[The IPKat] Otsuka seeks to appeal decision to deny PTEs for formulation patents in Australia
Claire Gregg
Otsuka seeks to appeal decision to deny PTEs for formulation patents in Australia
Dr Claire Gregg Monday, March 02, 2026 - Australia, Claire Gregg, formulation patents, OzKat, patent term extension
The Full Federal Court of Australia's recent decision to deny eligibility for patent term extension (PTE) of formulation patents in Australia sent shockwaves through the local pharmaceutical sector. Whether in support of the decision in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161 or not, it would be difficult to find someone with skin in the game who wasn't taken aback by the Full Court's disruption of the status quo, which had been in effect for nearly 30 years since the current PTE regime came into force.
The High Court has now been asked to grant Special Leave to Otsuka to appeal the Full Court's findings, including in relation to the eligibility of formulation patents for PTE and industry bodies are taking notice (and weighing in).
Background
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PTE Kat |
The claims at issue relate to formulations of the product ABILIFY MAINTENA (aripiprazole). Claim 1 is in the following terms:
A controlled release sterile aripiprazole injectable formulation which upon injection releases aripiprazole over a period of at least one week, which comprises:
(a) aripiprazole having a mean particle size of about 1 to 10 microns,
(b) a vehicle therefor, and
(c) water for injection.
As this OzKat previously reported (IPKat), the Full Court found that formulations are not "pharmaceutical substances per se” (the Formulation Issue) and, consequently, that formulation patents are ineligible for PTE. The Full Court also addressed other issues, including that the product ABILIFY MAINTENA does not contain the claimed controlled release injectable formulation because it is a kit containing claim elements (a) and (b) in one vial and (c) in another (the Product Issue).
Otsuka's Special Leave application
Otsuka has sought Special Leave on the basis that the Full Court erred in its finding on the Formulation Issue, including because it is:
1. inconsistent with the ordinary meaning of the words used in the definition of "pharmaceutical substance" in the Patents Act;
2. inconsistent with the objects of the legislation;
3. based on a flawed approach to statutory construction;
4. out of step with existing case law; and
5. Parliament has had ample opportunity to expressly exclude formulations from the PTE provisions and has not done so.
Otsuka also sought Special Leave in relation to the Product Issue, but that issue is not addressed in this article.
In considering whether to grant Special Leave, the High Court has relatively little regard to the individual implications of the lower court's decision for the parties. Rather, it is concerned, among other things, with whether the decision is incorrect as a matter of law and whether it has broader implications of public importance or creates significant uncertainty. In this OzKat's view, that is precisely the case in relation to at least the Formulation Issue.
Broader implications
The Formulation Issue raises questions beyond the eligibility of formulation patents for PTE. In reaching its conclusion, the Full Court found that only patents claiming an active pharmaceutical ingredient (API), or a combination of APIs, can form the basis for a PTE, which has implications extending far beyond formulation patents.
For example, claims directed to salts, polymorphs and prodrugs, which are not APIs per se because they are converted into the relevant API after administration, may be at risk in light of the Full Court's decision. Further, there are APIs that may be the product of primary research and development but cannot be claimed in isolation, either because they were previously known in the art for a completely different purpose, or because they are not patent-eligible subject matter.
It is on these bases that two industry bodies have sought to be heard as amicus curiae in the event the appeal is allowed – the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) and Medicines Australia – with a view to clarifying the state of the law for their respective stakeholders.
What next?
Given the broader implications, which were not addressed (or apparently contemplated) by the Full Court in making its judgment in relation to formulation patents, it is arguable that the legislative intentions underlying the current PTE regime are not met by the decision. Those intentions include compensating for regulatory delays that "erode the effective patent lives of [pharmaceutical] products by periods of up to several years" and to "foster[] primary research and development in inventive substances".
It is currently unclear when the High Court will consider the Special Leave application, although it is expected to occur in the March High Court sitting. With fewer than 10% of Special Leave applications granted, Otsuka's prospects are slim, but not out of the question given the breadth of the implications and the uncertainty created by the Formulation Issue.
Further updates will follow as the matter progresses.
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