Patent Term Extension Saga Continues: Australian High Court Prescribes a Hearing for Formulation Claims

Australian Patent Term Extensions

Australia permits a patent term extension (PTE) of up to five years beyond the 20‑year term for eligible pharmaceutical patents to offset regulatory delay. To qualify, a patent must, in substance, disclose and claim:

• one or more pharmaceutical substances per se; and/or
• one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology.

In addition, goods containing substances (i) and/or (ii), must be included on the Australian Register of Therapeutic Goods (ARTG); and at least five years must have elapsed between the patent date and the first regulatory approval. Only one extension is permitted per patent (which can be an issue where more than one ARTG registered product is claimed).

What the Full Federal Court held in Otsuka FC

Australian patent 2004285448 covers controlled‑release aripiprazole formulations.

In Otsuka FC, the Full Federal Court unanimously ruled that only patents claiming an active pharmaceutical ingredient (API) per se are eligible for a PTE; formulation claims are not. The Court read ‘pharmaceutical substance’ in section 70(2) of the Patents Act 1990 (Cth), as confined to the active ingredient that exerts the therapeutic effect, not excipient‑containing formulations or delivery systems. As a result, existing formulation‑based PTEs may be vulnerable to challenge.

A special leave appeal was filed with the High Court in December 2025.

The (un)settled position?

As special leave has been granted, the High Court will now consider the Full Federal Court's decision, and determine whether this represents binding precedent in Australia.

In addition to considering the validity of formulation claims for PTE applications, the Full Court decision arguably raises questions for “near‑API” claim sets. Salts, polymorphs and prodrugs, etc., where the therapeutic effect depends on in‑vivo conversion rather than the claimed form itself. Ideally, as part of their judicial review, the High Court will also further clarify on the scope of “a pharmaceutical substance per se”.

Next steps

Whilst we wait for the High Court to consider the position of the Full Federal Court (ideally later in 2026), at present IP Australia has already indicated that it will process non‑impacted (API‑based) PTE applications, and hold off from consideration potentially impacted cases until a final decision regarding formulation claims is made.

As the PTE saga continues, if you have any questions relating to pharmaceutical patents and/or the potential impact of the Otsuka FC decision, reach out to FB Rice for advice.