Pharmaceutical Patent Term Extension in Australia – Special Leave Granted By the High Court

Australia has provided a mechanism for pharmaceutical patent term extension or many years. Whilst there has been some litigation in this area it has generally been thought that the law was well settled and relatively non-controversial.

This view changed late last year when the Full federal court in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161[1], confirmed on appeal that Australian patent term extensions only applied to those patents that claimed an active pharmaceutical ingredient. Prior to this decision pharmaceutical patent term extensions had been granted for new formulations of known pharmaceuticals and a large number of patent term extensions had been granted for patents of this type. The patent in question in this litigation related to a controlled release aripiprazole formulation which the patentee claimed was a pharmaceutical substance per se for the purposes of the extension provisions.

In determining what was meant by the term “pharmaceutical substance per se” the court reviewed the legislative history along with earlier court authorities and came to the conclusion that a pharmaceutical substance is the active ingredient that exerts the therapeutic or prophylactic effect.  Under this interpretation of the term patents that relate to such things as improved formulations and dosage forms will not qualify for patent term extension. This is regrettable as in many instances the improved formulation demonstrates an improved therapeutic profile (even if the ultimate active is the same).

On 12 March 2026 the High Court (the final court of appeal in Australia) granted Otsuka special leave to appeal the decision of the full federal court. Special leave applications to the High court are only granted in a small number of patent cases per year in Australia indicating the significant interest this case has generated within the profession and the judiciary.

Whilst a hearing date has not as yet been set for the matter the patent profession and pharmaceutical companies will await the decision with interest. If the decision is overturned, it is hoped that the High court will provide a definitive definition of the term “pharmaceutical substance per se” which will provide applicants and practitioners with guidance moving forward. If the decision is upheld there is the possibility that there will be a wave of litigation as a significant number of patent extensions will be found to have been invalidly granted.

Until the situation has been clarified patentees of formulation patents are still filing extension requests in order to ensure the request is filed within the statutory time limits. The Australian patent office has indicated that these requests will be placed in abeyance until the situation is clarified.