Patent Term Extension Under Israeli Law
Liad Whatstein -
Liad Whatstein at Dr Shlomo Cohen & Co analyses the requirements for acquiring a Patent Term Extension in Israel.
Liad Whatstein
Israeli law provides Patent Term Extension for pharmaceutical patents. In 2006, the PTE provisions were substantially amended as a result of lobbying by the local generic industry. This amendment substantially curtailed the scope of PTE protection. Among others, under the revised PTE provisions, the period of extension in Israel cannot exceed the shortest period of extension in the US, EU-15 and some additional countries. In addition, if the drug is registered in the US and the EU-15, PTE in Israel will only be available if the patent was extended in the US and in at least one EU-15 country. In practice, this amendment resulted in a substantial erosion of the PTE period in Israel from an average of about five years to about two to three years. In some cases, these amendments can prevent PTE protection all together.
The following is a brief synopsis of the main requirements for obtaining a PTE in Israel in accordance with the current statutory regime and recent case law.
Ninety-Day Deadline for Filing the PTE Petition
A petition for a PTE must be submitted no later than 90 days from the date of regulatory approval of the drug. Originally, the deadline to file a petition for PTE was extendable in ‘appropriate circumstances’. Most of the extensions that were granted were quite short (extensions of a few days). Attempts to obtain longer extensions were consistently denied. However, in the Lundbeck decision, the Patent Office extended the deadline for filing a PTE petition by 19 months. In the decision, the Patent Office accepted the patentee’s arguments that it was not informed by its local patent agents of the PTE provisions in Israel.
Subsequent to the Lundbeck decision, the 2006 amendment limited the Patent Office discretion to grant extensions to circumstances where the petition was not filed on time ‘as a result of circumstances over which the applicant and his counsel or agent had no control and which could not be prevented’. This provision can potentially make extensions much more difficult to obtain. It was nevertheless so far liberally interpreted by the Patent Office which continued to extend deadlines to file PTE petitions in appropriate circumstances.
Eligibility for PTE
PTE is available for a Basic Patent. The Basic Patent is a ‘patent that protects a pharmaceutical compound [API], a process for making the API, use of the API or a pharmaceutical product containing the API, or a process for the making of the pharmaceutical compound containing the API, or a medical device that requires regulatory approval in Israel’. Accordingly, numerous patents covering the approved product can qualify as a Basic Patent. The patentee can select which Basic Patent to extend, but only one Basic Patent can be extended with respect to each product.
The Patent Office will extend the term of protection of the Basic Patent if the following conditions are met:
• the PTE petition was filed in good faith;
• the API, the process of its manufacture, its use, the pharmaceutical composition containing the API, or the medical device are claimed in the Basic Patent and the Basic Patent is in force;
• the pharmaceutical composition is registered in accordance with the Pharmacists’ Ordinance;
• the registration is ‘the first regulatory approval permitting use of the compound in Israel for pharmaceutical purposes’.
• if the pharmaceutical composition is registered in the US, PTE in Israel will only be available if a Patent of Reference in the US was also extended. The Patent of Reference is any patent that protects the pharmaceutical product or the medical device claimed in the Basic Israeli Patent, whether or not it is corresponding to the Basic Israeli Patent; and
• if the pharmaceutical composition is registered in any of the countries listed in Part B of the Addendum, PTE in Israel will only be available if a Patent of Reference was extended in at least one of these countries.
The Part B countries are Austria, Italy, Ireland, Belgium, Britain, Germany, Denmark, Holland, Greece, Luxembourg, Spain, Portugal, Finland, France and Sweden.
‘Dependency’ Requirement
The ‘dependency’ requirement (ie, that PTE in Israel will only be available if PTE/SPC was granted in the US and in at least one EU/Part B country) is the distinguishing feature of the Israeli legislation. The Patent Office interpretation of this requirement is that PTE in the foreign jurisdiction must be formally granted and issued before the expiry date of the Israeli patent. An expectation that a reference patent in a foreign jurisdiction will be extended after the date of expiration of the Israeli patent does not suffice.
‘First Regulatory Approval’
As indicated, PTE is only available with respect to the ‘first regulatory approval permitting use of the compound in Israel for pharmaceutical purposes’. Therefore, PTE is not available for second or subsequent medical indications of a previously approved API. PTE is also not available for new formulations of previously approved API’s. In addition, salts, esters, hydrates or different crystalline forms of previously approved API’s have been specifically excluded in the legislation from PTE protection.
Combination Products
In the Novartis decision, the Patent Office rejected a petition to extend the term of the patent relating to the drug Co-Diovan, which is a combination drug containing valsartan and hydrochlorothiazide. Both API’s were previously approved in Israel for separate administration. The Patent Office held that combination products can only be extended if at least one of the API’s was not previously registered. From a purely formalistic perspective, the Patent Office decision may be in line with the statutory language of the Israeli Patents Act. Nevertheless, a different interpretation of the statutory language was also possible. Among others, a combination product consisting of two previously approved API’s could arguably be regarded as a new product eligible for PTE, in particular if the combination results in a synergistic effect.
