Commissioner of Patents v Ono Pharmaceutical Co. Ltd

Federal Court of Australia (Full Court)|2022-03-18|Before: Allsop CJ, Burley JJ

The appeal be allowed.
Orders 1 and 2 made by the primary judge on 11 June 2021, and Orders 1 and 2 made by the primary judge on 19 July 2021, be set aside.
The respondents' originating application dated 14 October 2020 be dismissed.
The respondents pay the appellant's costs of the appeal and of the proceeding below. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction [1] 1.1 Background [1]
Legislation [12]
The Judicial Review Application [23] 3.1 The respondents' approach to construction [23] 3.2 The Commissioner's approach to construction [33] 3.3 The primary judge's reasons [40]
The appeal [60] 4.1 The grounds of appeal [60] 4.2 The Commissioner's submissions [64] 4.3 The respondents' submissions [88] 4.5 Analysis [109]
Disposition [140]

1.1 Background 1 This is an appeal from a judgment given, and orders made, in judicial review proceedings brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) concerning an application to extend the term of Australian patent 2011203119 entitled "Human monoclonal antibodies to programmed death 1(PD-1) and methods for treating cancer using anti-PD-1 antibodies alone or in combination with other immunotherapeutics". 2 The respondents in the appeal, Ono Pharmaceutical Co. Ltd, and E.R. Squibb & Sons, L.L.C. (E.R. Squibb), are the patentees of the patent, the date of which is 2 May 2006. The term of the patent will expire on 2 May 2026. 3 On 11 July 2016, the respondents filed an application pursuant to s 70 of the Patents Act 1990 (Cth) (the Patents Act) to extend the term. The application was based on the inclusion in the Australian Register of Therapeutic Goods (ARTG), on 11 January 2016, of the product OPDIVO (the OPDIVO application). OPDIVO contains the active pharmaceutical ingredient (API) nivolumab. Nivolumab falls within the scope of, at least, claim 3 of the patent. 4 On 11 July 2016, the respondents filed another application to extend the term of the patent based on the earlier inclusion in the ARTG (16 April 2015) of the product KEYTRUDA (the KEYTRUDA application). This application was filed out of time. It was, therefore, accompanied by a request under s 223(2)(a) of the Patents Act to extend time to allow the extension of term application to be made. KEYTRUDA contains the API pembrolizumab. Pembrolizumab falls within the scope of, at least, claim 3 of the patent. 5 The entry of OPDIVO in the ARTG was sponsored by Bristol-Myers Squibb Australia Pty Ltd (BMS Australia), which the primary judge described as a related entity of E.R. Squibb. The entry of KEYTRUDA in the ARTG was sponsored by Merck Sharp & Dohme (Australia) Pty Ltd (MSD Australia), which the primary judge described as a third party competitor of the respondents. 6 The respondents advanced the OPDIVO application as their "preferred option"; it had been made within time and, if successful, would result in a longer extended term (8 months, 26 days) than the KEYTRUDA application. However, the respondents acknowledged that earlier authority in the Australian Patent Office - G D Searle LLC [2008] APO 31; 80 IPR 210 (Searle) - had held that an extension of term application must be made on the basis of the first inclusion in the ARTG of goods that contain, or consist of, the pharmaceutical substance which falls within the scope of the claims of the specification, irrespective of the sponsor of the goods. 7 Recognising this obstacle, the respondents requested the appellant, the Commissioner of Patents, to consider the OPDIVO application first, and only to proceed with the s 223(2)(a) request if the OPDIVO application was unsuccessful. 8 As events transpired, the OPDIVO application was unsuccessful. A delegate of the Commissioner applied Searle and held that: 45 … the application for an extension of term does not comply with requirements as the extension request, relying as it does on OPDIVO, has not been made on the basis of the good on the ARTG with the first regulatory approval date. The good with the earliest regulatory approval date containing, or consisting of, the substance that falls within the scope of claim 3 of the patent is KEYTRUDA. Furthermore, amendment of the application to one based upon KEYTRUDA would convert the application to an application made out of time. As has already been noted, an alternative application for an extension of term on the basis of KEYTRUDA, along with the necessary request for an extension of time under section 223 has already been filed. In light of this, I consider it would be more appropriate to refuse the application made on the basis of OPDIVO pursuant to subsection 74(3). 9 On 14 October 2020, the respondents commenced their application for judicial review in this Court. The sole ground was that the delegate's decision involved an error of law, or was otherwise contrary to law. In short, the respondents contended that the delegate had misconstrued the relevant provisions of the Patents Act. 10 The primary judge found that the construction applied by the delegate, and persisted with by the Commissioner, was "not the preferable one". He concluded that the respondents' case, and their construction of the relevant provisions, should be upheld: Ono Pharmaceutical Co, Ltd v Commissioner of Patents [2021] FCA 643 (J) at J[30] and J[182] - [184]. His Honour, therefore, set aside the delegate's decision and ordered that the application to extend the term of the patent, on the basis of the OPDIVO application, be granted. 11 For the reasons that follow, we are of the view that the primary judge erred in reaching that conclusion. The appeal should be allowed.

Legislation 12 Part 3 of Ch 6 of the Patents Act provides for the extension of term of standard patents relating to pharmaceutical substances. It is only necessary for us to refer to those provisions which bear upon the issues of construction which were before the primary judge, and which are before us on this appeal. The parties agree that the form of the Patents Act as it appears in the compilation prepared on 4 February 2000 is applicable. 13 Section 70 of the Patents Act deals with a patentee's eligibility to apply to the Commissioner for an extension of term. Section 70(1) provides that the patentee may apply provided certain conditions are satisfied. Those conditions are found in ss 70(2), (3), and (4): (2) Either or both of the following conditions must be satisfied: (a) one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification; (b) one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification. (3) Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances: (a) goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods; (b) the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years. Note: Section 65 sets out the date of a patent. (4) The term of the patent must not have been previously extended under this Division. 14 The meaning of "first regulatory approval date" in s 70(3) is defined in s 70(5): (5) For the purposes of this section, the first regulatory approval date, in relation to a pharmaceutical substance, is: (a) if no pre-TGA marketing approval was given in relation to the substance - the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance; or (b) if pre-TGA marketing approval was given in relation to the substance - the date of the first approval. 15 Section 71 deals with the form and timing of an extension of term application. 16 As to form, s 71(1) provides: (1) An application for an extension of the term of a standard patent must: (a) be in the approved form; and (b) be accompanied by such documents (if any) as are ascertained in accordance with the regulations; and (c) be accompanied by such information (if any) as is ascertained in accordance with the regulations. For this purpose, document includes a copy of a document. 17 In relation to this provision, reg 6.8 of the Patents Regulations 1991 (Cth) (the Regulations) provides: (1) This regulation applies to an application under section 70 of the Act for an extension of the term of a standard patent for a pharmaceutical substance. (2) For paragraph 71(1)(c) of the Act, the application must be accompanied by information showing that goods containing, or consisting of, the substance are currently included in the Australian Register of Therapeutic Goods. (3) The application must also be accompanied by information identifying the substance, as it occurs in those goods, in the same way (as far as possible) as the substance is identified in the complete specification of the patent. 18 As to timing, s 71(2) of the Patents Act provides: (2) An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates: (a) the date the patent was granted; (b) the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3); (c) the date of commencement of this section. 19 Section 71(2)(b) is of particular relevance to the question of construction in this appeal. 20 Section 77 of the Patents Act - which deals with the calculation of the extended term - is also relevant to the question of construction: (1) If the Commissioner grants an extension of the term of a standard patent, the term of the extension is equal to: (a) the period beginning on the date of the patent and ending on the earliest first regulatory approval date (as defined by section 70) in relation to any of the pharmaceutical substances referred to in subsection 70(2); reduced (but not below zero) by: (b) 5 years. Note: Section 65 sets out the date of a patent. (2) However, the term of the extension cannot be longer than 5 years. 21 It is to be noted that s 77(1) expressly contemplates that, by applying the statutory formula, an extended term may be equal to zero. 22 For later reference, we note s 2A of the Patents Act (in its current form): The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.

