Grant Shoebridge
Shelston IP

Grant Shoebridge of Shelston IP unpacks the Australian High Court’s Myriad decision

It wasn’t that long ago that Myriad’s claims to isolated DNA were upheld in Australia—what changed?

The relevant Australian law requires that patent eligible subject matter be “an artificially created state of affairs” having “economic significance”.

The Australian High Court interpreted the claims at issue as being directed to “information embodied in the arrangement of nucleotides” and that “this information is not made by human action”. As a result, it was considered that the isolated naturally occurring nucleic acids defined in the relevant claims did not represent an artificially created state of affairs.

The High Court decision also stated: “The economic significance necessary to the patentability of an ‘artificially created state of affairs’ in the sense used in NRDC (National Research Development Corporation v Commissioner of Patents, 1959) is not demonstrated by stating that the artificially created state of affairs is a step along the way to a process or method itself claimed as an artificially created state of affairs of economic significance.”

So although the nucleic acids are defined as “isolated”, which the lower courts found to be sufficient to confer artificialness and patent eligibility, the High Court took the position that an invention’s artificialness needs to be directly related to its economic significance. In the present case, the economic significance resulted from carrying out the cancer screening test, and the isolation of the gene was only a “step along the way” to that economically significant process. The lower courts did not make this distinction. They viewed the claims as defining isolated, and therefore artificial, chemical compounds that had economical significance.

Did the Australian High Court rule completely against isolated DNA as patentable subject matter, or did it leave room to manoeuvre?

Importantly, the High Court decision affects isolated naturally occurring nucleic acid sequences. There is some uncertainty about how broadly the decision will be interpreted. Some observers are reporting that artificially synthesised DNA such as complementary DNA (cDNA) is encompassed by the decision. In my view, the patentability of certain cDNA, ie, cDNA that is used in genetic diagnostic tests, may be affected. But overall, my position is that the majority of cDNA will remain patent eligible subject matter.

I also think that there is an argument that isolated naturally occurring genes that are used as medicaments, for example, DNA vaccines, could remain patent eligible. I also think that the decision, unlike the corresponding US case, will not impact on the patentability of isolated naturally occurring biological material other than genes, for example, isolated naturally occurring proteins and microorganisms.

How has IP Australia, the country’s patent office, reacted to the ruling?

IP Australia has released a proposed revision of its examination guidelines in view of the High Court’s Myriad decision. These proposed guidelines say that naturally occurring material other than genes should remain patent eligible in Australia.

On the other hand, the guidelines do propose to broadly exclude cDNA from patentability. In my view, this is an incorrect interpretation of the High Court decision. As the commissioner of patents has invited interested parties to comment on her proposed practice revisions, I intend making my position known.

Where does the Myriad ruling mean for the petitioner and other cancer sufferers in Australia?

It is being reported by the press (despite my best efforts), and this includes statements by Yvonne D’Arcy, that the decision will result in lower breast cancer screening costs and also lower screening costs for future genetic diagnostic screening tests. This is not correct. In Australia, Myriad’s patent was never enforced. In fact, Myriad attempted to surrender the patent as a gift to the people of Australia. However, those opposed to Myriad’s patent did not permit this action.

The fact that Myriad never enforced the patent in Australia means there was never a monopoly on the breast cancer screening test and any clinical lab in Australia could conduct the test. In other words, the cost of the test had nothing to do with Myriad’s patent.

Also, the claims in the Myriad patent that define the method of conducting the screening test were not challenged. In fact, the High Court decision includes statements supporting the patentability of the method claims. In other words, following this decision, genetic diagnostic tests can still be developed and protected with patents in Australia.

What about biotechnology in Australia? Will this harm innovation?

The impact on the Australian biotechnology industry will depend on how the decision is interpreted by IP Australia and courts in the future. In my view, the decision should be interpreted narrowly and therefore unlike the views of some observers, I don’t think there is a need to “hit the panic button”, and push for immediate legislative change. We need to wait and see.

On the other hand, there have also been reports that this decision is a boon for medical researchers in Australian because they no longer need to worry about infringing patents. This is not true because in addition to the fact that Myriad was not enforcing this patent, there is no evidence that so called gene patents stifle innovation. This information comes from a Senate inquiry in 2009 on the patenting of genes and biological material.

Moreover, an independent report by the Centre for International Economics, published in 2013, confirmed patents play a key role in promoting innovation and the public-private partnerships required to bring new human gene-based medicines and diagnostics to market. The Australian Patents Act also includes a safeguard against infringement by research activities.

In view of the comments above, the reports that the High Court decision is a boon for medical researchers are completely unsubstantiated.

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