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Focus: High Court unanimously finds isolated genetic material not patentable

8 October 2015

In brief: In the culmination of a hard-fought patent dispute, the High Court of Australia has unanimously ruled that Myriad Genetics' patent claims to isolated nucleic acid coding for the mutant or polymorphic BRCA1 polypeptide are not valid. This overturns the previous decisions at trial and on appeal before the Full Federal Court, and effectively nullifies the long-standing practice that 'isolation' of material from a natural source is sufficient to meet the Australian patentable subject matter threshold. Partner Trevor Davies (view CV) and Managing Associate Linda Govenlock report.

 
 

How does it affect you?

  • Following D'Arcy v Myriad Genetics Inc, innovators developing biological products by mere isolation from natural sources will no longer be able to protect the isolated products per se. If, however, the biological products are modified to alter their function or activity for particular uses, this should meet the patentable subject matter threshold, in line with the approach set out by the High Court.
  • The court has sent a strong signal that claims to genetic tests and diagnostic methods remain eligible for patent protection in Australia.
  • Although the court emphasised that the decision was addressed to the specific question of whether isolated nucleic acids were patentable subject matter, it remains to be seen whether the Australian Patent Office will seek to apply this decision more broadly.

Background

Cancer Voices Australia and Yvonne D'Arcy originally applied to the Federal Court to have claims 1-3 of Myriad Genetics' patent revoked, on the basis that isolated nucleic acids were not a 'manner of manufacture', as required by section 18(1)(a) of the Patents Act 1990 (Cth), and were not patentable subject matter. The other claims in the patent directed to uses of the isolated nucleic acids and methods for diagnosing a predisposition for breast cancer and ovarian cancer were not challenged.

In Cancer Voices Australia v Myriad Genetics Inc,1 Justice Nicholas upheld the validity of the claims, on the basis that isolated nucleic acids satisfied the test enunciated by the High Court in its landmark decision National Research Development Corporation v Commissioner of Patents (NRDC): namely, that in order to be eligible for patent protection, 'a product that consists of an artificially created state of affairs which has economic significance will constitute a "manner of manufacture".'

Ms D'Arcy subsequently appealed that decision to the Full Court. As we reported in our Focus, the full bench of the Federal Court dismissed the appeal, unanimously upholding the decision of the trial judge and finding claims to isolated nucleic acids were eligible for patent protection under Australian law. In arriving at their decision, their Honours characterised the isolated nucleic acids as a product per se that differed significantly from the naturally occurring DNA in a cell from which they were derived and had been brought into existence by human artifice, and had valuable economic uses. The Full Court therefore concluded that isolated nucleic acids were 'an artificially created state of affairs' in a field of economic utility and, thus, patentable subject matter in accordance with the principles set forth in NRDC.

The decision

The High Court indicated that it was not concerned in this appeal with 'gene patenting' generally, but with whether Myriad's claims to isolated nucleic acid fell within established applications of the concept of 'manner of manufacture', which frames the fundamental issue of patent-eligible subject matter under the Patents Act.

Myriad again argued that the claims were directed to a chemical compound, and that there was no jurisprudential basis or normative principle upon which claims to isolated nucleic acids should be treated differently from any other product claims. This argument, which had been accepted by the trial judge and the Full Court, was soundly rejected by the High Court, on the basis that it elevated form over substance.

The High Court instead agreed with Ms D'Arcy (who invoked an observation of the US Supreme Court) that Myriad's claims 'simply are not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA'. In accepting that characterisation of the claims, the High Court found that the substance of the invention was the information embodied in arrangements of nucleotides that encode BRCA1 polypeptide. As this information was not 'made' by human action but only discerned, and was in effect the same information as that contained in the DNA of the person from which the nucleic acid was isolated, the claims were not eligible for patent protection. For similar reasons, the High Court also found cDNA (synthetic DNA that replicates a naturally occurring sequence of exons) was not patentable subject matter.

The High Court criticised the approach of the trial judge and Full Court in applying a 'verbal formula' adapted from the High Court's decision in NRDC to the question of patentable subject matter: namely, that to be patentable, it was 'sufficient for a product to result in an "artificially created state of affairs", leading to "an economically useful result".' The High Court found that approach was too narrow, as it attributed 'misplaced significance' to the conclusion reached in NRDC, without taking into consideration wider factors relating more broadly to policy, public interests and coherence of the law. 

The High Court stated that legislative history – including the fact that the Australian Government had not amended the Patents Act to expressly exclude genetic material – cannot be read as impliedly mandating the patentability of claims for inventions relating to isolated nucleic acids coding for particular polypeptides.

Following this vein, the majority of the High Court expressed a concern that resonated throughout the three separate judgements, that:

There is a real risk that the chilling effect of the claims, on the use of any isolation process in relation to the BRCA1 gene, would lead to the creation of an exorbitant and unwarranted de facto monopoly on all methods of isolating nucleic acids containing the sequences coding for the BRCA1 protein. The infringement of the formal monopoly would not be ascertainable until the mutations and polymorphisms were detected. Such a result would be at odds with the purposes of the patent system.

 

Comment

While this decision may be disappointing for innovators and researchers within the biotech sector, all is not lost. Importantly, claims to diagnostic methods for detecting BRCA1 were not challenged and such claims should still be considered patentable following this decision. Relevantly, Justices Gageler and Nettle observed:2

It is not disputed that a process or method of detecting the increased likelihood of certain kinds of malignancy by isolating the BRCA1 gene and examining it for the presence of any of the specified mutations and polymorphisms may be patentable subject matter as a process (subject to considerations of novelty and inventive step when compared to the prior art base).  But, to repeat, claim 1 is not a claim for any such process. It is a claim for a monopoly over such isolated fragments of naturally occurring DNA as comprise the BRCA1 gene as are found upon examination to contain the (naturally occurring) specified mutations and polymorphismstext.

 

Following this decision, Australia is now more closely aligned with the position in the US, in that isolated naturally occurring nucleic acid material is not eligible patent subject matter. Importantly, however, the High Court has sent a strong signal that claims to genetic tests and diagnostic methods remain eligible for patent protection in Australia. This will give some relief to innovators, in light of the uncertainty currently prevailing in the US.

What's next?

We recommend that patentees with innovations relating to isolated biological materials review their Australian patents, to ensure that they contain claims directed to patentable subject matter, and consider whether claim amendments are required.

Similarly, when drafting patent applications for new biological inventions, careful thought should be given to ensuring that the inventive concept is captured in claims covering any functional modifications, and practical uses of the biological products and methods of use.

Footnotes
  1. [2013] FCA 65
  2. At [168].

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