The highest court in Australia has unanimously ruled that isolated nucleic acids are not patentable subject matter, effectively reversing the status quo in Australia. Three separate judgments were issued by the full bench of seven Justices in the landmark decision, including a majority judgment from four Justices (1).
The patent at issue, owned by Myriad, relates to the testing of a patient’s DNA for variations in a particular gene (known as the BRCA1 gene) which are known to correlate to an increased chance of developing breast and ovarian cancer.
The patent included claims not only to methods of testing for the particular genetic variation, but also included claims to isolated nucleic acid sequences (i.e. isolated strands of genetic code). Although the patent contained claims to methods for testing, the case focused only on the claims to the isolated nucleic acid sequences. These types of claims are controversial as they are considered by some to encroach on individual’s rights to access their own genetic information.
Ms. D’Arcy, a breast cancer survivor, unsuccessfully sought to have the claims revoked in two lower Federal Court cases, but was granted leave to appeal to the High Court of Australia (the highest court in Australia), which overturned the previous decisions (2).
Majority Judgement – substance over form, again
In this article, we only consider the majority judgement by four of the Justices, although all seven Justices found the claims unpatentable.
Myriad argued that isolated nucleic acid sequences are analogous to chemical compounds, as the nucleic acid sequences are “isolated” from the rest of the cellular material, and thus differ from the genetic code inside a human. On this basis, Myriad asserted that isolated nucleic acid sequences fell well within the scope of subject matter that has long been considered patentable in Australia.
The Justices disagreed. The majority judgment criticised Myriad’s argument as one which “elevates form over substance”, a statement which echoes the recent Full Bench of the Federal Court of Australia decision in Research Affiliates (itself a decision regarding the patentability of computer implemented inventions) (3). It stated that the claims to nucleic acid sequences, properly construed, were not directed to the chemical entity (i.e. the form), but rather were directed towards the information encoded therein (i.e. the substance).
Interestingly, this interpretation was found to apply to all nucleic acids coding for known information where the information encoded is the same as found in nature, including cDNA and other sequences prepared either chemically or enzymatically. The inclusion of cDNA goes a step further than courts have done in other jurisdictions; for example, after the corresponding US decision cDNA remains patentable (4).
The decision re-assesses the NRDC “artificially created state of affairs” test, which has been the touchstone for patentability in Australia for over 50 years (5). The Court considered that, in determining whether to extend patentability to a particular subject matter, more was required than just creating an artificial state of affairs. There has to be something actually “made” to be patentable and Myriad were held by the Court to not actually have “made” the claimed sequences.
The purpose of the Australian patent legislation and Australia’s international obligations were also considered by the Court to be somewhat relevant factors. The purpose of patents is to encourage innovation without stifling or having a detrimental or discouraging effect on innovation. The Court considered that the subject matter of a patent should reflect the balancing policy considerations of encouraging and rewarding inventors without hindering technological advancement. The Court also considered that Australia has no international obligation to recognise the claimed isolated gene sequences as inventions.
One concurring opinion further considered the consequences for those working in field of genetic testing and the scenario of unknowing or unintentional infringement. The example of pathologists who may be required to isolate a sample from a patient and perform testing on the sample was considered. A pathologist may have no way of knowing whether a patient's DNA, and the isolated nucleotides coding for the BRCA1 polypeptide would contain the mutations and polymorphisms until the DNA fragment was isolated, amplified and assessed for the presence of the specified mutations and polymorphisms. It was found that this would be an unfair monopoly to impose.
Implications in Australia
As far as implications in Australia go, the patentability of gene sequences has been called into question. The key feature appears to be how the information encoded differs from the information found in nature. With this in mind, IP Australia has stated that it will be suspending the examination of gene sequence patents until the implications of the decision can be assessed.6
As the Court did not consider the method claims (only the claims to isolated sequences) it may be possible to still obtain method patents covering the use of gene sequences.
The re-assessment of the NRDC decision which has been heavily relied upon over the years could be applied to other areas of technology where questions of patentability have been raised, for example, software implemented inventions and business methods. It appears that something more is now required over an “artificially created state of affairs.”
Implications in New Zealand
New Zealand also applies the NRDC test in establishing patentability. While the new Australian decision is not binding in New Zealand, it will be considered highly persuasive because the decision comes from Australia’s highest court. The same issue has not yet come before New Zealand’s highest court, the Supreme Court.
The Intellectual Property Office of New Zealand (IPONZ) has not issued a statement of a change in practice. In our view, IPONZ is unlikely to do so in the absence of a New Zealand Court decision on the point. While it is possible that IPONZ may choose to follow the lead of Australia, especially given the current developments in aligning New Zealand and Australia’s patent systems in the form of the single trans-Tasman harmonisation program, there are other factors that would support the alternative view.
For example, it could be argued that it is not the New Zealand Parliament’s intention to exclude gene patents. New Zealand has recently passed the 2013 Patents Act, and the patentability of genetic material was at issue. This issue had also been before courts around the world for some time, giving Parliament some opportunity to consider specifically excluding gene sequences from patentability. This situation can be contrasted with amendments made in the computer software area which resulted in restrictions to “computer software as such.” In addition, there are a number of differences in New Zealand and Australian patent law that remain even after the introduction of the New Zealand Patents Act 2013 so one cannot simply assume that alignment with Australia should proceed.
This article is intended to summarise potentially complicated legal issues, and is not intended to be a substitute for individual legal advice. If you would like further information, please contact AJ Park representative.