3.1 The respondents' approach to construction 23 The respondents' approach to construction before the primary judge was as follows. 24 First, s 70(2) provides that its conditions can be satisfied by "one or more pharmaceutical substances" disclosed, and in substance claimed, in the complete specification of the patent. In the present case, nivolumab is one of a number of such substances. 25 Section 70(3) provides that its conditions must be satisfied by "at least one of" the pharmaceutical substances referred to in s 70(2). The respondents contended that provided ss 70(3)(a) and (b) are met, s 70(3) does not impose any conditions or restrictions on which of the "at least one of" the pharmaceutical substances (assuming there to be more than one) is used to satisfy its particular requirements. Once again, in the present case, nivolumab is one such substance. 26 When s 70(3)(b) refers to the period "ending on the first regulatory approval date for the substance" (emphasis added), its use of the definite article confines the "at least one of" the pharmaceutical substances to the one specified by the patentee to establish its eligibility to an extension of term. 27 When s 70(5) defines "first regulatory approval date" in relation to a pharmaceutical substance, its use of the definite article - in relation to the date of first inclusion in the ARTG of goods that contain, or consist of, "the substance" (emphasis added) - refers to the "at least one of" the pharmaceutical substances specified in the extension of term application. Therefore, the period referred to in s 70(3)(b) must be calculated by reference to that approval date. 28 Summarising the respondents' position, the primary judge said: 82 Accordingly, the applicants say that in the context of the OPDIVO application, the requirements of s 70 are satisfied by nivolumab. It is a pharmaceutical substance per se in substance disclosed in the complete specification and in substance falling within the scope of claim 3 (s 70(2)(a)). Goods containing nivolumab, namely OPDIVO, are included in the ARTG (s 70(3)(a)). The period beginning on the date of the patent (being 2 May 2006) and ending on the first regulatory approval date for OPDIVO (being 11 January 2016) is at least 5 years (s 70 (3)(b)). And the term of the patent has not been previously extended (s 70(4)). 29 In relation to the form of the application, the respondents contended that reg 6.8(3) - which provides that the application must be accompanied by "information identifying the substance, as it occurs in those goods, in the same way (as far as possible) as the substance is identified in the complete specification of the patent" - refers, implicitly, to the patentee's goods, not the goods of a competitor. 30 In relation to the timing of the application, the respondents contended that the language of s 71(2)(b) substantially mirrors the definition in s 70(5) of "first regulatory approval date". Significantly, the respondents contended that, when s 71(2)(b) refers to the first inclusion in the ARTG of goods that contain, or consist of, "any of the pharmaceutical substances referred to in" s 70(3), it is directing attention only to the first inclusion in the ARTG of the patentee's goods containing one of the s 70(2) substances. Further, even if the requirements of s 70(3) may have been satisfied at an earlier point in time by another substance, the application for an extension of term can be made at a later point in time based on another pharmaceutical substance satisfying its requirements, being the substance nominated by the patentee in its application for an extension of term. 31 The primary judge summarised the respondents' case on the relationship between ss 70 and 71 as follows: 87 The applicants say that when the requirements of ss 70 and 71 are read together, there is a nice fit. The substance referred to in s 70 and used as the basis for the application for extension of term is the same substance as that used for the purposes of calculating the time by which an application must be filed. (Emphasis added.) 32 As to s 77, the respondents contended that the calculation of the extended term is to be construed against the backdrop (according to their construction) of the earlier provisions. The term of the extension is to be calculated by reference to the earliest first regulatory approval date of any pharmaceutical substance disclosed, and in substance claimed, in the specification - being the substance nominated by the patentee in its application. Once again, the use of "any" in s 77 - "any of the pharmaceutical substances referred to in subsection 70(2)" - does not impose any condition or restriction on which of those substances is used. It is, the respondents submitted, simply the substance chosen by the patentee on which to base its application.

3.2 The Commissioner's approach to construction 33 The Commissioner contended that the operation of the relevant provisions is not limited to the particular pharmaceutical substance nominated by the patentee, at its election, in its extension of term application, or the date when the patentee's goods, containing or consisting of the pharmaceutical substance, were first entered in the ARTG. 34 In essence, the Commissioner's case was that the statutory scheme is agnostic as to any relationship between the patentee and the goods the subject of the relevant ARTG entry. Sections 71 and 77 operate by reference only to the "first" and "earliest" dates which goods containing any of the pharmaceutical substances (referred to in s 70) are included in the ARTG. There is no requirement that the relevant entry in the ARTG be in respect of the patentee's goods. Further, s 71(2)(b) does not operate by reference to any pharmaceutical substance on which the patentee might choose to base its extension of term application. 35 Section 70(3) contemplates that its requirements might be met by one or more pharmaceutical substances identified by reference to s 70(2). The use of the definite article in ss 70(3)(a) and (b), and in s 70(5) - when referring to "the" substance - is simply identifying that each substance (if there be more than one identified by reference to s 70(2)) is to be tested against the two requirements of s 70(3) concerning entry in the ARTG and the date of first regulatory approval. 36 Section 71(2)(b) then operates by reference to the date of first inclusion of goods - whoever's goods they might be - in the ARTG that contain, or consist of, any of the pharmaceutical substances referred to in s 70(3). This does not admit of any choice or election by the patentee. 37 Further, s 77(1)(a) contemplates the possibility of more than one "first regulatory approval date" as defined by s 70(5). Section 77(1)(a) takes the "earliest" such date. Once again, this does not admit of any choice or election by the patentee. 38 Section 70(4) of the Patents Act imposes the condition that the term of the patent must not have been previously extended. The Commissioner contended that this was consistent with the fact that more than one pharmaceutical substance might trigger eligibility to make an extension of term application. It does not mean, however, that if a patentee fails to exercise its right to seek an extension, within the time limited by s 71(2) (based on the date of first inclusion in the ARTG of goods that contain, or consist of, any of the pharmaceutical substances referred to in s 70(3)), the patentee can make an application based on another pharmaceutical substance satisfying the conditions of ss 70(2) and (3). 39 A further aspect of the Commissioner's case was that while s 71(2)(b) refers to s 70(3), s 77(1)(a) refers to s 70(2). This means that the date prescribed as the time within which an extension of term application must be made (by reference to s 71(2)(b)) is not, conceptually, the date used for calculating the term of the extension (s 77(1)(a)). This is because different substances might be brought into play, depending on whether one is looking to apply s 71(2)(b) or s 77(1)(a).

