This article discusses the appeal decision in Novartis AG v Pharmacor Pty Limited [2025] FCAFC 33, where the Full Federal Court of Australia dismissed Novartis’ appeal against a decision by a single Federal Court judge that invalidated Novartis’ patent term extension (PTE) for Patent No 2003206738 (AU 738).
This is an important decision as it:
- provides an example of when courts adopt a narrower claim construction than the patent office, and a different construction to that adopted in other jurisdictions
- demonstrates the importance of fully describing all intended embodiments in a patent specification at the time of filing
- demonstrates the importance of expert evidence in court proceedings
- highlights the complexity of PTE practice in Australia, where here the difference in claim construction resulted in an allowed PTE being cancelled.
The key issue in this case was the construction of a relatively typical “pharmaceutical combination composition” claim. Does a complex of a mixed salt form fall within the scope of a claim directed to a composition comprising two salt forms? Specifically, does a complex containing anionic forms of both valsartan and sacubitril/at, and sodium cations, fall within the scope of a claim directed to a composition comprising (i) valsartan sodium salt and (ii) sacubitril/at sodium salt (and a pharmaceutically acceptable carrier)?
Both at first instance and in this appeal, the answer to both of these questions was no – the complex of the mixed salt form was determined not to fall within the scope of the claim, leading to the invalidation of the PTE based on the drug product (and also effectively a decision of non-infringement of the alleged infringing Pharmacor generic product). This case highlights that claim construction in Australia must be considered in detail on a case-by-case basis, and following from this the need for careful consideration of PTE strategy.
AU 738
AU 738 was granted on 5 April 2007 to Novartis AG (Novartis).
Relevant for this article, claim 1 of AU 738 reads as follows:
A pharmaceutical composition comprising:
(i) the AT 1-antagonist valsartan or a pharmaceutically acceptable salt thereof;
and
(ii) the NEP inhibitor [sacubitril] or [sacubitrilat] or pharmaceutically acceptable salts thereof; and a pharmaceutically acceptable carrier.
Novartis sought PTE of AU 738 on the basis of the inclusion of Entresto on the Australian Register of Therapeutic Goods (ARTG) on 20 January 2016. The PTE, granted in December 2016, extended the patent term from 16 January 2024 to 16 January 2028. Entresto is an oral tablet containing a crystalline complex of the anionic forms of sacubitril and valsartan, sodium cations, and water molecules in the ratio of 1:1:3:2.5 (the “TSVH complex”), plus excipients. In granting the PTE, the patent office adopted a construction of claim 1 of AU 738 that did encompass the TSVH complex of anionic sacubitril, anionic valsartan and sodium cations.
Background – appealed decision
This appeal is of the decision in Novartis AG v Pharmacor Pty Limited (No 3) [2024] FCA 1307, where the Federal Court invalidated Novartis’ PTE for AU 738 based on the registration of Entresto.
Novartis alleged that Pharmacor Pty Limited (Pharmacor) had threatened to infringe claim 1 of AU 738 based on its intended supply of a pharmaceutical product listed on the ARTG, referred to as Valtresto.
Valtresto contains an amorphous complex, termed SVTI, which contains anionic forms of both valsartan and sacubitril, and sodium cations in a 1:1:3 complex.
Hence both the TSVH present in Entresto, and the SVTI present in the alleged infringing Valtresto, are complexes of a mixed salt form containing both actives as anions and counter cations. And therefore, were treated similarly both by the primary judge and also on appeal (see below).
Pharmacor challenged the validity of the extension of term for AU 738, alleging that Entresto was not within the scope of the claims and was not disclosed in the complete specification.
The primary judge adopted a construction of claim 1 that required distinct and separate components for valsartan and sacubitril. Essentially deciding that TSVH (and by inference SVTI also) represented a single component so could not satisfy the construction requiring separate components for each active. As a result, the Court invalidated the PTE, determining that Entresto did not fall within the scope of the patent claims, as it consisted of TSVH, not a valsartan salt separate from a sacubitril salt. And it was this construction that was the subject of the appeal.
Summary of appeal decision and reasoning
The appeal was dismissed, with the Full Court agreeing with the primary judge’s construction of claim 1 that the composition requires the presence of valsartan (or a salt thereof) and sacubitril/at (or salts thereof) and a carrier as separate components.
Novartis argued that the correct construction of the claim should include any combination of valsartan and sacubitril, regardless of their form. However, the Court deferred to the first instance reasoning and maintained the claim construction, having the effect of cancelling the PTE.
The Appeal Court affirmed the construction of claim 1. The construction requires that claim 1 must include integers (i) and (ii), in addition to the pharmaceutically acceptable carrier. Integer (i) specifies that the composition must contain the AT1-antagonist valsartan or a pharmaceutically acceptable salt thereof (PAS), integer (ii) specifies the NEP inhibitor sacubitril or sacubitrilat or PAS, and a final integer is the presence of a pharmaceutical acceptable carrier. At first instance, expert evidence was provided to discuss the differences between separate salt forms of each active – valsartan and sacubitril/at – and the complex forms present in Entresto (and Valtresto). In this case, the factors that appeared to most influence the Court included:
- Claim 1 separating the reference to (i) valsartan or PAS and (ii) sacubitril/at or PAS in separate numbered clauses connected by the word “and”, suggesting these were separate integers.
