Current Australian Patent Litigation

2025 saw a number of seismic shifts in the Australian patent litigation landscape. Two key appellate decisions with important legal and commercial ramifications have been raised for consideration by the High Court of Australia in special leave applications in early 2026. The Federal Court has also released a new practice direction to harmonise and streamline patent litigation practice and procedure, and has changed the ground rules for the conduct of disputes.

Gaining the most attention in the life sciences field is the decision of the Full Court of the Federal Court of Australia in Otsuka v Sun Pharma that formulation patents are not eligible for patent term extension. The Full Court also handed down its decision in the long-running dispute between Aristocrat Technologies and the Commissioner of Patents, paving the way for an expansion of patentable subject matter for computer-implemented inventions. In early February 2026, the High Court of Australia refused special leave to appeal, effectively endorsing the Full Court’s decision.

The Federal Court was also called on to decide three interlocutory injunction applications in Regeneron v Sandoz, Abbey Laboratories v Virbac and Janssen v Juno, in which the Court weighed the various factors in the balance of convenience, with different results. The Court’s decision in Perfect Day v Commissioner of Patents was notable in underlining the relative strictness of the sufficiency and support requirements for post-Raising the Bar patents. The decisions of NOCO v Brown and Watson and Zoetis v Boehringer provided further guidance on the Australian requirement for disclosure of the best method known to the patentee, including the relevant date for disclosure.

The Federal Court’s new practice note now applies to all patent cases, and is designed to standardise how Australian patent litigation is managed to minimise delays and promote the early identification of issues. The key changes are discussed in this chapter.

No PTEs for formulations: Sun Pharma v Otsuka

In December 2025, the Full Court of the Federal Court delivered its decision in Otsuka Pharmaceutical Co v Sun Pharma ANZ [2025] FCAFC 161, regarding the scope of the patent term extension (PTE) provisions of the Patents Act.

Otsuka’s patent covered certain controlled release injectable and freeze-dried formulations of aripiprazole. Sun Pharma challenged the validity of the PTE, arguing that the claims of the patent did not meet the statutory requirements for an extension. The central issue was whether a patent claiming a new formulation of a known active pharmaceutical substance (API) falls within the definition of a “pharmaceutical substance” eligible for a PTE.

In a unanimous decision, the Full Court found that, in light of a proper consideration of the legislative context, the natural and ordinary meaning of the definition of pharmaceutical substance “immediately and naturally puts the focus on the substance which itself produces the therapeutic effect”, and does not extend to new formulations, delivery methods or dosage forms containing known APIs. As a result, the patent was not eligible for a PTE. The Court found that the reasoning in earlier first instance decisions that had found formulations to qualify was incorrect, and preferred the construction given to the definition in other Full Court decisions which had focused on the API.

Otsuka has applied for special leave to appeal the decision to the High Court of Australia, which is due for consideration in March 2026. If special leave is refused, or if the High Court confirms the decision, it is a major course correction with significant implications. Australia’s Patent Office, IP Australia, has followed a practice of allowing PTEs on formulation patents over more than a decade based on earlier first instance decisions, despite the clear difficulties in their reasoning. If the Full Court’s decision stands, it will lead to action by IP Australia to rectify the register to remove PTEs granted on secondary patents, such as those claiming new formulations of known drugs. Actions by generics and biosimilar companies to clear the way can also be expected. It will also present new opportunities for earlier generic and biosimilar market access for a host of products that may be covered by invalid PTEs.

Aristocrat v Commissioner of Patents: update on computer-implemented inventions

The long-running quest by Aristocrat Technologies to secure patent protection for its gaming technologies has reached a successful conclusion. In September 2025, the Full Court in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2025] FCAFC 131 (Aristocrat 2025) held in Aristocrats’ favour, finding that the claims in four patents concerning electronic gaming machines would satisfy the “manner of manufacture” requirement for patentable subject matter.

Aristocrat 2025 was an appeal from the decision of Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents (No 3) [2024] FCA 212, in which Justice Burley found that Aristocrat had not established that any of the residual claims were a manner of manufacture, following the earlier Full Court decision of Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (Aristocrat 2021). In Aristocrat 2025, the Full Court determined that all claims remitted for consideration after the earlier Full Court and High Court rulings did qualify as patentable subject matter.

The Full Court held that it was too restrictive to conclude that the implementation of an idea using well-known computer functionality cannot be a “manner of manufacture”. Instead, the Full Court agreed with the views expressed by Justices Gordon, Edelman and Steward in the High Court (Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29) that a clearer approach is to ask whether, when properly characterised, the subject matter is:

• an abstract idea that is manipulated on a computer; or
• an abstract idea that is implemented on a computer to produce an artificial state of affairs and a useful result.

