Change is inevitable ... but an extension of time isn't if you change your mind

Date: 2012-03-08

Merck Sharp & Dohme Corp. [2012] APO 25

The Deputy Commissioner of Patents (the Delegate) recently refused to grant a request for an extension of time of 10 years and 4 months (the request) to file an application for an extension of term (the application).

The request related to Australian Patent No. 670300 (the patent) owned by Merck Sharp & Dohme Corp. (Merck).The patent claims certain compounds said to be useful for the inhibition of HIV reverse transcriptase to treat or prevent HIV infection or AIDS. One such compound disclosed in the specification of the patent is Efavirenz, the active ingredient in the pharmaceutical product Stocrin.

The facts

The potential term extension for the patent was 8 months and 3 days. However, the application was not filed within 6 months of the commencement date of the first inclusion of Stocrin in the Australian Register of Therapeutic Goods (the deadline) as required by the Patents Act 1990 (the Act).

The evidence showed that originally Merck had an intention to file the application but the application was not filed by the deadline due to ‘some error of procedure or judgement’ on the part of the Merck employee responsible for providing instructions to the Australian attorney on extensions of term. Merck realised that it had missed the deadline shortly after the deadline had passed, but decided not to pursue the application. Merck apparently held the view that the commercial advantage associated with the short extension of term (8 months and 3 days) would be outweighed by the commercial disadvantage associated with the extended opportunity for springboarding (approximately 14 years, since the springboarding exemption would trigger from the time the extension of term application was granted).

However, in 2006, the Intellectual Property Laws Amendment Act 2006 came into effect allowing springboarding of pharmaceutical patents, whether or not the term of the patent had been extended. Thus, the reasoning behind Merck’s decision not to pursue the application ceased to be relevant. Some 10 years and 4 months after the deadline, Merck filed the request for an extension of time to file the application for an extension of term.

Commissioner’s discretion

Although the Delegate accepted that there was a causative error to enliven the extension of time provisions in the Act, the Delegate refused to grant the request on discretionary grounds. The Delegate found that to grant the request would be clearly contrary to the balance of interests in this matter and indeed inconsistent with the purpose of the extension of time provisions and the intended operation of the extension of term scheme.

The facts in this case differ from those considered in Alphapharm Pty Ltd v H. Lundbeck A/S [2011] APO 36 where an extension of time of 10 years and 1 month was granted to allow the patentee to file an application for an extension of term. In that case, it was held that the patentee had acted at all material times with the intent of filing an application for an extension of term.

The key lesson to be learnt from this case is that the Commissioner’s discretion under the extension of time provisions in the Act will not be exercised in a party’s favour simply because it has changed its mind. That is, if a party makes a conscious decision to not undertake an action within the time required and then later decides that it does wish to undertake the action, an extension of time will not be granted.

This article was written by Dr Alexandra Angelatos, Patent Scientist, and Dr Nicole Watling, Senior Associate, Melbourne.