Irides: Weekly global patent litigation update

This edition features updates from: The European Union (EU), Australia, Switzerland, The Unified Patent Court (UPC), the United States of America (USA).

The Irides Weekly Update is our round-up of patent litigation news highlights from around the world.
 

EU - STOP PRESS

European institutions reach agreement on the EU pharma package.

On 11 December 2025, the European Council and Parliament announced an agreement on the so-called EU pharma package, formed by a new Directive and a new Regulation. These will update the legal framework on pharmaceutical law at EU level.  Some of the key changes include:

• new medicines on the market will benefit from an eight-year data protection period, and one year of market protection, with the possibility of having additional regulatory market protection periods, with a cap of 11 years in total;
• the duration of orphan market exclusivity will be nine years, although orphan medicines addressing high unmet medical needs will have 11 years of exclusivity:
• requirements that companies must be able to supply sufficient quantities of medicines to meet patient needs; and
• an extended so-called “Bolar exemption” to ensure generic versions of medicines can be made available on day one, which will include an exemption for the submissions for procurement tenders.

Some further formalities need to be completed before the new legislation is enacted, including revision of the legislative texts, official adoption by the European Council and Parliament, and publication in the EU’s Official Journal.
 

AUSTRALIA

Federal Court abolishes patent term extensions for pharmaceutical formulations.

On 1 December 2025, in the case of Otsuka Pharmaceutical Co., Ltd, H Lundbeck A/S and Lundbeck Australia Pty Ltd (together, Otsuka) v Sun Pharma ANZ Pty Ltd (Sun Pharma), in a decision that is expected to have broad reach for patent terms extensions for formulation claims, the Federal Court concluded that the patent term extension covering controlled release formulations for aripiprazole was invalid.

Principally: the lower court was wrong to conclude that the claimed controlled release formulations of aripiprazole (the Formulations) were a ‘pharmaceutical substance’ for the purposes of section 70(2)(a) of the Patents Act. Instead, this provision was confined to active pharmaceutical ingredients (APIs). Arguably, this means formulation patents are now ineligible for patent term extensions. Otsuka may still request leave to appeal this decision to the High Court.

Otsuka Pharmaceutical Co., Ltd held a patent entitled “Controlled release sterile injectable aripiprazole formulation and method” and its 20-year patent term expired on 18 October 2024 (the Patent). A request to extend the Patent term was granted (following an initial rejection). This extended the Patent’s expiry date to 25 July 2029. The extension request was based on two ”kit” products listed in the Australian Register of Therapeutic Goods (ARTG) comprising: a vial of freeze-dried aripiprazole and vehicle and another vial containing a solvent for injection.

Sun Pharma ANZ Pty Ltd (Sun Pharma) challenged this extension decision and Otsuka cross-claimed for threatened infringement (this cross-claim was not contested in order to expedite proceedings). Of most interest were Sun Pharma’s challenges to the patent term extension for formulation patents.

Conditions for the grant of a Patent term extension

S. 70 of the Patents Act contains three requirements a “pharmaceutical substance” must meet in order to obtain a patent term extension (only those requirements relevant to this case are summarised):

1. 1≤ pharmaceutical substances per se must be disclosed in the specification and in substance fall within the scope of the claim(s);
2. Goods containing, or consisting of, the substance must be included in the ARTG; and the period beginning on the grant date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years; and
3. The term of the patent must not have been previously extended.

“Pharmaceutical substance” is defined in Schedule 1 of the Patents Act to mean:

a substance (including a mixture or compound of substances) for therapeutic use whose application (or one of whose applications) involves: (a)  a chemical interaction, or physico-chemical interaction, with a human physiological system; or (b)  action on an infectious agent, or on a toxin or other poison, in a human body; but does not include a substance that is solely for use in in vitro diagnosis or in vitro testing.

“therapeutic use” is further defined to mean use for the purpose of:

(a) preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury in persons; or

(b) influencing, inhibiting or modifying a physiological process in persons; or

(c) testing the susceptibility of persons to a disease or ailment.