3.3 The primary judge's reasons 40 The primary judge saw the competing approaches to construction as raising the question: 27 … whether an application for an extension must be filed within 6 months of the first inclusion in the ARTG of goods containing or consisting of any pharmaceutical substance falling with the claims of the patent: (a) where the goods were those of the patentee (the applicants' position); or (b) irrespective of whether the goods were those of the patentee, that is, they could be the goods of a third party that had nothing to do with the patentee and, moreover, might be a competitor (the Commissioner's position). 41 At a higher level, his Honour saw the matter as a contest between (what he characterised as) a reasonable and commercial construction (the respondents' approach to construction), and a construction dictated by strict textualism (the Commissioner's approach to construction). 42 The primary judge saw the Commissioner's approach to construction as "seeking to sell … a literal form of textualism" which, "commercially", had "little to commend it". Moreover, it was a construction which, his Honour concluded, was not compelled by the statutory language. 43 On the other hand, the primary judge concluded that the respondents' approach to the construction of ss 70, 71 and 77 of the Patents Act was both preferable and correct. He said: 135 The extension of term regime is beneficial and remedial. It is designed to compensate a patentee of a pharmaceutical substance for the loss in time before which it can exploit its invention. It is designed to remedy the mischief of a shortened period for an effective monopoly that has been caused by delays in obtaining regulatory approval. Accordingly, a liberal rather than a literal construction is to be preferred. 44 In a similar vein, his Honour said: 151 But even so accepting and even if I was to consider the later introduced object clause in s 2A, which I take to reflect the then existing goals of the patent system at the time of the introduction of s 2A, in any event the applicants' construction is to be preferred. It reflects the mischief which the extension of term regime is intended to address. The evident purpose of the extension of term provisions is to provide the patentee with an effective patent life by restoring the time lost by the patentee prior to gaining market approval, thereby compensating the patentee for the additional time, expense and difficulty in commercialising its new product. 45 The primary judge reasoned that s 71(2)(b) - when referring to "any of the pharmaceutical substances referred to in subsection 70(3)" - implied a choice: 137 If one looks at s 70(3), it refers to "the substance". But "the substance" is that chosen from "at least one of those pharmaceutical substances", that is, the "one or more pharmaceutical substances" referred to in ss 70(2)(a) or (b). So the word "any" in s 71(2)(b) and by reference back to s 70(3) just reflects that it is the one chosen which then becomes "the substance" under s 70(3). The one chosen is "the substance" under s 70(3) if it meets the condition(s) of s 70(2). And it is "the substance" under s 70(5)(a). 138 Clearly, provided the conditions of ss 70(3)(a) and (b) are satisfied, s 70(3) does not impose any additional conditions or restrictions on which of the "at least one of those pharmaceutical substances" may be used to satisfy the requirements of s 70(3). Further, s 70(3) is not free-standing in the sense that it is to be read with and in the context of s 70(2). 139 Further, s 71(2)(b) substantially mirrors s 70(5)(a) save that it refers to "any of the pharmaceutical substances referred to in subsection 70(3)" rather than "the substance". But this is because the substance specified by the patentee to satisfy s 70(3) can be any pharmaceutical substance that is in substance disclosed and claimed in the patent. 140 Accordingly, it is for the patentee under s 71(2)(b) to stipulate the pharmaceutical substance. But of course in so stipulating, the requirements of s 70(3) read in the light of s 70(2) must be satisfied. But although the patentee has that freedom to stipulate, there are other broader constraints such as under s 70(4) and also under s 77(1)(a) concerning the calculation of the term which uses "the earliest first regulatory approval date" (my emphasis). 46 The primary judge considered that the Commissioner had "sought to finesse much" from the fact that s 71(2)(b) refers to s 70(3), while s 77(1)(a) refers to s 70(2). His Honour saw s 71(2)(b) and s 77(1)(a) as simply timing provisions that both, ultimately, refer back to s 70(2). 47 The primary judge referred to the following examples showing the differential application of s 71(2)(b) and s 77(1)(a), according to the Commissioner's construction of those provisions: 116 Let it be assumed that substance C is first contained in goods first included in the ARTG precisely 6 years after the date of the patent and that substance D is first contained in goods first included in the ARTG 6.5 years after the date of the patent. And let it be assumed that the patent has not been previously extended. 117 An application to extend the term of the patent would need to be made pursuant to s 71 within 6 months of the first inclusion of goods containing substance C on the ARTG. And if granted, the term of any extension would be calculated by reference to the regulatory approval date of goods containing substance C. This represents, in the language of s 77, "the earliest first regulatory approval date (as defined by section 70) in relation to any of the pharmaceutical substances referred to in subsection 70(2)". The extended term would be calculated as 1 year (6 years less 5 years). 118 The Commissioner then further modified the second scenario. Assume that substance C is contained in goods first included in the ARTG 4 years, instead of 6 years, after the date of the patent, but the timing in respect of substance D remained the same. The Commissioner said that the effect of s 71(2)(b) would be to permit an application to be made by the patentee within 6 months of the date that a good containing substance D was first included in the ARTG. But when it comes to calculating the extension of term, s 77(1)(a) would reduce the extended term to zero having regard to the timing of inclusion of goods containing substance C in the ARTG only 4 years after the date of the patent. I will return to this modified second scenario later. 48 The primary judge reasoned that these examples demonstrated the inappropriateness of the construction for which the Commissioner contended. His Honour said that the Commissioner's modified second scenario (referred to in J[118]) would always lead to an extension of term reduced to zero by dint of s 77 because goods comprising the earlier substance, not satisfying s 70(3)(b), would have to have been included in the ARTG less than five years after the date of the patent. Thus, the only circumstances in which a substance with a later-in-time ARTG registration might be used for the purposes of s 71 is one in which the extension of term application would not result in any extended term. This, the primary judge said, leads to an absurd result. 49 The primary judge posited other examples where, on the respondents' approach to construction, the patentee would achieve an extension of term greater than the term that would result from the Commissioner's approach to construction. He referred to the Commissioner's approach to construction as yielding "scenarios of disadvantage". 50 The primary judge concluded that the respondents' construction was supported by the extrinsic materials relating to the introduction of Ch 6 Pt 3 to the Patents Act. His Honour referred, in particular, to the Explanatory Memorandum, Intellectual Property Laws Amendment Bill 1997 (Cth), the second reading speech to the Bill (Commonwealth, Parliamentary Debates, House of Representatives, 26 November 1997, 11274 - 11275), and to the Final Government Response to the Industry Commission Report No. 51, The Pharmaceutical Industry (9 April 1997). 51 His Honour noted that the extension regime enacted in Ch 6 Pt 3 is one which seeks to balance a range of competing interests and purposes: Alphapharm Pty Limited v H Lundbeck A/S [2014] HCA 42; 254 CLR 247 (Alphapharm) at [60] (Crennan, Bell and Gageler JJ) and [120] (Kiefel and Keane JJ, albeit in dissent in the result); see also the object introduced as s 2A by the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 (Cth). He reasoned, however, that the respondents' construction was to be preferred because it reflects the mischief which an extension of term is intended to address - the restoration of effective patent life lost by a patentee prior to gaining marketing approval for its product. 52 Further, the primary judge noted that when Ch 6 Pt 3 was introduced, it included s 76A. This provision (which has since been repealed) required the extension of term applicant to lodge a return setting out certain information, including details of the amount and origin of any Commonwealth funds spent in the research and development of the drug the subject of the application and the total amount spent on research and development in respect of that drug. The primary judge reasoned that this strongly supported the respondents' construction because it referenced amounts spent on research and development, being activities and investments of the patentee, not a third party or competitor. As the primary judge put it: 156 It is self-evident from the requirements of the former s 76A that "the drug which was the subject of the application" was intended to be the drug of the patentee, not that of a third party. The patentee would only have available to it the requisite information relating to its (or its licensee's) drug. How could it sensibly be assumed that a patentee would have such information relating to a third party's drug, or that a patentee would have to somehow obtain that information, for the purposes of meeting its obligations under s 76A? 157 In my view the introduction of the former s 76A as part of the extension of term regime and howsoever it was "tacked on" in the Senate, supports the applicants' position that it was the legislature's intention that the scheme provided by Ch 6 Pt 3 limits consideration to only those substances developed by the patentee. 53 The primary judge rejected the Commissioner's submission that the former s 76A did not add material support for the respondents' construction. 54 In summary, the primary judge concluded that the respondents' construction could "fit within the ordinary meaning of the statutory language", and was "consonant with the legislative purpose" of Pt 6 Ch 3. 55 On the other hand, the primary judge thought that the Commissioner's construction led to absurdity and unreasonableness. He considered it to be manifestly unreasonable that a patentee could be "denied compensation" for the time lost in securing marketing approval for its own product because of a third party's ARTG registration. 56 Moreover, if a third party ARTG registration could fix the "first regulatory approval date" (within the meaning of s 70(5)), the patentee would need to monitor and review each and every approval granted in relation to the ARTG. The public information available from this might not provide sufficient information to tell if a product included in the ARTG falls within the scope of the patent (including whether the third party product is itself protected by a patent). Further, determining whether a product falls within the claims of a patent is a complex task, and may require information to be provided by a competitor, possibly through discovery ordered by the Court. 57 The primary judge also noted that the ARTG might not be, in any event, a complete source of information of all possible "first regulatory approval date(s)". Some products may have been removed from the ARTG at a sponsor's request and reside on separate databases of cancelled products. Further, even comprehensive searches, using reasonable care and skill, might miss the entry of a third party product included in the ARTG. 58 The primary judge noted that these consequences will also have significance for the Commissioner, if the Commissioner were required to monitor regulatory approvals. 59 The primary judge said: 171 In summary, if the Commissioner's construction was to be accepted, there would be very serious practical problems which would be unduly onerous and not beneficial to any patentee. In my view, the legislature should not be taken to have intended such consequences.

