[The IPKat] Formulation patents no longer eligible for PTE in Australia
Claire Gregg
Formulation patents no longer eligible for PTE in Australia
Dr Claire Gregg Saturday, December 06, 2025 - Australia, Claire Gregg, formulation patents, OzKat, patent term extension, PTE
The provision of patent term extensions (PTEs) and supplementary protection certificates (SPCs) under law are designed to account for significant delays encountered in obtaining regulatory approval for pharmaceutical products. Australia has previously enjoyed a relatively broad approach to PTEs. However, a recent decision by the Full Federal Court in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161 casts both the past and future of PTEs for formulation patents into jeopardy in Australia.
Australia's PTE provisions
A PTE of up to five years may be granted in Australia for pharmaceutical patents that in substance claim and disclose a relevant pharmaceutical substance, being either a pharmaceutical substance per se or a pharmaceutical substance when produced by a process that involves the use of recombinant DNA technology. The Patents Act 1990 (Cth) (Act) defines a "pharmaceutical substance" as:
… a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves:
a. a chemical interaction, or physico‑chemical interaction, with a human physiological system; or
b. action on an infectious agent, or on a toxin or other poison, in a human body;
but does not include a substance that is solely for use in in vitro diagnosis or in vitro testing. [Emphasis added]
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PTEs for formulation patents
A single judge of the Federal Court recently concluded that a "mixture or compound of substances" includes formulations of active ingredients and excipients, in Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414. The Australian Patent Office (APO) has also been granting PTEs based on formulation claims since the inception of the current regime when the Act came into force in 1990.
In Cipla, the Court observed that the intention of Parliament in introducing the PTE provisions in 1990 was to adopt a meaning of “pharmaceutical substance” largely synonymous with the meaning of “therapeutic substance” found in the Customs (Prohibited Imports) Regulations 1956 (Cth) (Customs Regulations). The Customs Regulations define a “therapeutic substance” as a “substance, including a mixture or compound of substances, that has a therapeutic use” and, importantly, expressly includes formulations (see Regulation 2(2)). Note the coincidence of language with the definition of "pharmaceutical substance" in the Act.
Case history
The patent at issue in Otsuka relates to controlled release aripiprazole formulations, marketed as ABILIFY MAINTENA. The relevant claims are directed to a freeze-dried controlled release aripiprazole formulation comprising, inter alia, aripiprazole having a mean particle size of about 1 to 10 microns and a vehicle therefor. The ABILIFY MAINTENA products are kits comprising aripiprazole monohydrate powder, and a vial comprising a solvent for prolonged release suspension for injection.
In the first instance decision as appealed in Otsuka (see Sun Pharma ANZ Pty Ltd v Otsuka Pharmaceutical Co Ltd [2025] FCA 44) the primary judge considered whether a claim that includes a process limitation or limitation by result is eligible for PTE. In deciding in the affirmative, the Court also considered whether, properly construed, the definition of “pharmaceutical substance” in the Act is confined to active ingredients, or whether it includes formulations with excipients. The Court agreed with the findings in Cipla, but noted that Sun Pharma elected to withdraw its submissions on this particular question and reserve its position to contest the findings in Cipla on appeal.
Appeal decision
In finding that formulation patents are not eligible for PTE, the Full Court in Otsuka noted that, when enacting the PTE provisions, Parliament set out certain exceptions to equating a "pharmaceutical substance" as defined in the Act with a "therapeutic substance" as defined in the Customs Regulations. In particular, the Full Court noted the intention that a "pharmaceutical substance" be limited to:
… only substances whose use involves a chemical or physico-chemical interaction with a human physiological system, or involves action on an infectious agent, or on a toxin or other poison, within a human body, are included (devices such as surgical ligatures are not included).
However, neither this exclusion nor any of the extraneous materials relied upon by the Full Court to support its conclusion expressly exclude formulations from PTE.
Rather, in adopting the wording of the definition of a "therapeutic substance" from the Customs Regulations in defining a "pharmaceutical substance" in the Act, Parliament chose to retain the words "including a mixture or compound of substances". However, the Full Court does not appear to have given any consideration to the meaning and weight of these words (which, when used in the Customs Regulations, include a formulation). Having effectively read these words out of the definition of a "pharmaceutical substance", this OzKat would argue that the remainder of the Full Court's judgment is flawed and relies on a reading of the referenced extraneous materials that does not fully support the conclusions reached (see, e.g., Otsuka at [147], [194], [204], [272]).
Serious ramifications for PTEs in Australia
The potential ramifications of this decision are enormous. Not only does it indicate formulation patents are no longer eligible for PTE (disrupting 35 years of status quo), but that PTEs previously granted for formulations are liable to be revoked. While it remains open for Otsuka to seek Special Leave to appeal the decision to the High Court, Australia's highest appellate court, in the meantime the APO will adhere to the Otsuka decision and any formulation PTEs will very likely be refused (unless the APO decides to hold applications for formulation PTEs in abeyance pending the outcome of any appeal).
While some commentators have argued the reasoning in Otsuka is "sound" or "water tight", this OzKat begs to differ. By failing to give weight to the definition of a "pharmaceutical substance" as "including a mixture or compound of substances", it seems there is scope for this decision to be revisited, hopefully sooner rather than later. And until that time, all hope is not lost - extensions of time may be available to request PTE for formulation patents after the relevant deadline in the event the decision is overturned.
Stay tuned for updates in relation to a potential appeal!
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