IP Australia doubles down on patent term extension decision
In our previous article we examined the controversial ramifications arising from the Full Court of the Australian Federal Court’s decision in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161 (The Otsuka decision).
That decision prompted IP Australia to temporarily pause the processing of patent term extension (PTE) applications while they considered the details of the Full Court’s decision.
New Statement from IP Australia
IP Australia has now issued a statement regarding the Otsuka decision clarifying it’s position and outlining changes to examination practice.
According to IP Australia’s statement:
- PTE applications not affected by the Otsuka decision are now being processed.
- Applications based on formulation claims remain suspended pending the outcome of the Special Leave application to the High Court.
This means that applications relying on formulation-based claims will continue to face uncertainty until the High Court determines whether it will grant leave to appeal.
Updates to the Patent Manual of Practice and Procedure
Importantly, the statement indicates that IP Australia’s Patent Manual of Practice and Procedure (PMPP) has been updated to reflect changes in PTE examination practice. These revisions include:
“A pharmaceutical substance was defined as the pharmaceutical active ingredient in Otsuka Pharmaceutical Co Ltd v Sun Pharma ANZ Pty Ltd [2025] FCAFC 161. Consequently, a mixture or compound of substances would be a mixture or compound of pharmaceutical active ingredients. The term does not include formulations or compositions of pharmaceutical active ingredients with excipients and/or carrier.”
Further:
“The Full Court held that claims to formulations, dosage units, compositions and the like were not directed to pharmaceutical substances. Consequently, only claims directed to the actives per se, such as compounds per se or peptides per se, relate to pharmaceutical substances.”
Practical Implications for Pharmaceutical Patents
IP Australia has reaffirmed the strict approach of the Full Court, which means, at least for the time being, claims directed to pharmaceutical compositions that include therapeutically inactive components, such as excipients, will not render a patent eligible for a PTE.
This is an important issue that needs to be a priority consideration for pharmaceutical applicant’s and patent attorneys during the patent drafting and prosecution process.
What Happens Next?
The application for special leave to appeal the Otsuka decision to the High Court is likely to be determined during the High Court’s March 2026 sitting.
We will continue to monitor developments closely and provide updates as the situation evolves.
For questions about extensions of term, please contact the authors of this article.