When Rights Don’t Exist Until They Suddenly Do: The Hidden Timing Trap in Patent Extensions
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Published: 18 November 2025 | Reviewed: 18 November 2025
(3-minute read)
Case Study: H Lundbeck A/S & CNS Pharma Pty Ltd v Sandoz Pty Ltd [2022] HCA 4 - Perspective 3
The Timing Problem at the Heart of S 79
In H Lundbeck A/S v Sandoz Pty Ltd [2022] HCA 4, the High Court examined the “statutory fiction” in s 79 of the Patents Act 1990 (Cth) - a provision that grants the patentee the right to sue for acts done after the patent expired but before the extension was granted, as if the extension had existed at the time.
The Court clarified two principles:
1. A patentee has no cause of action until the extension is granted.
The Court held:
“No cause of action arose until the later grant of the extension of the term of the Patent.”
2. Section 79 creates substantive rights - but only from the date of the extension.
The High Court emphasised that the rights “backdate” only because of the statutory fiction, not because any real-life rights existed at the time the acts were done.
This meant Sandoz incurred liability only once the extension was granted on 25 June 2014, even though the allegedly infringing acts occurred between June 2009 and December 2012.
The timing difference mattered. It changed:
who could sue,
when interest started running,
the calculation of damages,
the viability of misleading-conduct claims.
It was not intuitive - even to experienced litigators.
Why It Still Matters -
Timing mistakes create large, invisible financial exposure
The deeper risk revealed by the case is timing risk: when parties assume a right exists earlier than it legally does.
This risk appears in many contexts:
regulatory approvals (ASIC, ACCC, TGA),
contract renewal or expiry,
intellectual property registrations,
assignment dates,
settlement conditions precedent,
option notices and calls,
statutory limitation periods.
Clients often proceed on the basis of commercial timing, while the law operates on statutory timing. These mismatches expose them to:
funding work that has no effect until a later legal trigger,
committing to strategy before rights crystallise,
losing leverage because a right arises later than expected,
misunderstanding when damages actually accrue.
The Lundbeck decision shows the consequence: several years of litigation hinged on the exact moment a cause of action legally began to exist.
How to Avoid the Same Trap -
escrow and independent cost oversight
The safeguard most relevant to this risk is Clean Law’s Escrow + Cost Oversight system, documented in the Two-Lawyer Collaboration & Escrow Oversight Statement.
Why escrow matters in timing-sensitive disputes
In traditional models, a client may pay significant fees based on assumptions about:
when rights arise,
when claims accrue,
whether they can sue yet,
whether a statutory extension will be granted,
whether they will recover costs.
When those assumptions prove incorrect, the client carries the financial consequence — even if the work turns out to be strategically premature.
Clean Law’s model is designed to avoid that scenario:
1. Escrow: nothing moves without your approval
Funds are held in a Law Society-audited trust account.
No stage of work proceeds unless the basis for that work (including timing assumptions) is explained and authorised.
2. Independent cost oversight
Because Clean Law’s fixed-fee oversight is separate from courtroom advocacy, we can assess whether proposed work is:
legally possible at that time,
strategically premature,
contingent on a statutory trigger (as in Lundbeck),
likely to become sunk cost if timing shifts.
3. Incentive alignment
Traditional billing models reward early work, even if done before rights arise.
Clean Law’s structure is the opposite:
If you save, we win;
If your case drags, we lose.
Our incentives align with timing correctness, not workload.
4. Early settlement focus
In timing-sensitive disputes, cost-efficient resolution may be possible before a statutory right crystallises, something Clean Law explores independently of your courtroom lawyer’s trial obligations.
Collectively, these safeguards are built to prevent the precise structural risk revealed in Lundbeck, a risk created not by error, but by the complexity of statutory timing.
Reflection
The timing principles in Lundbeck are technical, but the lesson is simple: rights often arise later than expected. Strategic and financial decisions made too early can expose clients to unnecessary cost.
Clients managing disputes involving statutory extensions, approvals, or contingent rights often consider whether an escrow-based structure, where timing is checked before spend, provides safer control over both risk and cost.
When timing determines liability, clients benefit from structures that prevent premature or misaligned spending. Explore how escrow and oversight work.
If your dispute depends on a statutory date, extension, condition precedent or regulatory trigger, many clients start with a confidential, fixed-fee timing audit.
Book a confidential appointment
By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