The Appeal Court dedicated a significant part of its judgment to the construction of the term “pharmaceutical substance”. The Court acknowledged that the task of statutory construction required “some appreciation of the pre-existing law and the legislative history of relevant provisions”, whereupon it conducted an extensive review of: pre-existing law, 1989 amendments to the Patents Act, subsequent amendments to the Patents Act and earlier judgments addressing these terms.

Following this review, the Appeal Court concluded that the term “pharmaceutical substance” is limited to active substances and formulations do not fall within the scope of this term. This conclusion was primarily based upon the Explanatory Memorandum to the Patents Amendment Bill 1989, which introduced the definitions for ‘“pharmaceutical substance” and “therapeutic use” into the Patents Act. The Memorandum states that the new patent extension regime would “be available for ‘therapeutic substances’ in the terms of the [Customs Regulations], with added limitations”. The Court, having determined that “therapeutic substances” included formulations, found the “added limitation” required therapeutic substances to be involved a chemical interaction, or physico-chemical interaction, with a human physiological system. This focussed the definition of “pharmaceutical substance” on the substance producing the therapeutic effect (distinct from any non-therapeutically active excipients). The Court was comfortable that this construction was consistent with previous judgments and other references to the abovementioned terms in statute.

Having come to this conclusion, the Formulations were found to not constitute pharmaceutical substances under s. 70 of the Patents Act. Only aripiprazole can exert the desired therapeutic effect and none of the excipients in the Formulations had any therapeutic effect. As such, the Formulations should not qualify for an extension based on the Patent.

Finally, the Federal Court concluded that goods listed on ARTG did not contain the injectable Formulation, so s 70(3) of the Patents Act is not satisfied.
 

SWITZERLAND

Procedural guidelines amended to expedite consideration of validity in patent infringement actions.

On 9 December 2025, the Federal Patent Court announced that its procedural guidelines would be amended to expedite consideration of patent validity when that patent is relied upon in an infringement claim.

The procedural guidelines aim to ensure proceedings before the Federal Patent Court are conducted efficiently and the parties are able to predict the timelines of these actions. The latest addition to these procedural guidelines seeks to ensure validity issues are decided within a year.

If a patent nullity action is brought against an intellectual property right forming the basis for an infringement action, such nullity action will be conducted in expedited proceedings. In lieu of an instructional hearing, parties are to substantiate their case only if they receive an extended notice to do so. Unilateral requests for deadline extensions “will only be granted with extreme reluctance”.

While the procedural guidelines are yet to be amended, the new practice is to apply with immediate effect.
 

UPC

Court of Appeal sets aside damages award.

On 9 December 2025, the Court of Appeal of the UPC set aside an interim damages award from the lower court for reputational damage. Bhagat Textile Engineers (Bhagat) appealed the decision of the Milan Local Division to award provisional damages of EUR 15,000 for reputational damage to Oerlikon Textile GmbH & Co KG (Oerlikon) resulting from Bhagat’s infringement of Oerlikon’s patent. Bhagat also appealed the costs award at first instance in addition to the decision to not stay infringement proceedings pending the outcome in a parallel validity action (the appeal of this stay decision was ultimately dropped).

Bhagat's original infringing act was to offer a structuring/texturing machine to the public at a trade fair in Milan. During the appeal, it was not disputed that this machine infringed Oerlikon’s patent. It was also accepted that Oerlikon had failed to present evidence of negative economic consequences suffered by it or unfair profits made by Bhagat as a result of this exhibition. The parties did however disagree on the award of damages resulting from the alleged moral prejudice to Oerlikon pursuant to Art. 68(3)(a) UPCA.

The Court of Appeal concluded that Bhagat was at least negligent in failing to monitor the patent landscape before exhibiting its product.  As an “active stakeholder in the industry”, there were reasonable grounds for Bhagat to know about the existence of Oerlikon’s patent and the corresponding infringement risk. Art. 68(1) UPCA therefore applied. Under this provision, the Court shall order the infringer to pay the injured party damages “appropriate to the harm actually suffered by that party as a result of the infringement”. In addition, the Court should take into account all appropriate factors when setting damages. These factors include economic factors and factors such as moral prejudice (Art. 68(3)(a) UPCA).

