In Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161[1], the Full Federal Court has confirmed that Australian patent term extensions (PTE) apply only to patents claiming an active pharmaceutical ingredient (API) per se. Formulation claims no longer qualify. This overturns earlier authorities and reshapes exclusivity strategies for originators.
Background: Australian Patent Term Extension Framework
Australian Patent No. 2004285448, owned by Otsuka Pharmaceutical Co., Ltd., claims various controlled-release injectable formulations of aripiprazole, including a freeze-dried form (to be reconstituted before injection) and a ready-to-use liquid formulation. The patent does not include a claim to aripiprazole as a substance per se.
Under Australian patent law, a patent may be extended by up to 5 years if it claims a pharmaceutical substance per se, and if that substance is included in goods first registered on the Australian Register of Therapeutic Goods (ARTG). Otsuka had earlier obtained a PTE on the basis that the controlled release aripiprazole formulation was itself a pharmaceutical substance per se for the purposes of the Act.
Sun Pharma ANZ Pty Ltd, challenged the validity of the PTE arguing that the patent did not claim a pharmaceutical substance per se, but rather a formulation, which should not count as a substance per se.
What Counts as a Pharmaceutical Substance per se?
After examining the statutory text, the legislative history and earlier authorities, the Full Court concluded that a pharmaceutical substance is the active ingredient that exerts the therapeutic or prophylactic effect. It is not a formulation, excipient mixture, delivery system or dosage form. The Court reasoned that section 70(2) uses the words per se to make clear that the claim must define the pharmaceutical substance itself, not merely a composition that includes it.
In applying the Full Court’s own earlier decisions in Boehringer[2], Alphapharm[3] and AbbVie[4], the Full Court emphasised that administration features, delivery profiles and release characteristics cannot be included in a claim that seeks to define a pharmaceutical substance per se. These features describe how a substance is delivered or used, rather than the substance itself.
Because Otsuka’s claims included features that defined the formulation and its release characteristics, rather than aripiprazole itself, the Full Court found that the claims could not be treated as directed to a pharmaceutical substance per se.
Earlier Authorities Overturned
This Full Court ruling on PTE eligibility departs from three earlier decisions that had allowed PTEs based on formulation claims: Pharmacia[5], Spirit [6]and Cipla[7]. The Full Court held these earlier decisions were unpersuasive, proceeding on an incorrect understanding of “pharmaceutical substance per se” and paid insufficient attention to the words per se.
The Full Court concluded that formulations or compositions do not fall within the definition of pharmaceutical substance per se and therefore will not support PTE in Australia. Only claims to the active ingredient per se are eligible.
Implications for Pharmaceutical Patent Strategy in Australia
While it remains to be seen how the decision will be applied, it is a significant departure from the current practice. It will likely have immediate consequences for pharmaceutical companies operating in Australia and warrants prompt portfolio review. Given the decision’s immediate effect, originators should act quickly to review portfolios and adjust filing strategies.
Relevance for Biologics and Other Emerging Therapeutics
Although the case concerned small molecule formulations, the Court’s reasoning is not limited to any particular therapeutic modality. The Act does not distinguish between small molecules and biologic or nucleic acid-based therapies, and the definition of pharmaceutical substance applies uniformly. On this basis, a biologic, antibody, RNA or peptide would qualify for PTE only if claimed as the substance per se, while delivery systems such as lipid nanoparticles or controlled release matrices are unlikely to meet the definition.
Portfolio review is essential
We anticipate that the decision is likely to lead to generic companies seeking to revoke extended patents preventing generic entry or otherwise launch at risk.
Existing PTEs founded on formulation claims may now be vulnerable to challenge, either by the Commissioner on its own accord or by third parties through the courts or the Patent Office.
Patentees should assess their Australian portfolios to identify patents where the only product claims are directed to formulations or dosage forms, where the API per se is not claimed, or where PTEs have already been granted on this basis. Alternatively, companies should also consider a review of any patents impacting their freedom to operate.
Looking ahead, applicants should ensure that a claim to the active ingredient per se is included wherever possible and supported by appropriate disclosure.
Final remarks
This decision represents a significant narrowing of PTE eligibility in Australia. Only claims that define active ingredients per se can support an extension, and formulation-based PTEs are no longer available. Originators with substantial Australian market exclusivity at stake should consider targeted portfolio audits, remedial divisional filings and alternative exclusivity strategies.
If your portfolio includes formulation-based PTEs or you’re planning future filings, now is the time to review strategy. Contact our team for tailored advice on Australian patent term extension compliance and pharmaceutical patent strategy.
[1] Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161
[2] Boehringer Ingelheim International GmbH v Commissioner of Patents [2001] FCA 647
[3] H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 177 FCR 151
[4] Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129; 253 FCR 436
[5] Pharmacia Italia SpA v Mayne Pharma Pty Ltd [2006] FCA 305; 69 IPR 1
[6] Spirit Pharmaceuticals Pty Ltd v Mundipharma Pty Ltd [2013] FCA 658; 216 FCR 344
[7] Cipla Australia Pty Ltd v Novo Nordisk A/S [2024] FCA 1414; 185 IPR 299