- The absence of any discussion of mixed salt forms of the actives in the detailed description. The examples mainly describe separate formulations of actives, with limited examples of co-formulation of the 2 actives and then as distinct salt forms.
- The Court considered the discussion of timing of administering each active to a subject, which describes that the actives can be administered “together”, or that a “therapeutically effective amount of each of the (sic) component of the combination of the present invention may be administered simultaneously or sequentially and in any order”. However, the Court did not find these passages could be relied on to expand the construction of separate salt forms of each active.
- Expert evidence about the differences between individual salt forms of the actives and the mixed salt form TSVH (and SVTI).
Considering the above, the Court found that the most consistent construction was for the separate administration of the actives. The Court therefore concluded that the proper construction of claim 1 requires that integers (i) and (ii) must be satisfied by distinct components. Ultimately meaning that the complex TSVH (or SVTI) was not within the scope of the claim.
In light of the above, the Appeal Court maintained the PTE was invalid, determining that Entresto did not fall within the scope of the patent claims, as it consisted of TSVH, not valsartan and sacubitril as separate/distinct salts.
Novartis may seek special leave to appeal to the High Court of Australia, and we will continue to monitor developments closely.
Corresponding US case
In contrast, the validity of the Novartis’ US patent US 8,101,659 (US 659) covering Entresto was upheld by the United States Court of Appeals for the Federal Circuit, reversing a previous decision by a District Court.
Claim 1 of US 659 differs to the claim 1 of AU 738 and reads as follows:
A pharmaceutical composition comprising:
- the AT1-antagonist valsartan or a pharmaceutically acceptable salt thereof;
the NEP inhibitor [sacubitril] or [sacubitrilat] or a pharmaceutically acceptable salt thereof;
and
a pharmaceutically acceptable carrier; wherein said (i) AT 1-antagonist valsartan or pharmaceutically acceptable salt thereof and said (ii) NEP inhibitor [sacubitril] or [sacubitrilat] or pharmaceutically acceptable salt thereof, are administered in combination in about a 1:1 ratio.
Proceedings occurred during the 20-year patent term and the phrase in contention was the term ‘in combination’. The generic company MSN Pharmaceuticals argued that this phrase contemplated the administration of valsartan and sacubitril as “two separate components” and not a complex and that therefore the generic drugs were non-infringing. Novartis argued that this phrase was not limited, which was upheld by the District Court, stating that US 659 was “silent on whether sacubitril and valsartan must be separate”. This resulted in the scope afforded to Novartis in the US being broader than the scope determined in this appeal decision. Also interestingly, the US Court also found the representations that Novartis had made to the US patent office to obtain PTE to be persuasive in this claim construction.
Lessons for pharmaceutical patentees
The dismissal of the appeal offers several strategic takeaways for pharmaceutical patentees, particularly regarding claim construction, specification inclusions, litigation considerations, and alignment of PTE applications with claim scope.
Key lessons include:
Claim construction is determined on a case-by-case basis
This decision highlights how even seemingly straightforward claims can be construed in complex ways. However, Australian patent claim construction follows a determined set of rules. This decision shows that any Australian claim will be construed on a case-by-case basis, and the courts’ reliance on expert evidence and the wording of the specification is instructive. For patentees, this is a valuable reminder to always seek professional advice on infringement matters, and that there is a risk assuming that a claim will be construed to cover embodiments not foreshadowed in a patent specification.
Patent drafting
With the above in mind, to ensure that a claim will be construed to cover all intended embodiments, it is important for inventors/patent applicants to work closely with their attorneys and ensure that all embodiments intended to be covered are foreshadowed and the specification is drafted consistently with all embodiments in mind. If an important commercial embodiment was not contemplated when a specification was filed, patent applicants should consider if they are comfortable with the risk the embodiment is not covered, or whether it may be possible in Australia to pursue protection via a new application. This decision may be helpful to patent applicants seeking protection for forms of pharmaceutical products developed after filing the earliest application for a product.
Expert evidence
This decision shows that it can be critical to get the expert evidence right from the outset of legal proceedings in Australia. It is difficult to have an Australian Appeals Court reconsider any decision that flowed directly from findings of fact informed by expert evidence (even when the experts’ opinions diverge).
Patent Term Extension strategy
This case also underscores the importance of getting the PTE strategy right. Except for substances produced by a process involving recombinant DNA technology, an extension of term is only available in respect of a “pharmaceutical substance per se” within the scope of the claim of the patent. Goods containing or consisting of the substance must be included in the ARTG. Due to the finding on construction of the claim-in-suit, the Court held that none of the goods included in the ARTG are within the scope of the claim. This adds an additional layer of complexity over other recent decisions on PTE, such as Merck Sharp & Dohme Corp. v Sandoz Pty Ltd [2021] FCA 947 (summarised here). This also shows that the construction approach adopted by the Australian patent office can diverge from the construction decided by courts. We will be watching this space carefully to see if any other decisions show a difference of practice between the Australian patent office and the courts.