The Full Court accepted Aristocrat’s submission that each of the residual claims is a combination claim that involves an altered electronic gaming machine to produce an artificial state of affairs and a useful result. The Full Court found that the integers concerning the game controller’s functions interact and depend on the integers concerning the user interface. In addition to the interdependent player interface, the invention included feature games, special symbols and a jackpot prize when a predefined number of special symbols was achieved. As such, the Full Court found that each of the residual claims was a manner of manufacture.

The Full Court also endorsed the primary judge’s observation that it would be hard to justify why an electronic implementation of an electronic gaming machine, which takes advantage of the efficiencies of electronic technology, should be excluded from patent eligibility when a patent claiming older mechanical technologies would not have been.

In a disposition from all seven judges of the High Court on 5 February 2026, the High Court refused the Commissioner of Patents’ application for special leave to appeal, stating that there is insufficient reason to doubt the correctness of the decision of the Full Court, which had applied established principles and reached a clear conclusion. As a result, the Full Court’s decision now stands with the endorsement of the High Court as the correct approach to the patent eligibility of computer-implemented inventions in Australia.

The decision rejects the requirement for an advancement in computer technology itself in favour of a broader question: whether the claimed invention, as a whole, produces an artificial state of affairs and a useful result, rather than being a mere abstract idea or scheme implemented on a computer. It is likely that many more patents will now be granted for computer-implemented inventions in Australia.

Interlocutory injunctions: does the balance of convenience favour biosimilars?

Until recently, patentees in Australian pharmaceutical cases routinely obtained interlocutory injunctions by arguing that generic or biosimilar entry and listing on the Pharmaceutical Benefits Scheme (PBS) would trigger statutory price reductions, with lasting price effects, which would be difficult to remedy with damages alone. The Court’s tendency to preserve the status quo kept generics and biosimilar entrants at the gate pending a final hearing, protected by the usual undertaking as to damages – an undertaking by the patentee to compensate any person adversely affected by the injunction if ultimately wrongly granted.

However, a series of cases in which patents have later been found invalid have since inundated the Court with a wave of protracted compensation claims, including claims by the Commonwealth Government, involving multiple hypothetical scenarios in which the Court has been called on to determine compensation. The experience has brought an evolution in how the Federal Court assesses the balance of convenience in patent disputes, particularly in the context of first generic or biosimilar launches and PBS price dynamics.

The Court declined to grant an interlocutory injunction in Regeneron Pharmaceuticals v Sandoz [2025] FCA 1067. The applicants (Regeneron and Bayer) sought urgent injunctive relief to restrain Sandoz from launching its aflibercept products, which are biosimilar versions of the applicants’ EYLEA® products. The applicants alleged that the Sandoz products would infringe Regeneron’s patent claiming use of aflibercept according to a particular dosing regimen to treat angiogenic eye disorders.

Rofe J considered a number of arguments typically raised in pharmaceutical injunction cases, including:

• the mandatory statutory price reduction applied to an originator product when the first generic or biosimilar is listed on the PBS, alongside other price reductions;
• the originator’s loss of market share;
• the originator’s loss of revenue as a result of the PBS price drop;
• the implications of international pricing regimes to reduce the price in other countries;
• the impact of the biosimilar’s loss of first mover advantage and competitive edge over biosimilar contenders;
• changing market dynamics and the preservation of the status quo; and
• lost expenditure.

The 25% mandatory statutory price reduction that is applied to an originator product when the first generic or biosimilar is listed on the PBS is always a significant factor weighing in favour of the grant of an interlocutory injunction, as this price reduction changes the “status quo” with no guarantee that it would be reversed if the generic or biosimilar were later removed by a final injunction. However, Rofe J found that the applicants’ loss as a result of this price drop could be readily quantified and damages would be adequate to compensate the applicants.

Rofe J accepted Sandoz’s argument that loss of the first mover advantage would be significant to its business, particularly for a biosimilar medicine, and that the changing market dynamics (in circumstances where the applicants were moving to switch patients to a different patented product) would make Sandoz’s loss difficult to calculate.

Ultimately, Rofe J found that calculating the loss Sandoz would suffer if an interlocutory injunction was granted would involve more unknowns, and significant speculation as to market impact. Conversely, if Sandoz entered the market and were later found to have infringed the patent, the financial impact could be reasonably measured and the applicants could pursue damages or an account of profits. Ultimately, the Court held that the balance of convenience did not favour the grant of an interlocutory injunction, which was supported by the assessment of the applicants’ infringement case as relatively weak.

