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Focus: Government response to gene patenting inquiries

8 February 2012

In brief: The Federal Government has released a response to three different inquiries relating to the patenting of genes and related biological materials. Partner Sarah Matheson (view CV), Senior Associate Tom Reid and Vacation Clerk Lauren John report on the response, which has particular significance to biotech industry participants.

How does it affect you?

  • The Federal Government's response acknowledges public concern regarding access to healthcare, and the need to ensure that the patent system continues to encourage innovation in genetic materials and technologies.
  • The response confirms that the Government does not support an absolute prohibition on the patenting of genes, genetic products and associated technologies, which should provide a degree of certainty to those in the biotechnology sector.
  • It states that the Government will develop legislation to modernise the definition of patentable subject matter in the Patents Act 1990 (Cth) and include an objectives provision in the Act.
  • The response also endorses a number of recommendations directed at raising the standard of patents in Australia, which are contained in the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (Cth), currently before the Senate.

Background

On 23 November 2011, the Federal Government released its response to three inquiries into gene patenting.

The first of these inquiries is the, now somewhat dated, report of the Australian Law Reform Commission (the ALRC) into gene patenting and human health, Genes and Ingenuity: Gene Patenting and Human Health (the ALRC 99 Report), which assessed the laws and practices concerning intellectual property rights over genes and genetic products, and the impact of the patent system on human health issues. The ALRC 99 Report was published in 2004 and is discussed here.

The second is a report tabled in late 2010 by the Senate Community Affairs References Committee, which examined patents in Australia covering human and microbial genes, and the impact that the granting of such patents has had, and may have, on the provision and cost of healthcare and progress in medical research. The Senate Committee was asked to identify measures that would lessen any adverse impacts, including whether the Patents Act should be amended to prohibit the patentability of such materials.

The third, and most recent, is a report on patentable subject matter published earlier this year by the Advisory Council on Intellectual Property (ACIP). ACIP reviewed the appropriateness and adequacy of the 'manner of manufacture' test as the threshold requirement for patentable subject matter under Australian law, and the historical requirement that an invention must not be 'generally inconvenient.'

Objectives provisions for the Patents Act

Both the Senate Committee and ACIP recommended that the Patents Act be amended to include a statement of its objectives. ACIP went further, proposing that one of those objectives be to balance the rights of patent holders to exploit their inventions with the interests of users of technology and the wellbeing of Australians generally.

The Government has accepted those recommendations, and stated that it will engage in a widespread public consultation process on the development of a statement of objectives. According to its response, those objectives include ensuring that patents do not lead to patients being denied 'reasonable access to healthcare'. The response does not elaborate on what may be meant by 'reasonable access to healthcare'. Any developments on this topic will need to be closely monitored by pharmaceutical originators, and other healthcare industry patent owners and licensees.

Review of patentable subject matter

Under section 18 of the Patents Act, to be patentable, an invention must meet a number of requirements, including that it be a 'manner of manufacture' within the meaning of what is the now very archaic language of s 6 of the Statute of Monopolies of 1623.

Through a long line of United Kingdom, and then Australian, case law, the 'manner of manufacture' concept has been developed to define what subject matter is patentable in Australia. It still forms an essential component of Australian patent law today, despite having been replaced in the United Kingdom some time ago. Encouragingly, the Government has confirmed that it will direct legislative attention towards defining the concept of patentable subject matter using clear and contemporary language.

The Government has confirmed that it will not support the exclusion of human genes, genetic products, and methods of diagnostic, therapeutic or surgical treatment from patentable subject matter. Consequently, it is expected that the Patent Amendment (Human Genes and Biological Materials) Bill 2010 (No 2) (Cth), which is currently before the Senate and proposes to exclude from patentable subject matter 'biological materials and products which are substantially identical to such materials as they exist in nature', will not receive the Government's support. It was introduced as a Private Members' Bill by Senators Coonan, Heffernan, Siewert and Xenophon, and its supporters have stated that it is a response to public concern about the impact of gene patents on the cost and provision of healthcare in Australia.

The Government has, however, accepted an ACIP recommendation to amend the Patents Act to exclude from patentability inventions the commercial exploitation of which would be 'wholly offensive to the ordinary reasonable and fully informed member of the Australian public'. It also intends to expand the Commissioner of Patents' powers to seek advice when deciding whether to exclude an invention on this basis.

Other than noting that any exclusion would need to be subject to Australia's international obligations (perhaps most relevantly, the permitted exclusion of inventions from patentability where necessary to protect the ordre public or morality),1 the Government's response does not elaborate on what the 'wholly offensive' standard might mean in practice. A similar public policy exclusion operates in the United Kingdom, which may provide some guidance, as may any statement of objectives to be introduced to the Patents Act.

Other requirements for patentability

The Government's response also accepts a number of recommendations to amend the Patents Act to raise the threshold for patentability generally. Many of these are to be made by the Raising the Bar Bill which is before the Senate. The Bill has been promoted as raising the patentability threshold in a technology-neutral manner, and the Government's response endorses this approach.

Creating an exception for experimental use

The Government's response reiterates its support for the addition to the Patents Act of an exemption from liability for infringement for research and experimental use of a patented invention. The proposed amendments to the Patents Act under the Raising the Bar Bill would allow for use of a patented invention for the predominant purpose of research. The Bill will also expand the regulatory approval exemption.

In parallel, however, the Government's response rejects proposals in the ALRC 99 Report to amend the Copyright Act 1968 (Cth) to provide specifically that research with a commercial purpose is 'research', and thus fair dealing under that Act. The ALRC had expressed the view that while Australia's existing fair dealing provisions complied with its international obligations under the Berne Convention, it would be desirable to clarify that research is not excluded from the scope of the fair dealing exemption simply because it has a commercial purpose. Although the Government's response expresses the view that the current provisions do not exclude research where performed for a commercial purpose, there is, as yet, little case law supporting that view.

Footnotes
  1. Under Article 27(2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

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