4.1 The grounds of appeal 60 The Commissioner's supplementary notice of appeal contains four grounds. 61 In summary, Ground 1 is that the primary judge made errors of law in construing the provisions of Ch 6 Pt 3 of the Patents Act. Ground 2 is that the primary judge erred in his application of s 71(2)(b) of the Patents Act to the facts of the case. Ground 3 is that the primary judge erred in his application of s 77 of the Patents Act to the facts of the case. 62 These grounds of appeal are supported by extensive sub-grounds and particulars. However, in essence, Grounds 1, 2, and 3 are directed to the question of the construction of ss 70, 71, and 77 of the Patents Act, seen within the statutory scheme provided by Ch 6 Pt 3. The alleged errors are best summarised by reference to the Commissioner's submissions, considered below. In the course of oral submissions, the Commissioner suggested that, on further consideration, Ground 3 does not strictly arise, although the matters raised in respect of that ground nevertheless inform the question of construction presented by Ground 1. 63 Ground 4 of the appeal is that the primary judge erred in making Order 2 of the orders made on 11 June 2021. This ground is directed to the contention that Order 2 goes beyond the relief that was sought by the respondents and has the effect of making redundant the process provided by ss 74(2) and 75 of the Patents Act in relation to the respondents' extension of term application.

4.2 The Commissioner's submissions 64 In relation to Ground 1, the Commissioner submits that, by accepting the respondents' approach to construction, the primary judge construed s 71(2)(b) as referring only to the goods of the patentee containing one of the s 70(2) substances. Moreover, where there is more than one s 70(2) substance, the primary judge construed s 71(2)(b) as referring only to the substance which the patentee has nominated in its extension of term application. This, the Commissioner submits, involves a modification of the statutory text by reading into s 71(2)(b) words of limitation - such as "goods of the patentee" and "nominated by the patentee" - which are simply not in the text and are not necessary to give the provision a sensible operation. 65 The Commissioner submits, moreover, that recourse to the notion of "goods of the patentee" - which the Commissioner describes as an extra-statutory concept - introduces ambiguity and indeterminacy into the operation of the provision. 66 For example, in the present case, neither respondent was the sponsor of OPDIVO for inclusion in the ARTG. The sponsor was BMS Australia, which the primary judge described as a related entity of E.R. Squibb. The Commissioner contends that there was no evidential basis for this finding; the Statement of Agreed Facts did not provide that basis or describe the basis of the arrangements between the respondents and BMS Australia by which BMS Australia obtained first inclusion of OPDIVO in the ARTG. 67 In written submissions, the Commissioner submits: 24. The primary judge's introduction of the concept of 'goods of the patentee' introduces ambiguity and indeterminacy into the operation of the statutory text. The primary judge did not explain what is meant by 'goods of the patentee'. He cannot have meant only goods for which the patentee is the sponsor for inclusion in the ARTG, because neither of the Patentees were sponsors of OPDIVO. Is it sufficient that goods included in the ARTG have been sponsored by a related entity of a patentee? If so, what is the nature of the relationship required, and how does it work if there is more than one patentee and the sponsor is related to only one of them? Do 'goods of the patentee' include any goods involving an exploitation of patent rights authorised by the patentee or for which the patentee derives financial or other reward - such as, for example, pursuant to a licence or other commercial arrangement? If so, can a retrospective licence (for example, one granted as part of a settlement of infringement proceedings) operate so as to give goods sponsored by an unrelated entity the character of being 'goods of the patentee' at the time first included in the ARTG? On the construction of s 71(2)(b) adopted by the primary judge, it becomes necessary to identify some basis in the statutory text for determining whether each of these kinds of scenarios involves 'goods of the patentee' or not and why that is so. The Act itself gives no basis for how to draw such distinctions, let alone a textual foundation for them, because the approach of the primary judge introduces an extra-statutory concept. 68 The Commissioner submits that the primary judge rested his conclusion - that s 71(2)(b) is limited to "goods of the patentee" - on the basis that the Commissioner's approach to construction would lead to absurdity, practical difficulties and unfairness, contrary to the "clear" legislative intention. The primary judge's concerns in that regard included: (a) the implications of a patentee being unaware of all relevant regulatory approval and the consequent need for the patentee to monitor, strictly, the regulatory approvals of third party products; (b) the problem that the patentee's future extension of term applications might be "contaminated" or "stymied" by the earlier ARTG registration of third party products; and (c) the difficulty facing a patentee in ascertaining whether a third party product falls within the patent claims. 69 The Commissioner submits that the difficulties to which the primary judge referred are overstated, and that his Honour's approach overlooks certain undesirable consequences of the respondents' construction. It also errs with respect to legislative intent. 70 First, as to the primary judge's concern about patentees of pharmaceutical substances being unaware of the regulatory approvals of products sponsored by third parties, the Commissioner points to the fact that there was no evidence before the primary judge of any known or widespread problem of patentees having been deprived of extensions of term because the provisions of Ch 6 Pt 3 have operated on substances of which they are unaware. The Commissioner submits that, in most instances, save in cases of infringement, the patentee will have been responsible for licensing or authorising the exploitation in question. Further, there was nothing before the primary judge to suggest that patentees of pharmaceutical products do not, in any event, closely monitor activity that might amount to infringement or threatened infringement. After all, in the present case, the patentees had taken infringement action in relation to KEYTRUDA. The Commissioner submits, therefore, that it should not be assumed that patentees of pharmaceutical products lack the wherewithal to closely monitor ARTG registrations or the ability to take such steps as are necessary to protect their position. 71 Further, even if a patentee was unaware of a product registered in the ARTG, and the time for making an extension of term application has elapsed, the patentee can always apply for an extension of time under s 223(2)(a) of the Patents Act to make the extension of term application - once again, a course adopted in the present case by the patentees in relation to the KEYTRUDA application. 