The Court also declined to grant an interlocutory injunction in Abbey Laboratories v Virbac (Australia) [2024] FCA 1488, for similar reasons. Virbac sought an interlocutory injunction to restrain Abbey from selling and marketing its Levamox Duo product, which it alleged infringed its patent for a veterinary topical formulation. The Court held that the balance of convenience did not favour the grant of an injunction for two main reasons.

• There was a “very substantial delay on the part of Virbac”. Virbac had known for over 10 months that Abbey intended to launch Levamox Duo in Australia but had not sought undertakings not to launch, and raised the possibility of an interlocutory injunction application very late.
• If the injunction was not granted, any financial harm to Virbac could be reasonably estimated and compensated with damages, given Virbac’s established sales history. In contrast, the potential harm to Abbey if the injunction was granted would be harder to quantify.

These decisions reflect a broader trend in Australia that courts are becoming increasingly reluctant to grant interlocutory injunctions in patent cases, especially where the restraint could cause disproportionate harm to generic or biosimilar companies or where the relevant market is likely to change even if an injunction is granted.

However, the recent decision in Janssen Pharmaceutica v Juno Pharmaceuticals [2025] FCA 1538 illustrates that the Federal Court will still grant interlocutory injunctions in the pharmaceutical context, particularly where there is a very strong prima facie infringement case that is not diminished by the strength of the prima facie invalidity case.

Post-Raising the Bar: a high bar for sufficiency and support requirements

The decision of Perfect Day v Commissioner of Patents [2025] FCA 270 illustrates the Federal Court’s approach to assessing the validity of patents in view of the amendments to the Patents Act 1990 (Cth) made by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). In this case, the Court upheld the decision of the Commissioner, which found the claims of a patent application to a milk substitute product to lack support and held that the specification did not provide sufficient disclosure.

In 2019, Fonterra opposed the grant of Perfect Day’s patent application entitled “Compositions comprising a casein and methods of producing the same”. The main issue was that the specification, including the title, centred on compositions containing casein proteins. However, the claims were restricted to food compositions consisting solely of α-lactalbumin (ALA) and β-lactoglobulin (BLG), but explicitly excluding any other milk proteins, and having one or more characteristics of a dairy food product. In 2022, a Delegate of the Commissioner held that the specification failed to meet the sufficiency of disclosure requirement under Section 40(2)(a) of the Patents Act. Perfect Day appealed the Delegate’s decision to the Federal Court.

On appeal, the parties disagreed on the interpretation of claim 1, specifically the meaning of the phrase “one or more” as it pertained to the list of dairy food product characteristics. Perfect Day argued that claim 1 should be construed as requiring only one of the listed characteristics, and essentially as 16 distinct claims (one for each characteristic). The Court rejected this construction, instead finding that “one or more” means “one”, “more than one”, or “all” of the listed characteristics.

The Court found that claim 1 was not supported by matter disclosed in the specification. When properly characterised, the invention claimed was a food composition that comprised ALA and BLG proteins as the only milk proteins (rather than the invention of a dairy substitute composition). This claimed invention was distinct from that described in the specification, which, when viewed as a whole, described a food composition comprising casein and possibly other milk proteins, as well as the methods for its production. The Court also rejected Perfect Day’s reliance on the consistory clause as being sufficient disclosure and support for claim 1.

Furthermore, the Court held that claim 1 lacked sufficiency, as the specification provided no guidance to the person skilled in the relevant art seeking to perform the invention by making a dairy substitute composition with two or more of the listed characteristics; rather, they would need to embark on a prolonged research programme, inquiry or experimentation.

The Australian requirements for disclosure of best method – what and when?

Recent cases have provided welcome clarity on the Australian requirement under Section 40(2)(aa) of the Patents Act to disclose the best method known to the applicant of performing the invention.

In Zoetis Services v Boehringer Ingelheim Animal Health USA [2024] FCAFC 145, the Full Court clarified that an applicant will have failed to disclose the best method if the specification omits information known to the applicant that is material to achieving the advantages of the invention.

The decision noted the authority of Les Laboratoires Servier v Apotex [2016] FCAFC 27 in relation to the obligation for the patentee to include “aspects of the method of manufacture that are material to the advantages it is claimed the invention brings”. In Zoetis, the Full Court unanimously held that the specific antigen concentration was material to the advantages claimed and that the “disclosure of a range of antigen concentrations did not constitute a fair disclosure of the best method known”.

