The year has got off to a good start for innovators, with the Federal Court providing some assurance that methods of genetic testing continue to be patentable in Australia. But tender news for some can be a tough outcome for others. Senior Associate Tony Shaw reports.
Cargill and Branhaven applied for a patent covering methods of using cattle DNA to identify desirable traits, including meat tenderness. The method has broad applicability in animal breeding programs to increase the quality and value of livestock.
In 2016 Meat and Livestock Australia (MLA) and Dairy Australia Limited joined forces, and unsuccessfully opposed the grant of a patent on the application at the Australian Patent Office (MLA and Dairy Australia Limited v Cargill, Inc. and Branhaven LLC  APO 26). MLA subsequently appealed the Patent Office decision to the Federal Court.
In the appeal, MLA's principal challenge was that Cargill's claims to methods of genetic testing should not be eligible for patent protection.
This is the first time that the High Court's watershed decision in D'Arcy v Myriad Genetics Inc  HCA 35 has been applied to an invention involving genetic material. MLA's primary argument was that the court should apply the reasoning in Myriad to find that Cargill's claims were not eligible subject matter for patent protection, as they merely related to the discovery and use of naturally occurring genetic material.
The court soundly rejected MLA's argument, on the basis that Myriad was concerned with naturally occurring genetic information. In contrast, the court found that Cargill's invention related to the use of 'naturally occurring DNA sequences', rather than the DNA sequences themselves, and was therefore not excluded from patent protection.
MLA also argued that the court should follow the paradigm-shifting US cases of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012) and Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (2015), which held that diagnostic methods are not eligible for patent protection if the methods merely relate to the association of naturally occurring genetic information and a disease. Given the catastrophic effect that the Prometheus and Sequenom decisions have had on the biotech, medical and agricultural industries in the US, the Federal Court's recognition that patent eligibility is an evolving concept in the context of Australian legislation and Australian conditions, rather than following a foreign law approach, will bring some relief to innovators.
MLA also argued that Cargill's patent, if granted, would have a 'chilling effect' on research in the livestock industry in Australia and would be contrary to the Australian public interest. In rejecting these arguments, the court pointed to the fact that MLA is a co-owner of a separate patent that has very broad claims, which is hardly consistent with their 'chilling effect' argument.
The sizzle may not have gone out of the case just yet, as it remains to be seen whether MLA will appeal the decision.