Australia: The ALRC Delivers Its Report Into Gene Patenting And Human Health

Last Updated: 15 March 2005

By Amanda Turnill, partner, Clayton Utz and Jodi Ainsworth, graduate at law, Clayton Utz.

Key Point

  • The Australian Law Reform Commission has completed a major examination of gene patenting to ensure that Australia's intellectual property laws can deal with the rapid advances being made in genetic research.

After an 18 month inquiry, the Australian Law Reform Commission ("ALRC") has recently released its report into gene patenting and human health, Genes and Ingenuity: Gene Patenting and Human Health ("the Report"). This Report, which makes 50 recommendations regarding the patenting of genes, was tabled in Parliament on 31 August 2004. Its release follows the ALRC's report into genetic privacy and discrimination, which revealed a need to review gene patenting laws. It also follows the public debate over Myriad Genetics Inc's patenting of genes which can identify a predisposition to breast and ovarian cancer, the BRCA genes.

The Report considers the impact of patent laws and practices regarding genes and genetic technologies on:

  • Research, and its commercialisation;
  • The Australian biotechnology sector; and
  • Cost-effective healthcare in Australia.

This article considers some of the main recommendations of the Report.

1. Genetic materials and technologies should remain patentable

IP Australia has granted patent protection under the Patents Act 1990 (Cth) ("Patents Act") for numerous inventions involving genetic materials and technologies including:

  • Synthetic genetic sequences;
  • Mutants and fragments of genetic sequences;
  • Isolated or recombinant DNA coding for a sequence of a gene;
  • Proteins expressed by a gene;
  • Host cells, higher plants or animals carrying a gene; and
  • Recombinant DNA methods, such as polymerase chain reaction and novel expression systems.

These so-called gene patents have prompted concerns about the patentability requirements and also about the way in which these gene patents are exploited. Some of the specific concerns include:

  • Ethical issues;
  • The identification of a gene is a ‘discovery’, not a patentable ‘invention’;
  • Genetic material is not novel and should not be patentable; and
  • The identification of genetic material does not involve an inventive step.

After considering these concerns, the ALRC recommended that the Commonwealth should not amend the Patents Act to exclude the patenting of genetic materials. The reasons cited by the ALRC for this recommendation include: the long history of patenting such inventions; the harm the amendment would cause the Australian biotechnology industry; and the conflict it would generate with Australia's international obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights 1994. Any social and ethical concerns should be dealt with through regulation of the use or exploitation of these patents.

The ALRC also concluded that gene patents should be assessed using the same criteria as other inventions. However, the ALRC's investigations revealed a generic problem in the way 'usefulness' is assessed under the Patents Act. Currently there is confusion as to the extent to which an invention claimed in a patent application must be useful and how this requirement is imposed. To address this confusion, the ALRC recommended that ‘usefulness’ be included as a requirement in the examination for a standard patent and that an invention should only satisfy this requirement if the patent application discloses a specific, substantial and credible use.

2. There should be a statutory exemption in patent law for experimentation

There is no express exemption from infringement liability in the Patents Act for experimental or research use of patented inventions. There is concern that this may have a 'chilling effect' on research.

To deal with this concern, the ALRC recommended that an experimental use exemption be inserted into the Patents Act. The Report also contains a recommendation that bodies which fund research, for example the Australian Research Council ("ARC") and the National Health and Medical Research Council ("NH&MRC"), place conditions on their funding to encourage dissemination of the resulting research.

3. The effect of gene patents on the healthcare system should be monitored

Gene patents are relevant to the provision of healthcare, in particular:

  • Medical genetic testing; and
  • Novel therapies, including gene therapy, the production of therapeutic proteins, and the use of stem cells.

There is a concern that gene patents may make the provision of these kinds of healthcare more expensive. However, the ALRC found that, to date, there is no evidence to suggest this. The ALRC recommended that the impact of gene patents on cost-effective healthcare be monitored, and if a gene patent is adversely affecting healthcare, health departments should examine legal options to open up access to the invention. These options may include challenging the patent or reporting anti-competitive conduct to the Australian Competition and Consumer Commission ("ACCC").

4. Education within the biotechnology industry regarding licensing should be increased

The Australian biotechnology industry heavily relies on patent licensing. There is potential for licences to be granted in a restrictive manner, but the ALRC concluded that such restrictive practices are not common in Australia. However, the ALRC did observe that there is a lack of commercial experience regarding licensing gene patents. To address this, the ALRC recommended that education programs regarding such licensing be enhanced. Also, Ausbiotech Ltd (the peak biotechnology industry body) should develop model licence agreements and consider whether other iniatives are necessary.

5. Access to gene patents should be enhanced by Crown use provisions and compulsory licences

The Patents Act contains Crown use provisions which allow the Commonwealth or States to exploit a patented invention without infringment, or to authorise another person to do so. There are also provisions which enable the Commonwealth compulsorily to acquire the rights in a patented invention. The ALRC recommended that these provisions should be used in specific cases where gene patents are adversely affecting research or healthcare.

Compulsory licences may also be granted to enable access to a gene patent which is hindering research or healthcare. These licences are authorisations to exploit a patented invention where the 'reasonable requirements of the public' with respect to the patent have not been met, and the patent holder fails to explain why they have not exploited the patent. Compulsory licences are currently seldom used. The ALRC has propsed that a competition-based test be introduced into this provision to address those circumstances in which there is a public interest in enhanced competition in a market.

6. Copyright law should be amended

Scientists could potentially be able to protect the written representations of gene and protein sequences, and databases containing gene sequences, with copyright. Despite the fact that there are no problems currently, in the future copyright could hinder access or use of genetic information.

To address this concern, the ALRC recommended the 'fair dealing' exception for research and study in the Copyright Act 1968 (Cth) ("Copyright Act") be amended to ensure that research with a commercial purpose or objective can fall within this exception. The Copyright Act should be further amended to provide, for copyright in relation to databases, that the exception covering fair dealing for the purpose of research or study cannot be excluded or modified by contract.


The ALRC Report provides a detailed examination of the effects of gene patenting on research, the biotechnology industry and healthcare. This report does not propose any radical law reform. However, implementation of the Report's 50 recommendations has the potential to involve many different bodies, including Ausbiotech Ltd, the ACCC, the Australian Government, health departments (Commonwealth, state and territory), IP Australia, the ARC, the NH&MRC, research organisations and universities.

At the time of writing this article, the impact of the Report is yet to be seen. We will await with interest any announcements the Government will make regarding implementing of the ALRC's recommendations in this area.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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