The Federal Court’s decision in The NOCO Company v Brown and Watson International Pty Ltd [2025] FCA 887 has provided guidance for now regarding the relevant date by which the applicant must satisfy the best method requirement for divisional applications. The litigation concerned three of NOCO’s patents relating to “jump starter apparatus for boosting a depleted or discharged battery”. NOCO’s patents were filed between 2020 and 2022, each claiming an earliest priority date of 3 July 2014 based on the filing date of the relevant PCT application. NOCO alleged that a number of Brown and Watson’s products, branded as “Projecta” jump starters, infringed NOCO’s patents. Brown and Watson cross-claimed, alleging invalidity on a number of grounds, including lack of novelty and a failure to disclose the best method.

The main issue to be determined in relation to best method was the relevant date for ascertaining NOCO’s knowledge of the best method. Brown and Watson argued that NOCO was required to disclose the best method known to it at the time of filing the complete application for each patent – namely the relevant divisional filing dates in 2020, 2021 and 2022. NOCO, on the other hand, argued that the relevant date was the date of the first filed application in the claim of divisional applications which is the date from which the term of each patent runs – namely 3 July 2014.

Ultimately, Moshinsky J preferred NOCO’s position. Moshinsky J considered a variety of authorities, including Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224, in which French J and Lindgren J held that the relevant date to assess the best method known to the applicant was the filing date of the complete specification. This was in contrast to a more recent and controversial decision in Dometic Australia v Houghton Leisure Products [2018] FCA 1573, in which White J held that the relevant date was the filing date of the divisional application itself.

In applying Pfizer, Moshinsky J considered that the relevant date for assessing the applicant’s knowledge is the filing date of the earliest complete application, which in this case was the international filing date of the PCT application. Moshinsky J found that this approach was consistent with Section 29A(2) of the Patents Act, whereby “[t]he description, drawings, graphics, photographs and claims contained in a PCT application are to be treated as a complete specification filed in respect of the application”. Based on this reasoning, Moshinsky J determined that the filing date of a PCT specification, which is the international filing date, could constitute the filing date for the complete specification, meaning that disclosure of the best method was required to be made in the complete specification for the PCT application when it was filed (ie, on 3 July 2014).

Although Moshinsky J agreed with NOCO on the date at which the best method requirement is to be assessed, the Court ultimately found all asserted claims invalid for lack of inventive step. NOCO has since appealed the decision to the Full Court, and Brown and Watson have filed a notice of contention, so it appears the Full Court will consider this issue on appeal in March 2026.

New standard directions for Australian patent proceedings

In August 2025, the Federal Court introduced the Intellectual Property Practice Note – Standard Directions for Australian Patent Proceedings (IP-2), which sets out a range of measures aimed at standardising the management of patent litigation in Australia to reduce delays and encourage early identification of issues. The practice note aims to manage disputes in a quicker, more cost-effective manner, and to increase consistency and certainty in procedure.

A key part of the Practice Note is a set of standard directions to be made at the first case management hearing. The following points are of particular note.

• Applicants are expected to confine their allegations of infringement to as few claims as possible and, if feasible, one patent.
• Respondents advancing cross-claims are expected to confine the number of prior art documents and grounds raised.
• The parties must discuss the standard directions and inform the Court if they agree on any changes to the default orders or, if not, specify their points of disagreement. The standard directions will now be the default procedural orders, and the Court will not depart from them lightly.
• At the first case management hearing, parties must disclose if the patent applicant intends to amend the patent or if a party seeks to rely on experimental evidence.
• The trial is scheduled 12 to 18 months after the case management hearing, unless there are exceptional circumstances.
• When it comes to expert evidence on infringement, the patentee’s expert is required to provide a “Primer” section outlining uncontroversial technical background relevant to infringement as of the priority date, including a glossary of key technical terms.
• For expert evidence concerning invalidity, the revoker’s expert should include a “CGK Summary”, summarising widely accepted technical knowledge in the field before the relevant priority date(s).

The Court has also introduced a summary costs assessment procedure, borrowed from the UK, to encourage parties to resolve or narrow interlocutory disputes, and to discourage frivolous applications by the prospect of immediate cost consequences. Rather than deferring payment of costs of interlocutory disputes to after the final hearing, the Court now requires parties to submit statements of costs for the hearing of any interlocutory application, and may make a lump sum costs order payable within 14 days following an interlocutory decision.