72 Further still, the Commissioner submits that if a particular pharmaceutical substance is claimed by a patentee and, in the circumstances of the case, impedes the patentee from applying for an extension of term under s 70(1), the patentee is not without its own remedy. The patentee can amend its claims to exclude the substance or, perhaps, file a divisional application only in relation to the substance of interest to it, leaving the way free for the patentee to apply for an extension of term. 73 Secondly, as to the primary judge's concern that a patentee's future extension applications might be "contaminated" or "stymied" by the ARTG registration of third party products, the Commissioner points to the fact that, if a third party is able to obtain regulatory approval for a product before the patentee, then this suggests that any delay in obtaining approval for the patentee's product is not regulatory delay at all (the reason for granting extensions of term for patents relating to pharmaceutical substances), but the patentee's own delay or, perhaps, its own business choices in bringing products to market. The Commissioner submits that the advantage of her construction is that patentees are not delivered "windfall" extensions of term, at the expense of other stakeholders and the public interest, where the delay in obtaining regulatory approval and bringing a pharmaceutical product to market rest with the patentee's own decision-making. In any event, the patentee may have the right to sue for infringement, or be presented with the opportunity to license, the other product, and thus obtain the benefit of its monopoly over a reasonable period, without the need for an extension of term. 74 The Commissioner submits that the construction accepted by the primary judge - which limits s 71(2)(b) to the patentee's goods - creates the opportunity for patentees to "game the system". The Commissioner gave these examples: A patentee could [license] a third party to exploit the patent to develop a significant pharmaceutical product, but delay from obtaining registration itself of a different product for many years. The patentee could then obtain a significant extension of term based on 'the patentee's good'. Alternatively, a patentee could bring infringement proceedings in relation to a third party product and use that to obtain licence fees over many years, and then delay registering its own product and use that product to obtain a significant extension of term, which would include an extension of the licence fees. 75 The Commissioner also submits that the construction accepted by the primary judge could have the perverse consequence of disqualifying a patentee from making an extension of term application where the patentee seeks to base its application on the goods of a third party included in the ARTG. 76 As to legislative intention, the Commissioner submits that the primary judge erred in assuming that the legislative intention was that an extension of term could be triggered only by goods of the patentee. The Commissioner also submits that the respondents' construction is inconsistent with the legislative purpose because it permits patentees to "double dip" in circumstances, such as those exemplified above, where there is no regulatory delay justifying an extension of term. 77 In relation to the now-repealed s 76A, the Commissioner submits that there are difficulties in relying on that provision as an aid to construing s 71(2)(b) as limited to "goods of the patentee". 78 First, the Commissioner submits that it is wrong to assume that the purpose of s 76A was the same as the purpose for the extension of term regime as a whole, particularly having regard to provenance of s 76A. 79 To explain, the Intellectual Property Laws Amendment Bill 1997 (Cth), which introduced the modern extension of term regime, did not contain s 76A. The Commissioner submits that s 76A was a late addition that was introduced during the second reading stage of the Bill in the Senate. The provision was not intended to qualify or alter, in any way, the operation of the regime contemplated by the Bill. Rather, it was directed to a different matter - collecting data which might be of utility in assessing, in the future, whether Commonwealth expenditure associated with the extension of term regime for pharmaceutical substances was increasing research and development, and manufacturing, in Australia. 80 The Commissioner submits that when regard is had to the provenance and conditions surrounding the appearance of s 76A - it was agreed to by the government of the day in the interests of having the Bill passed by the Senate - the provision has reduced utility as an aid to the statutory construction of the cardinal provisions of the extension of term regime. The Commissioner called in aid, analogously, the observations made by Gageler J in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; 381 ALR 601 at [67]. 81 Secondly, the Commissioner submits that the primary judge's reliance on s 76A as an aid to construction was based on a misunderstanding of the effect of the provision, which was merely to require the patentee to identify such information as the patentee had available to it. 82 Here, the Commissioner points to another source of information identified by s 76A - namely, the name of any body in receipt of Commonwealth funds with which the patentee had a contractual relationship. Such body might be upstream from the patentee. For example, the body might be a licensor of technology to the patentee to enable the drug to be commercialised, or it might be some other supplier of manufacturing or other services, including clinical trial services, who is in receipt of Commonwealth funds for research and development. Such body might also be downstream from the patentee. For example, the body might be someone licensed by the patentee to commercialise the pharmaceutical substance, who is also in receipt of Commonwealth funds. The Commissioner's point is that s 76A cast a wide net. Its concern was not just with the information that could be provided by a patentee who had successfully applied for an extension of patent term. Its concern was also the information that could be provided by others. The Commissioner submits that a provision whose focus was simply information gathering, where information might be available, is a "shaky foundation" for construing the extension of term provisions, as introduced by the Bill itself. 83 Grounds 2 and 3 of the appeal proceed from Ground 1. 84 In relation to Ground 2, the Commissioner submits that, if her construction is correct, the primary judge necessarily erred in failing to find that the correct date, in the present case, for the purposes of s 71(2)(b), was the date of commencement of the first inclusion of KEYTRUDA in the ARTG. 85 The Commissioner submits further that, even if the primary judge did not err in his construction of the relevant provisions, he did err in applying that construction to the facts of the present case: there was no evidence to support a finding that the OPDIVO goods are goods of the patentees, or that the KEYTRUDA goods are not goods of the patentees. The Commissioner says that the primary judge did not address her submissions on these matters. She submits that, having construed the relevant provisions according to the respondents' construction, the primary judge should have ordered that the matter be remitted to the decision-maker to determine these questions. 86 As noted above, the Commissioner suggested in the course of oral submissions that Ground 3 of the appeal - which concerns the question of whether the primary judge erred in making a finding as to the correct construction and application of s 77 - does not arise. Section 77 is, however, one of the suite of provisions that provides context for considering the correct construction of ss 70 and 71 and, for this reason, its meaning cannot be ignored. Its meaning is addressed, briefly, below. The point of present significance is that the Commissioner submits that, in the present case, the primary judge should have held that, in respect of the OPDIVO application, the "earliest first regulatory approval date" for the purpose s 77(1)(a) was the first regulatory approval date of goods that contain or consist of KEYTRUDA. 87 Ground 4 of the appeal is, in substance, that the primary erred by overlooking the importance of opposition proceedings. The gist of this ground is that, if the primary judge's construction of the relevant provisions is correct, the immediate outcome should have been that the Commissioner should have accepted the extension of term application: s 74(1). Had that happened, the steps mandated by s 74(2), leading to possible opposition proceedings under s 75 of the Patents Act, would have been brought into play. However, as events transpired, the primary judge ordered that the term of the patent be extended, thereby effectively displacing the statutory scheme for dealing with extension of term applications.

