Pharmaceutical Patent Term Extensions in Australia

Pharmaceutical Patent Term Extensions in Australia

A standard patent lasts twenty years from the date of the patent (Patents Act 1990 (Cth) s 67). For most inventions, that term begins to deliver value soon after grant. For a pharmaceutical, it does not, because a medicine cannot be supplied in Australia until it has been entered on the Australian Register of Therapeutic Goods, and the clinical trials and regulatory assessment required for that can consume a decade or more of the patent's life. The Act responds by allowing the term of certain pharmaceutical patents to be extended by up to five years.

This guide explains which patents qualify, how an extension is obtained and calculated, what it protects, and why the regime is presently before the High Court.

Why extensions exist

The extension regime, found in Part 3 of Chapter 6 of the Act (ss 70–79A), was introduced in 1998 to compensate patent owners for the effective patent life lost while a new medicine moves through development and regulatory approval. It is not, however, a simple reward for patent owners. As the Full Federal Court has observed, the regime balances a range of competing interests, including those of the generic manufacturers who wait to enter the market and the public that funds medicines through the Pharmaceutical Benefits Scheme. That balance explains why the eligibility rules are strict, and why the courts have consistently read them that way.

Which patents qualify

The eligibility requirements

An extension is available only where the following requirements are met (s 70):

• one or more pharmaceutical substances per se must in substance be disclosed in the specification and fall within the scope of the claims, or the same must be true of a pharmaceutical substance when produced by a process involving recombinant DNA technology

• goods containing or consisting of the substance must be included on the Register

• at least five years must have passed between the date of the patent and the first regulatory approval date, being the first inclusion of such goods on the Register

• the term must not previously have been extended, so that each patent may be extended only once

  
  

A pharmaceutical substance is defined, in substance, as a substance for therapeutic use whose application involves a chemical or physicochemical interaction with a human physiological system, or action on an infectious agent or toxin in the body (sch 1).

What does not qualify

The requirement that the substance be claimed per se carries real weight, and a number of common claim types fall outside it:

• Methods of treatment: The regime is directed to new substances, not new ways of using them, so claims to methods of treatment do not support an extension (Prejay Holdings Ltd v Commissioner of Patents [2003] FCAFC 77).

  
  

• Swiss-type and use claims: Claims to the use of a substance in manufacturing a medicament for a particular purpose do not qualify, as the Full Court held in respect of adalimumab (Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129).

  
  

• Process claims: Claims to a manufacturing process do not qualify, save through the recombinant DNA limb discussed below.

  
  

• Formulations: Under the Full Court's decision in Otsuka, discussed later in this guide, claims to a formulation of an active ingredient do not qualify. That position is currently before the High Court.

  
  

Biologics and the recombinant DNA limb

The second limb of s 70(2) is of particular importance for biologic medicines. A monoclonal antibody or fusion protein is commonly claimed by reference to the recombinant process by which it is produced, and the Act expressly permits such a patent to be extended where the substance, so produced, is claimed. The rules on calculation and on rights during the extended term apply to these patents in the same way as to conventional small-molecule medicines, which makes extensions a central consideration for biosimilar manufacturers modelling their entry dates.

Applying for an extension

The application must be made during the term of the patent and within six months after the later of the grant of the patent and the first inclusion on the Register of goods containing the substance (s 71(2)). The window is short and easily missed, particularly where the relevant inclusion is not the one the patent owner expects, a point considered below.

A missed deadline is not necessarily fatal. In the escitalopram litigation, the High Court held that the Commissioner may grant an extension of time to apply for an extension of term, provided the application is made before the patent expires (Alphapharm Pty Ltd v H Lundbeck A/S (2014) 254 CLR 247). Once an application is advertised, any person may oppose it, but only on the ground that the requirements of ss 70 and 71 are not satisfied (s 75).

Calculating the extension

The formula

The length of an extension is the period from the date of the patent to the earliest first regulatory approval date, reduced by five years, and capped at five years (s 77). Three examples illustrate how the formula operates:

• where first inclusion on the Register occurs nine years after the date of the patent, the extension is four years, and the patent expires twenty-four years from its date

• where first inclusion occurs twelve years after the date of the patent, the calculation yields seven years, but the cap reduces the extension to five, giving the maximum term of twenty-five years

• where first inclusion occurs four and a half years after the date of the patent, no extension is available at all

  
  

A useful rule of thumb follows. Unless the cap applies, an extended patent expires fifteen years after the medicine's first inclusion on the Register.

