years under certain circumstances.
To be eligible, the patent must disclose and claim one or more ‘pharmaceutical substances per se’.[1] A ‘pharmaceutical substance’ is a substance which (among other things) is ‘for therapeutic use’.
The Australian Patent Office has for many years regarded pharmaceutical formulations (eg, combinations of active and inactive ingredients) as ‘pharmaceutical substances’ eligible for patent term extension. Australian courts have affirmed that approach, including recently in Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414 (which we reported on here).
Pharmaceutical formulations no longer eligible
The Full Federal Court has now determined that pharmaceutical formulations are not eligible for extension.
In Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161, the Full Court concluded that the term ‘pharmaceutical substance’ is limited to ‘active substances’ and does not include formulations. That conclusion followed a detailed analysis of the current and historical legislation, extrinsic materials and authorities.
As a result, the Full Court found the patent term extension the subject of the litigation — which related to controlled release formulations of aripiprazole — invalid.
Key takeaways
The Full Court’s decision has significant implications for the pharmaceutical sector in Australia.
We will report on any application for special leave to appeal the decision to the High Court of Australia, which must be filed by early in the new year.
In the meantime, generics and biosimilars should consider whether the Full Court’s decision creates new opportunities to bring forward product launches in Australia — whether by challenging existing patent term extensions or by launching ‘at risk’.
Conversely, originators should urgently review their patent portfolios to identify potential vulnerabilities and consider how best to defend their market position in the face of likely challenges.
[1] Alternatively, the patent may disclose and claim one or more pharmaceutical substances produced by a process involving recombinant DNA technology.