The overall approach of the Novartis decision was alarmingly restrictive and the Patent Office explicitly held that the PTE provisions should be interpreted narrowly. The Patent Office decision was approved on appeal by the District Court. The Supreme Court denied a further appeal on procedural grounds and did not address the eligibility of a combination drug for PTE. It is therefore expected that additional attempts will be made in the future to obtain PTE for combination drugs consisting of previously approved API’s.
Enantiomerically Pure Products and Metabolites
The restrictive approach expressed in the Novartis decision prompted the local generic industry to also oppose the grant of PTE for a patent relating to an enantiomerically pure product. The product in question was the anti-depressant drug Lexapro developed by Lundbeck. It contains the active pharmaceutical ingredient escitalopram which is the S-enantiomer of Citalopram. The racemate (Citalopram) is the API in a previously approved anti-depressant drug. The generics argued that the S-enantiomer (escitalopram) is the only active component in the racemate, whereas the inactive R-enantiomer should be regarded as a mere ‘impurity’. Therefore, the registration of the enantiomerically pure Lexapro is not ‘the first regulatory approval permitting use of the compound in Israel for pharmaceutical purposes’. The courts in Australia accepted this position with respect to Lexapro and denied a PTE petition on these grounds. In line with its restrictive approach, the Israeli Patent Office endorsed the Australian position. The decision was approved on appeal.
The Lundbeck decision seems to artificially attribute the earlier regulatory approval of the racemate to the single enantiomer that was separated and developed much later. Moreover, the racemate and the isolated enantiomers have different pharmaceutical properties. They are regarded as separate chemical entities from a regulatory perspective and cannot be regarded as the same substance with different levels of ‘impurities’ for PTE purposes. Indeed, in the recent Generics (UK) Ltd v Daiichi Pharmaceutical Co Ltd judgment, the UK court specifically held that enantiomerically pure compounds are eligible for PTE notwithstanding that the racemate was previously approved. It is yet to be seen whether it will be possible to distinguish the Lundbeck decision in future cases. For instance, it is at least arguable that the Lundbeck decision is not applicable in circumstances when both enantiomers are pharmaceutically active.
In contrast to the situation with single enantiomers, the Patent Office extended the term of a patent protecting the active metabolite of a previously approved drug. As the active metabolite and the previously approved pro-drug are chemically different, a PTE for a metabolite cannot be barred on the basis of the earlier regulatory approval for the pro-drug.
Term of Extension
The PTE period is calculated in accordance with the following guidelines:
• the period of extension will not exceed five years;
• the overall period of the patent and the extension must end no later than 14 years from the earliest date in which a regulatory approval was obtained in any of the recognised countries (Australia, US, Iceland, Japan, Norway, Switzerland, Austria, Italy, Ireland, Belgium, UK, Germany, Denmark, Holland, Greece, Luxembourg, Spain, Portugal, Finland, France and Sweden);
• the period of extension will be equal to the shortest period of extension granted to a Reference Patent in any of the recognised countries;
• in any event, the PTE will expire no later than the first expiry date of a PTE of any Reference Patent in any of the recognised countries.
The main principle is therefore that the Israeli PTE will be granted for a period equal to the shortest duration of a PTE granted in any of the recognised countries. In addition, the extension period cannot exceed five years and the overall patent and extension periods cannot exceed 14 years from the date of the earliest regulatory approval in any of the recognised countries;
Procedure, Oppositions and Temporary PTE Orders
The acceptance of the petition for PTE is published for possible oppositions in the Patents Gazette. Oppositions can be filed no later than three months from the date of publication. Oppositions are similar in nature to litigation. The parties submit expert testimony, witnesses are cross-examined and then the parties submit detailed post-trial briefs.
The filing of the opposition prevents the PTE order from entering into force. Moreover, the PTE order will only enter into force ‘after the opposition was rejected in a final decision by the Patent Office or by the Court’. By the time all the appellate proceedings are exhausted and the decision becomes ‘final’, the patent may already expire.
The Patent Office recognised that the current procedural framework can be easily abused. In its recent Johnson & Johnson decision, the Patent Office suggested that, in appropriate circumstances, it will consider the granting of temporary PTE orders that will remain in force while the opposition is litigated. This way patent protection will not be lost merely because the 20-year patent period expires before there is a final decision in the opposition proceedings.
Additional Amendments in the Pipeline
The Israeli PTE legislation triggered substantial criticism from the US government. Pursuant to an agreement with the US government, Israel undertook to reduce the number of reference countries which serve as a basis for calculating the PTE period. This legislative proposal is in the pipeline and is likely to be brought before the Israeli legislator in the near future. However, in addition to the implementation of the agreement with the US government, this proposal includes a number of pitfalls to patentees further undermining the scope of PTE protection. For instance, in accordance with the amendment, the Israeli PTE order will expire if PTE in one of the countries of reference is revoked. In addition, if a temporary PTE order is granted in the US, the period of the PTE order in Israel can be incorrectly interpreted to be limited to one year. The IP Committee of the Israel Bar, headed by the undersigned, advocated against these legislative changes and it is yet to be seen what will be the final form of the proposed bill.