What an extension protects

An extended patent does not carry the full scope of the original monopoly into its extended term. During the extension, the patent owner's rights are not infringed by exploiting the claimed pharmaceutical substance for a purpose other than therapeutic use, or by exploiting any form of the invention other than that substance (s 78). In practical terms, the extension protects the claimed substance for therapeutic use and little else, so method, process and other claims cannot be enforced once the original term has passed.

The extended term also enlarges the space available to competitors. The springboarding exemption, which permits a manufacturer to do what is required to obtain regulatory approval without infringing, ordinarily extends only to approval in Australia or overseas (s 119A(1)). During an extended term, it further permits the export of the substance for the purpose of obtaining regulatory approval abroad (s 119A(2)). Neither form of the exemption permits stockpiling product for sale after expiry.

When an extension is granted late

A generic manufacturer cannot safely assume that a patent has expired merely because its original term has run. If the patent expires while an application for an extension is still pending, and the extension is afterwards granted, the patent owner may sue for acts done after expiry as though the extension had been in force when those acts occurred (s 79).

The escitalopram litigation shows the consequence. The extension in that case was ultimately granted years after the patent's original expiry, and generic manufacturers that had launched in the meantime were exposed to damages for the retrospectively extended period. The High Court confirmed that liability, while holding that only the patent owner, and not its exclusive licensee, may bring proceedings in respect of that period (H Lundbeck A/S v Sandoz Pty Ltd [2022] HCA 4).

Formulation patents and the High Court

The most significant question in this area is now before the High Court. For many years, extensions were granted for patents claiming a formulation of an active ingredient, such as a long-acting or controlled-release form, and the Federal Court had accepted that a formulation could be a pharmaceutical substance. In Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161, the Full Court disagreed. It held that a pharmaceutical substance is confined to the active ingredient itself, so that Otsuka's patent over a long-acting injectable formulation of aripiprazole could not support the extension it had been granted.

The present position is as follows:

• the High Court granted special leave to appeal in March 2026, and heard the appeal on 16 and 17 June 2026, with the Generic and Biosimilar Medicines Association granted leave to be heard as amicus curiae

• judgment is reserved, and until it is delivered the Full Court's decision is binding, so formulation patents cannot be extended

• extensions already granted for formulation patents remain on the Register, but are open to challenge

• IP Australia has resumed processing extension applications it considers unaffected, while continuing to hold those that do or may relate to formulations, and has indicated it will not refuse those applications for missed response deadlines

The outcome will affect originators and generic manufacturers alike, and for many products it will move the date on which competition can begin.

Practical strategy

For patent owners

• Claim the active ingredient, and where relevant the recombinant product, per se, preferably in a patent or divisional separate from formulation claims.

• Monitor the Register for third-party inclusions of products falling within your claims, since a competitor's registration may start your six-month window and fix your term.

• File extension applications on time even where the formulation question is unresolved, since the deadlines continue to run while the High Court deliberates.

  
  

For generic and biosimilar manufacturers

• Audit every extension that stands between your product and the market for formulation-only claims, for a calculation based on the wrong approval, and for an application made outside the statutory window.

• Choose the appropriate forum for any challenge, whether opposition before grant, a request to the Commissioner to rectify the Register, or rectification in court.

• Do not launch at the original expiry date while an extension application remains pending, given the retrospective liability that s 79 creates.

• During an extended term, plan within the limits of s 78 and the export exemption in s 119A(2).

  
  

Where to from here

An extension of term can add up to five years of exclusivity to a pharmaceutical patent, and for a successful medicine those years are often the most valuable of the patent's life. Whether an extension is available, how long it runs, and whether it survives challenge turn on rules that are strictly applied and, in the case of formulations, presently unsettled. Patent owners should treat eligibility and timing as matters of claim strategy from the outset, and generic and biosimilar manufacturers should treat every extension on the Register as a calculation to be checked rather than a date to be accepted. The High Court's decision in Otsuka will reshape this area, and this guide will be updated when it is delivered.

Seeking further advice

For more on the topics raised in this guide, please review our further guides available on the Biopharmalex wesbite.

If you need specific advice, please contact Wayne Condon at Biopharmalex. Wayne is one of Australia's most experienced life sciences and intellectual property lawyers, and has acted in many of the leading pharmaceutical patent cases of the past three decades.

This guide states the law at October 2026 and is general information only, not legal advice.