4.3 The respondents' submissions 88 The respondents' submissions advance the correctness of the primary judge's reasoning and conclusions on the proper construction of ss 70, 71, and 77 of the Patents Act by reference to four cardinal propositions, all of which were accepted by the primary judge. 89 First, the requirements of ss 70(2), (3), and (4) of the Patents Act may be satisfied by any one of the pharmaceutical substances referred to in ss 70(2)(a) and (b) which is disclosed and claimed in the patent the subject of the extension of term application. 90 Secondly, any one of these substances may be used for the purpose of calculating the time by which an extension of term application must be filed under s 71(2). It is for the patentee to nominate the substance. 91 Thirdly, the term of the extension is calculated under s 77(1) of the Patents Act by reference to the "earliest first regulatory approval date" of the pharmaceutical substance that the patentee has nominated in its extension of term application. 92 Fourthly, when read in context and against the background of the underlying legislative purpose, the expression "pharmaceutical substance" in ss 70, 71, and 77 of the Patents Act means the pharmaceutical substance that is the subject of the patentee's extension of term application, not the pharmaceutical substance of "a stranger or competitor". 93 In support of these propositions, the respondents submit that, by considering the legislative purpose of the extension of term provisions of the Patents Act, including by reference to extrinsic materials, the primary judge was not deflected from the text-based task of construing those provisions. The respondents submit that the primary judge correctly concluded (at J[135] and J[151]) that the extension of term regime is beneficial and remedial. It is designed to provide the patentee of a pharmaceutical substance with an effective patent life by restoring the time lost by the patentee prior to gaining marketing approval. In this way, the patentee is compensated for the additional time, expense, and difficulty in commercialising its new product. 94 The respondents submit that the primary judge correctly identified the legislative purpose of the extension of term provisions. They submit that, given the beneficial and remedial nature of the extension of term regime, the relevant provisions should be construed liberally and consistently with their intended purpose. The respondents submit that the primary judge did so. They submit that the primary judge did not read words into the statutory text (as the Commissioner contends). Rather, his Honour did no more than construe ss 70, 71, and 77 in context. 95 As to the statutory text itself, the respondents advance, as correct, the primary judge's conclusion that the word "any" - as it appears in the phrase "any of the pharmaceutical substances referred to in subsection 70(3)" in s 71(2)(b) - refers to the substance "chosen" (a word which the primary judge used interchangeably with "specified" and "stipulated") by the patentee, from the substances referred to in s 70(2), for the extension of term application. This substance is not only the "substance" for the purpose of s 70(3)(a), it is also the "substance" for the purpose of s 70(3)(b), to which the definition in s 70(5) applies (the "first regulatory approval date"). In oral submissions, the respondents also contended that, when s 70(3)(a) refers to goods included in the ARTG, it means goods included in the ARTG "by or on behalf of the patentee". The respondents submit that this is so because, once one accepts their argument in relation to the operation of s 71(2)(b), it follows that the patentee must have "a relationship with the registration that underpins the extended term". 96 The respondents emphasise that, even though, on its proper construction, s 71(2)(b) refers to the substance chosen, specified, or stipulated by the patentee in its extension of term application, that substance must still satisfy the requirements of ss 70(2) and (3) of the Patents Act. In this sense, the respondents submit that the primary judge's finding in this regard (at J [140]) is, in fact, consistent with the observation made by Jagot J in Merck Sharp & Dohme Corp v Sandoz Pty Ltd [2021] FCA 947 (Merck (FCA)) at [65] that the statutory scheme does not operate by reference to a nomination or selection of a pharmaceutical substance by a patentee, but by reference to the facts. 97 The respondents also advance, as correct, the primary judge's conclusion that the word "any", as it appears in the phrase "any of the pharmaceutical substances referred to in subsection 70(2)" in s 77(1)(a), refers, once again, to the substance chosen, stipulated, or specified by the patentee in its extension of term application. 98 This submission, however, sits oddly with the further submission, made in the respondents' written submissions, that: … the word "earliest" serves to discriminate between "first regulatory approval dates" in circumstances where the patentee has secured ARTG registration for two (or more) pharmaceutical substances, each of which meet the requirements of s 70(2). In those circumstances, the earliest approval date is used to determine the length of the extension. 99 The last-mentioned submission proceeds on the basis that the word "any" does not refer to the substance chosen, stipulated, or specified by the patentee for its extension of term application, but to the earliest first regulatory approval date of any substance falling within s 70(2) of the Patents Act that is included in goods for which the patentee has secured ARTG registration. 100 In oral submissions, the respondents advanced the following submission: If a patentee had, for example, four applications for four different substances and sought an extension based on each of those, potentially each of the four substances would have more than one regulatory approval date because under the Therapeutic Goods Act, a good is defined, for example, by reference to its dosage, its indication or its concentration, and you might, therefore, have the same substance in a number of forms or formulations and find that you've got three or four different dates. OPDIVO, I think, had two because there were two different concentrations. The way section 71 deals with that is to say, well, if there is more than one, what is visited upon you, as it were, by 70, subsection (3) is the first approval date for each substance. So you're down to four substances with a particular date. When you get to section 77, then the reason the word "earliest" is that it confines you to - amongst those first regulatory approval dates, it confines you to the earliest. So the fact that you might have nominated more than one is not something you can profit from. You're stuck with the earliest regularly approval date no matter what you nominate and whatever the reasons might be. 101 In advancing that submission, the respondents also drew attention to a diagram reproduced by the primary judge at J[174]. That diagram appears to be consistent with the submissions noted at [98] - [100] above. 102 However, later in oral submissions, the respondents advanced this submission about the operation of s 77: Now, if we come then to the level of section 77, we accept that the extended term would, nonetheless, be based on the earliest first date, and that would be KEYTRUDA because the language of 77 confines attention to the earliest first regulatory approval date, and we would accept that that will capture KEYTRUDA on that alternative construction, but the reason we made that point is that the decision that has been impugned is not one under 77, but under 71, and we say the commissioner was wrong, notwithstanding the effect of 77. The commissioner was wrong to refuse the application predicated on OPDIVO. 103 When read in the context of the surrounding passages of the transcript, it is not clear what the respondents mean by "that alternative construction" in this submission. 104 In any event, it should be noted that, although KEYTRUDA is a substance falling within s 70(2) of the Patents Act, it is not the pharmaceutical substance chosen, stipulated, or specified by the respondents in the OPDIVO application with which the primary judge was concerned and with which this appeal is concerned. It also seems that the respondents do not contend that they have obtained ARTG registration of goods that contain or consist of KEYTRUDA or that any registration of goods that contain or consist of KEYTRUDA was a registration obtained on their behalf. 105 The respondents submit that, when read in context and against the background of the underlying legislative purpose, the expression "pharmaceutical substance" in ss 70, 71, and 77 should be construed as a reference to the pharmaceutical substance that is the subject of the patentee's extension of term application, and not the pharmaceutical substance of a stranger or a competitor. The respondents submit that this is because the mischief which the extension regime is designed to remedy is the time lost by a patentee due to regulatory delay. The aim is to provide an "effective patent life" after marketing approval to generate the cash flows to finance the development of new drugs. It is the incentive for patentees to invest in the development of new drugs that provides the economic rationale for the extension regime. The respondents submit that the primary judge was correct to find (at J[162]) that, if the "earliest first regulatory approval date" (in s 77(1)(a)) includes a third party's registration, it would be manifestly unreasonable because an extension of term applicant, in the position of the respondents, would be denied compensation for the time lost in securing marketing approval for its product, contrary to the clear legislative intention. 106 The respondents submit that their construction of the expression "pharmaceutical substance", as found by the primary judge, is supported by the requirements of (the now repealed) s 76A of the Patents Act. They also submit that their construction avoids the "absurdity or unreasonableness" to which the primary judge referred at J[161] - [171]. They contend that the Commissioner's submissions fail to grapple, in any meaningful way, with the "problems inherent" in the construction that she propounds. 107 As to Grounds 2 and 3 of the appeal, the respondents submit that, if their construction is accepted, there is no need for further evidence. They accept that if, contrary to their submission, the Full Court comes to the conclusion that further evidence is required, then the matter should be remitted to the Commissioner's delegate for the purpose of making the necessary factual findings. 108 The respondents also submit that even if the expression "pharmaceutical substance" in ss 70, 71, and 77 should not be construed as excluding the pharmaceutical substances of a stranger or a competitor, this does not affect the construction of s 71(2)(b). The premise for this submission appears to be that the primary judge was correct to conclude that s 71(2)(b) refers to the substance chosen, specified, or stipulated by the patentee for the extension of term application. 109 As to Ground 4 of the appeal, the respondents submit that the Commissioner's submissions overlook the orders made by the primary judge on 19 July 2021. Those orders directed the Commissioner to comply with the requirements of s 74(2) of the Patents Act. The respondents submit that Order 2 made on 11 June 2021 did not, therefore, displace the statutory scheme.

