In a unanimous decision, the Full Federal Court has confirmed that genetic materials in their isolated form remain patentable in Australia. The decision related to an appeal from an earlier Federal Court decision in which it was found isolated nucleic acids to be a 'manner of manufacture' as required by Australia's patent legislation and therefore patentable subject matter. The latest decision did not deal with policy, social or moral reasons as to whether nucleic acids or genes should be patentable which, as the court noted, has been considered by the Australian Law Reform Commission and the Australian Parliament. Partner Dr Trevor Davies and Associate Dr Tony Shaw provide an overview of the decision and its implications for patentees, patients, the biotechnology industry and the Australian medical research community.
How does it affect you?
- Owners of Australian patents directed to isolated nucleic acids should take comfort that their patents should not be vulnerable to a challenge under 'manner of manufacture'.
- Innovators can continue to obtain patent protection in Australia for biological inventions.
- No change is expected in the approach of IP Australia to examining patent applications directed to isolated nucleic acids.
A gene is a physical and functional unit of heredity which, in mammals such as humans, is made up of alternating sections of 'coding' and 'non-coding' DNA (a form of nucleic acid). Genes act as instructions to make proteins from the 'coding' sections of the DNA in a process that involves splicing the coding regions together. DNA is a large compound consisting of four different chemicals (designated A, T, C and G). In the coding region of a gene these four chemicals are arranged in particular sequences that 'code', or provide the necessary information or instruction, for a cell to make a particular protein. DNA that forms genes as well as small pieces of DNA may be isolated from cells and can also be synthesized in a laboratory.
Mutations or changes in the coding region of a gene often result in a change to the protein encoded by that gene. Myriad Genetics Inc found that certain mutations in the BRCA1 gene were associated with a predisposition to breast and ovarian cancers. The Myriad patent at issue (AU 686004 (the Patent)) claims isolated nucleic acids having those mutations and claims to tests for predisposition to breast and ovarian cancers which are based on detecting those mutations.
Cancer Voices Australia and Yvonne D’Arcy applied to the Federal Court to have only claims 1-3 of the Patent revoked because, in their view, isolated nucleic acids should not be patentable. Cancer Voices did not challenge claims 4-30 of the Patent, some of which are directed to methods for diagnosing a predisposition for breast and ovarian cancer. Cancer Voices' application to revoke claims 1-3 of the Patent was made on a single ground that the isolated nucleic acids of the Patent are not a 'manner of manufacture' as required by section 18(1)(a) of the Patents Act 1990 and therefore should not be patentable.
The meaning of ‘manner of manufacture’ was construed by the High Court of Australia in National Research Development Corporation v Commissioner of Patents (NRDC). The High Court held that a product found in nature may constitute a 'manner of manufacture' if the product as claimed in a patent involves an 'artificially created state of affairs' and has 'utility in a field of economic significance'. This approach to determining the patent-eligibility has been consistently used across new and evolving technologies since NRDC was handed down in 1959. The core principle in NRDC is that in order to be patent eligible, an invention must be for an 'artificially created state of affairs' or, in other words, it must be for something that would not exist but for the actions of a person.
Justice Nicholas applied NRDC and held that each of the claimed isolated nucleic acids is 'an artificial state of affairs, that has some discernible effect, and that is of utility in a field of economic endeavour' (at ). Accordingly, the application to revoke the claims 1-3 of the Patent was dismissed.
In appealing the decision of Justice Nicholas, Ms D'Arcy continued to assert that isolated nucleic acids as claimed in claims 1-3 of the Patent should not be patentable on the ground that they do not constitute a manner of manufacture.
Manner of manufacture
The Full Court reviewed Australian law on manner of manufacture and noted at  that the High Court in NRDC stated that it would be 'unsound to the point of folly' to attempt to restrict or define the concept of 'manufacture' in light of the advances in science and technology.
The Full Court also reviewed the meaning of 'manner of manufacture' as considered in Apotex v Sanofi, which was handed down in December 2013 (after Cancer Voices). In Apotex v Sanofi, the High Court noted that there has been a widening of the concept of 'manner of manufacture' reflecting scientific and technical developments and, consistent with NRDC, 'an artificially created state of affairs providing economic utility' is a manner of manufacture.
