DABUS: decoding Australia’s AI decision
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After surviving the Great Patent Cliff of 2011–2016, the pharma/biopharma industry finds itself in the Second Great Patent Cliff of 2019–2024. With it we find low-hanging fruit for generic/biosimilar market entrants, and the importance of having an elegant patent strategy enabling early market entry for generics and biosimilars is underscored.
The pharma/biopharma industry shouldn’t underestimate the importance of strategising to achieve early market entry for generics and biosimilars, says Naomi Pearce of Pearce IP.
Don’t start Australian FTO too late
Given the relatively small size of the Australian market compared with the EU and the US, freedom to operate (FTO) clearance in Australia is commonly deprioritised in favour of the more lucrative northern hemisphere markets. As a result, many early entry opportunities for Australia are superseded by the time Australia is considered. An early FTO addressing Australian patents—even at a high level—may reduce lost opportunities.
Beware of interlocutory injunctions in Australia
Unless the generic/biosimilar applicant has “cleared the way” in relation to any blocking patents in advance, they are very likely to be sued for patent infringement and to face an application for an interlocutory injunction which is rarely denied in Australia.
“Further reforms are anticipated in Australia which will result in the originator receiving notification of the generic/biosimilar application shortly after the dossier is filed.”
- Effective patent strategies that minimise the risk of the originator (or third party patentee) delaying market entry through an interlocutory injunction include:
- Circumvent: where possible, design around any blocking patents. This will involve consideration of any Australian patents early in the development process. Where pre-launch risk certainty is important, it is possible to seek a declaration of non-infringement in Australia, but this involves a reversal of the onus and is rarely used.
- Challenge: unless all market blocking patent hurdles are cleared in advance of launch, a generic/biosimilar applicant should expect to be off the market and embroiled in litigation for years after its target launch date, as shown in Figure 1. To enable pre-patent expiry market entry, applicants should consider challenging the validity of relevant patents in Federal court proceedings, or in re-examination before the patent office to “clear the way”. Start early to ensure that the relevant proceedings (including any appeals) are completed in advance of the target launch date, but not too early, at risk of clearing the way for competitors in the event that their development is ahead of the applicant’s, or the applicant’s launch slips.
- License: obtain a licence(s) from the originator or third party patentee supporting launch. The patentee is unlikely to sanction a supplier’s launch of a competing product unless there is a significant risk of the supplier entering the market without a licence. Such risk will become apparent to the originator if the infringement or validity positions are shown to be weak. This is best demonstrated in early correspondence, allowing time for a challenge to follow if negotiations fail.
- Market dynamics: where possible, present a case on the market dynamics which disrupts the balance of convenience favouring the patentee in the award of an injunction. This means establishing that the market dynamics are such that damages will be an acceptable remedy so generic/biosimilar launch should not be restrained. This will include biosimilars, authority script medicines, and products that are heavily licensed or genericised.
Beware of preliminary discovery in Australia
Preliminary discovery as a precursor to patent litigation has emerged as an effective tool to prevent generic/biosimilar market entry. When considering the strategic options available in response to such an application, applicants must be mindful of the lessons learned from the recent five-year (and counting) etanercept (Enbrel) Federal court preliminary discovery dispute (Pfizer Ireland Pharmaceuticals and Ors v Samsung Bioepis AU Pty, NSD2149/2016). Using a “typical” timeline, an application for preliminary discovery, followed by patent litigation, could result in judgment six to eight years after Therapeutic Goods Administration approval of the biosimilar/generic application, as shown in Figure 2.
Beware of reforms regarding early disclosure: further reforms are anticipated in Australia which will result in the originator receiving notification of the generic/biosimilar application shortly after the dossier is filed. This will alter the dynamics of patent litigation in Australia.
For applicants who have not taken steps to “clear the way”, the result will be the induced commencement of patent litigation by the patentee to shortly after filing the application, rather than on approval.
Naomi Pearce is founding principal at Pearce IP. She can be contacted at: email@example.com
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