4.5 Analysis 110 In Alphapharm, the High Court surveyed the pre-existing law and legislative history of patent term extension regimes in Australia at [42] - [60] (Crennan, Bell and Gageler JJ) and at [86] - [93] (Kiefel and Keane JJ) when considering, in the context of a patent extension application, the power conferred on the Commissioner under s 223(2) of the Patents Act to extend time for doing relevant acts. 111 At [58], the majority referred to the rationale for the current extension of term regime by reference to the Revised Explanatory Memorandum accompanying the Intellectual Property Laws Amendment Bill 1998 (Cth) which provided for that regime, and observed (at [60]): 60 The purposes of the extension of term scheme are to balance the competing interests of a patentee of a pharmaceutical substance whose exploitation of monopoly has been delayed (because of regulatory delay) and the public interest in the unrestricted use of the pharmaceutical invention (including by a competitor) after the expiration of the monopoly (that is, the term). 112 At [92], the minority observed: 92 … The aim of the amendments was said to be to provide an "effective patent life", during which companies could earn a return on their investment, more in line with that available to inventions in other fields of technology. and at [120]: 120 There is no doubting that the purpose behind s 70(1) is to benefit and encourage research and development. Other provisions of the 1990 Act, including those for advertisement of and opposition to applications for extension of the term of a pharmaceutical patent…, recognise that there are interests, other than those of a patentee, which are affected by an extension. The Explanatory Memorandum for the 1989 Amendment Act said as much, in its statement as to the policy behind s 160(4A), when extension provisions for pharmaceutical patents were introduced. Against this background, the requirements of s 71(2), the strictness of which is reinforced by the effect of reg 22.11(4)(b), may be taken as intended to provide those other interested persons with a level of certainty as to whether an application for extension of the term of a patent is to be made by a patentee. 113 The primary judge noted these remarks. As we have explained, he also considered a range of extrinsic materials beyond the Revised Explanatory Memorandum to inform his analysis of the relevant provisions. His Honour accepted that the extension of term regime seeks to balance a range of competing interests and purposes and that the compensation of some time lost due to regulatory hurdles is a purpose, but not the sole purpose, of the regime. He acknowledged that ss 70(3), 71(2), and s 77(2) reflect a balancing of purposes: see at J[150]. 114 However, in accepting the correctness of the respondents' construction of the relevant provisions, his Honour also said: 135 The extension of term regime is beneficial and remedial. It is designed to compensate a patentee of a pharmaceutical substance for the loss in time before which it can exploit its invention. It is designed to remedy the mischief of a shortened period for an effective monopoly that has been caused by delays in obtaining regulatory approval. Accordingly, a liberal rather than a literal construction is to be preferred. 115 Whilst it may be accepted that the object of the extension of term regime is to compensate a patentee of a pharmaceutical substance for time lost in obtaining regulatory approval before it can exploit its invention, it does not follow that ss 70, 71, and 77 should be construed so as to achieve what might be described as a commercial outcome for a patentee. As the High Court noted in Alphapharm, and as his Honour appeared to accept, the extension of term regime seeks to balance a range of competing interests, not just the interests of the patentee. It can be taken that the legislature saw the correct balance as being achieved by the very words it chose to implement that regime. 116 It is, of course, the fundamental duty of a court, when undertaking statutory construction, to give meaning to the legislative command according to the terms in which it has been expressed: Northern Territory of Australia v Collins [2008] HCA 49; 235 CLR 619 at [16]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 at [47]; Alphapharm at [42]. Hence, the importance of recognising, as the cases stress, that the task of statutory construction is, essentially, a text-based activity. Here, the balance which the legislature has chosen to strike for the competing interests is clear from the language it has chosen. That balance should not be altered by recourse to a process of reasoning that prefers "a liberal rather than a literal construction". 117 The task of statutory construction in the present case starts with the text of s 70, which sets out the requirements - expressed as "conditions" - that must be satisfied before a patentee can apply for an extension of the term of its patent. The requirements are expressed by reference to three inquiries. 118 The first inquiry is specified in s 70(2). One or more pharmaceutical substances per se, or one or more pharmaceutical substances produced through a process that involves the use of recombinant DNA technology, must, in substance, be disclosed in the complete specification of the patent and, in substance, fall within the scope of the claim or claims of the specification. 119 To emphasise the obvious, s 70(2) recognises that one or more pharmaceutical substances might be involved in the inquiry. Whether one or more substances (and, if more than one, how many substances) are involved, is a matter of objective determination by reference to the complete specification and the claim or claims of the patent in question. This inquiry is not directed to goods that contain, or consist of, the substance or substances. It is directed to the disclosure and claiming of a substance or substances as such. 120 The second inquiry is specified in s 70(3). It takes the one or more pharmaceutical substances identified in the s 70(2) inquiry and asks whether at least one of those substances satisfies each condition of ss 70(3)(a) and (b). Although ss 70(3)(a) and (b) are directed, in terms, to "the substance", the chapeau to s 70(3) recognises, once again, that one or more substances might be involved in this inquiry. By referring to "at least one of those pharmaceutical substances", the chapeau establishes a minimum. 121 The first condition (s 70(3)(a)) is that goods containing, or consisting of, the substance must be included in the ARTG. Once again, this is a matter of objective determination. It concerns the state of the ARTG. As such, it looks to all relevant goods. The inquiry is not restricted to the goods of a particular person. The condition does not ask by whom, or on whose behalf, the inclusion was sought or obtained. 122 The second condition (s 70(3)(b)) is that the period beginning on the date of the patent (see s 65 of the Patents Act) and ending on the "first regulatory approval date" for the substance must be, at least, 5 years. This, too, is a matter of objective determination. The definition in s 70(5) of the "first regulatory approval date" sets out the machinery for identifying that date with specificity. The definition recognises that there might be multiple entries in the ARTG for goods that contain, or consist of, a pharmaceutical substance that satisfy the conditions of s 70(2) and s 70(3)(a). 123 If there is one pharmaceutical substance that satisfies the conditions of s 70(2) and s 70(3)(a), the "first regulatory approval date" is the date of commencement of the first inclusion in the ARTG of goods that contain, or consist of, that substance. However, in a given case, there might be multiple pharmaceutical substances that satisfy s 70(2) and s 70(3)(a) and, therefore, potentially, multiple entries in the ARTG in respect of each of those substances. Amongst all these possible entries, s 71(2)(b) takes the "first regulatory approval date" of "any of the pharmaceutical substances", meaning the first regulatory approval date taken from the set of entries in the ARTG of the pharmaceutical substances that satisfy the conditions of ss 70(2) and (3). 124 The pharmaceutical substances that satisfy both conditions of s 70(3) can be conceptualised as a subset of the pharmaceutical substances that satisfy the conditions of s 70(2), recognising, of course, the possibility that, in a given case, only one substance might satisfy either or both of the conditions of s 70(2) and no substance might satisfy both conditions of s 70(3). In practice, there will be permutations. Section 70(3) calls for the consideration of all substances, and all goods that contain, or consist of, those substances in the particular case at hand. 125 The third inquiry is whether the term of the patent has been previously extended under Ch 6 Pt 3: see s 70(4). This inquiry is uncomplicated. But it, too, is a matter of objective determination. 126 The balance of the extension of term provisions operate on the state of affairs determined, objectively, by reference to the requirements or "conditions" of s 70. 