The Full Court considered the decision of the United States Supreme Court in Association for Molecular Pathology v Myriad Genetics (AMP v Myriad). The Full Court noted that the US Supreme Court had focused on the information encoded into genes associated with certain cancers and had held that claims to naturally occurring DNA were excluded from patentability, whether that DNA was isolated or not. The Full Court noted that this conclusion was reached ‘even though such important and useful genes had never before been located or isolated from surrounding genetic material’. This observation draws the important distinction between the newly isolated gene and the information it contains and the Full Court rejected the Supreme Court decision that a naturally occurring DNA segment is not patent eligible merely because it has been isolated. Rather, the Full Court favoured the reasoning of Judges Lourie and Moore in the US Federal Circuit in Association for Molecular Pathology v. US Patent and Trademark Office (AMP v USPTO) that isolated genes are not naturally-occurring substances but are 'the products of man'. At paragraph  the Full Court stated that:
What is being claimed is not the nucleic acid as it exists in the human body, but the nucleic acid as isolated from the cell. The claimed product is not the same as the naturally occurring product.
This is consistent with the statement at  that the claims 1-3 of the Patent are:
…not the genetic code. What is claimed is an isolated nucleic acid, a chemical molecule characterised in a certain way, which is chemically, structurally and functionally different to what occurs in nature..
The Full Court stated that '… isolated DNA can be characterised as material derived from naturally occurring material. This is not excluded from patentability within the reasoning of NRDC. The use of a living organism to produce a substance such as an antibiotic is patentable. It is not a question whether there is any overlap between what occurs in nature and that which is claimed. If so, all biological material would be inherently unpatentable' (at ).
Although in some instances an isolated nucleic acid can be derived from naturally occurring nucleic acid, the Full Court held that this is insufficient for it to be excluded from patentability. In particular, the Full Court stated '[a] mere discovery is not patentable and an idea is not patentable, but a "manner of manufacture", as that term has been developed, is.' (at ). Therefore, in determining whether a claim covers patentable subject matter, there is no requirement under Australian law to consider (as now occurs in the US) whether the claim covers a 'product of nature' or if it is 'markedly different' from that which exits in nature. Indeed, the Full Court stated that an exclusion from patentability on the basis that an isolated nucleic acid is a 'product of nature' is 'not in accordance with the principles of patent law in Australia and has been specifically rejected as a reason for exclusion in NRDC'.
Consistent with NRDC and Apotex v Sanofi, the Full Court held that the correct approach when determining if a claim covers patent eligible subject matter is that 'the analysis should focus on differences in structure and function effected by the intervention of man and not on the similarities' (at ). That is, a focus should be placed on the claimed products, the isolated nucleic acids in this case, not the information they contain. However, this approach is in contrast to the approach the US Supreme Court took in AMP v Myriad, a decision that attracted some criticism from the Full Court.
Having reached a view on what constitutes a 'manner of manufacture' within the meaning of the Patents Act 1990, the Full Court rejected D'Arcy's arguments and found the isolated nucleic acid of claims 1-3 of the Patent 'has resulted in an artificially created state of affairs for economic benefit.' and that '[t]he claimed product is properly the subject of letters patent.'
The Full Court pointed out at  this decision is not about policy, moral or social reasons that 'gene sequences' should be excluded from patentability, nor is the decision about the 'wisdom of the patent system.' These issues have been considered elsewhere and the Full Court referred to the lapsing of a Private Members Bill that sought to exclude from patentability all 'biological materials' and that the Federal Government had accepted an Australian Law Reform Commission's recommendation in 2004 that genetic materials and technologies should not be excluded from patentability.
As noted at , the decision is about 'the application of Australian patent law, as set out in the Act and as developed by the courts since the Statute of Monopolies.' The Full Court held that the correct approach to what constitutes a 'manner of manufacture' is one that is consistent with NRDC and Apotex v Sanofi. The approach requires consideration of the differences in structure and function effected by the intervention rather than the similarities to naturally occurring products to determine if the invention results in 'an artificially created state of affairs for economic benefit'.
In taking this approach, the Full Court held that the isolated nucleic acids of claims 1-3 of the Patent are for a manner of manufacture and should not be excluded from patentability. Consequently, the appeal was dismissed.
The Full Court also confirmed that nucleic acids in their natural state residing in human cells, are not (and have never been) patentable.
In the light of this decision, owners of Australian patents directed to isolated nucleic acids should take comfort that their patents should not be vulnerable to a challenge under a 'manner of manufacture'.
The decision will be welcomed by the biotechnology sector and medical researchers in that their biological innovation remains patent eligible in Australia.
The decision should also give comfort to patients that new diagnostics and medical treatments will continue to be developed and commercialised in Australia.
The lawyers for Ms D'Arcy have indicated that they will fight 'to the end'. Ms D'Arcy may seek leave to appeal the decision to the High Court so the Full Court decision may not be the last on this subject.
Allens will provide an update if this decision is appealed to the High Court.