The Court of Appeal concluded that Oerlikon had failed to evidence reputational damage: statements made by the Managing Partner of Bhagat Group were too general and merely indicated that Bhagat was present at the relevant trade fair. Oerlikon’s request for interim damages resulting from moral prejudice was therefore rejected.

The Court of Appeal did uphold the first instance decision to award costs to Oerlikon. Bhagat had argued that it should be liable for a lower portion of the costs due to its efforts to settle the dispute. However, the Court of Appeal noted that Art. 69(1) UPCA establishes reasonable and proportionate legal costs and other expenses should be borne by the unsuccessful party as a general rule. Oerlikon’s failure to send a warning letter was justified given the urgency and limited length of the relevant trade fair (7 days). As no unnecessary costs had been incurred by Bhagat, the first instance costs award was maintained.

Bhagat was ordered to bear 80% of Oerlikon’s appeal costs and Oerlikon was required to pay 20% of Bhagat’s appeal costs.
 

UPC

Court of Appeal considers change of language request.

On 1 December 2025, the Court of Appeal upheld the change of language in Innovative Sonic v OPPO, confirming that the proceedings will continue in English. The Court found that the President of the Court of First Instance had properly applied the Art. 49(5) UPCA fairness assessment, taking into account the parties’ international circumstances, the prevalence of English in the relevant technology sector, and the need for the parties themselves, not only their representatives, to fully follow the case.

The UPC Court of Appeal has dismissed Innovative Sonic’s appeal and confirmed that the proceedings will continue in English rather than German. The Court reaffirmed that the test under Art. 49(5) UPCA is one of overall fairness, requiring consideration of all circumstances specific to the case, with particular emphasis on the defendant’s position.

The President of the Court of First Instance had found that English is widely used in the wireless communications sector and is the internal working language of the OPPO group. The Court of Appeal agreed that proceeding in English would therefore better ensure that OPPO can fully understand the submissions and evidence. It stressed that parties cannot reasonably rely on machine translations, particularly when operating under strict procedural deadlines. The Court also confirmed that the language abilities of the parties’ representatives, the presence of German speaking judges, and the existence of parallel national litigation are of limited relevance to the Art. 49(5) assessment.

Reiterating its earlier case law, the Court emphasised that a party must be able to fully understand both what is submitted on its behalf and what is submitted by the opposing side.

Finally, the Court noted that, because the language had already been changed at an earlier stage, maintaining English promoted stability and procedural efficiency.
 

USA

USPTO revises Guidance on AI-Assisted Inventions.

On 28 November 2025, the USPTO released new guidance on AI-assisted inventions, rescinding the 2024 approach. The new position reaffirms that only natural persons can be named as inventors on U.S. patent applications, meaning AI systems or tools cannot be listed as inventors or joint inventors.

For AI assisted inventions, the traditional conception standard continues to apply. Conception has been characterised as “the touchstone of inventorship” and the “formation in the mind of an inventor”. Conception is only complete when the “inventor has a specific, settled idea”. A human inventor must form a definite and permanent idea of the complete and operative invention; simply setting a goal, following a research plan, or relying on AI generated output is not enough. Where multiple human contributors are involved, the usual joint inventorship rules apply, and the previously proposed AI specific joint inventor framework has been withdrawn.

In practice, this means innovators who use AI tools in their R&D can still obtain patents, provided a human contribution satisfies the conception requirement. As a result, clear documentation of human inventive input is now more important than ever. Determining inventorship is highly fact intensive and questions whether the natural person possesses knowledge of all the limitations of the claimed invention. As a result, conception turns on the ability of an inventor describe their invention with a degree of particularity. Any application naming an AI system as an inventor will be rejected under U.S. law. The guidance applies across all patent types.

Although the USPTO is explicit that AI cannot be an inventor, it leaves open several grey areas; in particular, how to assess borderline cases where an idea originates from AI output and how much human mental contribution is required to qualify as conception.
 

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