127 As we have noted, s 71 concerns the form and timing of an extension of term application. It is convenient to direct attention to s 71(2) dealing with the time for making an extension of term application, particularly s 71(2)(b). If applicable, this provision requires the application to be made during the term of the patent and within 6 months after the date of commencement of the first inclusion in the ARTG of goods that contain, or consist of, any of the pharmaceutical substances referred to in s 70(3). 128 Section 71(2)(b) was the starting point for the primary judge's analysis. His Honour noted the provision's reference to s 70(3). He reasoned that the reference to "the substance" in s 70(3) was to a substance that had been "chosen" by the patentee from the one or more pharmaceutical substances referred to in s 70(2). This choice could be made by the patentee from any of the pharmaceutical substances identified in s 70(2), provided the substance satisfies both conditions of s 70(3): J[137] - [140]. This means that the date referred to in s 71(2)(b) is referable to goods that contain, or consist of, the chosen substance. One takes, therefore, the date of first inclusion of goods in the ARTG that contain, or consist, of this substance, and this substance alone. 129 This reasoning reflects error. Section 70(3) does not involve choice. It speaks only of the state of the ARTG. Nor does the use of "any" in the phrase "any of the pharmaceutical substances" in s 71(2)(b) imply choice. It simply looks to the set of pharmaceutical substances satisfying the conditions of s 70(3) and fixes, as the relevant date, the date of commencement of the first inclusion of goods that contain, or consist of, any of the substances. 130 This part of the primary judge's reasoning is overlain with the notion that the "effective patent life" sought to be conferred by an extended patent term can only be achieved if the product on the ARTG "triggering the start of the extension" is a product of the patentee, not that of a stranger (including a competitor): J[62] - [73]. The primary judge considered that the requirements of reg 6.8(3) "implicitly talk to the patentee's goods, not that of a competitor": J[86]. This notion appears to have been used by the primary judge to bolster the conclusion that s 71(2)(b) proceeds on a choice that has been exercised by the patentee as to the substance, and hence the goods, that can be used for timing purposes under s 71(2)(b). 131 This reasoning also reflects error. Section 70(3) imposes no conditions beyond those stipulated in the provision. Once again, s 70(3) simply looks to the state of the ARTG. It does not discriminate between the goods that contain, or consist of, the one or more pharmaceutical substances. 132 As subordinate legislation, reg 6.8(3) cannot dictate the construction of s 70(3), as the primary judge recognised. Nevertheless, the primary judge considered that reg 6.8(3) supported his construction. His Honour's reasoning appears to have been that reg 6.8(3) requires information that can be provided only from the knowledge of the person whose goods are included in the ARTG, and that that person must be the patentee. 133 The text of reg 6.8(3) is, however, illuminating: (3) The application must also be accompanied by information identifying the substance, as it occurs in those goods, in the same way (as far as possible) as the substance is identified in the complete specification of the patent. 134 The use of the qualifying words "as far as possible", in this provision, recognises that, in fact, the patentee might not be able to identify, with exactitude, the substance as it occurs in the registered goods with the substance as it is identified in the complete specification, and makes allowance for that difficulty. Therefore, reg 6.8(3) does not provide the support which, it seems, the primary judge believed it to provide for the construction of s 70(3) he adopted. 135 It will be appreciated that the primary judge's reasoning - which implies the notion of choice and the notion that s 70(3) is concerned only with "the patentee's goods" - reduces the scope of s 70(3) to a more limited subset of goods than is provided for by the actual words of the provision. There is no warrant in the statutory language, or in the context provided by the other provisions of the extension of term regime, for reducing the scope of s 70(3) in that way. The primary judge considered that there is "a nice fit" when ss 70 and 71 are read in that way: J[87]. But that "fit" is achieved only by the expedient of imposing limitations on the statutory language that lead to the respondents' desired outcome. In other words, the "fit" is achieved by providing for it. 136 The primary judge sought to derive assistance from s 77, which is the provision for calculating the term of an extension, once an extension has been granted by the Commissioner. His Honour reasoned that a construction of s 77 which calculates the term of an extension as zero, is a construction that leads to an absurd result: J[144]. His Honour saw that prospect arising if the patentee is not able to exercise the choice, with respect to the substances, that his Honour saw implicit in the operation of ss 70 and 71. Thus, on this reasoning, the period referred to in s 77(1)(a) relates to the earliest first regulatory approval date in relation to the substance chosen by the patentee for the purposes of its extension of term application, not in relation to any of the pharmaceutical substances referred to in s 70(2), as s 77(1)(a) prescribes. 137 This reasoning is affected by the errors referred to above. It is also inconsistent with Jagot J's reasoning in Merck (FCA) where, at [65], her Honour said that the statutory scheme does not operate by reference to the nomination or a selection of a pharmaceutical substance by a patentee. Her Honour's reasoning and conclusions on the proper construction of s 77, which were delivered after the primary judge's reasons in the present case, have now been affirmed on appeal in Merck Sharp & Dohme Corp v Sandoz Pty Ltd in [2022] FCAFC 40. 138 To be clear, s 71(2)(b) is a timing requirement for seeking an extended patent term. It is directed, unambiguously, to the state of the ARTG concerning registered goods that satisfy the requirements of s 70(3). On the other hand, s 77(1)(a) provides the calculation for the duration of an extended patent term. It is directed, unambiguously, to the pharmaceutical substance or substances referred to in s 70(2), regardless of whether those substances satisfy the additional condition imposed by s 70(3)(b). Section 77(1)(a) recognises that certain substances referred to in s 70(2) might not satisfy s 70(3)(b), because s 77(1)(a) contemplates the possibility that the calculation it mandates might yield a negative result. Recognising this possibility, s 77(1)(a) forbids that outcome. Section 77 fixes the extended term to a period between zero and no longer than 5 years. Therefore, even if the Commissioner grants an extension of term under s 76, the reality is that, ultimately, that application might not be of practical benefit to a patentee. This outcome, however, is one that the legislature plainly contemplated. 139 When regard is had to its terms and provenance, as explained in the Commissioner's submissions, the former s 76A does not provide a sound basis to depart from the clear words of ss 70, 71, and 77. Further, the construction of ss 70, 71, and 77, explained above, does not result in absurdity or unreasonableness. As stated, in balancing the range of competing interests - not just providing for the patentee's interests - it can be taken that the legislature saw the correct balance as being achieved by the very words it chose in order to implement the extension of term regime. If, in its operation, that regime has not achieved, and is not achieving, its intended policy objectives, or is providing difficulty for patentees in its application, then it is for the legislature to drive the outcomes it seeks by undertaking the necessary legislative changes. 140 The possible problems of this construction that were perceived by the primary judge do not seem to have been realised in practice. The present case is an example. None of the difficulties to which the primary judge referred have thwarted the respondents from making an extension of term application based on KEYTRUDA, even though the KEYTRUDA application is not their preferred application and, if granted, will not lead to their preferred extended term. That said, it will be necessary for the respondents to persuade the Commissioner that an extension of time should be granted to allow that application to succeed. However, if successful, the KEYTRUDA application will provide an extension to 16 April 2030. 141 Ground 1 of the appeal succeeds, as does Ground 2 insofar as it follows from the conclusion on Ground 1. It is not necessary to consider the balance of Ground 2 or, as a practical matter, Grounds 3 and 4.

Disposition 142 The appeal should be allowed, with costs. 143 Orders 1 and 2 made by the primary judge on 11 June 2021, and Orders 1 and 2 made by the primary judge on 19 July 2021, should be set aside. 144 The respondents' originating application dated 14 October 2020 should be dismissed with costs. I certify that the preceding one hundred and forty-four (144) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Allsop and Justices Yates and Burley.

Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020(Cth)sch 1

Patents Act 1990(Cth)ss 2A, 65, 70, 71, 74, 75, 77, 223, ch

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